House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. Josh Frydenberg MP)

Chapter 4 Stimulus payments to households to support growth

Outline of chapter

4.1 Schedule 4 to this Bill provides for the payment of economic support payments of $750 to around 6.6 million Social Security and Veterans' income support and compensation recipients, Farm Household Allowance recipients, Family Tax Benefit recipients and holders of a Pensioner Concession Card, Commonwealth Seniors Health Card or Commonwealth Gold Card.

4.2 To be eligible for the first economic support payment, a person must be residing in Australia and be receiving one of the qualifying payments or hold one of the qualifying concession cards on a day during the period starting on 12 March 2020 and ending on 13 April 2020 (inclusive).

4.3 The second economic support payment is to be available to Social Security and Veterans' income support recipients, Family Tax Benefit recipients and holders of a of a Pensioner Concession Card, Commonwealth Seniors Health Card or Commonwealth Gold Card who, on 10 July 2020, receive their payment or hold their concession card unless they are eligible to receive the Coronavirus Supplement.

Context of amendments

4.4 The Australian Government is acting decisively in the national interest to address the economic consequences of the Coronavirus, without a permanent or structural impact on the budget balance.

4.5 On 12 March 2020 and 22 March 2020, the Prime Minister and the Treasurer announced an economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of Coronavirus.

4.6 As part of this plan, the Government announced the payments of $750 to certain income support and compensation recipients and holders of qualifying concession cards.

Summary of new law

4.7 This Schedule provides for the payment of new economic support payments to a range of income support payment recipients, compensation payment recipients and concession card holders.

Comparison of key features of new law and current law

Detailed explanation of new law

4.8 Item 1 amends subsection 3(1) of the Family Assistance Act to insert definitions of '2020 economic support payment', 'first 2020 economic support payment' and 'second 2020 economic support payment'.

4.9 A 'first 2020 economic support payment' is defined as a payment to which an individual is entitled under Division 1 of Part 9 of the Family Assistance Act.

4.10 A 'second 2020 economic support payment' is defined as a payment to which an individual is entitled under Division 2 of Part 9 of the of the Family Assistance Act.

4.11 A '2020 economic support payment' means 'a first 2020 economic support payment' or a 'a second 2020 economic support payment'.

4.12 Item 2 inserts Part 9 into the Family Assistance Act:

4.13 Section 110 of the Family Assistance Act sets out the circumstances in which a Family Tax Benefit recipient is entitled to a first 2020 economic support payment. An individual is entitled to a first 2020 economic support payment if new subsections 116(2), (3) and (4) of that Act apply to the individual on a day in the period:

•

starting on 12 March 2020; and

•

ending on 13 April 2020.

4.14 Section 111 of the Family Assistance Act provides that the amount of an individual's first 2020 economic support payment is $750.

4.15 Subsection 112(1) of the Family Assistance Act ensures that a person can only receive one payment of the first 2020 economic support payment even if they qualify under more than one provision.

4.16 The note to subsection 112(1) indicates that for the purposes of Part 9 of the Family Assistance Act and section 65JA (payment) and section 72 (debts) of the Family Assistance Administration Act, it is necessary to know which subsection of section 116 of the Family Assistance Act applies.

4.17 Subsection 112(2) of the Family Assistance Act provides that if either a first 2020 economic support payment under new Part 2.6B of the Social Security Act, a first 2020 economic support payment under new Part IIIH of the Veterans' Entitlements Act or a first 2020 economic support payment under the ABSTUDY Scheme is paid to a person, a first 2020 economic support payment under new Part 9 of the Family Assistance Act cannot be paid to a person.

4.18 Section 113 of the Family Assistance Act sets out the circumstances in which a Family Tax Benefit recipient is entitled to a second 2020 economic support payment. Broadly, an individual is entitled to a second 2020 economic support payment if the person receives an amount of Family Tax Benefit on 10 July 2020 and the individual does not receive the Coronavirus supplement under Social Security Act for 10 July 2020.

4.19 Section 114 of the Family Assistance Act provides the amount of an individual's second 2020 economic support payment under the Family Assistance Act is $750.

4.20 Subsection 115(1) of the Family Assistance Act ensures that a person can only receive one payment of the second 2020 economic support payment even if, on 10 July 2020, they qualify for such a payment under more than one provision.

4.21 The note to subsection 115(1) of the Family Assistance Act indicates that for the purposes of Part 9 of that Act and sections 65JB (payment) and section 72 (debts) of the Family Assistance Administration Act, it is necessary to know which subsection of new section 116 of Family Assistance Act applies.

4.22 Subsection 115(2) of the Family Assistance Act provides that if either a second 2020 economic support payment under new Part 2.6B of the Social Security Act, a second 2020 economic support payment under new Part IIIH of the Veterans' Entitlements Act or a second 2020 economic support payment under the ABSTUDY Scheme is paid to a person, a second 2020 economic support payment cannot be paid to the person under the Family Assistance Act.

4.23 Subsection 116 of the Family Assistance Act sets out the criteria a person must meet on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) to qualify for the first 2020 economic support payment. This section also sets out the criteria a person must meet on 10 July 2020 if they are to be paid the second 2020 economic support payment.

4.24 Subsection 116(2) of the Family Assistance Act operates so that a person is entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) for a day in that period:

•

a determination under section 16 of the Family Assistance Administration Act was in force in respect of the individual as a claimant; and

•

the rate of Family Tax Benefit payable under the determination for that day consists of or includes a Part A or Part B rate greater than nil.

