House of Representatives

Second Reading Speech

Mr Anthony (Minister for Community Services)

That the bill be now read a second time.

This bill follows through on the government's recent announcement of a $1,000 tolerance for families with a family tax benefit or child-care benefit overpayment because of incorrectly estimated income or shared care in 2000-01.

The bill adapts an existing provision in the family assistance law so that the government's decision can be put into effect through a disallowable instrument. The instrument will be made and tabled as soon as possible after the bill is enacted.

The new family assistance system put more than $2 billion extra into the pockets of Australian families. It meant, for the first time ever, that top-ups will be paid to families who have been paid less than their actual entitlement because they overestimated their income during the year.

The government's information campaign to tell families about the new system has been very effective, with some 800,000 families updating their income estimates during the year. However, the first year was one of transition, and some families clearly needed extra help in adjusting to the new arrangements. While many families have got their income estimates right, there are families whose circumstances mean that it is difficult for them to estimate their income accurately. This special $1,000 tolerance will be available to those who have underestimated their income and have an overpayment as a result.

The $1,000 tolerance will also be available where a separated parent has incorrectly estimated their share of their child's care. If a family has both a family tax benefit overpayment and a child-care benefit overpayment, the $1,000 tolerance will apply to each overpayment.

Any family who still has an excess payment after the $1,000 tolerance may have it recovered by adjusting their future payments. Of course, many families who overestimated their income will reap one of the main benefits of the new system when they are paid their family tax benefit or child-care benefit top-ups with their tax refund or in a direct payment.

Now that families have had time to adjust to the first year of the new system with the benefit of this lenient approach, the Family Assistance Office is working closely with them to help them with their income and shared care estimates for 2001-02. I present the explanatory memorandum to the House.