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1998-99
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
_____________________________________________________________________
A NEW TAX SYSTEM (FAMILY ASSISTANCE) (ADMINISTRATION) BILL 1999
A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL
AND RELATED MEASURES) BILL (NO. 2) 1999
_____________________________________________________________________
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Family and
Community Services,
Senator the Hon Jocelyn Newman)
ISBN: 0642 403708
A NEW TAX SYSTEM (FAMILY ASSISTANCE) (ADMINISTRATION) BILL 1999
A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (NO. 2) 1999
OUTLINE AND FINANCIAL IMPACT STATEMENT
As part of the Government's plan for a new tax system, the structure and
administration of family assistance is being simplified from 1 July
2000.
The package of Bills that will give effect to the new family
assistance regime are:
A New Tax System (Family Assistance) Bill
1999;
A New Tax System (Family Assistance) (Consequential and
Related Measures) Bill (No. 1) 1999;
A New Tax System (Family
Assistance) (Administration) Bill 1999; and
A New Tax System
(Family Assistance) (Consequential and Related Measures) Bill (No. 2)
1999.
The first two Bills are currently before the Parliament. In
broad terms, these Bills repeal the 12 existing forms of assistance for families
and outline the eligibility conditions for, and rates of payment of, three new
payment types, family tax benefit (Part A), family tax benefit (Part B) and
child care benefit (CCB). In addition, maternity allowance (MAT) and maternity
immunisation allowance (MIA), being family related payments, are incorporated
into the new family assistance regime.
The A New Tax System (Family
Assistance) (Administration) Bill 1999 contains administrative, procedural
and technical rules that will apply in relation to the administration of family
tax benefit (FTB) and CCB. The Bill provides for new and simpler administrative
arrangements for the delivery of FTB and CCB. As MAT and MIA will also form
part of the new family assistance regime, this Bill covers similar issues as
they relate to those payments.
The matters covered in this Bill include
claims processes, payment options, internal and external review of decisions,
debt recovery, information management including information gathering powers,
confidentiality of information, offences and other matters of an administrative
nature.
The A New Tax System (Family Assistance) (Consequential and
Related Measures) Bill (No. 2) 1999 makes consequential amendments to the
following Acts:
• Social Security Act
1991;
• A New Tax System (Family Assistance) Act
1999 (when enacted);
• Child Care Act
1972;
• Child Support (Assessment) Act
1989;
• Data-matching Program (Assistance and Tax) Act
1990;
• Farm Household Support Act
1992;
• Health Insurance Commission Act
1973;
• Health Insurance Act
1973;
• Veterans Entitlement Act
1986;
• Fringe Benefits Tax Assessment Act 1986;
• Income Tax Assessment Act
1936;
• Income Tax Assessment Act 1997;
• Income Tax Rates Act
1986;
• Income Tax Rates Amendment Act (No. 1)
1997;
• Income Tax (Transitional Provisions) Act
1997;
• Medicare Levy Act 1986;
• Taxation Administration Act
1953;
• Bankruptcy Act
1966;
• Safety, Rehabilitation and Compensation Act 1988;
and
• Seafarers Rehabilitation and Compensation Act
1992.
These Acts refer to concepts and terms that are relevant
under the existing family assistance structure. These references will be
repealed or amended to reflect the new family assistance regime. In addition,
amendments are made to allow a tax deduction for fees related to family tax
benefit claimed through the tax system.
Other related amendments are made
to the A New Tax System (Family Assistance) Act 1999 (when
enacted) and the A New Tax System (Family Assistance) (Consequential and
Related Measures) Act (No. 1) 1999 (when enacted) as
follows:
• an amendment is made to ensure that FTB (Part A)
recipients in receipt of income support (or whose partners receive income
support) have their FTB (Part A) calculated under Method 1 (Schedule 1, Part 2,
Division 4);
• an amendment is made to ensure that a CCB amount for
an instalment period is calculated not only with reference to a CCB rate that
applies in normal circumstances (under the CCB Rate Calculator in Schedule 2)
but also with reference to a CCB rate that applies in special circumstances
(under section 71);
• an amendment is made to allow the use or
disclosure of information by or between the three agencies (Centrelink, the
Australian Taxation Office and the Health Insurance Commission) involved in the
transition to the new family assistance regime, for the purpose of identifying
shared customers (so that customers receive only one letter instead of,
potentially, three);
• provide for other minor technical
amendments.
The total cost to revenue of the family package is $2.4 billion in
2000-01, $2.5 billion in 2001-02, and $2.6 billion in 2002-03.
REGULATION IMPACT STATEMENT
The Government, in its tax reform package Tax Reform: not a new tax, a
new tax system (ANTS) of 13 August 1998, stated its intention to reform the
income tax and social security systems from 1 July 2000. As part of this
reform, extra assistance will be provided to families, work incentives will be
improved and the structure and delivery of family assistance will be simplified
as twelve forms of family assistance, currently available under the tax and
social security systems, are reduced to three.
The three new family
payments which will be available to families under the new A New Tax
System (Family Assistance) Bill 1999 are family tax benefit part A, family
tax benefit part B and child care benefit.
The sole parent rebate, dependant spouse rebate (with child) and family
tax assistance, which are benefits currently provided to families under the
taxation system, are being replaced under the restructure of family assistance.
Taxpayers may anticipate their entitlement to a sole parent rebate and/or family
tax assistance by reducing their tax instalments taken from their salary or
wages under the Pay-As-You-Earn (PAYE) system.
To anticipate the sole
parent rebate and family tax assistance through reduced tax instalment
deductions (TIDs) employees must first complete an employment declaration and
give it to their employer. The employer must then give the employment
declaration to the Commissioner. The employment declaration remains in force
until the employee ceases employment or another employment declaration is lodged
with the employer. The Commissioner may, by a notice published in the Gazette,
determine that all or part of the employment declaration ceases to have effect
from a certain date.
Child care assistance is paid for child care services provided by
approved child care organisations, and is claimed by and paid to the service
provider, who then reduces the fees paid by families.
Taxpayers who choose to claim family tax benefit parts A and/or B through
the taxation system by reducing their TIDs will need to lodge a new declaration
under the proposed new withholding system for individuals which is also proposed
to commence on 1 July 2000. The withholding component of the new system, known
as Pay-As-You-Go (PAYG), will incorporate tax deductions from salary or wages,
as well as deductions from a range of other payments. The PAYG arrangements
will be broader that existing PAYE arrangements and will cover payers other than
employers who pay salary or wages.
A number of options were considered
for ceasing the current reduction of TIDs from salary or wages of individual
taxpayers for sole parent rebate and family tax assistance after 30 June 2000.
It is considered that the most appropriate option, in terms of administrative
and compliance impacts, is to publish in the Gazette a notice stating that all
claims in an employment declaration for a rebate and, or, family tax assistance
will cease to have effect after 30 June 2000.
This option will impact on
all individuals who have claimed a reduction in TIDs for rebates, including
rebates not directly affected by the family assistance reform. This impact
stems from the fact that it is not always possible for employers to distinguish
the type of the rebate being claimed from employment declarations. Therefore
all rebate claims through reduced TIDs will have to cease.
Under the new child care benefit system, the person whose child is in
care will generally make claims. When care is provided by approved child care
services, payment of child care benefit will be made to the child care service.
When a family accesses informal care, child care benefit will be paid to the
family direct by the Family Assistance Office (FAO) on presentation of receipts.
For families to access child care benefit for informal care, the carer must be
registered with the FAO.
The proposal will affect the following
groups:
• individuals;
• payers;
• Australian
Taxation Office (ATO); and
• child care
service providers.
From 1 July 2000, individual taxpayers who previously claimed their
entitlement to rebates and, or, family tax assistance through reduced TIDs will
have TIDs deducted at the normal marginal rates of tax until a new declaration
is lodged under the new withholding arrangements. Therefore, individuals
wishing to claim the zone rebate, spouse rebate (without child), housekeeper,
child housekeeper, invalid relative and parent rebates through reduced TIDs
after 30 June 2000, will have to lodge new declarations with their payers. It
is not possible to reliably estimate how many of these individuals will be
claiming their entitlements through reduced TIDs under the new withholding
arrangements.
As in the case of those seeking to receive family tax
benefit Parts A and/or B through reduced TIDs, the cost of preparing a new
declaration will tend to fall on payers assuming that these declarations are
completed during working hours.
New employees will not be affected by the
change.
Payers will bear most of the compliance costs associated with the
measure. They will have to learn about the changes, receive declarations from
those individuals affected by the changes, work out the new rates of TIDs and
remit the deductions to the ATO.
It is not possible to accurately
estimate the number of individuals affected by the proposed measure. But it is
likely that all group employers will be affected. The ATO estimates that by 1
July 2000 there will be 760,000 employers. The average cost to payers is
estimated to be $10 per payee that lodges a new declaration.
Under the new system, there will be minimal alteration in the way that
funding is made available for formal child care service providers. A
family’s child care benefit will be paid direct to their nominated
service/s to enable them to reduce the fee which the family is required to
pay.
As families will now have the choice of receiving their child care
benefit as an end of year lump sum payment, service providers will be required
to keep records on, and provide information in respect of, all the children in
their care; currently this is only required in respect of children for whom
child care assistance is paid. Additionally, the new method of calculating the
rate of child care benefit will require providers to train staff in the new
arrangements.
The ATO will need to design, print and distribute new declaration forms
and instructional materials. It is expected that families identified as being
affected by the new family assistance reforms will be written to and advised of
the new arrangements. The changes will also need to be publicised so that
payers and individuals understand the new changes and know what is required of
them.
The ATO, Health Insurance Commission and Centrelink, operating
jointly as the FAO, will answer inquiries about the changed arrangements and
will provide assistance to taxpayers in determining their TID reductions for
family tax benefit.
The changes to declarations will have a minimal effect on the ATO’s
recurrent costs.
The total cost to revenue of the family package is $2.4 billion in
2000-01, $2.5 billion in 2001-02, and $2.6 billion in 2002-03.
Individuals who wish to anticipate family tax benefit through the tax
system will be able to choose whether they receive the benefit during the year
by way of a reduction in their TIDs or whether they wish to wait for a lump sum
at the end of the year.
To reduce their TIDs, a person will have to lodge
an appropriate declaration with their employer or other payer. Existing
employment declarations serve more than one purpose. First, they allow for the
tax free threshold to be taken into account in working out TIDs. People who
don’t lodge an employment declaration have tax deducted at a higher rate.
Secondly, people can use an employment declaration to reduce their TIDs in
anticipation of certain rebates. Individuals who currently anticipate the sole
parent rebate and family tax assistance through reduction in TIDs will have to
make new declarations in order to receive family tax benefits through reduced
TIDs. However, the part of an employment declaration that allows the tax free
threshold to be taken into account in working out the amount of a person’s
TIDs, will continue to remain in force until a declaration under the new
withholding arrangements is lodged with their payer. Payers will therefore be
able to continue to deduct TIDs from affected individuals’ payments at the
applicable marginal rates of tax rather than the higher rates that would
otherwise apply if the whole declaration was negated.
Consultation was undertaken with various interest groups including
professional and business associations and other taxpayer bodies. For example,
the ATO consulted with the Australian Society of Certified Practicing
Accountants, the Institute of Chartered Accountants in Australia, National
Institute of Accountants, H&R Block and the Council of Small Business
Organisations of Australia. These bodies expressed concern over the extra
burden the TID option would place on payers.
Consultations with families
and child care providers revealed widespread support from both the child care
sector and families for a continuation of payments to service providers. The
availability of a lump sum payment would provide a possible option for those
families with lower entitlements and those who choose to access informal care
only. There was also widespread support for simplifying the eligibility process
and improving electronic commerce between the Government and
providers.
Allowing primary carers to receive direct payments of family tax benefit
Parts A and/or B, to claim them as a lump sum payment at the end of the
financial year and to access them via a reduction in their TIDs allows families
more choice than the existing family assistance system. This flexibility enables
individuals to minimise the costs of applying for and receiving family
assistance, albeit at some cost to payers (notably, employers) and employees
eligible for other rebates who utilise existing TID arrangements.
The
proposed option for implementing child care benefit should minimise compliance
costs, and ensure that those eligible for child care benefit are not discouraged
from applying for, and receiving, it.
The ATO and Treasury will monitor
this measure, as part of the whole taxation system, on a continuing basis.
A NEW TAX SYSTEM (FAMILY ASSISTANCE)
(ADMINISTRATION) BILL 1999
OVERVIEW OF THE ADMINISTRATION OF THE
NEW FAMILY
ASSISTANCE REGIME
The new family assistance regime will comprise family tax benefit
Parts A and B (FTB), child care benefit (CCB), maternity allowance (MAT) and
maternity immunisation allowance (MIA).
The new Family Assistance Office (FAO) will deliver FTB, CCB, MAT and
MIA. The law does not refer to the FAO as it will use the existing
infrastructure of Centrelink, the ATO and HIC (Medicare Offices). It is
expected that all ATO offices, all Centrelink offices and all Medicare offices
will have a FAO as part of their office. The extended network of sites will
ensure families have a greater choice about the way in which they access
assistance.