4.25 A person (who may or may not have received a first 2020 economic support payment) will be entitled to a second 2020 economic support payment if they meet these criteria on 10 July 2020.

4.26 Subsection 116(3) of the Family Assistance Act operates so that a person is entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if in relation to a day in that period:

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a determination under section 17 of the Family Assistance Administration Act (FTB for a past period) was in force in respect of the individual as a claimant; and

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the rate of FTB payable under the determination for that day consists of, or includes a Part A or Part B rate greater than nil; and

•

the determination was made as a result of a claim made in the 2019-20, 2020-21 or 2021-22 income year.

4.27 A person (who may or may not have received a first 2020 economic support payment) is entitled to a second 2020 economic support payment if they meet these criteria on 10 July 2020.

4.28 Subsection 116(4) of the Family Assistance Act operates so that a person is entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if for a day in that period:

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a determination under section 18 of the Family Assistance Administration Act (Family Tax Benefit for a bereavement claim) was in force in respect of the individual as a claimant; and

•

the rate of Family Tax Benefit payable under the determination in relation to that day consisted of or included a Part A or Part B rate greater than nil; and

•

the determination was made as a result of a claim made in the 2019-20 income year or a later income year.

4.29 A person (who may or may not have received a first 2020 economic support payment) is entitled to a second 2020 economic support payment if they meet these criteria on 10 July 2020.

4.30 Subsection 116(5) of the Family Assistance Act operates so that a person is only entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if they reside in Australia on that day.

4.31 Subsection 116(5) of the Family Assistance Act also applies such that a person is only entitled to a second 2020 economic support payment if they reside in Australia on 10 July 2020.

Amendments to the Family Assistance Administration Act

4.32 Item 3 inserts Division 4DA into Part 3 of the Family Assistance Administration Act. An individual is to be paid a first 2020 economic support payment in a single lump sum if the person is entitled to be paid that amount under section 110 of the Family Assistance Act.

4.33 Division 4DA also contains section 65JB of the Family Assistance Administration Act which provides for an individual to be paid a second 2020 economic support payment in a single lump sum if the person is entitled to be paid under section 113 of the Family Assistance Act.

4.34 Subsection 65JA(1) of the Family Assistance Administration Act provides that the Secretary must, subject to new subsection 65JA(2), pay the first 2020 economic support payment to the individual in a single lump sum:

•

on the date that the Secretary considers to be the earliest date on which it is reasonably practicable for the payment to be paid; and

•

in such manner as the Secretary considers appropriate.

4.35 A note to subsection 65JA(1) of the Family Assistance Administration Act provides that the individual does not have to make a claim for the first 2020 economic support payment.

4.36 Subsection 65JA(2) of the Family Assistance Administration Act provides that the Secretary must not pay the first 2020 economic support payment on or after 1 July 2022 if the individual is entitled to the payment because subsection 116(2) or (4) of the Family Assistance Act applies to the individual on a day.

4.37 Subsection 65JB(1) of the Family Assistance Administration Act provides that the Secretary must, subject to subsection 65JB(2), pay the second 2020 economic support payment to the individual in a single lump sum:

•

on the date, occurring on or after 10 July 2020, that the Secretary considers to be the earliest date on which it is reasonably practicable for the payment to be paid; and

•

in such manner as the Secretary considers appropriate.

4.38 The note to subsection 65JB(1) of the Family Assistance Administration Act provides that the individual does not have to make a claim for the second 2020 economic support payment.

4.39 Subsection 65JB(2) of the Family Assistance Administration Act provides that the Secretary must not pay the second 2020 economic support payment on or after 1 July 2023 if the individual is entitled to the payment because subsection 116(2) or (4) of the Family Assistance Act (discussed above) applies to the individual on 10 July 2020.

4.40 Item 4 amends subsection 66(1) of the Family Assistance Administration Act to insert a reference to the two new economic support payments provided for in Part 9 of the Family Assistance Act.

4.41 Subsection 66(1) of the Family Assistance Administration Act provides that various payments paid under the family assistance law are absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy or otherwise. This amendment ensures that the two new economic support payments are likewise absolutely inalienable.

4.42 Item 5 amends section 70 of the Family Assistance Administration Act to insert a reference to the two new economic support payments provided for in Part 9 of the Family Assistance Act. This amendment ensures that if one or both of these payments has been paid, the amount is a debt due to the Commonwealth but only to the extent to which a provision of the Family Assistance Administration Act expressly provides that it is. Section 72 sets out this debt provision.

4.43 Item 6 inserts section 72 into the Family Assistance Administration Act. This section sets out the circumstance in which a 2020 economic support payment under the Family Assistance Act may be recovered as a debt.

4.44 Subsection 72(1) of the Family Assistance Administration Act provides that section 72 applies for an individual who has been paid a 2020 economic support payment because subsections 116(2), 116(3) or 116(4) of the Family Assistance Act applied to the individual on the day.

4.45 Subsection 72(2) of the Family Assistance Administration Act then provides that the amount of a 2020 economic support payment is a debt due to the Commonwealth by the individual if:

•

after the payment was paid to the individual, the determination mentioned in subsections 116(2), 116(3) or 116(4) of the Family Assistance Act, about the day in subsection 72(1), is or was (however described) changed, revoked, set aside, or superseded by another determination; and

•

the decision to change, revoke, set aside or supersede the determination is or was made for the reason, or for reasons including the reason, that the individual knowingly made a false or misleading statement, or knowingly provided false information; and

•

had the change, revocation, setting aside or superseding occurred on or before that day, the payment would not have been paid.

