House of Representatives

Revised Explanatory Memorandum

(Circulated by the authority of the Minister for Social Services, the Hon Kevin Andrews MP)

Schedule 12 - Other amendments

Summary

This Schedule makes miscellaneous amendments. These include improving the administration of debt recovery under the Student Financial Supplement Scheme, clarifying the provisions relating to the time period for lodging tax returns for family assistance purposes, and ensuring that funding under the National Disability Insurance Scheme paid into a person's account, which is set up for the purpose of managing the funding for supports for a participant's plan, cannot be garnisheed for debt recovery purposes.

Further amendments recast and simplify the tax file number provisions in the Family Assistance Administration Act, including to enable the Commissioner of Taxation to provide the Secretary with income information about an individual who is not required to lodge a tax return (that is, Australian Taxation Office pre-fill data), using tax file numbers as the primary matching key.

Amendments to the child support legislation ensure that provisions relevant to child support service delivery operate consistently with the arrangements for child support administration.

Background

Part 1 - Repayment of financial supplement through taxation system

This Schedule amends the Social Security Act and the Student Assistance Act to allow the Commissioner of Taxation to continue administering the recovery of debts under the Student Financial Supplement Scheme (SFSS), and to make other minor amendments relating to the administration of the SFSS.

These amendments commence on the day after Royal Assent.

Part 2 - Time periods and FTB reconciliation conditions

Section 32A of the Family Assistance Administration Act ensures that the family tax benefit Part A supplement and family tax benefit Part B supplement cannot be included in determining an individual's rate of family tax benefit unless and until the individual satisfies the family tax benefit reconciliation conditions. These conditions are set out in sections 32C to 32Q. Each of these sections provides when it applies and then provides for a reconciliation time. It is possible that more than one section applies to a particular individual, in which case section 32B provides that the reconciliation conditions are satisfied at the latest reconciliation time.

Sections 32C to 32H deal with cases where an individual and/or their partner are required to lodge income tax returns. These provisions ensure that the individual does not meet the family tax benefit reconciliation conditions if they or their partner do not lodge tax returns within the specified timeframe. Where the individual separates from their partner before the period allowed for lodging tax returns, the provisions seek to ensure that the individual's family tax benefit entitlement is not affected by their ex-partner's failure to lodge a tax return.

The current reconciliation provisions are more complex than they need to be. The provisions have some gaps (current section 32H does not cover all necessary scenarios involving separations in the second income year) and also produce unintended consequences in some scenarios. These are addressed by the amendments.

The date of effect rules that apply in relation to review decisions (sections 107 and 109E of the Family Assistance Administration Act) and the time limits applicable to review of certain decisions (section 109D) currently refer to an income tax return lodged before the end of the next income year. These provisions are amended to allow a further period in special circumstances if a tax return is lodged in the second income year, consistent with the claim and reconciliation provisions that allow a further period in special circumstances if a tax return is lodged in the second income year.

These amendments commence on the day after Royal Assent.

Part 3 - Protection of amounts under the National Disability Insurance Scheme

One of the objects of the National Disability Insurance Scheme Act 2013 (the National Disability Insurance Scheme Act) is to provide reasonable and necessary supports for participants in the National Disability Insurance Scheme. In some cases, amounts will be paid to the participant, their nominee or a registered plan management provider for the specific purpose of enabling the purchase of supports identified in the participant's plan. It would be contrary to the objectives of National Disability Insurance Scheme Act to allow amounts paid in respect of reasonable and necessary supports to be garnisheed, sold or transferred for any other purposes.

This measure amends the National Disability Insurance Scheme Act to ensure that amounts paid under the National Disability Insurance Scheme in relation to funding for supports are inalienable. It also seeks to prevent third parties from seeking to recover debts by obtaining a garnishee order over bank accounts kept for the purpose of managing funding for supports under the National Disability Insurance Scheme.

These amendments commence on the day after Royal Assent.

Part 4 - Use of tax file numbers

Section 154A of the Family Assistance Administration Act currently allows for the exchange of tax file number data between the Secretary and Commissioner of Taxation for the purpose of the Commissioner informing the Secretary of amounts determined by the Commissioner to be included in an individual's adjusted taxable income. There are also rules requiring destruction of tax file number records provided by the Secretary and covering situations where an individual is not required to lodge a tax return. Section 154B currently allows the Secretary to provide an individual's tax file number and other relevant information to the Commissioner in relation to specified debt recovery actions provided for in the Family Assistance Administration Act, which involve the Commissioner.

