Child Support Legislation Amendment (Reform of the Child Support Scheme - New Formula and Other Measures) Act 2006 (146 of 2006)

Schedule 8   Amendments relating to family tax benefit (commencing on 1 July 2008)

Part 1   Regular care children

Division 1   Amendments

A New Tax System (Family Assistance) Act 1999

84   After Division 2A of Part 5 of Schedule 1

Insert:

Division 2B - Rent assistance

Subdivision A - Rent assistance

38B Rent assistance children

(1) An individual's eligibility for, and rate of, rent assistance is affected by whether an FTB child, or a regular care child, of the individual is also a rent assistance child of the individual.

(2) An FTB child of an individual is a rent assistance child of the individual if the FTB child rate for the child:

(a) exceeds the base FTB child rate (see clause 8); or

(b) would exceed the base FTB child rate but for clause 11.

(3) A regular care child of an individual is a rent assistance child of the individual if:

(a) the regular care child is under 16 years of age; and

(b) the regular care child is not an absent overseas regular care child.

38C Eligibility for rent assistance

(1) An amount by way of rent assistance for a period is to be added in working out an individual's maximum rate if:

(a) the individual has at least one rent assistance child; and

(b) the individual's claim for family tax benefit is not a claim to which subclause (2) applies; and

(ba) neither the individual nor the individual's partner is receiving payments of incentive allowance under clause 36 of Schedule 1A to the Social Security Act 1991; and

(c) the individual is not an ineligible homeowner; and

(d) the individual is not an aged care resident; and

(e) the individual pays, or is liable to pay, rent (other than Government rent); and

(f) if the individual has at least one FTB child and is not a relevant shared carer - the rent is payable at a rate of more than:

(i) if the individual is not a member of a couple - $3,073.30 per year; or

(ii) if the individual is a member of a couple but is not partnered (partner in gaol) or a member of an illness separated couple, a respite care couple or a temporarily separated couple - $4,547.90 per year; or

(iii) if the individual is partnered (partner in gaol) or is a member of an illness separated couple or a respite care couple - $3,073.30 per year; or

(iv) if the individual is a member of a temporarily separated couple - $3,073.30 per year; and

(fa) if the individual is a relevant shared carer, or has only one or more regular care children (but no FTB children) - the rent is payable at a rate of more than:

(i) if the individual is not a member of a couple - $2,332.35 per year; or

(ii) if the individual is a member of a couple but is not partnered (partner in gaol) or a member of an illness separated couple, a respite care couple or a temporarily separated couple - $3,806.95 per year; or

(iii) if the individual is partnered (partner in gaol) or is a member of an illness separated couple or a respite care couple - $2,332.35 per year; or

(iv) if the individual is a member of a temporarily separated couple - $2,332.35 per year; and

(g) if the individual is outside Australia:

(i) the person was paying rent (other than Government rent) for accommodation in Australia immediately before the individual left Australia; and

(ii) the person continues to pay rent for the same accommodation while outside Australia.

(2) This subclause applies to an individual's claim for family tax benefit if:

(a) the claim is for family tax benefit for a past period that occurs in the first or second income year before the one in which the claim is made; and

(b) when the claim is made the individual:

(i) is eligible for family tax benefit; and

(ii) is not prevented by section 9 of the A New Tax System (Family Assistance) (Administration) Act 1999 from making an effective claim for payment of family tax benefit by instalment; and

(c) the claim is not accompanied by a claim for family tax benefit by instalment.

38D Rate of rent assistance payable to individual who has at least one FTB child and who is not a relevant shared carer

The rate of rent assistance payable to an individual who has at least one FTB child and who is not a relevant shared carer is worked out using the following table. Work out the individual's family situation and calculate Rate A for the individual using the corresponding formula in column 2. This will be the individual's rate of rent assistance but only up to the individual's maximum rent assistance rate. The individual's maximum rent assistance rate is Rate B, worked out using column 3.