4.46 Item 7 amends paragraph 74(a) of the Family Assistance Administration Act. This amendment ensures that the amount of a cheque is a debt due by the person to the Commonwealth if:

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a 2020 economic support payment (as defined above) under the Family Assistance Act is paid by cheque; and

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a person other than the payee obtains possession of the cheque from the payee; and

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the cheque is not endorsed by the payee to the person; and

•

the person obtains value for the cheque.

4.47 Item 8 inserts a reference to 'a payment of 2020 economic support payment' into the definition of family assistance payment. This ensures that if a 2020 economic support payment under the Family Assistance Act is paid to an account kept with a financial institution and is paid to the wrong account-holder, the Secretary can recover the misdirected payment from the financial institution.

4.48 Items 9 and 10 amend the review provisions for family assistance to include a reference to the 2020 economic support payment.

4.49 Item 11 contains a minor consequential amendment to insert a reference to a '2020 economic support payment' in the definition of relevant benefit in section 219TA of the Family Assistance Administration Act. This amendment facilitates the payment of a 2020 economic support payment under the Family Assistance Act to a person's payment nominee if they have one.

Amendments to the ITAA 1997

4.50 Items 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 and 22 amend sections 11-15, 52-10, 52-40, 52-65, 52-75, 52-131 and 52-150 of the ITAA 1997 to ensure that 2020 economic support payments under the Social Security Act, Family Assistance Act, Veterans' Entitlements Act and ABSTUDY scheme are tax exempt.

Amendments to the Social Security Act

4.51 Item 23 amends paragraph 8(8)(jaa) of the Social Security Act to ensure that a payment of a 2020 economic support payment under the Family Assistance Act is not assessed as income for the purposes of the social security law.

4.52 Item 24 inserts paragraphs 8(8)(ym) and (yn) of the Social Security Act to ensure that a payment of a 2020 economic support payment under the Veterans' Entitlements Act is not assessed as income for the purposes of the social security law.

4.53 Item 25 inserts paragraph 23(4AA)(ac) into the Social Security Act after paragraph 23(4AA)(ab) of that Act. The new paragraph contains a reference to new Part 2.6B of the Social Security Act.

4.54 The effect of this amendment is that a person qualifies for a first 2020 economic support payment under section 304 of the Social Security Act if on a day during the period starting 12 March 2020 and ending on 13 April 2020 (inclusive) they are taken to be receiving a social security benefit or pension under subsection 23(4A) of the Social Security Act on a day during that period. Also, the effect of this amendment is that a person qualifies for a second 2020 economic support payment under section 306 of the Social Security Act if, on 10 July 2020, the person is taken to be receiving a social security benefit or pension under subsection 23(4A) of the Social Security Act.

4.55 Subsection 23(4A) of the Social Security Act treats a person as though they are still 'receiving' a social security pension or benefit (for the purposes of receiving certain supplementary payments listed in subsection 23(4AA) of the Social Security Act if they ceased to be eligible for their pension or benefit because employment income reduced the rate of their pension or benefit to nil.

4.56 Item 26 inserts Part 2.6B into the Social Security Act.

4.57 Subsection 304(1) provides that a person qualifies for a first 2020 economic support payment under the Social Security Act if subsections 308(2), (3) or (4) apply to the person on a day in the period starting on 12 March 2020 and ending on 13 April 2020 (inclusive).

4.58 Subsection 304(2) then operates to ensure that a person may receive only one first 2020 payment under the Social Security Act, regardless of how many times the person qualifies under section 304 of the Social Security Act.

4.59 Subsection 304(3) also makes clear that if a first 2020 economic support payment under the Veterans' Entitlements Act, a first 2020 economic support payment under the Family Assistance Act or a first 2020 economic support payment under the ABSTUDY Scheme is paid to a person, a first 2020 economic support payment cannot be paid to the person under the Social Security Act.

4.60 Section 305 provides that a person's first 2020 economic support payment under the Social Security Act is $750.

4.61 Subsection 306(1) provides that a person is qualified for a second 2020 economic support payment under the Social Security Act if subsections 308(2), (3) or (4) apply to the person on 10 July 2020 and the person does not receive the Coronavirus supplement.

4.62 Subsection 306(2) operates to ensure that a person may receive only one second 2020 economic support payment under Social Security Act, regardless of how many times the person qualifies under section 306 of the Social Security Act.

4.63 Subsection 306(3) also makes clear that if a second 2020 economic support payment under the Veterans' Entitlements Act, a second 2020 economic support payment under the Family Assistance Act or a second 2020 economic support payment under the ABSTUDY Scheme is paid to a person, no second 2020 economic support payment under the Social Security Act can be paid to the person.

4.64 Section 307 provides that a person's second 2020 economic support payment under the Social Security Act is $750.

4.65 Section 308 sets out the qualification criteria a person must meet on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if they are to be paid the first 2020 economic support payment. This section also sets out the criteria a person must meet on 10 July 2020 if they are to be paid the second 2020 economic support payment.

