Senate

Supplementary Explanatory Memorandum

(Circulated by authority of the Minister for Education and Youth, the Honourable Alan Tudge MP)

PROPOSED GOVERNMENT AMENDMENTS

The Government proposes the following amendments to the Bill.

Amendment (1) omits subclause 3A(2) of Schedule 2 and substitutes a new subclause 3A(2). This amendment has the effect that the determination of applicable percentage for a 'higher rate child' under clause 3A would be subject to subclauses (4) and (5) of clause 3A.

Amendment (2) omits paragraph 3A(3)(d) of Schedule 2.

Amendment (3) inserts new subclauses (4) and (5) to clause 3A. The effect of this is that where an individual's adjusted taxable income for the session of care is above the lower income threshold and below the second income threshold, the applicable percentage for the 'higher rate child' would also be 30 percentage points higher than the applicable percentage in relation to a basic case (as set out in the amended clause 3 of Schedule 2 as per item 5 of the Bill), with a maximum applicable percentage of 95%.

These amendments rectify a technical drafting error in the Bill. This involves an omission in the formula which calculates the subsidy rate for second and subsequent children for families earning above the lower income threshold and below the second income threshold. These amendments rectify this issue and ensure that the Bill gives effect to the policy intent of the measure.

Financial Impact

The Government amendments will have no financial impact.