In order to give families these choices, the Secretary of the
Department of Family and Community Services will have the power to delegate his
or her powers to constituent agencies of the new FAO. The heads of these
agencies and their staff, as delegates of the Secretary, will be able to process
claims, make payments and perform other functions under the family assistance
law.
Making a claim for FTB
The primary carer will be able
to make a claim for FTB in one of the following ways:
• lodge a
claim with the FAO (through Centrelink) for fortnightly payments;
or
• claim a lump sum payment at the end of the year (through the
taxation system), either through the primary carer’s tax return or their
partner’s tax return. Families will have a further option to reduce their
(or their partner's) tax instalment deductions (TIDs) during the year in
anticipation of their end of year FTB lump sum entitlement.
Making a
claim for CCB
Families will be able to claim CCB for formal care (in
approved child care services) in one of the following ways:
• as
instalment payments paid directly to their nominated child care service
to enable the service to reduce the fees that the family will pay (current
arrangements under which child care assistance advance payments are made to
child care services will be preserved for CCB purposes); or
• as a
lump sum after the end of the financial year (from the FAO).
CCB
for informal care will be claimed as a lump sum for a period of care of up to
12 months and paid via the FAO.
CCB will not be delivered through
the tax system because of the complexity of the information parents would need
to retain to be able to correctly assess their entitlement.
Like CCB, MAT and MIA will not be delivered through the tax
system.
Families who choose to receive fortnightly payments will estimate their
income for the current financial year. Their estimated income will be compared
with their actual income at the end of the year. Families who have
overestimated their income during the year and have been underpaid will receive
a ‘top up’ payment at the end of the year. On the other hand,
families who have underestimated their income and have been overpaid, will be
required to pay back the amount they were overpaid during the year. This is
much fairer than the current arrangements for family allowance where families
who underestimate their income are required to pay back the amount they were
overpaid but families who overestimate their income during the year do not
receive a top up payment. It is also fairer than the current arrangement for
child care assistance where families do not receive a top up payment if they are
underpaid, and are not required to pay back overpaid amounts.
The administration of these payment will not change significantly under
the new family assistance regime.
Rather than dealing with potentially 12 forms of assistance with
different eligibility rules and payment arrangements through three different
agencies, families will now have to deal with only 3 payments with similar
eligibility rules and with one agency, the FAO.
There will be one set of rules for all families regardless of how they
choose to receive family assistance. For FTB, this means that regardless of
whether families receive fortnightly payments or as an end of year lump sum
claimed with their tax returns, they will all be subject to the same eligibility
criteria, rate calculators and administrative arrangements under the family
assistance law. For CCB, regardless of whether families receive ongoing
payments or lump sum payments from the FAO (through Centrelink), the same
eligibility rules and rates will apply.
Under the new arrangements,
decisions made by the Secretary regarding entitlement to, or eligibility for,
FTB and CCB will be reviewable by the Secretary, or an authorised review
officer, regardless of delivery option. It is expected that where FTB is paid
through the tax system, the Commissioner, as delegate of the Secretary, will
carry out the review functions for those customers. There will be further
rights of appeal to the Social Security Appeals Tribunal (SSAT), Administrative
Appeals Tribunal (AAT) and the Federal Court. Rules explaining the process for
review of decisions are set out in Part 5 of this Bill and will be kept separate
from the ATO appeal and review process. Determinations made by approved child
care services regarding CCB in special circumstances will not be reviewable.
Approved child care services and registered carers will also have the right to
appeal to the AAT about the Secretary’s decisions affecting them, except
where the decision is the result of a Commonwealth planning strategy affecting
the distribution of child care places.
As FTB is partly administered through the tax system, overpayments of FTB
will be recovered from a claimant's tax refund where possible. This Bill will
also allow another person, for example the claimant's partner, to make his or
her income tax refund available to offset a claimant's FTB debt. In such cases,
where consent is given, the Commissioner will apply the partner's income tax
refund to reduce or extinguish the claimant's FTB debt. The new administrative
arrangements for recovering overpayments of FTB, will make it much easier for
families to repay a FTB debt. Where it is not possible to recover overpayments
of FTB from the taxation system, and for overpayments of CCB, these will be
recovered by the FAO under existing Centrelink arrangements.
Since
CCB will not be delivered through the tax system, tax refunds and debts will not
be applied against CCB debts and payments. Also other family assistance
overpayments will not be recoverable from CCB. However, CCB overpayments will
be recoverable from FTB or from social security payments.
FTB paid
through the tax system will be a payment not a tax rebate or an increase in tax
free threshold
Although claimants will be able to lodge claims for
FTB and receive lump sum and top up payments through the taxation system, the
FTB entitlement will not be in the form of a tax rebate or an increase in a
person's tax free threshold.
Traditionally, measures like FTB (such as
the family tax assistance) have been provided as tax rebates or as an increase
in a person's threshold where the rate of family assistance is calculated by the
ATO and offset against tax payable.
A similar approach was not adopted
for FTB because the administrative mechanism of delivering FTB through a
person's income tax assessment would have been very complicated and families
would not have been able to benefit from the simpler structure and
administrative arrangements of the proposed system (for example, it would not
have been possible to ensure that all families receive their correct entitlement
regardless of delivery option) which is the main feature of family assistance
reform.
Section 1 of the A New Tax System (Family Assistance)
(Administration) Bill 1999 (the Bill) sets out how the Act is to be
cited.
Section 2 provides for the commencement of the Act.
Sections 1 and 2 and subsection 236(5) commence on the day of Royal Assent.
The remaining provisions commence immediately after the commencement of the
A New Tax System (Family Assistance) Act 1999 (1 July
2000).
Several abbreviated terms will be used widely throughout this
Explanatory Memorandum in relation to this Bill. The abbreviations
are:
• the Social Security Act 1991 (the Social
Security Act); and
• the A New Tax System (Family Assistance)
Act 1999, currently still a Bill before the Parliament (the Family
Assistance Act).
Part 2 – Interpretation
Section 3 provides definitions for expressions used in the Bill.
These definitions will be explained in the context in which they appear in the
Bill.
Expressions used in the Bill that are defined in the Family
Assistance Act will have the same meaning as in that Act.
Section 4
enables the Secretary or another officer to approve the making or
withdrawing of any application or claim or the doing of any other thing required
or permitted by or under the family assistance law by use of a
telecommunications system or other electronic equipment.
Part 3 – Payment of family assistance
Division 1 – Family Tax Benefit
Subdivision A - Making claims
Individuals or approved care organisations who want to claim FTB will
be able to choose from one of two delivery
mechanisms:
• fortnightly payments for a current period, paid
directly from the Family Assistance Office (FAO); or
• a lump sum
payment for a past period, either paid through the tax system or from the FAO
when making a claim for fortnightly payments.
Customers choosing delivery
via the tax system will also have the option of reducing their tax instalment
deductions (TIDs) in anticipation of their end of year lump sum FTB entitlement.
In such cases, the lump sum FTB payment will be applied against any tax debt
resulting from the TID reduction.
Under section 5, in order to become entitled for payment of FTB a
person must make a claim in accordance with the rules outlined in Division
1.
Who can claim
According to section 6, only
individuals or approved care organisations can claim FTB. If the relevant
eligibility conditions are met (eg, the person or organisation has an FTB
child), a determination can then be made that the person or organisation is
entitled to be paid FTB.
How to claim
Under section
7, an individual or approved care organisation (a claimant) may make a claim
for FTB by way of:
1. fortnightly instalments for a current
period;
2. a lump sum payment for a past period; or
3. a single
payment where an FTB child or another person dies.
A claimant may make a claim for a current period via FAO/Centrelink.
(Centrelink pays FTB to claimants who are currently eligible for FTB on a
fortnightly basis).
A claimant may make a claim for a past period in one of two
ways.
First, an individual can claim a lump sum payment through the tax
system by lodging a claim for FTB with the individual’s tax return. A
lump sum claimant may also reduce their TIDs in anticipation of their end of
year FTB entitlement but this is not a claim for FTB. The person's FTB
entitlement will be worked out at the end of the year when they lodge a claim
for FTB with their tax return. The FTB entitlement will be offset against any
tax shortfall caused by the reduction of tax instalment
deductions.
Second, a claim may be made for a past period from
FAO/Centrelink when making a claim for fortnightly payments. For example, if a
person, while making a claim for fortnightly instalments, realises that he or
she was also eligible for a past period, the person may claim a lump sum for the
time (up to 2 years) that they were not paid. It is important to note that a
claim for a past period cannot be made unless it is accompanied by a claim for
ongoing fortnightly payments.
This type of claim covers two situations.
First, where an FTB
child dies, a person remains eligible for FTB for the child for up to 14 weeks
after the death. The person has the option, however, of claiming FTB for the
deceased child as a single payment. This situation is addressed in
section 32 of the Family Assistance Act.
Second, if a person who is, or
would be, eligible for FTB in respect of an FTB deceased child dies before being
paid their FTB entitlement, another person can claim "in substitution"
under section 33 of the Family Assistance Act. Similarly, if a person who is
eligible for FTB for a child in normal circumstances dies before being paid
their entitlement, then another person can claim "in
substitution".
Form and manner of claim
To be effective, a
claim for FTB must be made in a form (which may be electronic) and manner
approved by the Secretary. The claim must contain any information and be
accompanied by any supporting documents required by the Secretary (subsection
7(2) refers). This means the Secretary may specify what information is to
be provided in claims, how claims are to be made and where they are to be
lodged.
A claim must also meet the tax file number requirements set out
in section 8 of the Bill in order to be effective (subsection 7(2)
refers).
Lodgement of claims
A person who wants to receive
their FTB through the tax system will be expected to lodge their claim with
their tax return. Individuals who have varied their TIDs in anticipation of
their FTB lump sum entitlement will also be expected to lodge an end of year
claim for a lump sum payment with their tax return.
Information
required from claimants will vary for different delivery
options
Information required in the claim form will vary depending on
the individual's circumstances. A person making a claim for fortnightly
payments for a current period will be asked for information relevant at the
time. Claims through the tax system, on the other hand, will ask for
information and changes to circumstances (where applicable) for a period in the
past.
Past period claims through the tax system will need to be lodged
each financial year
Individuals claiming through the tax system will
be required to lodge a FTB claim each financial year. Fortnightly recipients
however, will have their payment continued without the need for a new claim.
(Fortnightly recipients will be obliged to notify the FAO of change(s) to
circumstances. There will also be periodic reviews to ensure that changes
affecting a person's entitlement are taken into account.)
In recognition
of the fact that many taxpayers use a tax agent to prepare their tax returns and
are, therefore, likely to ask their agents to help prepare claims for FTB
through the tax system, a new provision will be inserted in the Income Tax
Assessment Act 1997 to allow a tax deduction for fees or commission paid
to a recognised tax adviser for advice in relation to FTB claims. (This is
consistent with the current practice of allowing a deduction for tax agent fees
related to tax return preparation and other tax related advice.) This amendment
is contained in the A New Tax System (Family Assistance) (Consequential and
Related Measures) Bill (No.2) 1999 and explained later in this explanatory
memorandum.
Tax file number requirement
As part of the
claim process, a claimant will be subject to a tax file number (TFN)
requirement. "Tax file number" is defined in section 3 of the Bill as
having the same meaning as in Part VA of the Income Tax Assessment Act
1936. The rules relating to this requirement are set out in section
8.
Each TFN claim person is subject to the TFN requirement. A "TFN
claim person" is defined in section 3 as meaning the claimant, the
claimant's current partner or, where the claim is for a past period, any partner
of the claimant during the past period.
The TFN requirement can be
satisfied in several ways.
First, the claimant can provide his or her TFN
and the TFN of any partner (past or current) that is a TFN claim person as
defined.
Second, the claimant can provide a statement to the effect that
the claimant has a TFN but does not know what it is, that the claimant has asked
the Commissioner of Taxation for the TFN and authorises the Commissioner to tell
the Secretary whether the claimant has a TFN and, if so, the number. If the
claimant has or had one or more partners who are a TFN claim persons, then the
claimant must provide a similar statement made by each TFN claim
person.
Third, the claimant can provide a statement to the effect that
the claimant has applied for a TFN and authorises the Commissioner for Taxation
to tell the Secretary whether the application is refused or withdrawn or, if a
TFN is issued to the claimant, that number. Again, if the claimant has or had
one or more partners who are a TFN claim persons, then the claimant must provide
a similar statement made by each TFN claim person.
There will be
situations where a claimant cannot satisfy the TFN requirement because the
claimant cannot obtain a relevant statement from, a current or previous partner
who is a TFN claim person. In these circumstances, the Secretary will have a
discretion to exempt the claimant from the TFN requirement.
An example
where the Secretary might use the discretion would be where the claimant has a
well based reason to believe that that he or she would be subject to violence
from the partner or there are other concerns for the safety of the claimant or a
child of the claimant if the partner were approached for a relevant
statement.
Restriction on instalment claims
Under
section 9, a claim for FTB is not effective if:
• the
claimant has previously claimed FTB by instalment but the claim has not yet been
determined; or
• the claimant is already entitled to be paid FTB by
instalment; or
(The term “entitled to be paid by instalment”
is defined in section 3 of the Bill to mean a person in respect of whom a
determination under section 16 is in force under which the person is
entitled to be paid FTB at or after a particular time.)