4.66 Subsection 308(2) operates so that a person is entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if for a day in that period the person receives one of the following benefits for that day:

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age pension;

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disability support pension;

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wife pension;

•

carer payment;

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bereavement allowance;

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widow B pension;

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widow allowance;

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parenting payment;

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youth allowance;

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austudy payment;

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newstart allowance;

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jobseeker payment

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sickness allowance;

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special benefit;

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partner allowance;

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carer allowance; or

•

double orphan pension.

4.67 A person (who may or may not have received a first 2020 economic support payment) is entitled to a second 2020 economic support payment if they receive one of the above benefits in respect of 10 July 2020 (and the person does not receive the Coronavirus supplement).

4.68 A note at the end of subsection 308(2) provides that references to youth allowance, newstart allowance and jobseeker payment in section 308 of the Social Security Act include references to Farm Household Allowance.

4.69 This note clarifies that recipients of Farm Household Allowance will receive the first 2020 economic support payment if they meet the qualification criteria in section 308 for a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive).

4.70 Subsection 308(3) operates so that a person is entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if:

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the person makes a claim for a Commonwealth Seniors Health Card under Division 1 of Part 3 of the Social Security (Administration) Act on or before that day; and

•

the person does not withdraw that claim on or before that day; and

•

the person is qualified for the card on that day.

4.71 A person (who may or may not have received a first 2020 economic support payment) is entitled to a second 2020 economic support payment if they satisfy the same criteria in respect of 10 July 2020.

4.72 Subsection 308(4) operates so that a person is entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if the person is qualified for a Pensioner Concession Card on that day.

4.73 A person (who may or may not have received a first 2020 economic support payment) is entitled to the second 2020 economic support payment if they qualified for a Pensioner Concession Card in respect of 10 July 2020.

4.74 Subsection 308(5) operates so that a person is entitled to a first 2020 economic support payment on a day during the period starting 12 March 2020 and ending 13 April 2020 (inclusive) if they reside in Australia on that day.

4.75 Subsection 308(5) also applies such that a person is only entitled to a second 2020 economic support payment if they reside in Australia on 10 July 2020.

4.76 Item 27 inserts items 4H and 4J into the table at subsection 1222(2) of the Social Security Act. This a consequential amendment resulting from insertion of sections 1223ABI and 1223ABJ of the Social Security Act.

4.77 Item 28 inserts sections 1223ABI and 1223ABJ into Social Security Act to set out the circumstances in which a debt can arise for the two 2020 economic support payments paid to a recipient of one of the benefits outlined in subsection 308(2) or a concession card holder referred to in subsection 304(3) or subsection 304(4) in the Social Security Act.

4.78 Under subsection 1223ABI(1), a debt will be due and payable to the Commonwealth for the amount of the first 2020 economic support payment if:

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a first 2020 economic support payment under Part 2.6B of the Social Security Act is paid to a person; and

•

after the first 2020 economic support payment is paid to the person, an underlying determination about the person, is or was changed, revoked, set aside, or superseded by another determination, at least so far as it relates to:

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a day included in the period mentioned new subsection 304(1) of the Social Security Act; or

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a period that includes that day; and

•

the decision to change, revoke, set aside or supersede the underlying determination is or was made for the reason, or for reasons including the reason, that the person knowingly made a false or misleading statement, or knowingly provided false information; and

•

had the change, revocation, setting aside or superseding occurred on or before that day, the first 2020 economic support payment would not have been paid.

4.79 Subsection 1223ABI(2) of the Social Security Act defines 'underlying determination' for the purposes of subsection 1223ABI(1) Social Security Act. This subsection provides that a determination is an underlying determination if it is a determination made under Part 3 of the Social Security (Administration) Act because a benefit mentioned in subsection 308(2) of the Social Security Act was payable to the person.

4.80 Under subsection 1223ABI(3) of the Social Security Act, a debt is due and payable to the Commonwealth for the amount of the first 2020 economic support payment if:

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a first 2020 economic support payment under new Part 2.6B of the Social Security Act is paid to a person; and

•

the person qualified for the payment because of new subsection 308(3) of the Social Security Act applying to the person in relation to having made a claim for a Commonwealth Seniors Health Card; and

•

the person knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and

•

the first 2020 economic support payment would not have been paid to the person, but for that statement or information.

4.81 A debt for a first 2020 economic support payment will not arise under any other provisions of Part 5.2 of Chapter 5 of the Social Security Act other than section 1224AA (see subsection 1223ABI(4) of the Social Security Act).

4.82 Under subsection 1223ABJ(1) of the Social Security Act, a debt will be due and payable to the Commonwealth for the amount of the second 2020 economic support payment if:

•

a second 2020 economic support payment under new Part 2.6B of the of the Social Security Act is paid to a person; and

•

after the second 2020 economic support payment is paid to the person, an underlying determination is or was changed, revoked, set aside, or superseded by another determination (as defined in subsection 1223ABJ(2) of the Social Security Act about the person, at least so far as it relates to:

-

1 July 2020; or

-

a period that includes that day; and

•

the decision to change, revoke, set aside or supersede the underlying determination is or was made for the reason, or for reasons including the reason, that the person knowingly made a false or misleading statement, or knowingly provided false information; and

•

had the change, revocation, setting aside or superseding occurred on or before 10 July 2020, the second 2020 economic support payment would not have been paid.

