House of Representatives

Explanatory Memorandum

(Circulated By The Authority of the Minister for Education and Minister for Employment and Workplace Relations the Honourable Julia Gillard MP)

General outline and financial impact

Outline

Child care rebate amendments

The Bill makes amendments to the family assistance law as it relates to child care rebate to:

•

change the name of the rebate from 'child care tax rebate' (CCTR) to 'child care rebate' (CCR) in recognition of the fact that the rebate is no longer a tax offset under the taxation legislation but it is a benefit paid under the family assistance law;

•

align the operation of CCR provisions with child care benefit (CCB) provisions by extending payment of CCR for care provided by an approved child care service to a child of a deceased individual to an individual who is eligible for CCB in respect of that care in substitution for the deceased individual;

•

provide the Secretary with a discretion not to make a separate payment to an individual of a quarterly CCR amount for the fourth quarter of an income year but to include the calculation relevant to that quarter in the determination of the individual's entitlement for CCR for the income year in which the fourth quarter falls.

Recovery of debts

Amendments are made to CCR debt creation provisions in the family assistance law to take into account the introduction of quarterly CCR payments from July 2008 and the amendments made in this Bill providing for payment of CCR to an eligible individual in substitution for the deceased individual. The amendments ensure that if an individual was paid an amount by way of quarterly CCR payments or by way of CCR in substitution and the individual was not entitled to that amount or was entitled to a lower amount, the amount, or the overpayment amount, is a debt due to the Commonwealth by the individual.

Compliance with child care services' obligations

Child care services approved for the purposes of the family assistance law are required to comply with various obligations imposed by the family assistance law. Civil penalties specified in the A New Tax System (Family Assistance) (Administration) Act 1999 apply for failure to comply with some of those obligations. Amendments made by this Bill enable the imposition of civil penalties in regulations made under that Act.

An operator of an approved child care service must, as a condition of the service's continued approval, notify the Secretary of an intention to cease operating the service at least 30 days before the operator ceases to operate the service. Amendments are made to require the notice to be provided in a form, manner or way approved for this purpose by the Secretary. A further amendment imposes an additional obligation to give further information about the intended cessation upon written request from the Secretary.

The legislative intention behind the imposition of obligations, or conferment of permissions, on approved child care services, has been clarified by the amendment specifying that the obligations and permissions are taken to be imposed on the person who operates the service.

CCB % provisions

The Bill makes amendments to the family assistance law consequential to the removal of the minimum CCB rate from 7 July 2008. The amendment enables reconsideration of a determination of no entitlement to CCB for a past period or entitlement to CCB by single payment/in substitution made in respect of a claimant who opted for a zero CCB rate or who did not provide the specified information required to calculate the CCB rate. The reconsideration may occur if the claimant provides the documentation relevant to the recalculation of his/her entitlement by the end of the second year following the year in which the determination of no entitlement was made.

Financial impact

Nil