• the
claimant’s determination under section 16 has been varied by
determination under paragraph 27(5), 29(2) or 30(2) so that the claimant
is not entitled to FTB at the determination time or at any later time and the
determination time is before the end of the income year following the one in
which the variation determination took effect.
Restrictions on claims
for FTB for a past period
There are some restrictions on past
period claims for FTB. These restrictions are set out in section
10.
A claim is not effective if the claimant has previously made a
claim for any of the past period.
A claim is not effective if the
claimant was or would have been entitled to FTB by instalments for a day in or
after the past period.
A claim is not effective if a determination under
section 16 was in force at some time in the past period, that
determination was varied under paragraph 27(5), 29(2) or 30(2) with the
effect that the claimant is not entitled to FTB for the past period and the
claim is made before the end of the income year following the one in which the
variation determination took effect.
A claim must fall wholly within one
income year.
A claim must be made before the end of the next income
year.
A claim for a past period that occurs in the income year of the
claim must be accompanied by an instalment claim if, at the time of claiming,
the claimant is also eligible for payment of FTB by instalment. Otherwise, the
claim is ineffective.
A claim for a past period that occurs in the income
year before the one in which the claim is made must be accompanied by an
instalment claim if:
• the claimant is receiving a social security
pension or benefit or a service pension at the time of claim and was receiving
such a payment at any time during the past period; and
• when the
claim is made, the claimant is also eligible for payment of FTB by
instalment.
Otherwise the past period claim is ineffective.
Tax
clients (or their partners) who have reduced their TIDs in anticipation of their
FTB entitlement cannot make a claim in the same income year in which the past
period occurs. The practical effect of this provision will be that where a
claimant, or their partner, reduce their TIDs during the year in anticipation of
their end of year FTB entitlement, they will not be able to claim for that past
period until that income year has ended, that is, when they lodge a tax return
for that year.
Restrictions on bereavement
claims
Bereavement claims can be made in the following
situations.
First, where an FTB child dies, a person remains eligible for
FTB for the child for up to 14 weeks after the death. The person has the
option, however, of claiming FTB for the deceased child as a lump sum. This
situation is addressed in section 32 of the Family Assistance Act.
The
reference in section 11 to a claim for payment of FTB by single
payment is a reference to this first type of claim.
Second, if a
person who is, or would be, eligible for FTB in respect of a deceased child dies
before being paid their FTB entitlement, another person can claim "in
substitution" under section 33 of the Family Assistance Act. Similarly, if a
person who is eligible for FTB for a child in normal circumstances dies before
being paid their entitlement, then another person can claim "in
substitution".
The reference in section 11 to a claim for payment
of FTB in substitution is a reference to a claim arising under the second
set of scenarios.
Subsection 11(1) provides that a claim for
payment of FTB by single payment/in substitution is not effective if the
claimant has previously claimed FTB on the same basis. It is irrelevant whether
or not the claim has been determined.
Under subsection 11(2), a
claim for payment of FTB by single payment/in substitution where eligibility is
based in subsection 32(2) or section 33 of the Family Assistance Act must be
made before the end of the financial year after the year in which the person
died. Otherwise, the claim is not effective.
Claim may be
withdrawn
Under section 12, a claim can be withdrawn or varied
( in a manner determined by the Secretary) before it is determined.
A
claim that is withdrawn is taken not to have been made. This means that the
Secretary is not in the position of having to determine an unwanted
claim.
Subdivision B - Determination of claims etc
Secretary must determine claim
Section 13 deals with
the determination of claims.
If a claim is effective, then it must be
determined by the Secretary in accordance with
sections 16 to 19. If
the claim is not effective, it is taken not to have been made.
The
Secretary is required to determine an effective claim by having regard to only
the information provided in the claim or to a combination of information
provided in the claim and any other relevant information or
documents.
Restrictions on determining a claim
There are
two situations where the Secretary can defer determining a claim.
The
first is where a person makes a past period claim for the previous income year,
the person is required to lodge a tax return in relation to that previous year
and, at the time the claim is made, an assessment of the person's taxable income
has not been made. In this situation, the claim can only be determined when the
assessment is made.
This rule, contained in section 14, enables
the Secretary to determine the claim and the amount of the person's entitlement
for that previous year based on the person's actual income. In cases where a
claimant has reduced his or her TIDs in anticipation of FTB entitlement at the
end of the year, this provision also allows the claimant’s FTB entitlement
to be offset against the claimant’s taxation liability.
The second
situation, addressed in section 15, relates to the TFN requirements that
apply when a claim for FTB is made. If a claimant provides the relevant TFN's
at the time of claim, then the claim can be determined. If, however, a TFN
claim person makes a statement under subsection 8(5) (that the TFN claim
person does not know his or her TFN number etc), the Secretary can only
determine the claim if:
• within 28 days of the claim, the
Commissioner for Taxation tells the Secretary the person's TFN;
or
• 28 days passes without the Commissioner telling the Secretary
that the person does not have a TFN.
If a TFN claim person makes a
statement under subsection 8(6) (that the TFN claim person has applied
for a TFN), then the Secretary can only determine the claim
if:
• within 28 days of the claim, the Commissioner for Taxation
tells the Secretary the person's TFN; or
• 28 days passes without
the Commissioner telling the Secretary that the person has not applied for a TFN
or that the application has been refused by the Commissioner or withdrawn by the
person.
Determination of instalment entitlement
claim
Section 16 provides for the determination of a claim for
FTB by instalment.
If a claim is made for payment of FTB by instalment
and the claimant is eligible under the normal rules in Subdivisions A or C of
Division 1 of Part 3 of the Family Assistance Act, then the Secretary must
determine that the claimant is entitled to be paid FTB for each day on which the
determination is in force, at a daily rate for which the person is eligible
(subsection 16(2) refers). This rule applies to both individual s and
approved care organisations who claim FTB by instalment.
If, however, a
pattern of care exists in relation to an FTB child with the effect that the
claimant is eligible for FTB for regular but broken periods while the child is
in the claimant's care, then subsection 16(2) allows the Secretary to
make a determination that the claimant is entitled to be paid FTB for those days
on which the claimant has the care of the child. This rule only applies to
individuals who claim payment of FTB by instalment.
This provision
enables a single determination to remain in force in cases where a person shares
the care of an FTB child and there is a pattern of care in relation to the
child. Without such a provision, a person would need to reclaim FTB each time
the person resumed care of the child and the entitlement determination would
need to be "cancelled" for loss of eligibility each time the child left the care
of the person.
Subsections 16(2) and (3) provide for the making of
a entitlement determination that is in force from the day of the determination.
Because the day on which a determination is made may not be the same as the
claim day, subsection 16(4) enables the claimant to be paid for the
period between claim and determination if, during that period or part of the
period, the claimant was eligible for FTB under the normal rules in Subdivisions
A or C of Division 1 of Part 3 of the Family Assistance Act. The rule in
subsection 16(4) applies to both individuals and approved care
organisations who claim FTB by instalment.
Subsections 16(5) and (6)
deal with the situation where a person claims FTB by instalment at a time
when the person is eligible for FTB under section 31 of the Family Assistance
Act. Section 31 covers eligibility for FTB during a bereavement period (ie, a
period of 14 weeks after the death of an FTB child). At the end of the
bereavement period, if the person has other FTB children, eligibility would be
determined under the normal rules in Subdivision A of Division 1 of Part 3 of
the Family Assistance Act.
Under subsection 16(5), if the claimant
is eligible for FTB under section 31 of the Family Assistance Act and has one or
more FTB children that would attract eligibility for the person under the normal
rules in Subdivision A of Division 1 of Part 3 of that Act, then the Secretary
must determine that the person is entitled to be paid FTB at an appropriate rate
for each day in the bereavement period and thereafter for each day while the
determination is in force.
Under subsection 16(6), if the claimant
is eligible for FTB under section 31 of the Family Assistance Act but does not
have any FTB children that would attract eligibility for the person under the
normal eligibility rules, then the Secretary must determine that the person is
entitled to be paid TFB at an appropriate rate for each day in the bereavement
period.
Determination of past period entitlement
claim
Where a claimant is eligible for FTB for a past period, the
Secretary must determine that the claimant is entitled to be paid for the past
period (section 17 refers).
A past period claim through the tax
system can relate to an income year or one or more periods in an income year
(during which the individual believes that he or she is eligible for FTB). The
individual’s lump sum payment for that past period will be calculated by
reference to those days in the income year during which the individual was
eligible for FTB and the individual’s circumstances on each day in the
period.
An example which shows how an individual's lump sum payment may
consist of more than one period of entitlement is where a claimant has a baby
(her second child) on say, 1 January and is entitled to a higher daily rate
of FTB for the second half of the tax year. The lump sum paid to the claimant
would comprise the claimant's FTB entitlement for two separate periods - a lower
daily rate for the first period when she had one child and a higher daily rate
when she had two children.
Determination of bereavement entitlement
claim
Under section 18, if a claim is made for FTB by single
payment/in substitution and the claimant is eligible for FTB under section 32 or
33 of the Family Assistance Act, the Secretary must determine that the claimant
is to be paid the FTB.
Determination that no entitlement
If
the Secretary is not satisfied that a claimant is eligible for payment of FTB by
instalment, for a past period or because of the death of another individual,
then the Secretary must make a determination to that effect (section 19
refers).
Determination of rate may be based on an
estimate
An individual's rate of FTB is calculated on the basis of
the individual's taxable income for the current income year. If the individual
is a member of a couple, the partner's taxable income for the current income
year is also relevant. Where a claim is made for FTB by instalment, an
individual's taxable income for the income year will not be known until the end
of the income year. A similar issue also arises in relation to claims for a
past period.
Accordingly, section 20 allows the Secretary to use a
reasonable estimate of the amount provided by the individual for the purposes of
calculating the person's rate of FTB.
The estimate used to calculate the
individual’s rate or amount of FTB will then be reconciled against their
actual income for the relevant income year when it becomes known and any
adjustment to the person’s payment made accordingly.
When
determination is in force
The general rule is that a determination
comes into force when it is made and continues in force at all times afterwards
(subsection 21(1) refers).
Subsection 21(2) deals with the
possibility of overlapping determinations. This can occur where, for example, a
review is pending on a decision that a claimant is not entitled to FTB by
instalment, a claim is subsequently made and determined in favour of the
claimant and the outcome of the review is that the claimant was, in fact,
entitled to be paid FTB by instalment in the first instance.
If a
determination that a claimant is entitled or not entitled to be paid FTB by
instalment is in force, then that determination ceases to be in force if another
determination is made in relation to an instalment claim or a past period claim
that overlaps with the first determination.
Under subsection
21(3), a determination that the claimant is entitled to be paid FTB on a
particular day or a later day can also cease to be in force on request from a
claimant, provided the claimant is not receiving a social security pension,
social security benefit or a service pension (these terms are defined in
subsection 23(1) of the Social Security Act.
Notice of
determination
The Secretary is required, under section 22, to
notify a claimant of the outcome of his or her claim, that is, whether the
claimant is entitled to be paid FTB by instalment or for a past period, the
daily rate or amount of payment and how the payment is to be made. The
determination must also inform the claimant of his or her right of review in
relation to the determination.
The determination is not ineffective if
these notice requirements are not complied with.
Payment of family tax
benefit by instalment
Under subsection 23(1), if a claimant is
entitled to be paid FTB by instalment, then the Secretary must pay the
"instalment amount" to the claimant after each "instalment period" after the
determination is made.
"Instalment amount" is defined in subsection
23(2) to mean the amount accruing for the days in the instalment period on
which the claimant is entitled to be paid under the determination. "Instalment
period" is generally the period of 14 days beginning on the day the Secretary
considers appropriate and each successive period of 14 days.
The
Secretary can change the day on which an instalment period begins under
subsection 23(3). This might be done where the claimant requests,
for good reason, that he or she receive payments on a different
day.
While the general rule is that the person entitled to FTB is to be
paid the benefit at such time and in such manner as the Secretary considers
appropriate, there may be occasions when it is appropriate for the Secretary to
pay someone else on behalf of the entitled person. The power to do so is
contained in subsection 23(4). This may happen where the entitled person
is incapable of looking after his or her own affairs or in cases where the
entitled person asks the Secretary to make such a direction. It is envisaged
that the discretion in subsection 23(4) would be used infrequently where
the entitled person does not consent to the direction. A decision by the
Secretary under this provision is subject to review.
Subsection
23(5) contains a regulation making power to deal with the timing and manner
of making payments.
The payment provisions in section 23 are
subject to overpayment and debt recovery provisions in Part 4 and the
offsetting rules in sections 226 to 229.
Other payments of
family tax benefit
If a claimant is entitled to be paid FTB for a
past period or by single payment/in substitution because of the death of another
person, then the Secretary must pay the person the amount to which they are
entitled (subsection 24(1) refers).
As is the case with payment of
FTB by instalment, the Secretary has a discretion, under subsection
24(2), to pay the whole or part of the amount to another person on behalf of
the claimant. For example, payment of FTB for a past period may, on direction
of the claimant, be made to a tax agent on behalf of the claimant.