Amendments are made to replace the current provisions with new section 160A. In broad terms, new section 160A is cast more generally, is simpler and more closely aligned with the model of tax file number provisions used in other portfolio Acts.

The new provision allows for the exchange of tax file numbers between the Secretary and Commissioner of Taxation for the purpose of the Commissioner providing the Secretary with information relevant for specified family assistance purposes relating to compliance and debt recovery. The new provision covers the data transfer allowed under the existing rules but would also allow the Secretary to require the Commissioner to provide income information received by the Australian Taxation Office from third parties (that is, pre-fill data) in relation to individuals who are not required to lodge tax returns. This information is of relevance in determining the adjusted taxable income of individuals who are not required to lodge tax returns and may be relevant in verifying eligibility for family assistance or in determining rate. The new provision also deals with the transfer of tax file number data for debt-related purposes.

These amendments commence on the day after Royal Assent.

Part 5 - Child support amendments

Child support administration involves the Department of Social Services, with responsibility for child support policy, and the Department of Human Services, with responsibility for child support service delivery. The amendments to the child support legislation ensure that certain provisions relevant to child support service delivery will operate consistently with these arrangements for child support administration.

A number of provisions relevant to child support service delivery will be amended to replace references to 'the Secretary' with 'the Human Services Secretary', replace references to 'the Department' with 'the Human Services Department', or add reference to 'the Human Services Department'.

The relevant provisions are for the Child Support Registrar, Acting Child Support Registrar, the use of computer programs to make decisions, the delegation provision, the multiple secrecy provision, and the procedures on receiving an application for a Social Security Appeals Tribunal review of certain child support decisions.

The Child Support Registrar will be an SES employee in the Human Services Department, appointed by the Human Services Secretary. The amendment of the other provisions noted will ensure they relate to the Human Services Secretary, or relate to the Human Services Department.

A number of amendments simplify provisions by replacing references to 'the Family Assistance Secretary' with 'the Secretary', as these references relate to the Secretary of the Department of Social Services.

The amendments made by this Schedule will commence on the 7th day after the Act receives Royal Assent.

Part 6 - Other amendments

This Part makes some minor adjustments to provisions relating to the newborn supplement and newborn upfront payment of family tax benefit and the stillborn baby payment, which commence on 1 March 2014, including to:

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ensure that the newborn upfront payment of family tax benefit is treated in the same way as the newborn supplement where the relevant tax returns have not been lodged on time and the non-lodger provisions apply;

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ensure that percentage determinations that allow family tax benefit to be split in blended families and in certain situations where couples separate, are taken into account in determining eligibility for the newborn supplement and amount of the newborn upfront payment;

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allow a claim for stillborn baby payment to be made more than 52 weeks after the birth of the stillborn child in further specified circumstances;

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clarify that the higher rate of newborn supplement is available in relation to the first child aged less than one year who is entrusted to the care of an individual or their partner; and

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ensure that a stillborn child in a multiple birth is taken into account in determining the amount of newborn supplement.

These amendments commence on 1 March 2014, immediately after the commencement of Parts 1 and 2 of Schedule 2A to the Family Assistance and Other Legislation Amendment Act 2013. Those Parts replace baby bonus with the newborn supplement (and related newborn upfront payment) and stillborn baby payment.

Explanation of the changes

Part 1 - Repayment of financial supplement through taxation system

Amendments to the Social Security Act

Item 1 inserts section 1061ZZENA, which provides that the Commissioner of Taxation has the general administration of Part 2B.3 of the Social Security Act with respect to Divisions 2, 4, 6 to 8 and 5 (except for section 1061ZZFE), as well as section 1061ZZFO. These provisions are taken to be taxation laws for the purposes of the Taxation Administration Act.

The purpose of this provision is to allow the Commissioner of Taxation to continue administering the recovery of debts under the SFSS.

Item 2 repeals section 1061ZZFGC as this section related to the now-redundant provisional tax system.

Item 3 amends subsection 1061ZZFJ(1) to allow the Commissioner of Taxation to delay the making of an assessment under section 1061ZZFH if the person has made an application in an approved form. This gives greater flexibility to a person to make an application as it will not have to be strictly in written form.

