House of Representatives

Explanatory Memorandum

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

Chapter 2 Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 and consequential amendments

Outline of chapter

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

2.2 The Payments and Benefits Bill is a key part of the Commonwealth response to the potential national emergency arising from the spread of the Coronavirus.

2.3 The Payments and Benefits Bill establishes a framework for Coronavirus economic response payments. Under the framework, the Treasurer will be able to make rules to provide for new payments administered by the Commissioner. This allows for flexibility of the payment arrangements and ensures the payments can be quickly introduced and revised to appropriately respond to the impacts of the Coronavirus.

2.4 The design of the framework recognises that the Commissioner, through existing arrangements, makes payments to and receives payments from taxpayers as part of the administration of the tax law. Therefore, the Commissioner is well placed to administer payment programs to individuals and businesses, but requires specific legislative authority to facilitate this.

2.5 The payments under the framework are intended to support entities that are directly or indirectly affected by the Coronavirus. The JobKeeper Payments announced on 30 March 2020 are intended to be delivered under this payment framework.

2.6 The payments may only be made by the Commissioner from the day of commencement and must relate to the period from 1 March 2020 until 31 December 2020 (inclusive).

Context of amendments

2.7 The economic impacts of the Coronavirus pose significant challenges for many businesses - many of which are struggling to retain their employees.

2.8 Under the JobKeeper Payment, businesses significantly impacted by the Coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. This assistance will help businesses to keep people in their jobs and re-start when the crisis is over. For employees, this means they can keep their job and earn an income - even if their hours have been cut.

2.9 The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus. The JobKeeper Payment will also be available to the self-employed. The Government will provide $1,500 per fortnight per employee for up to six months. The JobKeeper Payment will support employers to maintain their connection to their employees. These connections will enable business to reactivate their operations quickly - without having to rehire staff - when the crisis is over.

Summary of new law

2.10 The Payments and Benefits Bill establishes a framework for the Treasurer to make rules which provide for the Commissioner to make payments to eligible entities. Under this payment framework, the Commissioner has general administration of these payments.

2.11 The framework also sets out:

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the manner in which payments are made;

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rules for overpayments (including the application of interest);

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the process for the review of decisions about the payments; and

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the applicable record-keeping requirements.

2.12 Details of eligibility for particular payments as well as the amount of payments and the time when they are to be paid are to be set out in the rules made by the Treasurer. This allows for flexibility of the arrangements to introduce and modify payments to appropriately respond to the impacts of the Coronavirus.

2.13 The payments may only be made by the Commissioner from the day of commencement and only for the period from 1 March 2020 until 31 December 2020 (inclusive).

2.14 Schedule 2 to this Bill makes a number of consequential amendments to facilitate the Payments and Benefits Bill, including:

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technical amendments to the ITAA 1936, ITAA 1997, the Social Security Act and the Veterans' Entitlement Act 1986 to ensure a consistent treatment of the Coronavirus economic response payments;

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amendments of a machinery nature to the Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020;

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providing a power in the Coronavirus Omnibus Act for the Minister for Families and Social Services to determine modifications to Part 5 of the SSAA. The modifications to the SSAA must be in connection with payments under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020, including applications for such payments; and

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amendments to the PPL Act to address relevant changes to paid parental leave as a result of the Coronavirus economic response payments.

Comparison of key features of new law and current law

Detailed explanation of new law

2.15 The Payments and Benefits Bill is a key part of the Commonwealth response to the potential national emergency arising from the spread of the Coronavirus.

2.16 The object of the Payments and Benefits Bill is to establish a framework for the provision of financial support to entities that are directly or indirectly affected by the Coronavirus. [Clause 3 of the Payments and Benefits Bill]

2.17 The framework applies to Australia within the meaning in section 960-505 of the ITAA 1997. This definition includes Australia's external Territories. [Clause 4 of the Payments and Benefits Bill]

2.18 Under the framework, the Commissioner has general administration over the Act established by the Payments and Benefits Bill and of payments established under the rules made by the Treasurer. As a consequence, the general confidentiality provisions that apply to the Commissioner in relation to taxpayer information (under Division 355 of the TAA 1953) also apply in relation to information under this framework. [Clause 5 of the Payments and Benefits Bill]

2.19 The Payments and Benefits Bill includes a number of definitions, including general definitions and specific definitions relating to schemes. The following definitions apply generally:

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The term approved form is used. This term has the meaning given in section 388-50 in Schedule 1 to the TAA 1953, and means, broadly, a document approved in writing by the Commissioner for a particular purpose provided in the manner and with such information as the Commissioner may require.