Subsection 24(3) contains a regulation making power to deal with
the timing and manner of making payments.
The payment provisions in
section 24 are also subject to overpayment and debt recovery provisions
in Part 4 and the offsetting rules in sections 226 to
229.
Obligation to notify changes of circumstances
A
claimant who becomes entitled to be paid FTB by instalment will be subject to
certain notification obligations. These obligations are to ensure that payments
are reassessed in a timely manner.
Under section 25, a claimant is
required to notify the Secretary if anything happens (or is likely to happen)
that may cause the claimant to cease to be eligible for FTB or which may impact
on the claimant's rate of payment. There is a penalty for failing to comply
with these obligations.
Secretary's power to request tax file
number
Under section 8, a claimant is subject to certain TFN
requirements before a claim can be determined. Similar requirements apply under
section 26 if a determination is in force under which a claimant is
entitled to be paid FTB by instalment or for a past period. These TFN
requirements apply in relation to a "TFN determination person", defined in
section 3 as meaning:
• in relation to a determination that
a claimant is entitled to be paid FTB by instalment - the claimant or any
partner of the claimant at any time since the determination was made;
or
• in relation to a determination that a claimant is entitled to
be paid FTB for a past period - the claimant or any partner of the claimant
during that past period.
Section 26 might be used where, for
example, a claimant becomes a member of a couple at a time when a determination
that the claimant is entitled to be paid FTB by instalment is in
force.
The consequences of failing to meet the TFN requirements set out
in this provision are outlined in section 27.
Subdivision C - Variation of determinations
Variation of instalment and past period determination where failure to
provide
tax file number
Section 27 sets out the
circumstances in which the TFN requirements in section 26 are not
satisfied and the consequences of failing to satisfy those requirements
within 28 days of being requested to do so. The TFN requirements are not
satisfied if:
• within 28 days of the request, the claimant gives
the Secretary a statement by the TFN determination person that the person does
not know his or her TFN and the Commissioner for Taxation tells the Secretary
that the person does not have a TFN (subsection 27(3) refers);
or
• within 28 days of the request, the claimant gives the
Secretary a statement by the TFN determination person that the person has
applied for a TFN and the Commissioner for Taxation tells the Secretary that the
person has not applied for a TFN or that the application has been refused by the
Commissioner or withdrawn by the person (subsection 27(4)
refers).
If the TFN requirements are not satisfied then, under
subsection 27(5), the consequences are as follows:
• where
an instalment determination is in force in relation to the claimant, the
determination is varied with the effect that the claimant is not entitled to be
paid FTB by instalment from the day after the end of the last instalment period
before the variation; or
• where a past period determination is in
force in relation to the claimant - the determination is varied with the effect
that the claimant is not entitled to be paid FTB for any day in the past
period.
However, the Secretary has the discretion not to apply the
consequences set out in subsection 27(5) if the TFN determination person
is the claimant's partner and the claimant cannot obtain the partner's TFN or
relevant statement under subsection 26(2), (3) or (4). This rule is set
out in subsection 27(2).
The consequence in subsection
27(5) can be undone in certain circumstances. These are as
follows:
If an instalment determination has been varied under
paragraph 27(5)(a) and the Secretary finds out the TFN number of the
relevant person before the end of the income year in which the variation took
effect, then the effect of the variation is undone.
If a past period
determination is varied under paragraph 27(5)(b) and the Secretary finds
out the TFN number of the relevant person at any time after the variation took
effect, then the effect of the variation is undone.
These rules are
contained in subsection 27(6).
Variation of instalment and past
period entitlement determination where income tax return not
lodged
Section 28 deals with the situation where an instalment
or past period entitlement determination is in force, for one or more days in
the previous income year the claimant is entitled to FTB under the
determination, the claimant or the claimant's partner or both are required to
lodged a tax return for that previous income year but have not done so and an
income tax assessment has not been made in relation to each relevant person. If
this happens, subsection 28(2) provides the entitlement determination
must be varied with the effect that claimant is not entitled to be paid FTB in
the previous income year. For customers who are being paid FTB by instalment,
this would mean that the amount of FTB paid during the previous income year
would be a debt, recoverable under Part 4. The outcome is similar where
a customer has been paid FTB for a past period based on the claimant’s
actual income and a partner’s estimated income, and the partner does not
lodge a tax return as required.
This provision supports the end of year
income reconciliation process. Although FTB can be paid on the basis of an
estimate, the rate of FTB is ultimately based on a person's actual income in a
relevant income year. This amount cannot be known until a return is lodged and
an assessment made. It is only then that a person's "real" entitlement can be
determined.
If the Commissioner for taxation subsequently makes an
assessment in relation to each relevant person, then, under subsection
28(3), the determination must again be varied with the effect that the
claimant is entitled to be paid the lesser of:
• the actual amount
of FTB to which the claimant is entitled; or
• the amount that the
claimant was entitled to be paid before the variation in
subsection 28(2).
Variation of instalment entitlement
determination where failure to provide information
Section 29
operates where an instalment entitlement determination is in force in relation
to a claimant, the Secretary requires the claimant or claimant's partner,
under Division 1 of Part 6, to give information or provide documents
concerning the claimant’s eligibility or rate and the requirement is not
complied with.
Where this happens, the instalment determination may be
varied by the Secretary under subsection 29(2) with the effect that the
claimant is not entitled to be paid FTB by instalment from the day after the end
of the last instalment period before the variation.
Under subsection
29(3), if the claimant subsequently gives the information or produces the
documents by the end of the income year following the one in which the variation
took effect, the Secretary must undo the variation determination under
subsection 29(2).
Variation of instalment entitlement
determination where failure to notify change of address
Subsection
30(1) enables the Secretary to vary an instalment entitlement determination
that is in force where there is reason to believe that the claimant's address
has changed and the Secretary, after taking reasonable steps to find out the new
address, is unable to do so.
Where this happens, the Secretary may vary
the determination under subsection 30(2) with the effect that the
claimant is not entitled to be paid FTB by instalment from the day after the end
of the last instalment period before the variation.
If the Secretary
subsequently finds out that the claimant's address has not changed or finds the
claimant's new address before the end of the income year following the year in
which the determination took effect, then the Secretary must vary the
determination to undo the effect of the previous variation (subsection
30(3) refers).
Variation of instalment entitlement determination
to reflect later changes in eligibility
Subsection 31(1)
enables the Secretary to vary an instalment entitlement determination at any
time after its making to take account of changes in the claimant's circumstances
that impact on eligibility for, or rate of, FTB. A determination can be varied
so that it has effect at all times after the change in circumstances. Subject
to the rule in subsection 31(2), the effect of the variation
determination can be prospective or retrospective.
This provision is
required because the review provisions in Part 5 only allow for the
review of a decision with effect from the date of that decision. For example, a
determination is in force on day 1 and a change in circumstances subsequently
occurs on day 20 which affects the claimant's rate of FTB and the Secretary is
notified of the change on day 25. The effect of the change is that the
claimant's rate of FTB should be increased from day 20. The only decision that
can be reviewed under Part 5 is the original entitlement determination.
This is not appropriate in the given scenario. What is needed is a power to
vary the determination from day 20. Section 31 allows this type of
variation to be made. A variation under section 31 is a "decision" that
can be reviewed under Part 5.
By contrast, if the original
determination was incorrect, the Secretary would have the power under the review
provisions in Part 5 to set aside the incorrect original decision and
substitute a new decision with effect from day 1. Similarly, the claimant could
seek review of the original determination.
Subsection 31(2) limits
the effect of a beneficial variation determination in certain circumstances.
If:
• the Secretary does not become aware of a claimant’s
change in circumstances and the claimant does not notify the Secretary of the
change until after the end of the income year following the one in which the
change occurred; and
• the Secretary would be required under
subsection 31(1) to increase the claimant’s entitlement to FTB as a
result of the change,
then the Secretary is required to increase the
claimant’s entitlement from the beginning of the income year that precedes
the year in which the Secretary becomes aware of the change.
Under
subsection 31(3), if a variation under section 27, 28, 29 or 30 is
in force when the Secretary varies a determination under section 31, then
the variation under section 27, 28, 29 or 30 prevails. This provision
ensures that the variation power in section 31 cannot override the effect
of those other provisions.
Under section 32, the Secretary must notify the claimant of any
variation determination that is made under Subdivision C, including the
effect of the variation, and inform the claimant of his or her review
rights.
A variation determination is not ineffective if the notice does
not comply with these requirements.
Division 2 – Payment of family tax benefit advances
Determination of entitlement to family tax benefit
advance
Subsection 33(1) provides that the Secretary may
determine that an individual is entitled to be paid FTB for a standard advance
period. ‘Standard advance period’ is defined in section 3 of the
Family Assistance Act as a period starting on 1 January and ending on the
following 30 June, or starting on 1 July and ending on the following 30
December. The Secretary may determine that the individual is entitled to be
paid FTB for the advance period where:
• on the advance assessment
day:
- the individual is entitled to be paid FTB by
instalment;
- the individual’s Part A rate is calculated under Part
2 of Schedule 1 to the Family Assistance Act (where income does
not exceed the higher income free area); and
- the individual’s
Part A rate is equal to or exceeds twice the individual’s FTB advance rate
(‘FTB advance rate’ is defined in section 3 of the Family Assistance
Act);
• the individual has requested payment of an FTB advance for
the period; and
• the request is made before the end of the
period.
Subsection 33(2) defines an individual’s
‘advance assessment day’ as either the first day in the standard
advance period, or, if the individual is not entitled to FTB by instalment on
that day but becomes entitled on a later day of the period due to the birth of a
child, the day on which the individual becomes entitled to
FTB.
Subsection 33(3) provides that the request for an advance may
operate for a particular standard advance period only, or for subsequent periods
as well. Subsection 33(4) provides that where the request applies for
subsequent periods, the individual may withdraw the request at any time for
standard advance periods for which FTB advance has not yet been
paid.
Subsection 33(5) provides that an individual cannot become
entitled to more than one FTB advance for a standard advance period.
Section 34 sets out the method of calculating the amount of the
FTB advance. The FTB advance rate is converted to a daily rate by dividing the
rate by 365, and the result is then multiplied by the number of days in the
individual’s FTB advance period. An individual’s ‘FTB advance
period’ is the standard advance period, except:
• where it is
not practicable on the first day in the standard advance period to adjust the
individual’s payment of FTB to take account of the advance, the
individual’s FTB advance period starts at the beginning on the first
instalment period on which it is practicable to adjust the payment;
and
• the Secretary may determine that an individual’s FTB
advance period is to end before the end of the standard advance period, if the
Secretary considers that this is appropriate having regard to the
individual’s eligibility for FTB and the rate of FTB to which the
individual is entitled.
Section 35 provides that the advance is to be paid as such time
and in such manner as the Secretary considers appropriate, subject to Part
4 of the Act (overpayments and recovery).
Division 3 – Maternity allowance and maternity immunisation allowance
Division 3 sets out the claims and payment rules that apply to
maternity allowance (MAT) and maternity immunisation allowance (MIA). These
rules are similar to the claims and payment rules which currently apply to the
maternity allowances under the Social Security Act.
Need for a
claim
A person can only become entitled to be paid MAT/MIA if a
person makes a claim for the payment in accordance with the rules set out in
Division 3. Section 36 provides for this rule.
Who can
claim
Only individuals can claim MAT/MIA (section 37
refers).
How to claim
According to section 38, a
person can claim MAT/MIA in normal circumstances (ie, where the person meets the
eligibility conditions set out in section 36 of the Family Assistance Act) or in
situations where an eligible person dies before being paid MAT/MIA (ie, where
section 38 of the Family Assistance Act applies).
In either of these
cases, a claim must be made in a form and manner approved by the Secretary. The
claim must also contain any information or be accompanied by any documents
required by the Secretary.
If these conditions are not met, the claim is
not effective.
Restrictions on claiming
There are a number
of situations in which a claim for MAT or MIA will not be effective. These are
outlined in section 39.
In relation to a "normal circumstances"
claim, the following rules apply.
A claim is not effective where the
claimant has previously claimed MAT or MIA on the basis of the same
circumstances.
A person is required to claim MAT within 26 weeks of the
birth of a child in respect of whom the person is claiming MAT or within 26
weeks from the time the child is entrusted to the person's care (whichever is
relevant). Claims for MAT outside these time limits will generally not be
effective. The exception, which is at the discretion of the Secretary, is where
the person is unable to claim MAT for the child within the 26 week time limit
because of severe illness associated with the birth of the child (for example
post natal depression). In this situation, the 26 week time limit can be
extended.
A person is required to claim MIA in respect of a child before
the child reaches the age of 2. If the child dies before that time, MIA must be
claimed within 13 weeks of the death of the child or within 2 years of the birth
of the child, whichever is the later.
If a person who is eligible for MAT
or MIA dies before being paid their entitlement, then another person may claim
the payment. Such a claim is effective only if the claimant has not previously
claimed MAT or MIA because of the death of the first person.
Claim may
be withdrawn
Under section 40, a claim can be withdrawn or
varied (in a manner determined by the Secretary) before it is
determined.
A claim that is withdrawn is taken not to have been made.
This means that the Secretary is not put in the position of having to determine
an unwanted claim.