4.83 Subsection 1223ABJ(2) of the Social Security Act defines 'underlying determination' for the purposes of subsection 1223ABJ(1) of the Social Security Act. This subsection provides that a determination is an underlying determination if it is a determination made under Part 3 of the Social Security (Administration) Act because a benefit mentioned in new subsection 308(2) of the of the Social Security Act was payable to the person.

4.84 Under subsection 1223ABJ(3) of the Social Security Act a debt is due and payable to the Commonwealth for the amount of the second 2020 economic support payment if:

•

a second 2020 economic support payment under new Part 2.6B of the of the Social Security Act is paid to a person; and

•

the person qualified for the payment because of new subsection 308(3) of the of the Social Security Act applying to the person in relation to having made a claim for a Commonwealth Seniors Health Card; and

•

the person knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and

•

the second 2020 economic support payment would not have been paid to the person, but for that statement or information.

4.85 A debt for a second 2020 economic support payment will not arise under any other provisions of Part 5.2 of Chapter 5 of the of the Social Security Act other than section 1224AA of the Social Security Act.

Amendments to the Social Security (Administration) Act

4.86 Item 29 inserts section 12AE into the Social Security (Administration) Act. This section provides that a claim is not required for a first 2020 economic support payment or a second 2020 economic support payment under new Part 2.6B of the of the Social Security Act.

4.87 Item 30 amends the Social Security (Administration) Act to include a first 2020 economic support payment and a second 2020 economic support payment as a lump sum benefit for the purposes of that Act.

4.88 Section 47AE of the Social Security (Administration) Act provides for the payment in a single lump sum of a first 2020 economic support payment to a person who qualifies for such a payment on the date that the Secretary considers to be the earliest date on which it is reasonably practicable for the payment to be paid, and in such manner as the Secretary considers appropriate.

4.89 Subsection 47AE(2) of the Social Security (Administration) Act provides that the Secretary must not pay the payment on or after 1 July 2022.

4.90 New section 47AF provides for the payment in a single lump sum of a second 2020 economic support payment to a person who is qualified for such payment on the date, occurring on or after 10 July 2020, that the Secretary considers to be the earliest date on which it is reasonably practicable for the payment to be paid, and in such manner as the Secretary considers appropriate.

4.91 New subsection 47AF(2) of the Social Security (Administration) Act provides that the Secretary must not pay the payment on or after 1 July 2023.

4.92 Item 32 inserts a definition of 2020 economic support payment into the Social Security (Administration) Act. This definition covers a first 2020 economic support payment and a second 2020 economic support payment under the Social Security Act, Family Assistance Act, and the ABSTUDY Scheme.

4.93 Item 33 makes minor consequential amendments to the heading of Subdivision DB of Division 5 of the Part 3B of the Social Security (Administration) Act.

4.94 Item 34 inserts section 123XPBA into the Social Security (Administration) Act. This section provides for a 2020 economic support payment to be subject to income management under Part 3B of the Social Security (Administration) Act, if the recipient of the payment is a person subject to income management. The full amount ($750) of any first 2020 economic support payment or second 2020 economic support payment paid to a person will be subject to income management under section 123XPBA of the Social Security (Administration) Act.

4.95 Subsection 123XPBA(1) of the Social Security (Administration) Act provides that section 123XPBA of that Act:

•

a person is subject to the income management regime; and

•

a 2020 economic support payment is payable to the person.

4.96 Paragraph 123XPBA(2)(a) of the Social Security (Administration) Act provides that the Secretary must deduct from the 2020 economic support payment the deductible portion of the payment.

4.97 Paragraph 123XPBA(2)(b) of the Social Security (Administration) Act provides an amount equal to the deductible portion of the payment is credited to the person's Income Management Record.

4.98 Paragraph 123XPBA(2)(c) of the Social Security (Administration) Act provides an amount equal to the deductible portion of the payment is credited to the person's income management account.

4.99 Subsection 123XPBA(3) of the Social Security (Administration) Act provides that, for the purposes of subsection 123XPB(2) of the Social Security (Administration) Act, the 2020 economic support payment is 100 per cent of the amount of the payment.

4.100 Item 35 amends the definition of restrictable payment in subsection 124PD(1) of the Social Security (Administration) Act to insert a reference to a 'first 2020 economic support payment' and a 'second 2020 economic support payment' under the Social Security Act, the Family Assistance Act and the ABSTUDY Scheme. The insertion of these terms into the definition of restrictable payment, in conjunction with existing subsection 124PJ(2) of the Social Security (Administration) Act, will mean that 100 per cent of a 2020 economic support payment paid under either the Social Security Act, Family Assistance Act or the ABSTUDY Scheme will be subject to the cashless welfare card if the recipient of the 2020 economic support payment is a participant in the cashless welfare card trial in Part 3D of the Social Security (Administration) Act.

Amendments to the Veterans' Entitlements Act

4.101 Items 36 and 37 amend subsection 5H(8) of the Veterans' Entitlements Act to specify the first 2020 economic support payment and second 2020 economic support payment in the list of excluded amounts for the purposes of that Act. This amendment in effect ensures that the economic support payments do not count as income for income testing purposes but instead are a type of 'Excluded amount - general'.

4.102 Item 36 amends paragraph 5H(8)(paa) of the Veterans' Entitlements Act to ensure the economic support payments payable under the Family Assistance Act are not counted as income.