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The term Australia is used. This term is given the same meaning used in section 960-505 of the ITAA 1997. This definition includes Australia's external Territories.

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The term Commissioner is used. This refers to the Commissioner of Taxation.

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The term Coronavirus economic response payment is used. This refers to all payments administered under the rules of the payment framework established by the Payments and Benefits Bill.

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The term entity is used. This term is given the meaning used in the ITAA 1997. This is a broad definition that covers generally any individual, body corporate, body politic, partnership, trust, superannuation fund, approved deposit fund and unincorporated association or body of persons.

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The term general interest charge is used. This term refers to the charges worked out under Part IIA of the TAA 1953.

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The terms income tax return and income year are used. These terms are given the meaning used in section 995-1 of the ITAA 1997.

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The term prescribed period is used. This term describes the period to which Coronavirus economic response payments under the framework must relate. The prescribed period is the period between 1 March 2020 and 31 December 2020 (inclusive).

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The term this Act is used. This term refers to both:

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the Act established by the Payments and Benefits Bill; and

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the rules made under the framework.

[Clause 6 of the Payments and Benefits Bill]

2.20 This framework is intended to deliver the JobKeeper Payments, announced on 30 March 2020. These payments will support businesses to keep more Australian workers in jobs through the course of the Coronavirus outbreak. These payments are aimed at maintaining the connection between employers and employees. This will allow businesses to recommence their operations quickly and productively.

2.21 Rules will be made by Treasurer to establish the JobKeeper Payment, including setting out:

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which employers are eligible for the payment;

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the employee to which the payments relate;

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the amount payable and the timing of payments; and

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the obligations for recipients of the JobKeeper Payment.

The Coronavirus economic response payment framework

2.22 Under the payment framework set out in the Payments and Benefits Bill, the Treasurer may make rules that provide for payments to be made by the Commissioner. The rules may also provide for the establishment of arrangements dealing with matters relating to such payments and related administrative matters (such as obligations to notify the Commissioner or to hold particular records). [Clause 7 of the Payments and Benefits Bill]

2.23 The matters the rules may deal with include, but are not limited to, the following:

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the eligibility criteria for a payment;

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if or how an application for a payment may or must be made;

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whether a payment is to be paid in instalments or as a lump sum;

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entitlement to a payment or an instalment of a payment;

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the amount of a payment (including the amount of any instalments);

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when a payment or an instalment of a payment is payable;

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conditions applying to a payment or an instalment of a payment;

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providing information or notices; and

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the rights, obligations and liabilities under the payment scheme of payment recipients, and other entities that directly benefit from payments or in relation to which a payment is made.

2.24 Effectively, the rules may establish particular payments programs and deal with matters that are specific to the payment programs, such as entitlement, amount and timing. Any payments must relate to the prescribed period - that is, the period from 1 March 2020 to 31 December 2020. Although earlier events may affect payment entitlements, payments can only be made prospectively after the commencement of both the Bill and the rules providing for the payment

Method of payment

2.25 Payments under the framework will generally be paid to the entity by the Commissioner by crediting the amount of the payment to the financial institution account nominated under subsection 8AAZLH(2) of the TAA 1953 (where tax refunds are generally administered). If no such account has been nominated, payments will generally be made to the financial institution account nominated in the entity's most recent income tax return. [Clause 8 of the Payments and Benefits Bill]

2.26 The Commissioner may also direct that a payment is to be made to an entity in another way, including by crediting an amount to the running balance account of the entity. Circumstances where the Commissioner may choose to direct that the payment is made as a credit within the meaning of section 8AAZA of the TAA 1953 include where the Commissioner wishes to delay the payment to verify the entitlement to the payment under section 8AAZLGA of the TAA 1953 (which allows the Commissioner to delay payments while verifying information). [Subclause 8(2) of the Payments and Benefits Bill]

2.27 Where an account has not been nominated, and the Commissioner has not directed the payment to be made in another way, the Commissioner is not obliged to make the payment until:

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an account is so nominated; or

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the Commissioner directs that the payment is to be made in another way.

2.28 This ensures that payments can be made through existing processes, minimising administrative and compliance costs. These payments will not be offset against tax liabilities or other amounts owing to the Commissioner, unless the Commissioner directs that a payment is to be made in a manner subject to offsetting.

Where there is overpayment

2.29 Where the Commissioner has overpaid an entity a payment under the framework, the entity must repay the overpaid amount to the Commissioner. This can arise where:

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the entity is not entitled to the whole or part of a payment that is made; or

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the entity is paid more than the correct amount.