Secretary must determine
claim
Section 41 deals with the determination of
claims.
If a claim is effective, then it must be determined by the
Secretary. If the claim is not effective, it is taken not to have been made
(see subsection 41(1)).
Under subsection 41(2), the
Secretary is required to determine an effective claim by having regard to only
the information provided in the claim or to a combination of information
provided in the claim and any other relevant information or
documents.
Ordinarily, a claim reflects existing circumstances and is
made at a time when the claimant believes he or she may be entitled to payment.
The claim is then determined within a reasonable time after it is made. Without
specific provision to the contrary, a claim for payment in anticipation of
future eligibility would be determined in the negative.
In relation to
MAT and MIA, provision is made to allow early claims (at a time when the
claimant is not eligible) in certain circumstances. The early claims provisions
applicable to MAT and MIA are as follows.
Under subsection 41(3),
a person can claim MAT up to 13 weeks before becoming eligible for the payment
provided the reason for the ineligibility is not that the child to whom the
claim relates has not yet been born and the Secretary is satisfied that the
person will be eligible for MAT within 13 weeks of claiming. In this situation,
subsection 41(4) provides that the claim is to remain undetermined until
the claimant becomes eligible for MAT (provided that occurs within the 13 week
period) or 13 weeks after the claim is made.
An example of where this
provision might apply would be where a person’s income will be reduced
from a known time such that the person will be eligible for FTB (Part A) and
therefore MAT.
Under subsection 41(5), a person can claim MIA at a
time when the person is not eligible for that payment provided the following
conditions are met:
• the person must claim MAT and MIA at the same
time;
• the person is eligible for MAT in respect of the child;
and
• the person is eligible for family tax benefit (Part A) in
respect of the child.
Where the conditions in subsection 41(5) are
met, subsection 41(6) provides that the claim is to remain undetermined
until the claimant becomes eligible for MIA (provided that occurs within 2 years
of the birth of the child for whom MIA is claimed) or 2 years after the child
was born.
Determination of "normal circumstances" entitlement
claim
Under section 42, if a person claims MAT/MIA in respect
of a child and the Secretary is satisfied that the person is eligible for
MAT/MIA under the relevant eligibility provisions in the Family Assistance Act,
then the Secretary must determine that the person is entitled to be paid
MAT/MIA.
Determination of "bereavement" entitlement
claim
If a person claims MAT/MIA because of the death of another
person (who was eligible for MAT/MIA but never paid their entitlement) and the
Secretary is satisfied that the person is eligible for MAT/MIA under the
relevant eligibility provisions in the Family Assistance Act, then the Secretary
must determine that the person is entitled to be paid MAT/MIA. This rule is in
section 43.
Determination that no entitlement
If the
Secretary is not satisfied that a person is entitled to be paid MAT/MIA, then
the Secretary must make a determination to that effect (section 44
refers).
When determination is in force
Section 45
provides that a determination comes into force when it is made and remains in
force thereafter.
It should be noted that an MAT/MIA determination is a
decision that can be reviewed or appealed against. The determination can
therefore be affirmed, varied or set aside in accordance with the review of
decisions provisions in Part 5.
Notice of
determination
The Secretary is required, under section 46, to
notify the claimant of a determination. The notice must tell the
claimant:
• whether he or she is entitled to
MAT/MIA;
• if the claimant is entitled, the amount of allowance and
how it is to be paid; and
• that the claimant has rights of
review.
The determination is not ineffective if the notice does not
comply with these requirements.
Payment of maternity allowance or
maternity immunisation allowance
Section 47 provides for the
payment of MAT and MIA.
The general rule is that the person entitled to
MAT/MIA is to be paid the allowance at such time and in such manner as the
Secretary considers appropriate. Both MAT and MIA are paid as lump sums,
generally into an account nominated by the person.
There may be
occasions, however, when it is appropriate for the Secretary to pay someone else
on behalf of the entitled person. This may happen where the entitled person is
incapable of looking after his or her own affairs or in cases where the entitled
person asks the Secretary to make such a direction. It is envisaged that the
discretion in subsection 47(2) would be used infrequently where the
entitled person does not consent to the direction.
A decision by the
Secretary under this provision is subject to review under Part 5.
Division 4 – Child care benefit
Division 4 provides regulation-making powers in relation to
determinations of eligibility for, or entitlement to, child care benefit (CCB),
and how payments are to be made.
Section 48 provides an overview of the
Division.
Determinations about eligibility for child care
benefit
Sections 49 to 53 provide that regulations may
prescribe circumstances in which, and procedures (including the making of
claims) by which, the Secretary is to determine:
• conditional
eligibility, under section 41 of the Family Assistance Act, of an individual for
CCB paid by instalment to an approved child care service in respect of child
care provided by the service;
• if an individual is conditionally
eligible for CCB paid by instalment to an approved child care service and is
eligible for CCB under section 42 of the Family Assistance Act, entitlement of
the individual to have CCB paid to the service;
• entitlement of an
individual who is eligible, under section 43, for CCB for past periods of care
provided by an approved child care service to be paid lump sum
CCB.
• entitlement of an approved child care service to be paid CCB
amounts if the service is eligible, under section 45 of the Family Assistance
Act, for CCB in special circumstances (eligibility for the first 13
week);
• conditional eligibility, under section 46 of the Family
Assistance Act, of an approved child care service for CCB in special
circumstances paid by instalment (eligibility for more than 13
weeks);
• if an approved child care service is conditionally
eligible for CCB paid by instalment and is eligible for CCB under section 47 of
the Family Assistance Act, entitlement of the service to have CCB
paid;
• entitlement of an individual who is eligible, under section
49 of the Family Assistance Act, for CCB for past periods of care provided by a
registered carer to be paid lump sum CCB;
• entitlement of an
individual who, because of death of another person, is eligible, under section
57 of the Family Assistance Act, for a CCB lump sum amount under Subdivision B
(CCB for past periods for care provided by an approved child care service) or D
(CCB for past periods for care provided by a registered carer) of the Family
Assistance Act.
Family Assistance Act is defined in section 3 as
the A New Tax System (Family Assistance) Act
1999.
Section 49(2) provides that, if regulations are made
under section 49(1)(a) (which relates to determinations that an
individual is conditionally eligible for CCB by instalment in respect of child
care provided by an approved child care service), the regulations may provide
for the conditional eligibility to cease if the child does not ‘meet the
immunisation requirements’. The meaning of meeting the immunisation
requirements is set out in section 6 of the Family Assistance Act and related
provisions are contained in sections 3, 4, 5 and 7 of that Act. The
immunisation requirements are described in detail in the explanatory memorandum
relating to section 39 of that Act.
Section 54 provides that regulations may provide for the use of
estimates of ‘adjusted taxable income’ in determining CCB
entitlements. Section 3 of the Family Assistance Act defines ‘adjusted
taxable income’ by reference to clause 2 of Schedule 3 to that Act which
sets out the components which combine to make up an individual’s adjusted
taxable income.
Section 55 provides that regulations may make provision for the
amount, timing and manner of making of CCB payments (these regulations may deal,
for example, with such issues as paying CCB instalment amounts to approved child
care services and paying CCB lump sum amounts to individuals). This includes
the power to provide for an individual who is entitled to be paid CCB amounts to
nominate another individual to receive the amounts.
Section 56 provides that regulations may make provision for the
variation, suspension or cancellation of determinations.
In particular,
subsection 56(2) provides that where estimates of adjusted taxable income
have been used in determining an individual’s CCB entitlement for an
income year, the regulations may provide for the entitlement determinations to
be varied, suspended or cancelled as a result of the process of reconciliation
of the individual’s entitlements undertaken after the end of the income
year, or in other situations, when the actual taxable income has been assessed.
It is proposed to reconcile routinely CCB entitlements based on estimated
taxable income once actual taxable income for the relevant income year is
known.
Subsection 56(3) provides that regulations under
subsection 56(2) may provide exemptions from variations etc. of
determination of CCB entitlements resulting from the assessment of taxable
income if the entitlement relates to CCB in special
circumstances.
Passing on child care benefit by way of reduced charges
etc.
Subsection 57(1) provides that regulations may make
provision for approved child care services who are paid amounts of CCB (whether
as CCB advance payments or CCB entitlements of individuals) to pass on the
benefit of the CCB to the person who pays or would normally be liable to pay the
child care charges. The regulations may provide for the benefit to be passed on
either by reducing the amounts that the service would otherwise charge, or by
making cash payments to the persons who have paid the
charges.
Subsection 57(2) provides that the regulations under this
section may also provide for child care services to give to the person who would
normally pay the charges a document setting out the amount of the charges or
that there were no charges, what the charges would have been without the
reduction, how much CCB was passed on in reducing the charges, and any other
specified information.
Section 58 provides that regulations may make provision for
approved child care services to maintain records in relation
to:
• the services’ eligibility for
CCB;
• payments received by the services under this
Act;
• the services’ compliance with conditions for continued
approval:
• any other specified matters.
The regulations may
provide for the records to be retained for a specified period, and for the
records to be produced to the Secretary in specified circumstances.
Subsection 59(1) provides that regulations may make provision for
individuals or approved child care services to provide information to the
Secretary about changes in circumstances that may be relevant to their
entitlement, or their address. Subsection 59(2) provides that
regulations may provide for individuals to advise the Secretary about changes in
the child care service used, and subsection 59(3) provides that the
regulations may provide for child care services to give the Secretary
information in relation to their services, including the names of all the
children to whom sessions of care have been provided, the number of hours in
those sessions of care and the amount of CCB that the services have been or will
be paid for the sessions of care provided.
Provision of tax file
numbers to the Secretary in claims or in documents given together with
claims
Section 60 provides that, if regulations under
section 49, 50, 52 or 53 provide for the making of claims
for CCB, those regulations may provide for the claimant, or his or her partner,
to provide a statement:
• of the individual’s tax file number
(subsection 60(2) refers);
• that the individual does not
know his or her tax file number and has asked the Commissioner of Taxation to
inform the Secretary of the number, and which authorises the Commissioner of
Taxation to tell the Secretary the number (subsection 60(3)
refers);
• that the individual has a tax file number application
pending, and which authorises the Commissioner of Taxation to tell the Secretary
the outcome of the application (subsection 60(4)
refers).
Subsection 60(5) provides that the regulations may also
provide for the Secretary to exempt claimants from the requirements of this
section if the claimant cannot obtain from his or her partner the statement
required.
Subsection 60(6) provides that the regulations under
this section may provide for determinations on claims not to be made where
statements have been made under subsections 60(3) or (4).
Section 61 provides that regulations may make provision for the
Secretary to request (but not compel) an individual to give the Secretary,
within 28 days, a statement of the kind set out in section 60 (tax file
numbers). The Secretary may request that the statement be made by the
individual concerned, or by his or her partner or former partner. The
regulations may provide for entitlement or conditional eligibility to CCB to be
removed if the individual does not comply with the request.
Section 62 provides that the regulations may provide for the
Secretary to vary determinations under this Subdivision (for instance a
determination as to entitlement to CCB) where information requirements or other
aspects of the regulations are not complied with.
Section 63 provides that regulations may make provision
for:
• the giving of notices of determinations under this
Subdivision, and the content of such notices;
• the period for
which determinations are to be in force;
• the reduction of
payments of CCB on account of CCB debts owed to the
Commonwealth;
• the making of CCB advance payments to approved
child care services (to be set off against later CCB
entitlements);
• any other incidental matters.
Provision of instalment statements where individual conditionally
eligible for child care benefit by instalment
Section 64
provides that, where a determination is in force that an individual is
conditionally eligible for CCB by instalment, the approved child care service
must give the Secretary, during the next instalment period, the statement and
information required by paragraph 42(1)(b) (statement of amounts of CCB etc.) of
the Family Assistance Act. The penalty for contravention of this provision,
without reasonable excuse, is a fine not exceeding 60 penalty
units.
Provision of instalment statements where approved child care
service conditionally eligible for child care benefit by instalment
The term ‘instalment period’ used in sections 64 and
65 is defined in section 3 as having the meaning given by subsections
42(4) or 47(2) (as the case may be) of the Family Assistance
Act.
‘Family Assistance Act’ is defined in section 3
as the A New Tax System (Family Assistance) Act 1999.
Division 5 – Payment protection and garnishee orders
Protection of payment of family tax benefit, maternity allowance and
maternity immunisation allowance
Section 66 provides for a
payment of FTB (including FTB advances), MAT, MIA, CCB or certain advance
payments prescribed by the regulations to be absolutely inalienable whether by
way of, or in consequence of, sale, assignment, charge, execution, bankruptcy,
or otherwise.
This rule is subject to exceptions
where:
• payment is made to someone else on a person’s
behalf;
• deductions are made from the payment to repay a
debt;
• a person consents to deductions from his or her payment to
repay the debt of another person;
• deductions are made from the
payment to pay the Commissioner of Taxation;
• family assistance
entitlement is set off against a tax liability;
• entitlement to
arrears of family assistance is set off against a debt;
• a person
consents to deductions from his or her entitlement to arrears of family
assistance to repay the debt of another person.