Item 4 inserts subsection 1061ZZFJ(4), which provides that, for section 1061ZZFJ, an approved form has the same meaning in section 388-50 in Schedule 1 to the Taxation Administration Act.

Item 5 amends subsection 1061ZZFK(1) to allow the Commissioner of Taxation to amend an assessment made under section 1061ZZFH so that no amount is payable under the assessment if the person has made an application in the approved form. This gives greater flexibility to a person to make an application as it will not have to be strictly in written form.

Item 6 inserts subsection 1061ZZFK(3), which provides that, for section 1061ZZFK, approved form has the same meaning in section 388-50 in Schedule 1 to the Taxation Administration Act.

Amendments to the Student Assistance Act

Item 9 inserts section 12ZEA to provide that the Commissioner of Taxation has the general administration of Division 6 of Part 4A of the Student Assistance Act to the extent that it relates to the Commissioner. These provisions are taken to be taxation laws for the purposes of the Taxation Administration Act.

The purpose of this provision is to allow the Commissioner of Taxation to administer the recovery of debts under the SFSS.

Items 7 and 8 make technical amendments for the purpose of item 9.

Item 10 repeals section 12ZNC as this section is related to the now-redundant provisional tax system.

Item 11 amends subsection 12ZP(1) and 12ZP(2) so that a person may apply to the Commissioner of Taxation in an approved form, rather than strictly by written application, under these subsections.

Item 12 inserts subsection 12ZP(4), which provides that, for section 12ZP, approved form has the meaning given by section 388-50 in Schedule 1 to the Taxation Administration Act.

Item 13 is a minor technical amendment.

Item 14 provides that the amendments made by items 3, 5, and 11 (which will allow applications in an approved form, rather than in written form) will apply to applications made on or after the commencement of those items. This means an application in written form made before the commencement of those items will comply with the requirements of those provisions amended by items 5, 15 and 30.

Part 2 - Time periods and FTB reconciliation conditions

Amendments to the Family Assistance Administration Act

Replacement of sections 32C to 32H

Item 16 replaces current sections 32C to 32H with new sections 32C to 32F.

In broad terms, if the first individual is or was required to lodge a tax return, then one provision (new section 32C) would set out the relevant reconciliation time for that circumstance, rather than six sections (current sections 32C to 32H). If the first individual's tax return is lodged before the end of the first income year after the relevant income year or such further period allowed by the Secretary, then the individual's relevant reconciliation time is when the tax assessment is made under the Income Tax Assessment Act 1936.

If the other member of the couple is or was required to lodge a tax return, then three new provisions would set out the relevant reconciliation time.

New section 32D applies where the first individual has a partner who is required to lodge a tax return and they continue to be a couple until the end of the first income year after the relevant income year or such further period allowed by the Secretary. If the partner's tax return is lodged before the end of the first income year after the relevant income year or such further period allowed by the Secretary, then the relevant reconciliation time is when the tax assessment is made.

New section 32E covers situations where the first individual's partner is required to lodge a tax return for the relevant income year and the couple separate during the first income year after the relevant income year. If the partner lodges a tax return before the end of the first income year after the relevant income year, then the relevant reconciliation time is when the tax assessment is made. Otherwise, it is the end of the first income year after the relevant income year.

New section 32F covers situations where:

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the first individual's partner is required to lodge a tax return for the relevant income year;

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the partner does not do so before the end of the next income year;

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the Secretary has allowed a further period for lodgement; and

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the couple separate after the end of the first income year but before the end of that further period.

If the partner lodges the tax return before the separation, then the relevant reconciliation time is when a tax assessment is made. Otherwise, it is when the couple separate.

New sections 32C to 32F do not use the concept of a designated date. A consequential amendment is therefore made by item 17 to repeal section 32R of the Family Assistance Administration Act (which defines designated date).

These changes apply in relation to a relevant income year (as referred to in subsection 32A(1) of the Family Assistance Administration Act) that is the 2013-14 income year or a later income year ( subitem 26(1) refers).