[Clause 9 of the Payments and Benefits Bill]

2.30 However, the requirement to repay overpayments does not apply if the Commissioner makes a written determination to this effect. This ensures that the Commissioner has flexibility to address issues that might otherwise arise where entities may have made an honest mistake and not retained any personal benefit from a payment they have received.

2.31 Where there has been an overpayment which the entity is required to repay, the entity is liable to general interest charges for the overpaid amounts that have not been repaid. These general interest charges apply automatically. [Clause 10 of the Payments and Benefits Bill]

2.32 The Commissioner has existing powers to remit general interest charges in particular circumstances. The overpayment and the interest charge are also tax-related liabilities and are subject to the administrative regime under Part 4-15 in Schedule 1 to the TAA 1953, including the discretions to remit amounts under that regime.

Joint and several liability to repay overpayment

2.33 The Payments and Benefits Bill also provides that in some circumstances, another entity may be jointly and severally liable for an overpayment (and any associated interest) with the entity that received the payment. [Clause 11 of the Payments and Benefits Bill]

2.34 Where an entity is liable to repay an overpaid amount, and if that payment was made in reliance on information provided by another entity, then the Commissioner may determine that both the entity and the other entity are jointly and severally liable to repay the amount. The Commissioner may only make such a determination if the Commissioner is satisfied that:

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the overpayment was a result of the entity acting in reasonable reliance on written information provided by the other entity in the approved form;

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the information was materially false or misleading;

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the other entity did not take reasonable care in making the statement;

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the other entity received a direct benefit from the payment; and

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the Commissioner is satisfied that joint and several liability is reasonable in the circumstances.

2.35 These provisions recognise that some payments made under the payment framework may be made to the ultimate benefit of another entity (such as an employee) and may rely on the provision of accurate and truthful information by that other entity. In cases where an entity makes a careless or deliberately false statement and receives a direct benefit, this allows recovery of the payment from the other entity in addition to the entity who received the payment.

2.36 Similarly, the Commissioner may determine that an entity and another entity are jointly and severally liable to make a repayment if the Commissioner is satisfied that:

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the entity is liable to repay an overpaid amount;

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the overpayment was because of the fraud of another entity; and

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it is reasonable for the other entity to be jointly and severally liable.

2.37 These powers allow the Commissioner to recover amounts obtained by the Commonwealth as a result of fraud, even where the entity that undertakes the fraud may do so as part of a scheme under which the direct payments go to another entity.

2.38 An entity that engages in fraud about payments made under the framework is also potentially liable for a wider range of administrative and criminal sanctions under the tax law and general criminal law, some of which are set out in the table below.

Review of decisions made by the Commissioner

2.39 The rules made by the Treasurer may specify:

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if and when a decision is taken to be made by the Commissioner; and

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when a decision that is made is taken to have been given by the Commissioner.

[Clause 12 of the Payments and Benefits Bill]

2.40 In some cases, the rules may provide for payments to be made without requiring applications by entities or notice by the Commissioner. This provision ensures that, in such cases, the rules may set out when a decision is taken to be made and notice is taken to be given. However, if the rules do not provide that actual notice of a decision must be given, or that notice of the decision is taken to be given at a particular time, then, if the decision is one to which an entity could object, notice of the decision is taken to have been given at the time of the decision for the purposes of section 14ZW of the TAA 1953.

2.41 The provisions ensure that the objection process under Part IVC of the TAA 1953 can operate appropriately for such payments, allowing appropriate review.

Right to review

2.42 Review under Part IVC of the TAA 1953 applies to decisions made by the Commissioner under the framework, including:

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whether an entity is entitled to a Coronavirus economic response payment for a period (whether an entity's entitlements are altered as a result of a contrived scheme (see paragraphs 2.61 to 2.67);

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whether an entity is entitled to a particular amount of a Coronavirus economic response payment for a period;

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whether an entity is relieved from repaying the overpayment amount (see paragraph 2.30);

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whether another entity (that is not the recipient of a payment) is jointly and severally liable to repay an overpayment amount; and

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whether an entity is exempt from record keeping requirements (see paragraph 2.50).

[Clause 13 of the Payments and Benefits Bill]

2.43 This allows affected entities to object to and seek review of decisions about payments (including review by the Administrative Appeals Tribunal), consistent with the general review framework applying to decisions about liabilities and entitlements under laws administered by the Commissioner.