Section 67 covers the same payments that are protected under the
inalienability rule in section 66. These are listed in subsection
66(1). Section 67 protects a “saved amount” of these
payments in a person’s bank account from being garnisheed by third party
creditors. The “saved amount” is calculated by working out the
total amount of those payments credited to the person's account in the
4 week period immediately before the court order came into force, and
deducting from that amount the total amount withdrawn from the account during
the same period.
Subsection 68(2) provides that an amount of family assistance is taken
to have been paid to a person if it has been applied against their own or
another person’s liability for primary tax or a debt under this Act or the
Social Security Act 1991.
Subsection 69(1) provides that a reference to an amount being paid
to the operator of a child care service, includes a reference to an amount being
paid to a former approved child care service, or to a child care service that
has since ceased to provide the service concerned.
Section 70 provides that if an amount has been paid by way of
family assistance, it is only considered a debt due to the Commonwealth if a
provision of this Act or the Data-matching Program (Assistance and Tax)
Act 1990 expressly provides that it is.
Subsection 71(1) provides that an amount is a debt due to the
Commonwealth if an amount of family assistance in respect of a period or event
has been paid to a person who was not entitled to the family assistance in
respect of that period or event.
Subsection 71(2) provides that if
CCB is paid on behalf of a person to the operator of a child care service, and
that payment is in respect of a period which occurred when the operator had
ceased to provide care for the FTB child, the amount paid is a debt due by the
child care service, and not the person.
Subsection 71(3) specifies
that a debt may arise in cases where there is a duplicate instalment of family
assistance. Where an amount of family assistance is paid to a person by way of
an instalment, and another amount is paid to the person in respect of the same
instalment, and the other amount is neither a payment of arrears or otherwise a
debt due to the Commonwealth, it is a debt due to the Commonwealth by the
person.
Subsection 71(4) modifies the effect of subsection
71(3). It provides that where an amount is paid twice to a child care
service, as opposed to the person, in respect of the same instalment, the second
amount is a debt due to the Commonwealth by the operator of the child care
service, not the person.
Subsection 71(5) provides that if an
amount (the received amount) has been paid to a person by way of family
assistance, and the received amount is greater than the amount of family
assistance (the correct amount) that should have been paid to the person, then
the difference between the received amount and the correct amount is a debt due
to the Commonwealth. The reason for the discrepancy is not
relevant.
Subsection 71(6) specifies circumstances where an
individual will be liable to pay a debt due to the incorrect payment of special
circumstances CCB. This will be the case where paragraphs 71(6)(a) to
(c) are satisfied.
These paragraphs apply where an amount of CCB is
paid for a session of care provided by a child care service to an FTB child of
the individual or the individual’s partner, and the individual has
knowingly made a false statement or misrepresentation to the child care service.
Paragraph (c) applies where, because of that false statement or
misrepresentation, the child care service is eligible for CCB for the session of
care, or the rate of CCB for the session of care is an amount certified by the
service under subsections 71(1), (2) or (4) of the Family Assistance Act.
In the circumstances specified in paragraphs (a) to (c), the difference
between the amount paid and the amount that would have been paid if the
individual had not made the false statement or misrepresentation to the child
care service is a debt due by the Commonwealth to the
individual.
Subsection 71(7) specifies that, for the purposes of
subsection 71(6), the amount that would have been paid if the individual
had not made the false statement or misrepresentation to the service may be
nil.
Subsection 71(8) deals with overpayments where CCB is paid at
the special circumstances rate when the service is not satisfied that special
circumstances exist.
Subsection 71(8) will apply in cases where an
approved child care service gives a certificate under subsection 71(1) of the
Family Assistance Act, and the child care service is not satisfied that the
child is at risk of serious abuse or neglect, or that the individual is
experiencing hardship of a kind specified in a determination in force under
subsection 48(1) of the same Act.
In this case, the difference
between the amounts paid to the individual and the amounts that would have been
paid to the individual if the service had not given the certificate, is a debt
due to the Commonwealth by the service.
• the following apply:
- the person’s nil Part A rate
resulted from the amount the person’s adjusted taxable income year for the
relevant income year;
- maternity allowance or maternity immunisation
allowance was made on the basis of a determination of the person’s Part A
rate that was based on an incorrect estimate by the person of the income
component of the person’s adjusted taxable income;
- at the time
when the estimate was made the person did not know, and had no reason to
suspect, that the estimate was incorrect.
Section 73 deals with debts arising from Administrative Appeals
Tribunal (AAT) stay orders. It provides that when a person seeks review of a
decision by the AAT and, as a result of the AAT stay order under subsection
41(2) of the Administrative Appeals Tribunal Act 1975, the
amount of family assistance that has been paid to the person is greater than the
amount that the review established the person was entitled to, the
difference between the amounts is a debt due to the Commonwealth.
Section 74 provides that if an instalment of family assistance is
paid by cheque, and a person other than the payee obtains value for the cheque
without the payee’s endorsement, the amount of the cheque becomes a debt
due to the Commonwealth by the person.
Debts arising from conviction of a
person for involvement in contravention of this Act by debtor
Section
75 provides that if a person (the recipient) is liable to repay an amount
paid to them under this Act, and the amount was paid to them because they
contravened this Act, and another person is convicted of an offence under
section 5, 7A or 86 of the Crimes Act 1914, the recipient and the
other person are jointly and severally liable to pay the
debt.
Data-matching Program (Assistance and Tax) Act
debts
Section 76 provides for the recovery of an amount that
has been paid to a person by way of family assistance payment if the amount is a
debt due to the Commonwealth under subsection 11(6) of the Data-matching
Program (Assistance and Tax) Act 1990.
While the ability to
utilise data-matching cycles has been maintained, Centrelink and the Australian
Taxation Office (ATO) will rely primarily on the information gathering powers of
the Secretary under Part 6 and the secrecy provisions of the Income
Tax Assessment Act 1936 (ITAA36). The secrecy provisions of the ITAA36
will be amended to allow the ATO to give information to Centrelink and the HIC,
who are partners with the ATO in the Family Assistance Office joint venture.
This will result in a more timely and efficient process which will ensure that
families receive correct entitlements.
Interest payable on debt for
failure to enter agreement to pay debt
Section 77 sets out
circumstances when interest may be payable on a debt if a person fails to enter
an agreement to pay the debt.
Subsection 77(1) covers the
situation where a person owes a debt to the Commonwealth under Part 4 and
does not receive instalments of family assistance, or does not receive group
payments (if a person is the operator of an approved child care service), and
fails to negotiate or enter into an agreement with the Commonwealth to repay the
debt within a specified period. In these circumstances, the Secretary may give
the person a notice stating the amount of the debt and informing the person
that, unless, within 14 days, the person pays the whole of the debt or enters
into an agreement to pay the debt by reasonable instalments, interest may be
payable on the debt. The notice is to also indicate how any interest is to be
calculated.
Subsection 77(2) provides that if the whole of the
debt is not paid within 14 days after the person is given the notice, or within
14 days the person fails to agree to pay the debt, interest is payable on the
debt as a penalty. The amount of interest is to be worked out according to
subsection 77(4).
Subsection 77(3) gives the Secretary a
discretionary power to determine that interest is not payable on the debt if the
Secretary is satisfied that the person intends to pay the debt as soon as it is
reasonably practicable.
Subsection 77(4) provides that interest is
payable on the amount of the debt remaining after the end of the 14-day period
and that it is payable at the penalty interest rate.
Subsection
77(5) provides that if interest is payable on the debt and payments are made
in satisfaction of the debt and the interest, the amount paid is to be applied
first in satisfaction of the amount of the debt (excluding interest) that is due
when the payment is made, then, after the debt (excluding interest) is fully
paid, in satisfaction of the interest that had become payable on the debt before
the debt was fully paid.
Subsection 77(6) provides that a person
entering into an agreement to pay the debt by reasonable instalments is not
liable to pay penalty interest from the day on which the agreement is entered
into.
Subsection 77(7) creates a debt out of the amount of
interest payable on the debt.
Section 78 provides for the payment of interest on a debt as a
result of breach of an agreement to repay the debt.
Subsection
78(1) covers the situation where a person who owes a debt to the
Commonwealth under Part 4 and who does not receive instalments of family
assistance or does not receive group payments (if a person an approved child
care service) enters into an agreement with the Commonwealth to repay the debt
and does not pay an instalment. In these circumstances, the Secretary may give
the person a notice stating the amount of the debt and informing the person
that, unless, within 14 days, the person pays the instalment, interest may be
payable on the debt. The notice is to also indicate how any interest is to be
calculated.
Subsection 78(2) provides that if the instalment is
not paid within 14 days after the person is given the notice, interest is
payable on the debt as a penalty. The amount of interest is to be worked out
according to subsection 78(5).
Subsection 78(3) gives the
Secretary a discretionary power to determine that interest is not payable on the
debt if the Secretary is satisfied that the person intends to pay the instalment
as soon as reasonably practicable.
Subsection 78(4) provides that
interest payable on the amount of the debt ceases to accrue on and from the day
the person next pays the instalment due under an agreement or enters into a new
agreement, whichever occurs first.
Subsection 78(5) provides that
interest is payable on the amount of the debt (excluding interest) as remains
due from time to time on and from the day after the 14 day period ends and
that it is payable at the penalty interest rate.
Subsection 78(6)
provides that if interest is payable on the debt and payments are made in
satisfaction of the debt and the interest, the amount paid is to be applied
first in satisfaction of the amount of the debt (excluding interest) that is due
when the payment is made, then, after the debt (excluding interest) is fully
paid, in satisfaction of the interest that had become payable on the debt before
the debt was fully paid.
Subsection 78(7) creates a debt out of
the amount of interest payable on the debt.
Subsection 79(1) sets the penalty interest rate at 20% per year,
unless the Minister determines in writing, under subsection 79(2), a rate
of interest for the purposes of sections 77 and 78 that is lower than 20%
per year.
Subsection 79(3) provides that the Minister's
determination is a disallowable instrument for the purposes of section 46A of
the Acts Interpretation Act 1901.
Section 80 deals with the situation in which a person who is given
a garnishee notice (the garnishee debtor) in respect of a debt due by another
person (the original debtor) fails to comply with the notice to the extent that
he or she is capable of complying with it.
In this situation,
subsection 80(1) creates a debt out of the amount of the outstanding debt
calculated under subsection 80(2) that is recoverable from the garnishee
debtor by means of legal proceedings or garnishee notice.
Subsection
80(2) specifies that the amount of the debt outstanding is the lesser
of:
• as much of the amount specified in the garnishee notice under
section 89 as the garnishee debtor was able to
pay;
• as much of the debt due by the original debtor at the time
when the notice was given as remains due from time to time.
Subsection
80(3) provides that if the Commonwealth recovers the whole or part of the
debt due by the garnishee debtor under subsection 80(1) or the whole or
part of the debt due by the original debtor, then both debts are reduced by the
amount that the Commonwealth has so recovered. Consequently, the amount stated
in the garnishee notice under section 89 is taken to be reduced by the
recovered amount.
Subsection 80(4) provides that this section
applies in spite of any law of a State or Territory that would have made the
amount inalienable.
Subsection 80(5) provides that this section
binds the Crown in right of the Commonwealth, of each of the State, of the
Australian Capital Territory, of the Northern Territory and of Norfolk
Island.
Section 81 extends the application of sections 60 to
75 to acts, omissions, matters and things done outside Australia and to
all persons irrespective of their nationality or citizenship.
Section 82 specifies the means by which a debt owed by a person,
other than a child care service may be recovered. Subsection 82(1)
specifies that if a debt is owed by a person, it may be recovered by means
of:
• deductions of family assistance payable to the person;
or
• if section 92 (Deductions by consent from family
assistance of person who is not a debtor) applies to another person to whom
family assistance is payable – deductions from that other person’s
family assistance; or
• application of an income tax refund owed to
the person; or
• if section 93 (Application of income tax
refund owed to another person) applies to another person to whom an income tax
is owed – application of that refund; or
• legal proceedings;
or
• garnishee notice.
However, not all debts can be
recovered by all of these means. In particular, a CCB debt cannot be recovered
by means of the application of an income tax refund owed to the person or under
section 93 of this Act.
• if group payments are being made to the service –
deductions from those payments; or
• legal proceedings;
or
• garnishee notice.
Subsection 82(3) defines the
term “debt” for the purposes of this section.
Subsection 83(1) states that sections 84, 85 and 92
provide for debt recovery by deductions from family assistance. The
scenarios to which these sections apply are listed.
Subsection
83(2) provides that a person is taken to be receiving a family assistance
payment even if the person is only entitled to be paid a single payment, such
as, for example, a lump sum payment in respect of a retrospective claim.
Section 84 makes provision for the recovery of a debt from a
debtor’s family assistance. Subsection 84(1) provides that a debt
may be recovered from a debtor’s family assistance if, under section
82, the debt is recoverable by the Commonwealth by means of deductions from
a person’s family assistance, or if the amount is a debt under the Social
Security Act.
Subsection 84(2) specifies how the debt is to be
recovered from payments of family assistance. It provides that the Secretary is
to determine the amount by which the payment of family assistance to the person
is to be reduced, and that each payment of family assistance is to be reduced by
the amount determined by the Secretary until the sum is equal to the debt. This
provision does not allow deductions to be made under this Act and the Social
Security Act at the same time. Subsection 84(2) also allows for the
Secretary to vary, from time to time, the amount by which payments of family
assistance are to be reduced.