Amendments to certain review provisions

Subsections 107(3), 109D(4) and 109E(3) of the Family Assistance Administration Act set out date of effect rules relating to certain review decisions and time limits on seeking review of other decisions. However, the limitations set out in these provisions do not apply where the relevant decision is being reviewed because the Commissioner of Taxation has made or reviewed a decision on the basis of an income tax return lodged before the end of the first income year following the income year to which the assessment relates.

These provisions are amended by items 18 to 25 to ensure that the limitations also do not apply in relation to tax returns that are lodged within such further period (if any) as the Secretary allows because of special circumstances that prevented the income tax return being lodged before the end of the first income year. This approach is consistent with the claim and reconciliation provisions that allow a further period in special circumstances if a tax return is lodged in the second income year.

These changes apply in relation to an income year as referred to in specified provisions that is the 2013-14 income year or a later income year ( subitem 26(2) refers).

Technical amendment

Item 15 makes a technical amendment to the heading of subsection 10(2) to reflect the content of the provision.

Part 3 - Protection of amounts under the National Disability Insurance Scheme

Amendments to the National Disability Insurance Scheme Act

Item 27 inserts new sections 46A and 46B at the end of Division 3 of Part 2 of Chapter 3.

New subsection 46A(1) provides that an NDIS amount is absolutely inalienable. An NDIS amount is defined under section 9 to mean an amount paid under the National Disability Insurance Scheme in respect of reasonable and necessary supports funded under a participant's plan. This provision gives legal force to the intention that NDIS amounts are paid to a participant, their nominee or a registered plan management provider for the specific purpose of purchasing the supports identified under a participant's plan. Such an amount cannot be transferred to another person either by a voluntary act or by the operation of the law.

New subsection 46A(2) provides that inalienability is subject to Part 1 of Chapter 7. The effect is that the Agency may fully exercise its powers to recover debts due to the Agency in accordance with sections 183, 184 and 185, despite subsection 46A(1).

New subsection 46B(1) provides the general rule that a court must not make an order in the nature of a garnishee order in respect of an account with a financial institution if:

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one or more NDIS amounts for a particular participant have been paid into an account; and

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the account has been kept solely for the purpose of managing the funding for supports under the participant's plan.

New subsection 46B(2) provides an exception to the general rule in subsection 46B(1). That is, a court may make an order in the nature of a garnishee order in respect of an account if:

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the account is made in favour of a person in relation to a debt that arose because of the person providing goods or services in relation to the participant; and

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the goods and services are reasonable and necessary supports specified in the participant's plan.

New subsection 46B(1) is intended to protect NDIS amounts paid into certain accounts from being garnisheed by third parties for debt recovery purposes. New subsection 46B(2) seeks to limit this protection, in the situation where the person seeking a garnishee order should rightfully be paid from NDIS amounts held in an account, because they have not been paid for providing goods or services that have been identified as reasonable and necessary supports under a participant's plan.

Item 28 provides the application provisions, such that new section 46A applies in relation to amounts paid on or after the commencement of this item, and new section 46B applies in relation to court orders made on or after the commencement of this item.

Part 4 - Use of tax file numbers

Amendments to the Family Assistance Administration Act

Items 29 and 30 replace sections 154A and 154B of the Family Assistance Administration Act with a new section 160A.

New section 160A applies in relation to a tax file number provided under and for the purposes of the Family Assistance Administration Act (see, for example, section 8, which sets out the tax file number requirement).

New subsection 160A(2) provides specific authority for the Secretary to provide such a tax file number to the Commissioner of Taxation and require the Commissioner to provide specified information, including the individual's tax file number, back to the Secretary. This could be a different tax file number to the one provided by the Secretary if it is not the correct tax file number for the individual concerned. The Secretary could also provide other relevant information about the individual to the Commissioner, provided the disclosure is consistent with the confidentiality provisions in the Family Assistance Administration Act.

Under new subsection 160A(3), the information provided to the Secretary by the Commissioner can only be used by the Secretary for specified, compliance related purposes (for example, to verify eligibility or entitlement or to establish whether the correct rate of family assistance is or was paid).

New subsection 160A(4) provides authority for the Secretary to provide a tax file number to the Commissioner for specified debt related purposes which involve the Commissioner. For example, section 87 of the Family Assistance Administration Act allows for the application of a tax refund by the Commissioner to satisfy the whole of part of a family assistance debt. Section 226, on the other hand, provides for the setting off of family assistance entitlement against a tax liability.