4.103 Item 37 inserts paragraphs 5H(8)(zzal) and 5H(8)(zzam) into the Veterans' Entitlements Act to ensure the economic support payments payable under the new Part IIIH are not counted as income.

4.104 Item 38 inserts a new Part IIIH into the Veterans' Entitlements Act after Part IIIG (2019 one-off energy assistance payment). This new Part IIIH provides for the payment of two types of economic support payments to persons. The eligibility criteria is set out in Division 3 to the Veterans' Entitlements Act.

4.105 The amendments to the Veterans' Entitlements Act will allow the economic support payments to be paid to persons receiving the following payments or who hold the appropriate card:

•

service pension;

•

income support supplement;

•

disability pension under the Veterans' Entitlements Act;

•

war widow(er)s pension under the Veterans' Entitlements Act;

•

permanent impairment compensation under the Military Rehabilitation and Compensation Act 2004;

•

special rate disability pension under the Military Rehabilitation and Compensation Act 2004;

•

wholly Dependent Partner payments under the Military Rehabilitation and Compensation Act 2004;

•

those who converted their weekly Permanent Impairment Compensation, or Wholly Dependent Partner Payments under the Military Rehabilitation and Compensation Act 2004 prior to the date their eligibility for economic support payment is assessed and those who have received Permanent Impairment compensation under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988;

•

veteran payment;

•

all Repatriation Health Card - For All Conditions (Gold Card) holders;

•

Veteran Education Scheme recipients aged 16 or over;

•

persons who receive fringe benefits (where a Pensioner Concession Card is issued); and

•

all Commonwealth Seniors Health Card holders under the Veterans' Entitlements Act.

4.106 Division 1 sets out the criteria for payment and details of the first 2020 economic support payment to persons who will be eligible for the economic support payments under the Veterans' Entitlements Act.

4.107 Subsection 67L(1) provides that a person is eligible for the first 2020 economic support payment if the person meets the requirements of set out in Division 3 on 12 March 2020 or on any subsequent date up to and including 13 April 2020. Subsection 67L(2) of the Veterans' Entitlements Act provides that the amount of a person's first 2020 economic support payment under Division 1 is $750.

4.108 Section 67M of the Veterans' Entitlements Act prohibits multiple entitlement or payment of the first 2020 economic support payment for eligible persons.

4.109 Subsection 67M(1) of the Veterans' Entitlements Act provides that a person receives only one payment of the first 2020 economic support payment despite that person being eligible for more than one payment under new Division 1 of Part IIIH.

4.110 There is only one payment of the first 2020 economic support payment per eligible recipient. If a person qualifies for the first 2020 economic support payment in multiple ways, they will only receive one payment. A person who is paid the first 2020 economic support payment and is subsequently granted another qualifying payment backdated to or before 12 March 2020 is not entitled to an additional first 2020 economic support payment. A person who is paid the first 2020 economic support payment and is subsequently granted another qualifying payment backdated to a day during the period 12 March 2020 to 13 April 2020 is not entitled to an additional first 2020 economic support payment. Regardless of how many times the person qualifies for the first 2020 economic support payment, only one payment will be made.

4.111 Subsection 67M(2) of the Veterans' Entitlements Act provides that a person is not eligible to receive the first 2020 economic support payment under the Veterans' Entitlements Act if any of the following first 2020 economic support payments have been paid to the person under the ABSTUDY scheme or under Division 1 of Part 9 of the Family Assistance Act or under Division 1 of Part 2.6B of the Social Security.

4.112 Section 67N of the Veterans' Entitlements Act provides that a person will not be required to make a claim for the first 2020 economic support payment.

4.113 Section 67P of the Veterans' Entitlements Act provides that, where a person is eligible for the first 2020 economic support payment, the Repatriation Commission must pay the payment in a single lump sum of $750 on the earliest date that is reasonably practical for the payment to be made and in the manner the Repatriation Commission considers to be appropriate.

4.114 Subsection 67P(2) of the Veterans' Entitlements Act provides that the Commission must not pay the first 2020 economic support payment on or after 1 July 2022. This ensures that all persons receive their first 2020 economic support payment no later than 30 June 2022.

4.115 Division 2 of the Veterans' Entitlements Act sets out the criteria for payment and details of the second 2020 economic support payment under the Veterans' Entitlements Act.

4.116 Subsection 67Q(1) of the Veterans' Entitlements Act provides that a person is eligible for the second 2020 economic support payment if the person meets the requirements of Division 3 on 10 July 2020 and does not receive the Coronavirus supplement under the Social Security Act.

4.117 The person must meet the eligibility requirements of Division 3 of Part IIIH of the Veterans' Entitlements Act on 10 July 2020 by receiving the relevant payment or holding the appropriate card. If the person receives the Coronavirus supplement in respect of 10 July 2020, the person cannot receive the second 2020 economic support payment under the Veterans' Entitlements Act.

4.118 A person need not have received the first 2020 economic support payment in order to receive the second 2020 economic support payment.

4.119 Subsection 67Q(2) of the Veterans' Entitlements Act provides that the amount of a person's second 2020 economic support payment is $750.

4.120 Section 67R of the Veterans' Entitlements Act prohibits multiple entitlement or payment of the second 2020 economic support payment for eligible persons.

4.121 Subsection 67R(1) of the Veterans' Entitlements Act provides that a person will receive only one payment of the second 2020 economic support payment despite that person being eligible for more than one payment.