Record keeping requirements

2.44 The Payments and Benefits Bill requires that entities create and retain records substantiating information provided to the Commissioner in relation to payments unless the Commissioner provides otherwise.

2.45 There are record keeping requirements both prior to payment and post-payment. [Clause 14 of the Payments and Benefits Bill]

2.46 Requirements for the keeping of records prior to payment are referred to as the pre-payment record keeping requirements. If an entity does not satisfy the pre-payment record keeping requirements then, despite any other eligibility criteria or provisions in the rules, an entity is not entitled to a Coronavirus economic response payment.

2.47 If an entity does not meet the post-payment record keeping requirements, the entity is taken to have never been entitled to the payment.

2.48 Where an entity gives the Commissioner a statement in an approved form to the effect that they will undertake to comply with the record keeping requirements, the Commissioner may assume that there is compliance with the record keeping requirements. This assumption is to facilitate the Commissioner's decision regarding the entity's entitlement to a payment.

2.49 However, if the record keeping requirements are in fact not met, the Commissioner may, taking into account available evidence:

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revoke the decision about the entity's entitlement to a payment so that the entity is no longer entitled to a payment; or

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vary the decision to pay the entity a reduced amount.

2.50 Despite the general record-keeping obligations, the Commissioner has the power to make a determination that an entity is not required to comply with a record keeping requirement. This will allow the Commissioner to reduce compliance costs in situations where records are not required given the circumstances of the entity and the payment.

Record keeping requirements prior to payment - pre-payment record keeping

2.51 To satisfy the pre-payment record keeping obligations, the entity must keep records to substantiate all information provided in their application. These records must be either kept in English, or are readily accessible and easily convertible to English. [Clause 15 of the Payments and Benefits Bill]

2.52 The Commissioner may determine how records should be kept for the purposes of these pre-payment record keeping requirements. Where an entity complies with this determination, the entity is taken to have satisfied the pre-payment record keeping requirements. Under this determination, the Commissioner may specify:

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the kinds of records that must be kept; and

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the manner in which they must be kept.

2.53 The Commissioner's determination about pre-payment record keeping is a legislative instrument.

Post-payment record keeping requirements

2.54 To satisfy the post-payment record keeping obligations, the entity must:

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if record keeping provisions are made in the rules by the Treasurer - retain records according to the rules;

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retain all records for five years after the payment was made;

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specifically retain their pre-payment records for five years after the payment was made; and

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comply with a written notice from the Commissioner to produce their records (when asked to do so).

[Clause 16 of the Payments and Benefits Bill]

2.55 The Commissioner may make a determination about the types of records to keep and the manner in which to keep them for the purposes of the obligation on an entity to retain records under the rules. Where such a determination has been made, an entity is taken to have satisfied the obligation to retain records according to the rules if they comply with the Commissioner's determination.

2.56 The records must be kept by the entity in English, or be readily accessible and easily convertible to English.

2.57 A written notice from the Commissioner to produce records must allow the entity at least 28 days to comply. A longer period may be given by the Commissioner. [Clause 17 of the Payments and Benefits Bill]

2.58 However, unlike a failure to comply with taxation notices to produce records, a failure to comply with the notice to produce records under the payment framework is not a criminal offence.

2.59 An entity may stop retaining records if the Commissioner notifies the entity that the entity is not required to do so.

Lost or destroyed records

2.60 If records that are required to be kept are lost or destroyed, then:

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if a copy of the original record that is lost or destroyed exists - the copy is taken to be the original; or

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if the original record is lost or destroyed but the Commissioner is satisfied that the entity took reasonable precautions to prevent the loss or destruction of the record - the entity's entitlement to a payment under the framework is not affected by the failure to produce the document.

[Clause 18 of the Payments and Benefits Bill]

Contrived schemes and consequences

2.61 If one or more entities (these entities are referred to as participants) enter into or carry out a scheme for the sole or dominant purpose of obtaining a Coronavirus economic response payment or an increased amount of a Coronavirus economic response payment for an entity (whether or not a participant), then the Commissioner may make a determination regarding the scheme. [Clause 18 of the Payments and Benefits Bill]

2.62 The Commissioner may determine that the entity was never entitled to a payment or the amount to which the entity was entitled was always the amount specified by the Commissioner in the determination. Under the payment framework, the term scheme is given the meaning used in the GST Act. Under subsection 165-10(2) of the GST Act, a scheme includes a broad range of arrangements.