Item 31 sets out application and saving provisions.

Subitem 31(1) ensures that new section 160A can apply to a tax file number provided to the Secretary before, on or after commencement of the provision.

Subitem 31(2) preserves the operation of existing sections 154A and 154B in relation to a record of a tax file number provided to the Commissioner under subsection 154A(2) or 154B(1) before commencement of new section 160A.

Part 5 - Child support amendments

Amendments to the Child Support (Assessment) Act 1989

Item 32 repeals the definition of Family Assistance Secretary contained in subsection 5(1). This definition will not be required, as other amendments made by this Part replace references to 'Family Assistance Secretary' with 'Secretary'. Under the child support legislation, 'the Secretary' is the Secretary of the Department of Social Services.

Item 33 amends subsection 12A(1) by omitting the words, 'The Secretary of the Department of which the Registrar is an employee', and substituting the words, 'The Human Services Secretary'. This amendment will enable the Human Services Secretary to arrange for the use, under the Registrar's control, of computer programs for the purposes of decision-making.

Items 34 to 41 omit references to 'Family Assistance Secretary', and substitute a reference to 'Secretary' in the relevant provisions. These items are consequential to item 32.

Item 42 amends subsection 149(1) by adding a reference to 'the Human Services Department'. Section 149 contains the Registrar's powers of delegation and this amendment enables the Registrar to delegate all or any of the Registrar's powers and functions under the Act to an officer or employee of the Department (of Social Services) or the Human Services Department, as well as to the Chief Executive Centrelink.

Items 43 to 47 amend section 150, which regulates the use of 'protected information'. Item 43 amends the definition of person to whom this section applies in subsection 150(1), with the effect that it will refer to 'the Minister' (for Social Services) and 'the Human Services Minister'.

Item 44 amends the definition of relevant Minister in subsection 150(1), with the effect that it will refer to 'the Minister' (for Social Services) and 'the Human Services Minister'.

Item 45 amends paragraph 150(3)(ba) by adding a new subparagraph 150(3)(ba)(ia), which refers to 'the Human Services Secretary'.

Items 46 and 47 amend paragraphs 150(4)(a) and 150(4C)(d), with the effect that the provisions will refer to the Department (of Social Services) and 'the Human Services Department'.

The amendments made by items 43 to 47 ensure that the relevant provisions apply to the persons specified and operate consistently with the arrangements for child support administration.

Item 48 amends the definition of relevant information in subsection 150AA(3) by inserting a reference to 'the Human Services Department. Section 150AA provides for an offence of unauthorised use of information. This amendment ensures that section 150AA applies to the records of the Department (of Social Services) and the Human Services Department.

Items 49 and 50 amend subparagraph 151A(1)(b)(ii) and paragraph 151A(7)(b) by omitting the reference to 'Department' and inserting a reference to the 'Human Services Department'.

Amendments to the Child Support (Registration and Collection) Act 1988

Item 51 amends the definition of Human Services Department in subsection 4(1). This definition is simplified by omitting the words, 'Minister administering the Human Services (Centrelink) Act 1997', and substituting, 'Human Services Minister'.

Item 51 is consequential to item 52 , which inserts a new definition of Human Services Minister into subsection 4(1). Human Services Minister means the Minister administering the Human Services (Centrelink) Act 1997.

Item 53 inserts into subsection 4(1) a definition of Human Services Secretary, which is defined to mean the Secretary of the Human Services Department.

Item 54 amends subsection 4A(1) by omitting the words, 'The Secretary of the Department of which the Registrar is an employee', and substituting the words, 'The Human Services Secretary'. This amendment is made for similar reasons to item 33.

Items 55 and 56 amend section 10 by replacing the reference in paragraph 10(2)(a) to 'the Department' with 'the Human Services Department', and replacing the reference in paragraph 10(2)(b) to 'the Secretary' with "the Human Services Secretary'. These amendments provide that the Child Support Registrar is an SES employee in the Human Services Department and appointed by the Human Services Secretary.

Item 57 makes corresponding amendments to section 10A, which provides for the appointment of an Acting Child Support Registrar.

Item 58 amends subsection 15(1) by adding a reference to the Human Services Department. This amendment is made for similar reasons to item 42.