4.122 There is only one payment of the second 2020 economic support payment per eligible recipient. If a person qualifies for the second 2020 economic support payment in multiple ways, they will only receive one payment. A person who is paid the second 2020 economic support payment and is subsequently granted another qualifying payment backdated to or before 10 July 2020 is not entitled to an additional second 2020 economic support payment. Regardless of how many times the person qualifies for the second 2020 economic support payment, only one payment will be made.

4.123 Subsection 67R(2) of the Veterans' Entitlements Act provides that a person is not eligible to receive the second 2020 economic support payment if any of the following second 2020 economic support payments are paid to the person under:

•

the ABSTUDY scheme; or

•

Division 2 of Part 9 of the Family Assistance Act; or

•

under Division 2 of Part 2.6B of the Social Security Act.

4.124 Section 67S of the Veterans' Entitlements Act provides that a person is not required to make a claim for the second 2020 economic support payment.

4.125 Section 67T of the Veterans' Entitlements Act provides that, where a person is eligible for the second 2020 economic support payment, the Repatriation Commission must pay the payment in a single lump sum of $750 on the earliest date that is reasonably practical for it to be paid and in the manner the Repatriation Commission considers to be appropriate.

4.126 Subsection 67T(2) of the Veterans' Entitlements Act provides that the Commission must not pay the second 2020 economic support payment on or after 1 July 2023. This ensures that all persons receive their first 2020 economic support payment no later than 30 June 2023.

4.127 To receive either the first 2020 economic support payment or the second 2020 economic support payment under the Veterans' Entitlements Act a person must be resident in Australia on the day that their eligibility is determined.

4.128 Subsection 67V(1) of the Veterans' Entitlements Act provides that a person is eligible for an economic support payment if service pension or income support supplement is payable or will be payable to the person on a day during the relevant period (for the first 2020 economic support payment) or on the relevant day (for the second 2020 economic support payment).

4.129 Subsection 67V(2) of the Veterans' Entitlements Act provides for the circumstances where a person may not be receiving a service pension due to a temporary increase in the person, or the person's partner's, employment income.

4.130 Subsection 67V(2) of the Veterans' Entitlements Act provides that those who have personal and/or partner employment income that reduces their rate to nil during the 12 week period prior to their service pension or income support supplement ceasing (the 'cessation day') are still taken to be receiving a payment on the 'test day' and qualify for the economic support payment.

4.131 Subsection 67V(3) of the Veterans' Entitlements Act provides that a veteran is eligible for an economic support payment if an amount of disability pension at the general rate of pension and extreme disablement adjustment, intermediate rate, special rate of pension, temporary special rate or an increased rate of pension due to a kind of incapacity set out in section 27 of the Veterans' Entitlements Act, is payable to the veteran on the day that their eligibility is determined.

4.132 Subsection 67V(4) of the Veterans' Entitlements Act provides that a person who is the widow or widower of a deceased veteran, or a reinstated pensioner in relation to the veteran, is eligible for the economic support payment if an amount of pension is payable to the person under subsection 30(1) of Part II or Part IV of the Veterans' Entitlements Act on the day their eligibility is determined.

4.133 Subsection 67V(5) of the Veterans' Entitlements Act provides that, a pension is payable even if the rate of pension is nil because the pension has been fully offset under provisions located in Divisions 4, 5 and 5A of Part II or under section 74 of that Act.

4.134 Divisions 4, 5 and 5A of Part II and section 74 of the Veterans' Entitlements Act provide that payments of disability and war widow/ widower pensions under Part II or lump sum and periodic payments of compensation that have been paid to the person under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 , are offset against payments by State and foreign governments and by another person or organisation.

4.135 Subsection 67V(6) of the Veterans' Entitlements Act provides that a person is eligible for the economic support payment if veteran payment is payable or will be payable to the person on the day their eligibility is determined.

4.136 Section 45SB of the Veterans' Entitlements Act provides for certain details of the scheme for veteran payment to be dealt with by way of legislative instrument.

4.137 Section 67W of the Veterans' Entitlements Act provides for the economic support payment to be paid to certain persons who receive payments under the Veterans' Children Education Scheme.

4.138 The economic support payment is payable if the person is, on the day their eligibility is determined, aged 16 or over and receiving a payment under the Veterans' Children Education Scheme. Where a person aged 16 or over has made a claim for Veterans' Children Education Scheme on the day their eligibility is determined and that claim is subsequently granted, the person will also be eligible for the economic support payment.

4.139 Section 67X of the Veterans' Entitlements Act provides for the payment of the economic support payment to certain people holding seniors health cards or gold cards or who are eligible for fringe benefits (where a Pensioner Concession Card is issued) under the Veterans' Entitlements Act.

4.140 If a person has made a successful claim for a seniors health card on or before the day their eligibility is determined, then they will receive the economic support payment. However, if they have withdrawn their claim on or before the day their eligibility for an economic support payment is determined or have ceased to be eligible for the seniors health card on that day, they will not receive the economic support payment. People who hold a seniors health card under the Social Security Act cannot hold a seniors health card under the Veterans' Entitlements Act.

4.141 A person who holds a Repatriation Health Card - For All Conditions, may be eligible for the economic support payment. The Repatriation Health Card - For All Conditions is also known as the Gold Card and is issued to people who are eligible to be provided with treatment for all injuries or diseases under the Veterans' Entitlements Act, Military Rehabilitation and Compensation Act 2004 , the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019.