Subsection 84(3) specifies when a
debt can be recovered from a person’s CCB. The debt can be recovered by
means of deductions from a person’s payment of CCB only in cases where the
debt arose from a payment of CCB, and at the time the decision is taken to
recover the debt, it is not possible to recover the debt by means of deductions
from family assistance (excluding CCB). Further, it must be the case that it is
not possible to recover the debts under Chapter 5 of the Social Security
Act from a social security payment.
Subsection 84(4) provides
that, subject to section 86 (Time limits on recovery action under
sections 84 and 85) the debt must be deducted from a person’s
family assistance unless the Secretary takes action under Division 4
(Non-recovery of debts) in relation to the amount, or the amount is recovered by
the Commonwealth under another provision of this Division, or under the Social
Security Act.
Subsection 85(1) applies to a person if, under section 82,
the debt is recoverable by means of deductions from group payments being
received by the operator of an approved child care service.
Subsection 85(2) specifies how the debt is to be deducted from
group payments being received by an approved child care service. It provides
that the Secretary is to determine the amount by which each group payment is to
be reduced, and each group payment to the service is to be reduced by the amount
determined by the Secretary until the sum of those amounts is equal to the debt.
The Secretary may from time to time vary the amount by which the group payments
are to be reduced.
Subsection 85(3) provides that, subject to
section 86 (Time limits on recovery action under sections 84 and
85) the debt must be deducted from a person’s family assistance unless
the Secretary takes action under Division 4 (Non-recovery of debts) in
relation to the amount, or the amount is recovered by the Commonwealth under
another provision of this Division.
Subsection 86(1) imposes a general limitation period on the
recovery of debt under sections 84 and 85. Action for the recovery of a
debt under those sections is not to be commenced after the end of the period of
6 years starting on the day on which the debt arose, subject to subsections
86(2) to (5).
Subsection 86(2) provides that if the debt arose
because the person owing the debt made a false statement or representation, or
contravened a provision of this Act, then action may be commenced under
section 84 for recovery of the debt. However, the recovery action may
only be commenced at any time within the period of 6 years. The period starts
on the first day on which an officer become aware, or could reasonably be
expected to have become aware, of the circumstances that gave rise to the
debt.
Subsections 86(3), (4) and (5) all apply to situations where
either subsection 86(1) or (2) applies so that action for the recovery of
a debt must be commenced within a particular period, as
follows:
• if, within that particular period, part of the amount
owing is paid, then action under either of those sections for the recovery of
the balance of the debt may be commenced within the period of 6 years starting
on the day of payment (Subsection 86(3) refers).
• if,
within that period, the person who owes the amount acknowledges that he or she
owes it, then action under that section for the recovery of the debt may be
commenced within the period of 6 years starting on the day of acknowledgment
(subsection 86(4) refers).
• if, within that period, action
is taken under either this section, section 88 (legal proceedings) or
section 89 (garnishee notice) for the recovery of the debt, or, a review
of a file relating to action for the recovery of the debt occurs, or other
internal departmental activity relating to action for the recovery of the debt
occurs, then action under section 84 or 85 for the recovery of the debt
may be commenced within the period of 6 years after the end of the action,
review or activity (subsection 86(5) refers).
This provision allows the Commissioner of Taxation to apply an
“income tax refund” to reduce or extinguish a person’s family
assistance debt.
An “income tax refund” is an amount that the
Commissioner of Taxation would be required to pay to a person resulting from an
overpayment of income tax, Medicare levy, a Higher Education Contribution Scheme
debt, or Supplement Loan Scheme debt.
Subsection 87(1) provides
that if, under section 82, a debt owed by a person is recoverable by the
Commonwealth by means of application of an income tax refund payable to the
person, the Commissioner of Taxation may apply the whole or part of the refund
to the debt. However, due to the operation of subsection 82(1), a CCB
debt that is owed by a person cannot be recovered by the Commonwealth by means
of application of an income tax refund that is owed to the
person.
Subsection 87(2) provides that the amount of the refund
and the amount of the debt are reduced accordingly.
Subsection
87(3) provides that action for the recovery of a debt under this section
must not be taken after the end of a period of six years starting on the day on
which the debt arose. An exception to this rule is specified in subsection
87(4) which provides that if:
• action is taken under this
section to recover a debt owed by a person from an income tax refund that
relates to a particular income year, and
• the action is taken
within 6 years starting on the day on which the debt arose,
and
• the amount of the refund is not sufficient to reduce the
amount to nil,
action may be taken to apply an income tax refund that is
payable to the person for an income year beyond the six year period.
Subsection 88(1) provides that where a debt is recoverable under
section 82 by means of legal proceedings, the debt may be recovered in a
court of competent jurisdiction.
Subsection 88(2) imposes a
general limitation period of six years, beginning on the day on which the debt
arose, for instituting legal proceedings for recovery. This general limitation
period is subject to subsections 88(3), (4), (5) and
(6).
Subsection 88(3) imposes a specific limitation period on
debts that arise because the person owing the debt made a false statement or
representation or contravened a provision of this Act. The subsection provides
that, in these cases, the time period within which legal proceedings for
recovery must be instituted is 6 years from the day on which an officer became
aware (or could reasonably be expected to heave become aware) of the
circumstances giving rise to the debt.
Subsection 88(4) provides
that where the limitation period applies and some of the debt owed is paid
during that time, then the limitation period on the Commonwealth taking action
to recover the balance of the debt is 6 years from the day of the debt
repayment.
Subsection 88(5) covers the situation where the
limitation period applies and the person acknowledges that he or she does in
fact owe the amount of the debt to the Commonwealth. In these circumstances the
limitation period on the Commonwealth taking legal proceedings for recovery is 6
years from the day of the acknowledgment of the debt.
Subsection
88(6) provides that the limitation period in relation to legal proceedings
does not run while any of the following activities are in
progress:
• action is being taken under this section or under
section 84 (Deductions from debtor’s family assistance), section
85 (Deductions from group payments made to child care service), or
section 89 (Garnishee notice) for the recovery of the debt,
or
• the file relating to the recovery action is being reviewed,
or
• other internal activity of the Department relating to the
recovery of the debt.
In these circumstances, action for recovery of the
debt may be commenced within the period of 6 years after any of the above
activities have been completed.
Section 89 provides for recovery of a debt that is recoverable by
the Commonwealth by means of a garnishee notice.
Subsection 89(1)
provides that the Secretary may serve written notice on another person (not the
debtor) who owes money to the debtor or is holding money for the debtor. The
person to whom the notice is given would be required to pay to the Commonwealth
the amount stated in the notice that should not exceed the amount required to be
paid by the third person to the debtor. Payment to the Commonwealth may be
demanded as a lump sum, or where the third person makes ongoing payments to the
debtor, by instalment expressed as a set amount or percentage
figure.
Subsection 89(2) provides that the notice should stipulate
a time within which payment must be made. However, payment must not be demanded
before the money becomes due or is held by the other person, or before the end
of the period of 14 days after the notice is given.
Subsection
89(3) makes it an offence for a person not to comply with a garnishee
notice, to the extent that the person is able to comply with the notice. The
penalty for such non-compliance is set at imprisonment for 12
months.
Subsection 89(4) provides that a copy of the garnishee
notice must be given to the debtor.
Subsection 89(5) provides that
a payment made to the Commonwealth in compliance with a garnishee notice is
taken to be made with the authority of either the debtor or of any other person
concerned.
Subsection 89(6) deals with the situation where a
garnishee notice is served on someone and another person pays an amount in
reduction of the debt. In these circumstances the Secretary is to notify the
person who received the garnishee notice that an amount has been paid and the
amount stated in the notice is to be reduced by the amount already
paid.
Subsection 89(7) provides that where a condition has to be
fulfilled before money becomes due to the person being served with the notice,
the money is taken to have become due, for the purposes of this section, even if
the condition has not been fulfilled.
Subsection 89(8) stipulates
that this section applies to money in spite of any law of a State or Territory
(however expressed) under which the amount is inalienable.
Subsection
89(9) states that this section binds the Crown in right of the Commonwealth,
of each of the States, of the Australian Capital Territory, of the Northern
Territory and of Norfolk Island.
Section 90 stipulates a general limitation period for recovery of
a debt by way of garnishee notice of 6 years, beginning on the day on which the
debt arose.
Subsection 90(2) imposes a specific limitation period
on debts that arise because the person made a false statement or representation
or contravened a provision of the family assistance law. In this case, the time
period within which garnishee proceedings for recovery must be instituted is 6
years starting on the first day on which an officer becomes aware, or could
reasonably be expected to have become aware, of the circumstances that gave rise
to the debt.
Subsection 90(3) provides that where the limitation
period applies and some of the debt owed is paid during that time, then the
limitation period on the Commonwealth taking action to recover the balance of
the debt by way of garnishee proceedings, is six years from the day of the debt
repayment.
Subsection 90(4) covers the situation where the
limitation period applies and the person acknowledges that he or she does in
fact owe the amount of the debt to the Commonwealth. In these circumstances, the
limitation period on the Commonwealth taking garnishee proceedings for recovery
is 6 years from the day of the acknowledgment of the debt.
Subsection
90(5) provides that the limitation period in relation to garnishee
proceedings does not run while any of the following activities are in
progress:
• action is being taken under this section, or under
section 84 (Deductions from debtor’s family assistance), section
85 (Deductions from group payments made to approved child care service) or
section 88 (Legal proceedings) for recovery of the
debt;
• the file relating to the recovery action is being
reviewed;
• other internal activity of the Department relating to
the recovery of the debt.
In these circumstances, action for recovery of
the debt or overpayment may be commenced within the period of 6 years after any
of the above activities have been completed.
Section 91 enables the Secretary to decide that a person may repay
the debt by means of instalments (subsection 91(1) refers). The
Secretary's decision is to take effect on the day stated in the notice. If no
day is stated, the decision is to take effect on the day the decision is made
(subsection 91(2) refers). Subsection (3) states that the term
'debt' used in subsection (1) means a debt recoverable by the
Commonwealth under Division 3.
Section 92 provides that a debt owed to the Commonwealth by a
person who incurs a debt under this Act may be deducted from another person's
family assistance if the other person so consents. If such deductions occur,
then subsection 92(2) provides that the debtor's debt is reduced by
an amount equal to the amount deducted from the consenting person's family
assistance. Subsection 92(3) provides that the consenting person
may revoke the consent at any time.
As provided in section 87 a person’s income tax refund may
be applied to reduce or extinguish his or her outstanding family assistance
debt. Section 93 extends this concept to include a consenting person.
For example, a person may allow the Commissioner of Taxation to apply his or
her “income tax refund” to reduce or extinguish his or her
spouse’s family assistance debt.
However, a debt owed in relation
to CCB is not recoverable by means of the application of a consenting
person’s income tax refund (subsection 82(1)
refers).
Subsection 93(1) provides that if a person incurs a
debt under this Act and another person (the consenting person) is entitled to an
income tax refund, the consenting person may consent to the application of an
amount from their tax refund to the debt by the Commissioner of
Taxation.
Subsection 93(2) provides that the amount of the refund
and the debt are reduced accordingly.
Subsection 93(3) specifies
that the consenting person may revoke the consent at any time.
Section 94 defines the term “debt” for the purposes of
this Division as a debt that is recoverable by the debt under Division
2.
Subsection 95(1) specifies that the Secretary may decide to write
off a debt on behalf of the Commonwealth in relation to a stated period or
otherwise.
However, the Secretary's power to write off a debt is limited
by subsection 95(2). This subsection specifies that the Secretary
may only write off a debt if:
• the debt is irrecoverable at law,
or
• if the debtor has no capacity to repay the debt,
or
• after all reasonable efforts have been made to locate the
debtor, the debtor's whereabouts are unknown; or
• the debt cannot
be recovered by deductions under this Act or the Social Security Act and it is
not cost effective for the Commonwealth to take action to recover the
debt.
Subsection 95(3) specifies when a debt is taken to be
irrecoverable at law. This occurs when (and only when):
• the debt
cannot be recovered, because the relevant time limit for recovery has lapsed, by
means of:
- deductions from payment (sections 84 and 85
refer)
- the application of an income tax refund (section 87
refers)
- legal proceedings (section 88 refers)
- garnishee
notice (section 89 refers)
• it would be impossible to
sustain legal proceedings for the recovery of the debt because there is no proof
of the debt; or
• the debtor is discharged from bankruptcy and the
debt was incurred before the discharge and was not incurred by fraud;
or
• the debtor has died leaving no estate or insufficient funds in
the debtor's estate to repay the debt.
The term “capacity to repay
the debt” in paragraph 95(2)(b) is explained further in
subsection 95(4). If the debt is recoverable by means of deductions
under section 84 or by the application of an income tax refund under
section 87, the person is taken to have the capacity to repay the debt
unless recovery by those means would cause the person severe financial hardship.
If the debt is recoverable by means of deductions under section 85, the
person is taken to have the capacity to repay the debt, regardless of whether
this would cause them financial hardship.