Items 59 and 60 amend subsection 16(1) by adding references to the Human Services Minister in the definitions of person to whom this section applies and relevant Minister. These amendments are made for similar reasons to items 43 and item 44.

Items 61 and 62 amend subsection 16(2AA), which applies to communication of a Social Security Appeals Tribunal (SSAT) child support decision under Part VIIA of the Child Support (Registration and Collection) Act 1988. Item 61 amends paragraph 16(2AA)(a) by inserting after, 'by the Secretary', the words, 'or to the Human Services Secretary or a person authorised by the Human Services Secretary'. Item 62 amends paragraph 16(2AA)(b) by adding at the end of that paragraph 'or the Human Services Secretary from communicating the reasons for a decision of the SSAT under Part VIIA to a person authorised by the Human Service Secretary'. Both items ensure that paragraphs 16(2AA)(a) and (b) operate in relation to the Secretary (of Social Services) and the Human Services Secretary.

Item 63 amends subsection 16(2AB) by inserting the words, 'or the Human Services Secretary, or a person authorised by the Human Services Secretary', after the words, 'by the Secretary'. Subsection 16(2AB) enables the publication of 'de-identified' SSAT child support decisions. The amendment ensures that subsection 16(2AB) operates in relation to the Secretary (of Social Services) and the Human Services Secretary.

Item 64 amends paragraph 16(3)(ba) by inserting a reference to the 'Human Services Secretary' before subparagraph 16(3)(ba)(i). This amendment is made for similar reasons to item 45.

Items 65 and 66 amend paragraphs 16(4)(a) and 16(4C)(d) by inserting references to the Human Services Department. These amendments are made for similar reasons as for items 46 and 47.

Item 67 amends the definition of relevant information contained in subsection 16AA(3) by adding a reference to the Human Services Department after 'Department'. This amendment is made for similar reasons to item 48.

Items 68 and 69 amend subsection 16AB(2). Section 16AB deals with multiple secrecy provisions. Item 68 amends paragraph 16AB(2)(a) by replacing the reference to 'the Secretary, the Registrar or an officer or employee of the Department' with a reference to 'the Human Services Secretary, the Registrar or an officer or employee of the Human Services Department'. Item 69 makes a similar amendment to paragraph 16AB(2)(b).

Item 70 amends section 80A by omitting the reference to 'Family Assistance Secretary', and substituting 'Secretary'. This item is consequential to item 32.

Items 71 and 72 amend subsection 95(1) and paragraph 95(2)(b) by omitting 'Secretary', and substituting references to 'Human Services Secretary'. Section 95 deals with procedures on receiving application for review to the SSAT. These amendments ensure that these provisions will operate in relation to the Human Services Secretary.

Item 73 amends paragraph 110Y(1)(a) by omitting the reference to 'Family Assistance Secretary', and substituting, 'Secretary'. This item is consequential to item 32.

Part 6 - Other amendments

Amendments to the Family Assistance Act

Items 74, 75 and 76 make some minor adjustments to subsection 36(2) of the Family Assistance Act (eligibility for stillborn baby payment) to ensure the provisions work as intended.

The amount of newborn upfront payment of family tax benefit under subsection 58AA(1) is $500. There is no provision for splitting the payment where family tax benefit is shared because a percentage determination is in force under section 28 (blended families) or section 29 (eligibility for family tax benefit where a couple separates, for a period before separation).

Item 77 inserts such a rule as new subsection 58AA(1A). New subsection 58AA(1A) applies where an amount of newborn supplement is added for a day in relation to both members of a couple and an FTB child, there is a percentage determination under section 28 or 29 in force in relation to the couple and the child for that day, and the day is the first day on which an amount of newborn supplement is added in relation to that child. In this situation, each member of the couple is entitled to the same percentage of $500 as is applicable under the percentage determination.

A note at the end of new subsection 58AA(1A) indicates to the reader that the newborn upfront amount is paid as a single lump sum and cross-references the relevant provision.

Item 84 makes a related amendment to the indexation provisions to ensure the amount of $500 referred to in new subsection 58AA(1A) is indexed in the same way as the amount referred to in subsection 58AA(1). To this end, a reference to new subsection 58AA(1A) is added into item 7B of the table in clause 2 of Schedule 4 to the Family Assistance Act.

Item 78 makes a consequential amendment, which takes account of new subsection 58AA(1A).