4.142 A person who holds and is eligible for the Repatriation Health Card - For All Conditions under the Veterans' Entitlements Act or Military Rehabilitation and Compensation Act 2004 is eligible on that day for the economic support payment.

4.143 Subsection 67X(4) deals with the circumstances where a person either receives treatment or has made a claim under the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006 or the Treatment Benefits (Special Access) Act 2019 for eligibility to be provided for treatment. In essence, if a person has made a successful claim for the Repatriation Health Card - For All Conditions under either of these Acts on or before the day their eligibility is determined, then the person will receive the economic support payment. However, if the person has withdrawn their claim on or before the day their eligibility is determined or ceased to be eligible for Repatriation Health Card - For All Conditions, the person will not receive the economic support payment.

4.144 Subsection 67X(5) of the Veterans' Entitlements Act provides that a person qualified for an economic support payment if the person qualified for fringe benefits under subsection 53A(1A) of the that Act. A person is eligible for fringe benefits (in effect, a veterans' entitlements pensioner concession card) if:

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immediately before 1 January 2017, a person was receiving a service pension or income support supplement; and

•

the rate of that pension was nil on 1 January 2017 because of the operation of the amendments made by Part 1 of Schedule 3 to the Social Services Legislation Amendment (Fair and Sustainable Pensions) Act 2015.

4.145 A person is not eligible for the economic support payment if they are eligible for fringe benefits under other subsections in section 53A of the Veterans' Entitlements Act.

4.146 People who on 1 January 2017 ceased to be paid a service pension or income support supplement because of the amendments by the Social Services Legislation Amendment (Fair and Sustainable Pensions) Act 2015 receive fringe benefits despite not being in receipt of an income support payment. Subsection 67X(5) of the Veterans' Entitlements Act ensures that this group of people receive the economic support payment, in line with people who hold a Pensioner Concession Card under subsection 1061ZA(1B) of the Social Security Act.

4.147 Section 67Y of the Veterans' Entitlements Act sets out the criteria for persons who are eligible for the economic support payment because they are in receipt of a payment under the Military Rehabilitation and Compensation Act 2004.

4.148 A person is eligible for the economic support payment if one or both of the following conditions is met on the day their eligibility for the economic support payment is determined:

•

weekly compensation for permanent impairment is payable to the person under Part 2 of Chapter 4 of the Military Rehabilitation and Compensation Act 2004 on that day or weekly compensation for permanent impairment would have been payable under Part 2 of Chapter 4 for that day if it had not been offset under paragraph 398(3)(b) of the Military Rehabilitation and Compensation Act 2004 or subsection 13(4) of the Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004; or

•

on or prior to that day, the person had received lump sum compensation for permanent impairment under Part 2 of Chapter 4 of the Military Rehabilitation and Compensation Act 2004.

4.149 A person is eligible for the economic support payment if Special Rate Disability Pension is payable to the person under the Military Rehabilitation and Compensation Act 2004 the day their eligibility for economic support payment is determined. The economic support payment is also payable if the Special Rate Disability Pension would have been payable for that day if it had not been offset under section 204 or paragraph 398(3)(b) of the Military Rehabilitation and Compensation Act 2004.

4.150 A wholly dependent partner is eligible for the economic support payment if one or both of the following conditions are met on the day the person's eligibility for the economic support payment is determined:

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weekly compensation as a wholly dependent partner is payable to the person under Division 2 of Part 2 of Chapter 5 of the Military Rehabilitation and Compensation Act 2004 on that day, or weekly compensation as a wholly dependent partner would have been payable to the person under Division 2 of Part 2 of Chapter 5 for that day if it had not been offset under paragraph 398(3)(b) of the Military Rehabilitation and Compensation Act 2004; or

•

on or before that day, the person had received lump sum compensation as a wholly dependent partner under Division 2 of Part 2 of Chapter 5 of the Military Rehabilitation and Compensation Act 2004 and before that date the person had not been precluded under subsection 388(6) of the Military Rehabilitation and Compensation Act 2004 from being eligible for any further compensation under the Military Rehabilitation and Compensation Act 2004 following the recovery of damages for the death of the person's partner from the Commonwealth.

4.151 Subsections 67Y(1), (2) and (3) of the Veterans' Entitlements Act all refer to the circumstances where compensation payable under the Military Rehabilitation and Compensation Act 2004 is to be regarded as being payable to the person even though the payment rate is nil due to the operation of one of the offsetting provisions in the Military Rehabilitation and Compensation Act 2004.

4.152 Section 67Z of the Veterans' Entitlements Act provides for the economic support payment to be paid to certain persons who receive payments under the education scheme under section 258 of the Military Rehabilitation and Compensation Act 2004. The economic support payment is payable if the person is, on the day their eligibility is determined, aged 16 or over, and receiving a payment under that education scheme.

4.153 A person is also eligible for the economic support payment where that person is aged 16 or over and has made a claim for that education scheme on the day their eligibility is determined and that claim is subsequently granted.

4.154 A person receiving a payment of compensation under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 is eligible for the economic support payment if the compensation was paid because of a claim the person made on or before the day their eligibility for an economic support payment is determined.

4.155 A person must reside in Australia on the day that their eligibility for the economic support payment is determined to be eligible for the payment.

Application and transitional provisions

4.156 The amendments in Schedule 4 to this Bill will commence on the day after this Bill receives Royal Assent.