2.63 The Commissioner may make the determination by having regard to:

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the manner in which the scheme was entered into or carried out;

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the form and substance of the scheme;

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the time at which the scheme was entered into and the length of the period during which the scheme was carried out;

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the result in relation to the operation of the Coronavirus payment framework that, but for this provision, would be achieved by the scheme;

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any change in the financial position of the recipient that has resulted, will result, or may reasonably be expected to result, from the scheme;

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any change in the financial position of any entity that has, or has had, any connection (whether of a business, family or other nature) with the recipient, being a change that has resulted, will result or may reasonably be expected to result, from the scheme;

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any other consequence for the recipient, or for any connected person, of the scheme having been entered into or carried out; and

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the nature of any connection (whether of a business, family or other nature) between the recipient and any connected person.

2.64 These rules protect the integrity of the payment framework. They ensure that entities that enter into contrived schemes do not obtain a payment (including an increased amount of payment) they would otherwise not be entitled to.

2.65 The scheme does not need to be criminal in nature. For example, the Commissioner could make a determination to deny an entity an assistance payment, such as the JobKeeper Payment, if the entity has deliberately altered its business arrangements to reduce its turnover in order to allow the entity to meet the turnover requirements to receive the payment.

2.66 The Payments and Benefits Bill provides that a determination of the Commissioner in relation to a scheme is not a legislative instrument. This provision is purely declaratory, as the instrument, being an administrative decision relating to a single entity, is not legislative in character and would not otherwise have been a legislative instrument.

2.67 In addition to the scheme provisions, there is an extensive existing framework of penalties in the Criminal Code and the TAA 1953 that can apply in circumstances where individuals and entities make false, misleading or reckless statements to the Commonwealth or engage in arrangements or assist others to defraud the Commonwealth.

The rules under the framework

2.68 The rules made by the Treasurer for the purposes of the payment framework are a legislative instrument. [Clause 19 of the Payments and Benefits Bill]

2.69 The power to make these rules is provided to the Treasurer because they allow for a flexible way to provide for new payments by the Commissioner. This allows the framework to be modified and updated so that the payments respond appropriately to rapidly changing circumstances. This flexibility and responsiveness is necessary in order to effectively address the impacts of the Coronavirus in a situation of considerable uncertainty.

2.70 The use of rules rather than regulations enhances flexibility and responsiveness, which is central to achieving the purpose of the Payments and Benefits Bill to provide financial support to address the economic impacts of the Coronavirus. It is also consistent with the general approach of the Office of Parliamentary Counsel as set out in Drafting Direction No. 3.8.

2.71 Any rules made by the Treasurer using this power are subject to the full process of Parliamentary scrutiny including disallowance as set out in the Legislation Act 2003.

2.72 Consistent with general principles for legislative instruments, these rules may not:

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create a criminal office or civil penalty;

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provide for powers of arrest, detention, entry, search or seizure;

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impose a tax;

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set an amount of appropriation from the Consolidated Revenue Fund; or

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directly amend the text of the primary Act.

2.73 The rules may apply differently for different classes of entities, or for different kinds of payments.

2.74 The rules may also:

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sub-delegate a power to the Commissioner to make an administrative or legislative instrument for the purposes of the rules; and

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incorporate other instruments or documents by disregarding the rule in subsection 14(2) of the Legislation Act 2003.

2.75 It is anticipated that there may be administrative matters for which it may be appropriate for the Commissioner to make general provision by making legislative instruments (for example, exempting a class of entities from reporting requirements) or for the rules to operate by reference to other instruments or documents (such as international treaties or World Health Organisation documents).

2.76 Together these provisions enable the rules to remain responsive and appropriate to the rapidly evolving climate. The legislative instrument made by the Commissioner can be used to supplement the rules made by the Treasurer. This sub-delegation is intended to further promote the policy objectives of this measure and to ensure its responsiveness. Given that the Commissioner is administering the payments, the Commissioner is a suitable delegate with firsthand knowledge about how the administration of the payment framework can remain robust over time.

2.77 The collective use of these legislative instruments is necessary to allow the framework to achieve its policy outcome of quickly and more effectively supporting those impacted by the Coronavirus. They ensure that the law and the administration can remain robust and responsive, while giving a high degree of certainty to relevant entities by incorporating other documents that can be more easily updated outside of Parliamentary processes.

2.78 The Payments and Benefits Bill makes clear that the rules may prescribe matters required or permitted to be prescribed in these rules by other laws of the Commonwealth, such as is set out in the consequential amendments made in Schedule 2 to this Bill.