Item 79 inserts new subsection 58AA(5) to ensure that the application of section 58AA is subject to new sections 28AA and 32AEA of the Family Assistance Administration Act, as inserted by this Part.

Subclause 35A(10) of Schedule 1 ensures that the partner of an individual who has been paid the newborn supplement in respect of an FTB child for 13 weeks cannot also be eligible for newborn supplement in respect of that child. This rule does not have regard to circumstances in which family tax benefit can be shared by a couple, that is, where there is a percentage determination in force under section 28 (blended family) or section 29 (where a couple separates, for a period before separation) of the Family Assistance Act. Item 81 amends subclause 35A(10) to add another condition which ensures that eligibility for the newborn supplement is not precluded unless there is also no percentage determination in force in relation to both members of the couple and the child.

Item 80 is a technical amendment.

Clause 35B of Schedule 1 to the Family Assistance Act sets out the annualised rate of newborn supplement for the different eligibility categories. A higher rate is available for a first child who is born alive to a woman or who becomes entrusted to the care of an individual or their partner. This amount is also applicable where two or more children are born during the same multiple birth or come into the care of the individual or their partner as part of the same entrustment to care or adoption process.

Item 82 makes a minor amendment to paragraph 35B(1)(b) so the higher rate is available in relation to a first entrustment of the care of a child who is aged less than one on the relevant day.

Item 83 amends subclause 35B(2) to ensure that a stillborn child is taken into account in determining the amount of newborn supplement for an FTB child who is born alive in the case of a multiple birth. If, for example, a multiple birth consists of a stillborn child and a child who is delivered alive, then the child who is born alive would attract the higher rate under subclause 35B(2). A stillborn baby payment would be available in respect of the stillborn child, subject to the relevant eligibility conditions being satisfied.

Amendments to the Family Assistance Administration Act

Section 28 of the Family Assistance Administration Act outlines the consequences for family tax benefit where the relevant tax returns have not been lodged within required timeframes. Section 28 sets out the circumstances in which a claimant's family tax benefit entitlement determination can be varied with the effect that the claimant is not entitled to family tax benefit in relation to a particular income year (which can result in a debt) and the circumstances in which that decision can be undone. As newborn supplement is a component of the rate of family tax benefit, section 28 can also affect entitlement to the newborn supplement.

New section 28AA, as inserted by item 85 , ensures the newborn upfront payment of family tax benefit is affected in the same way as the newborn supplement where section 28 applies.

If a claimant is entitled to a newborn upfront payment because an amount of newborn supplement is added to their rate of family tax benefit and the claimant's family tax benefit entitlement determination is varied under section 28 with the effect that the claimant is not entitled to family tax benefit, then new subsection 28AA(1) provides that the claimant is also not entitled to the upfront amount. However, new subsection 28AA(2) ensures that, if that variation is undone, then new subsection 28AA(1) ceases to preclude entitlement to the upfront amount. New subsection 28AA(3) makes it clear that new subsection 28AA(1) can apply more than once.

A variation under section 28 to the effect that the individual is not entitled to family tax benefit can also affect ongoing payment of family tax benefit on an estimated income basis under Subdivision CA of Division 1 of Part 3.

Item 86 inserts a new section 32AEA at the end of Subdivision CA. The effect is to preclude entitlement to the newborn upfront payment if payment of family tax benefit, worked out on an estimated income basis, is precluded under Subdivision CA.

As a general rule, a claim for stillborn baby payment is not effective unless it is made before the end of 52 weeks beginning on the day of the birth of the stillborn child (subsection 39(2) of the Family Assistance Administration Act refers). There are exceptions, as set out in subsections 39(3) and (4).

Item 88 inserts a new exception, as new subsection 39(3A). The new rule applies where an individual is eligible for the stillborn baby payment because the individual or their partner is entitled to family tax benefit that includes a Part A rate greater than nil in relation to a day during the period of 52 weeks after the birth of the stillborn child and the individual or their partner is notified of their rate of family tax benefit after the end of, or during the last 13 weeks of, that 52 week period. In these circumstances, the individual can made a claim for stillborn baby payment up to 13 weeks after the day on which the notice is given.

Item 87 makes a consequential amendment to subsection 39(2) to take account of new subsection 39(3A).