House of Representatives

Explanatory Memorandum

(Circulated by authority of the Assistant Minister for Education, the Honourable Sussan Ley MP)

Outline

This Bill amends the A New Tax System (Family Assistance) Act 1999 to continue to maintain the Child Care Rebate (CCR) limit at $7,500 for three income years, starting from 1 July 2014, and maintain the Child Care Benefit (CCB) income thresholds at the amounts applicable as at 30 June 2014 for three income years, starting from 1 July 2014, with the first indexation of these amounts recommencing on 1 July 2017.

As a result of these amendments:

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families will continue to be able to receive up to the maximum CCR amount of $7,500 per child, per financial year for out-of-pocket child care costs for the three income years starting from 1 July 2014 and ending on 30 June 2017; and

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families' CCB income thresholds will remain at the amounts applicable on 30 June 2014 for the three income years starting from 1 July 2014 and ending on 30 June 2017.

The CCB standard hourly rate, the minimum hourly amount and the multiple child loadings related to the CCB will continue to be indexed by the Consumer Price Index (CPI) on 1 July each year. These amounts are not affected by either of these measures.

Maintaining the CCR limit at $7,500 per child, per financial year for a further three years was a 2013-14 Budget savings measure. The savings were included in the Budget, but the required legislative amendments were not introduced to the 43rd Parliament.

The CCR measure was put forward in the Social Services and Other Legislation Amendment Bill 2013 (at Schedule 9) which was passed by Parliament on 25 March 2014. The Senate passed an amendment that removed the CCR measure prior to the passage of the Bill.

Maintaining the CCB income thresholds for three years from 1 July 2014 is a 2014-15 Budget savings measure.