38E Rate of rent assistance payable to individual who is a relevant shared carer or who has only one or more regular care children

The rate of rent assistance payable to an individual who is a relevant shared carer, or who has only one or more regular care children (but no FTB children), is the higher of:

(a) the rate of rent assistance that would be payable to that individual if that individual's rate were worked out using clause 38D; and

(b) the rate of rent assistance worked out using the following table.

In working out rent assistance, work out the individual's family situation using column 1 and calculate Rate A for the individual using the corresponding formula in column 2. This will be the individual's rate of rent assistance in accordance with the table but only up to Rate B specified in column 3.

38F Annual rent

Annual rent in the tables in clauses 38D and 38E is the annual rate of rent paid or payable by the individual whose rate is being calculated.

38G Rent paid by a member of a couple

If an individual is a member of a couple and is living with his or her partner in their home, any rent paid or payable by the partner is to be treated as paid or payable by the individual.

38H Rent paid by a member of an illness separated, respite care or temporarily separated couple

If an individual is a member of an illness separated, respite care or temporarily separated couple, any rent that the individual's partner pays or is liable to pay in respect of the premises occupied by the individual is to be treated as paid or payable by the individual.

Subdivision B - Offsetting for duplicate rent assistance

38J Offsetting for duplicate rent assistance under family assistance and social security law

When this clause applies

(1) This clause applies if:

(a) a decision (the social security decision ) was made that rent assistance was to be included when calculating an individual's, or an individual's eligible partner's, rate of social security payment for a day; and

(b) when the social security decision was made, no decision (the family assistance decision ) to make a determination that includes, or to vary a determination to include, rent assistance when calculating the individual's Part A rate of family tax benefit for that day had been made; and

(c) after the social security decision was made, the family assistance decision was made; and

(d) the day mentioned in paragraphs (a) and (b) comes before the day on which the family assistance decision was made.

Note: For the definition of eligible partner see subclause (5).

Part A rate to be reduced

(2) The individual's Part A rate for that day (as calculated or recalculated because of the making of the family assistance decision) is to be reduced:

(a) first, by the individual's annual social security RA amount for that day (see subclause (3)); and

(b) then, by the individual's eligible partner's annual social security RA amount for that day (see subclause (4)).

However, it is not to be reduced to less than:

(c) if it has been calculated for the first time under clause 3 or 28A because of the making of the family assistance decision - nil; and

(d) if it has been recalculated under clause 3 or 28A because of the making of the family assistance decision - the Part A rate as it was immediately before the recalculation.

(3) The individual's annual social security RA amount for that day is the amount worked out as follows:

Method statement

Step 1. Work out the rate (if any) of social security payment (the actual payment ) that was payable to the individual for that day.

Step 2. Work out the rate (if any) of social security payment (the notional payment ) that would have been payable to the individual for that day if rent assistance were not included when calculating the rate of the individual's social security payment for that day.

Step 3. Subtract the notional payment from the actual payment. The difference is the individual's daily social security RA amount for that day.

Step 4. Multiply the individual's daily social security RA amount for that day by 365. The result is the individual's annual social security RA amount for that day.

(4) The individual's eligible partner's annual social security RA amount for that day is the amount worked out as follows:

Method statement

Step 1. Work out the rate (if any) of social security payment (the actual payment ) that was payable to the individual's eligible partner for that day.

Step 2. Work out the rate (if any) of social security payment (the notional payment ) that would have been payable to the eligible partner for that day if rent assistance were not included when calculating the rate of the eligible partner's social security payment for that day.

Step 3. Subtract the notional payment from the actual payment. The difference is the eligible partner's daily social security RA amount for that day.

Step 4. Multiply the eligible partner's daily social security RA amount for that day by 365. The result is the individual's eligible partner's annual social security RA amount for that day.

(5) For the purposes of this clause, an individual is the eligible partner of another individual if both individuals are members of a couple (other than an illness separated couple, a respite care couple or a temporarily separated couple).

