House of Representatives

Supplementary Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon Scott Morrison MP)

Chapter 6 Income limit for FTB Part A supplement (Chapter 21A)

Outline of chapter

Amendment 19 inserts a new Schedule 21A into the Bill.

Schedule 21A amends the A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) to introduce an income limit of $80,000 on payment of the FTB Part A supplement.

Clause 38A of Schedule 1 to the Family Assistance Act currently provides for the rate of the FTB Part A supplement. The FTB Part A supplement is a component of the rate of FTB that is added in calculating an individual's rate of FTB when FTB is reconciled at the end of the relevant income year.

Item 1 in Schedule 21A of the Bill inserts a new subclause 38A(1A) into Schedule 1to the Family Assistance Act. Under this new provision, an individual's FTB Part A supplement for a given income year is nil if the individual's adjusted taxable income for that year is more than $80,000.

A note at the end of new subclause 38A(1A) informs the reader that where an individual is a member of a couple, the individual's adjusted taxable income also includes their partner's adjusted taxable income. The relevant rule is in clause 3 of Schedule 3 to the Family Assistance Act.

Item 2 is an application provision that ensures that the amendment made by item 1 applies in relation to working out the rate of FTB for days on or after commencement. The effect is that the income limit will apply in working out an individual's rate of FTB for the 2016-17 and later income years.

Amendment 3 inserts a new item 24A into the commencement table. This new item provides for the commencement of Schedule 21A from the 2016-17 financial year.