2.79 The Payments and Benefits Bill also makes clear that the provision of specific rules in framework set out on the Payments and Benefits Bill on matters such as record keeping does not prevent the rules from providing additional or supplementary requirements about those matters that may be appropriate in the context of particular payments.

Consequential amendments

2.80 Schedule 2 to this Bill makes amendments to a number of Acts to implement measures to address the potential economic impacts of the Coronavirus.

2.81 For the Coronavirus payment framework measure, Schedule 2 to this Bill amends:

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the objects provision regarding the establishment of tax file numbers under of paragraph 202(s) of the ITAA 1936 to include for the purposes of the Coronavirus economic response payments.

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the list of exempt income provisions in section 11-15 of the ITAA 1997 to include certain payments received under the Coronavirus payment framework;

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the list of non-assessable non-exempt income provisions in section 11-55 of the ITAA 1997 to include certain payments received under the Coronavirus payment framework;

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Division 53 of the ITAA 1997 to provide that the payments received under the Coronavirus payment framework are exempt income where the rules specify that those payments are exempt income;

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Division 59 of the ITAA 1997 to provide that the payments received under the Coronavirus payment framework are non-assessable non-exempt income where the rules specify that those payments are non-assessable non-exempt income;

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the index of provisions dealing with liability to the general interest charge in subsection 8AAB(4) of the TAA 1953 to include the provision applying the general interest change to all wrong or overpaid payments received under the Coronavirus payment framework;

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the definition of credit in section 8AAZA of the TAA 1953 so that payments made under the framework are not automatically a credit for the purposes of the running balance account rules, ensuring that the payments are not automatically offset against tax liabilities;

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the provision for payments under the framework to be treated as credits where relevant by including section 8AAZAA of the TAA 1953;

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the list of exclusions in section 8WA of the TAA 1953 from which tax file numbers cannot be requested to also exclude tax file numbers quoted for the purposes of payments under the Coronavirus payment framework;

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the index of tax-related liabilities under other Acts administered by the Commissioner in subsection 250-10(2) to Schedule 1 to the TAA 1953 to include wrong or overpaid amounts received under the Coronavirus payment framework; and

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the Social Security Act and the Veterans' Entitlement Act 1986 to exclude payments received under the Coronavirus payment framework from the income testing arrangements under those Acts (where the rules specify that those types of payments are excluded) - this ensures that the relevant payments made under the framework do not count as income for the purposes of income tests under those Acts.

[Schedule 2, items 1 to 14, paragraph 202(sa) of the ITAA 1936, sections 11-15, 11-55, 53-25 and 59-95 of the ITAA 1997, paragraph 8(8)(zu) of the Social Security Act, item 19B of the table in subsection 8AAB(4), sections 8AAZA and 8AAZAA, and paragraphs 8WA(1AA)(b) and 8WB(1A)(a) and (b) of the TAA 1953, item 143 of the table in subsection 250-10(2) in Schedule 1 to the TAA 1953 and paragraph 5H8(zzd) of the Veterans' Entitlements Act 1986]

2.82 Schedule 2 to this Bill also makes minor amendments to the Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020 to:

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ensure that the payments under that Act are available to businesses and non-profit entities operating in the external territories; and

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allow the Commissioner to provide further time for an entity to first hold an ABN if it does not hold one on 12 March 2020.

[Schedule 2, items 22 to 26, sections 2A, 5 and 6 of the Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020]

2.83 This discretion is only able to be exercised by the Commissioner for unintended situations where the entity was running an active business prior to 12 March 2020 but was not required to have an ABN to operate it.

2.84 This will occur only in limited circumstances, such as for businesses that are conducted in the external Territories. Businesses that only operate in the external Territories are not required to have an ABN as GST does not apply within the external Territories. In order to be eligible for the business boost payment these businesses will need to obtain an ABN. However as they are unlikely to hold an ABN on 12 March 2020, this provision provides the Commissioner with a limited discretion to allow these businesses to hold an ABN later, and still be entitled to the business boost payment. It is envisaged that the Commissioner will release guidance outlined the limited circumstances that this discretion is able to be used.

2.85 This amendment is retrospective but is entirely beneficial to affected entities. It enables the Commissioner to allow for a later time for these entities to obtain an ABN. This can allow relevant entities to become entitled to benefits under the Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020.