38K Offsetting for duplicate rent assistance under family assistance and veterans' entitlements law

When this clause applies

(1) This clause applies if:

(a) a decision (the veterans' entitlements decision ) was made that rent assistance was to be included when calculating an individual's, or an individual's eligible partner's, rate of service pension or income support supplement for a day; and

(b) when the veterans' entitlements decision was made, no decision (the family assistance decision ) to make a determination that includes, or to vary a determination to include, rent assistance when calculating the individual's Part A rate of family tax benefit for that day had been made; and

(c) after the veterans' entitlements decision was made, the family assistance decision was made; and

(d) the day mentioned in paragraphs (a) and (b) comes before the day on which the family assistance decision was made.

Note: For the definition of eligible partner see subclause (5).

Part A rate to be reduced

(2) The individual's Part A rate for that day (as calculated or recalculated because of the making of the family assistance decision and as reduced (if at all) under clause 38J) is to be reduced:

(a) first, by the individual's annual veterans' entitlements RA amount for that day (see subclause (3)); and

(b) then, by the individual's eligible partner's annual veterans' entitlements RA amount for that day (see subclause (4)).

However, it is not to be reduced to less than:

(c) if it has been calculated for the first time under clause 3 or 28A because of the making of the family assistance decision - nil; and

(d) if it has been recalculated under clause 3 or 28A because of the making of the family assistance decision - the Part A rate as it was immediately before the recalculation.

(3) The individual's annual veterans' entitlements RA amount for that day is the amount worked out as follows:

Method statement

Step 1. Work out the rate (if any) of service pension or income support supplement (the actual payment ) that was payable to the individual for that day.

Step 2. Work out the rate (if any) of service pension or income support supplement (the notional payment ) that would have been payable to the individual for that day if rent assistance were not included when calculating the rate of the individual's service pension or income support supplement for that day.

Step 3. Subtract the notional payment from the actual payment. The difference is the individual's provisional veterans' entitlements RA amount for that day.

Step 4. Divide the individual's provisional veterans' entitlements RA amount for that day by 364, then multiply it by 365. The result is the individual's annual veterans' entitlements RA amount for that day.

(4) The individual's eligible partner's annual veterans' entitlements RA amount for that day is the amount worked out as follows:

Method statement

Step 1. Work out the rate (if any) of service pension or income support supplement (the actual payment ) that was payable to the individual's eligible partner for that day.

Step 2. Work out the rate (if any) of service pension or income support supplement (the notional payment ) that would have been payable to the eligible partner for that day if rent assistance were not included when calculating the amount of the eligible partner's service pension or income support supplement for that day.

Step 3. Subtract the notional payment from the actual payment. The difference is the eligible partner's provisional veterans' entitlements RA amount for that day.

Step 4. Divide the eligible partner's provisional veterans' entitlements RA amount for that day by 364, then multiply it by 365. The result is the individual's eligible partner's annual veterans' entitlements RA amount for that day.

(5) For the purposes of this clause, an individual is the eligible partner of another individual if both individuals are members of a couple (other than an illness separated couple or a respite care couple).

Division 2C - Income test

38L Application of income test to pension and benefit recipients and their partners

If an individual, or an individual's partner, is receiving a social security pension, a social security benefit, a service pension or income support supplement:

(a) the individual's income excess is nil; and

(b) the individual's income tested rate is the same as the individual's maximum rate.

38M Income test

This is how to work out an individual's reduction for adjusted taxable income if clause 38L does not apply to the individual:

Method statement

Step 1. Work out the individual's income free area using clause 38N.

Step 2. Work out whether the individual's adjusted taxable income exceeds the individual's income free area.

Step 3. If the individual's adjusted taxable income does not exceed the individual's income free area, the individual's income excess is nil.

Step 4. If the individual's adjusted taxable income exceeds the individual's income free area, the individual's income excess is the individual's adjusted taxable income less the individual's income free area.

Step 5. The individual's reduction for adjusted taxable income is 20% of the income excess.

38N Income free area

An individual's income free area is $40,000.