Modifications of information management provisions in social security law

2.86 Schedule 2 to this Bill also makes a minor amendment to item 40A of the Coronavirus Omnibus Act to specify that the Minister referred to in these provisions is the Minister for Families and Social Services. This amendment is purely for avoidance of doubt. The context of this provision has always made it clear that the Minister referred to was the Minister for Families and Social Services. However, this amendment has been made to ensure that the clearer drafting approach adopted in other contexts did not make the past approach confusing. Similarly, the amendment applies retrospectively so this drafting clarification does not itself create doubt.

Summary

2.87 Schedule 2 to this Bill provides a power for the Minister for Families and Social Services to determine modifications to Part 5 of the SSAA. The modifications to the SSAA must be in connection with payments under the Payments and Benefits Bill, including applications for such payments.

2.88 A determination made under the power included in Schedule 7 to this Bill may be necessary to ensure that information is able to be provided by the Australian Taxation Office to Services Australia in connection with payments under the Payments and Benefits Bill, including applications for such payments. This flexibility is particularly important as the data sharing arrangements between the Australian Taxation Office and Services Australia for payments under the Payments and Benefits Bill have not yet been finalised.

Detailed amendment

2.89 The term Social Services Minister is defined. Under the current Administrative Arrangements Order, the Social Services Minister is the Minister for Families and Social Services.

2.90 A power is conferred on the Social Services Minister to make a determination that modifies and provision in Part 5 of the SSAA. Part 5 of the SSAA relates to information management. This Part of the SSAA includes provisions relating to the collection, use, recording and disclosure of information, including provisions requiring that information be provided in certain circumstances. Section 2B of the Acts Interpretation Act 1901 provides that the word modifies includes additions, omissions and substitutions.

2.91 A determination may only be made in connection with payments under the Payments and Benefits Bill, including applications for such payments.

2.92 In addition, the Social Services Minister may only make a determination if the Minister is satisfied that that the determination is in response to circumstances relating to the Coronavirus.

2.93 It is intended that a circumstance where the Social Services Minister may make a determination is to permit the Australian Taxation Office to provide information to Services Australia about payments under the Payments and Benefits Bill, to facilitate the efficient assessment of claims for social services payments by Services Australia.

2.94 A determination is a legislative instrument that is subject to disallowance.

2.95 The Social Services Minister's power to make determinations is temporary in nature. The power to make determinations will be repealed at the end of 31 December 2020. Any determinations made by the Minister will cease to have any effect after 31 December 2020.

Paid parental leave amendments

Summary

2.96 Schedule 2 to this Bill also amends the PPL Act to provide that a person in receipt of the JobKeeper Payment will be considered to be performing qualifying work for the purpose of the paid parental leave work test. This will mean that the period the person receives the JobKeeper Payment will count toward the paid parental leave work test. [Schedule 2, items 15 to 21, sections 6, 30, 32, 34, and 35B of the PPL Act]

2.97 As a result of the Coronavirus, many people who would otherwise have qualified for paid parental leave may no longer meet the requirements of the work test. For example, where a person has been stood down, had their hours of work reduced or ceased work entirely.

2.98 Eligibility for paid parental leave is provided for in Division 3 of Part 2-3 of the PPL Act. To be eligible for paid parental leave, a person must meet all of the following:

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satisfy the work, income and residency tests;

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be the primary carer of the child,

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not return to work until the end of the 18 week paid parental leave period (or if they do, relinquish any remaining entitlement to parental leave pay); and

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not be subject to the Newly Arrived Residents Waiting Period.

2.99 The work test requires that the person:

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perform qualifying work for at least 10 of the 13 months prior to the expected birth date of the child;

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work at least 330 hours during those 10 months; and

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not have a gap in work days of more than 12 weeks.

2.100 Qualifying work involves a person performing at least one hour of paid work on a day or using at least one hour of paid leave of a day. Currently, unpaid leave and being stood down from work would not be considered qualifying work and the person would not satisfy the work test as a result of the impact of the Coronavirus on the economy.

2.101 The amendments to the PPL Act contained in Schedule 2 to this Bill will enable a person or an employer of the person who is entitled to one or more Coronavirus economic response payments for the person for a period, to be considered to be performing qualifying work for the purposes of the paid parental leave work test.

2.102 The amendments also provide for matters pertaining to hours of qualifying work and similar matters to be addressed in the PPL Rules.

Detailed explanation

2.103 Schedule 2 to this Bill amends section 6 of the PPL Act to insert definitions for JobKeeper payment and JobKeeper payment period referring to new subsections 34(4) and 34(3) respectively, which provide the detailed definitions. [Schedule 2, item 15, section 6 of the PPL Act]

2.104 It also amends the guide to Part 2-3 of the PPL Act, dealing with eligibility for paid parental leave. The amendment includes the words 'Any JobKeeper payment period for the person may also be taken into account' after the existing words 'subsequent child'. This amendment is made to the paragraph of the guide beginning with 'Division 3' which explains the paid parental leave work test. [Schedule 2, item 16, section 30 of the PPL Act]

2.105 Note 3 to section 32 of the PPL Act is amended to insert the words 'and does not also perform qualifying work on that day because of paragraph (e) of that definition,' after 'subsection 34(1)'. [Schedule, item 17, note 3 to section 32 of the PPL Act]

2.106 Further, a fourth note is added at the end of the method statement in section 32 of the PPL Act to provide where a person performs qualifying work on a day as a result of receiving the JobKeeper Payment, the hours of qualifying work can be worked out with reference to section 35B of the PPL Act. New section 35B of the PPL Act provides for this to be dealt with via the PPL Rules. More details on the new section 35B of the PPL Act are provided below. [Schedule 2, item 18, note 4 to section 32 of the PPL Act]

2.107 Schedule 2 of this Bill inserts a new paragraph 34(1)(e) to provide that a person will perform qualifying work on a day if the day is in a JobKeeper payment period for the person. [Schedule 2, item 19, paragraph 34(1)(e) of the PPL Act]

2.108 A further amendment is made to add new subsections 34(3) and 34(4) to the PPL Act. [Schedule 2, item 20, subsections 34(3) and (4) to the PPL Act]

2.109 New subsection 34(3) of the PPL Act defines jobseeker payment period for a person to be a period for which:

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an employer of the person is entitled to one or more JobKeeper Payments (not concurrently) for the person; or

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the person themselves is entitled to one or more JobKeeper Payments.

2.110 New subsection 34(4) of the PPL Act defines JobKeeper payment as a payment that is payable by the Commonwealth in accordance with rules made under the Payments and Benefits Bill and is known as the JobKeeper Payment.

2.111 Schedule 2 to this Bill also inserts new section 35B into the PPL Act to provide for working out the hours of qualifying work that a person has performed on a day if that day is in a JobKeeper payment period. New section 35B is made for the purposes of step 5 of the method statement contained in section 32 of the PPL Act. [Schedule 2, item 21, section 35B of the PPL Act]

2.112 Step 5 of the method statement in section 32 of the PPL Act requires the person to have performed at least 330 hours of qualifying work during 10 of the 13 months preceding their paid parental leave claim to satisfy the work test.

2.113 Subsection 35B(1) of the PPL Act provides for the calculation of the number of hours for the work test, for a person who does not perform paid work or take paid leave in a JobKeeper payment period is to be worked out in accordance with the PPL Rules.

2.114 The PPL Rules are made under section 298 of the PPL Act and are a legislative instrument. Section 298 of the PPL Act enables the Minister for Families and Social Services to make rules providing for matters necessary or convenient to give effect to the relevant Act. This extends to the calculations of hours in relation to the work test.

2.115 The PPL Rules already provide for matters pertaining to the work test. For example, Division 2.3.2 sets the parameters of what is considered to be paid leave and paid work for the purposes of the work test.

2.116 Subsection 35B(2) of the PPL Act provides that new subsection 35B(1) of the PPL Act has effect:

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even if the person also performs qualifying work on that day due to paragraphs 34(1)(a), (b), (c) or (d); and

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despite section 35A of the PPL Act.

Application and transitional provisions

2.117 The Payments and Benefits Bill commences immediately after the commencement of Part 1 of Schedule 1 to this Bill. [Clause 2 of the Payments and Benefits Bill]

2.118 Payments may only be made under this framework from the day of commencement and in relation to the period from 1 March 2020 to 31 December 2020 (inclusive). This ensures that the payment framework is only in place for a temporary period when needed to provide financial support concerning the Coronavirus.

2.119 Parts 1, 2 and 3 of Schedule 2 to this Bill (that is, all of the amendments other than the modifications of provisions relating to the social security law in Part 4 of Schedule 2 to this Bill) commence at the same time as the Payments and Benefits Bill. [Clause 2 of this Bill]

2.120 The amendments to the Coronavirus Omnibus Act made by Part 4 of Schedule 2 to this Bill commence immediately after the commencement of Schedule 11 to that Act. [Clause 2 of this Bill]

2.121 The other amendments made by Part 4 of Schedule 2 to this Bill commence on the day after the day on which this Bill receives the Royal Assent. [Clause 2 of this Bill]