A decision to write off a debt
takes effect as specified by subsection 95(5). Under this subsection, if
a day is specified in the decision, the decision takes effect on the day stated
in the decision. If the decision does not state such a day, then the decision
takes effect on the day on which the decision is made. It should be noted that
subsection 95(6) specifies that nothing in section 95 prevents the
subsequent recovery of a debt that has been written off under this
section.
Section 96 covers the waiver of the whole or the part of a debt.
In particular, subsection (1) specifies that the decision to waive a debt
on behalf of the Commonwealth lies with the Secretary and only occurs in
accordance with the sections named in this section.
A waiver of debt
takes effect in accordance with subsection 96(2). Under this subsection,
if a day is specified in the decision, the waiver takes effect on the day stated
in the decision. However, if the decision does not state such a day, then the
decision to waive takes effect on the day on which the decision was made. A
note to this subsection indicates that, if the Secretary waives the
Commonwealth's right to recover a debt, this is a permanent bar to recovery of
the debt. As a result, the debt (or part of the debt) ceases to exist.
Subsection 97(2) provides that the Secretary will waive the debt
if:
• the debtor received in good faith the payment or payments
that gave rise to the administrative error proportion of the debt;
and
• the person would suffer severe financial hardship if it were
not waived.
Subsection 97(3) provides that the Secretary will
waive the debt if the payments were made in respect of the debtor’s
eligibility for family assistance for a period or event, and the debt is not
raised within the period specified in paragraph 97(3)(b), and the debtor
received in good faith the payment or payments that gave rise to the
administrative error proportion of the debt.
Subsection 97(4)
states that for the purposes of this section, the administrative error
proportion of the debt may be 100% of the debt.
Section 98 applies where a person has incurred a debt, been
convicted of an offence in relation to the debt, and had a longer custodial
sentence imposed on them because they were unable or unwilling to pay the debt.
In such a case, the Secretary must waive the right to recover the proportion of
the debt that arose in connection with the offence.
Subsection
98(2) makes it clear that references to "a proportion of a debt" can be
taken to include the entire debt.
Section 99 applies to small debts, which are defined as being (or
being likely to be) less than $200. In this case, and if it is not cost
effective for the Commonwealth to take action to recover the debt, the Secretary
must waive the right to recover the debt.
However, if the debt is at
least $50 and could be recovered by deductions under sections 84 or
85, then subsection 99(2) provides that section 99 does not
apply to the debt.
Waiver in relation to settlements
This
section relates to the waiver of debts where there has been a settlement agreed,
either through civil action or before the Administrative Appeals
Tribunal.
Subsection 100(1) applies to settlement of civil action.
If the Commonwealth agrees to settle a civil action against a debt for less than
the full amount of the debt, then the Secretary must waive the right to recover
the difference between the debt and the amount that is the subject of the
settlement.
Subsection 100(2) applies where there has been a
settlement agreement before the Administrative Appeals Tribunal. If the debtor
has repaid at least 80% of the original value of the debt, and is unable to
repay a greater proportion of the debt, the Commonwealth and the debtor may
agree that the amount recovered is in full satisfaction of the debt. In such a
case, subsection 100(3) provides that the Secretary must waive the
remainder of the debt.
Where there is an agreement between the Secretary
and a debtor to the effect that the debtor's debt will be fully satisfied if the
debtor pays the Commonwealth an agreed amount less than the amount of the debt
outstanding at the time of the agreement, subsection 100(4) provides that
the Secretary must waive the right to recover the difference between the unpaid
amount and the agreed amount.
However, under subsection 100(5),
the Secretary must not make an agreement to which subsection 100(4)
applies, unless the Secretary is satisfied that:
• the debtor
cannot repay more of the debt than the agreed amount; and
• the
agreed amount is at least the 'present value of the unpaid amount' repaid in
instalments whose amount and timing is determined by the Secretary;
and
• it would take at least a year to recover the unpaid amount
under Part 2 if subsection 100(4) did not apply.
The
term “present value of the unpaid amount” is defined in
subsection 100(6).
Subsection 100(7) provides that a
determination for the purposes of the definition of 'interest' in subsection
100(6) is a disallowable instrument.
The Secretary is provided with a discretionary power in section
101 to waive a debt in special circumstances. This power may be exercised
where the debt did not arise as a result of a false statement or false
representation being knowingly made, or a person knowingly failing or omitting
to comply with the Act. In addition, there must be special circumstances (aside
from financial hardship alone) which make it desirable to waive the debt and
finally, it must be more appropriate to waive the debt than to write it
off.
Section 102 states that the Minister may specify, by determination
in writing, a class of debts and that the Secretary may, on behalf of the
Commonwealth, waive the Commonwealth's right to recover those debts.
A
decision under section 102 will take effect as specified by subsection
(2). According to this subsection, if a day is specified in the decision,
it will take effect on the day stated in the decision (regardless of whether
that day is before, after or on the day on which the decision is made).
However, if the decision does not state such a day, then the decision would take
effect on the day on which the decision is made.
Subsection 102(3)
specifies that the determination of the Minister referred to above is a
disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901.
Subsection 103(1) specifies that this section deals with the
making of determinations that interest is not payable in certain circumstances
(ie, determinations under subsections 77(3) and 78(3)).
The
determination made under subsections 77(3) and 78(3) may relate to a
period before the making of the determination (subsection 103(2) refers).
Moreover, subsection 103(3) states that the determination may be
expressed to be subject to the person complying with special conditions.
The Secretary must also give the person affected a copy of the
determination as soon as is practicable (subsection 103(4) refers).
However, a failure to do so does not invalidate the determination (subsection
103(5) refers). If the person that the determination relates to is required
to comply with specified conditions and the person contravenes a condition, then
subsection 103(6) specifies that the determination ceases to have
effect.
Internal review may be initiated in two ways. The Secretary may initiate
the review or the applicant may initiate the review. Section 104 covers
situations where the Secretary has initiated the review of a
decision.
Subsection 104(1) specifies the grounds on which the
Secretary may initiate the review of a decision. It provides that the Secretary
may, if he or she is satisfied that there is sufficient reason to do so, review
a decision of any officer under the family assistance law. A child care service
is not an officer for the purposes of the family assistance law. Consequently,
the Secretary cannot review a decision that is made by a child care
service.
Subsection 104(2) provides that the Secretary may review
the decision even if an application for review of the decision has been made to
the Social Security Appeals Tribunal (SSAT) or the Administrative Appeals
Tribunal (AAT).
Subsection 104(3) provides that the Secretary must
not review the decision, or must cease reviewing the decision, for as long as a
review of the decision is taking place under section 105. Subsection
(3) ensures that there is no confusion as to who is conducting the review at
the internal review level.
Subsection 104(4) provides that, when
the Secretary reviews a decision, he or she may:
- affirm the decision,
or
- vary the decision, or
- set the decision aside and substitute
a new decision.
Subsection 104(5) imposes a notification
requirement when the Secretary makes a decision under paragraph 104(4)(b) or
(c). Here, the Secretary must give notice of the decision to the person
whose entitlement, or possible entitlement, is affected by the decision. The
notice must state the effect of the decision and that the person may apply for
review of the decision involved in the manner set out in Part 5. This
will involve making an application for review under section
105.
Subsection 104(6) provides that if the Secretary fails to
notify a person as required by subsection (5), the decision of the
Secretary remains valid.
Subsection 104(7) provides that, where
the Secretary decides to do one of the things in paragraphs 104(4)(b) and
(c), and by the time the Secretary makes that decision, the person has
applied to the SSAT or AAT for review of the decision that was reviewed by the
Secretary, the Secretary must give written notice of the Secretary’s
decision the Executive Director of the SSAT or the Registrar of the AAT (as the
case requires). The notice requirement for other people is covered by
subsection 104(5).
Subsection 104(8) provides that if the
Secretary sets aside a decision under subsection (4), and the Secretary
is satisfied that an event that did not occur would have occurred if the
decision had not been made, the Secretary may, if he or she is satisfied that it
is reasonable to do so, deem the event to have occurred for the purposes of the
family assistance law.
Section 105 covers situations where the applicant has initiated
the review of a decision.
Subsection 105(1) provides that a person
who is affected by a decision of an officer under the family assistance law may
apply to the Secretary for a review of the decision. However, if the Secretary
has made the decision personally, the person may not apply for
review.
Subsection 105(2) provides that if the person makes an
application for review under subsection (1), the Secretary must either
review the decision and:
- affirm the decision, or
- vary the
decision, or
- set the decision aside and substitute a new
decision,
or arrange for an authorised review officer, nominated under
section 106, to do so.
Subsection 105(3) provides that the
decision reviewer, who may be either the Secretary or an authorised review
officer, must give the applicant written notice of his or her decision to do one
of the things under subsection (2). Section 109 details
the information that the notice is to contain.
Subsection 105(4)
provides that if the decision reviewer sets aside a decision under subsection
(2), and the decision reviewer is satisfied that an event that did not occur
would have occurred if the decision had not been made, the decision reviewer
may, if he or she is satisfied that it is reasonable to do so, deem the event to
have occurred for the purposes of the family assistance
law.
Subsection 105(5) provides that if a person who may apply for
a review of a decision under subsection (1) has not done so, and the
person applies to the SSAT for review of the decision, the person is taken to
have applied to the Secretary for a review of the decision under subsection
(1), on the day on which they applied to the SSAT.
Section 106 details the way in which officers are appointed as
authorised review officers.
Subsection 106(1) provides that the
Secretary must authorise officers to be authorised review officers for the
purposes of this Division.
Subsection 106(2) provides that, where
the officer belongs to an agency other than the Department, the Secretary can
only appoint such an officer as an authorised review officer with the consent of
the head of the relevant agency.
Subsection 107(1) provides that an application for review must be
made no later than 52 weeks after the person was notified of the decision. An
exception to this time limit is stated in subsection 107(2).
Under
subsection 107(2), if there are special circumstances, an application for
review may be made after the 52 weeks. The Secretary is to determine what the
special circumstances are. The determination is a disallowable instrument for
the purposes of section 46A of the Acts Interpretation Act
1901.
Subsection 107(3) states that regulations may
prescribe circumstances in which an application may be made after the 52 weeks
mentioned in subsection (1). The regulations will limit the date of
effect of certain determinations outside the 52 week
period.
Subsection 107(4) provides that an applicant for review
under section 105 may, in writing or in any other manner approved by the
Secretary, withdraw the application at any time before the decision reviewer
does any of the things in subsection 107(3). If the person withdraws
their application, it is taken never to have been made (subsection (5)
refers).
Subsection 108(1) provides that where an adverse decision is made
and that decision is based on the exercise of a discretion, and the person has
applied to the Secretary for review of that decision, the Secretary may declare
that the person’s entitlement to family assistance will continue as if the
adverse decision had not been made. The payment will continue pending the
outcome of the review.
Subsection 108(2) provides that this Act
will apply as if the adverse decision was not made only for as long as the
Secretary’s declaration is in force.
Subsection 108(3)
specifies when the declaration commences and ceases. The declaration starts to
have effect on the day on which it was made, or on an earlier day if this is
specified in the declaration. The declaration stops having effect on the day
that:
- the application for review of the adverse decision is withdrawn,
or
- the review of the adverse decision is determined, or
- the
declaration is revoked.
Subsection 108(4) defines “adverse
family assistance decision” as any decision having the effect that an
entitlement to family assistance under the determination is reduced or
ceases.
Subsection 109(1) specifies the requirements for a notice sent to
a person under subsection 105(3). The notice must inform the person of
their right to appeal to the SSAT and the AAT, and include a statement about the
decision maker’s decision that:
- sets out the reason for the
decision, and
- sets out the findings by the decision reviewer,
and
- refers to the evidence or other material on which those findings
were based.
The notice must also include a statement to the effect that
if the applicant is dissatisfied with the SSAT’s decision, the applicant
may apply to the AAT for review of the SSAT’s
decision.
Subsection 109(2) states that a contravention of
subsection (1) in relation to a decision does not affect the validity of
the decision.
Section 110 requires the SSAT to pursue, in carrying out its
functions, the objective of providing a mechanism of review that is fair, just,
economical, informal and quick.
Application for review by the
SSAT
Subsection 111(1) states that a person can apply to the
SSAT for the review of a decision only if that decision has been reviewed under
Division 1 (Internal review).
Subsection 111(2) provides
that a person cannot apply to the SSAT for review of specified decisions.
Time limit for applying for review by the SSAT
Section
112 states that a person has 28 days from when they are notified of the
internal review decision, to apply to the SSAT for review of that decision.
However, if the SSAT is satisfied that special circumstances exist for doing so,
it may extend the period of 28 days.
Section 113 enables the Secretary to declare in writing that
payment of a person’s social security payment is to continue while an
application to the SSAT for review of an adverse decision that affects the
person’s payment is under way, regardless of that adverse decision. This
applies where the adverse decision depends on someone exercising a discretion or
holding an opinion.
Subsection 113(2) states that while the
declaration is in force in relation to the adverse decision, this Act (other
than this Division) applies as if the adverse decision had not been made.
Subsection 113(3) specifies the period for which the declaration
will be in force.
Subsection 113(4) defines what is meant by
adverse decision for the purposes of this section.
Subsection 114(1) sets out the powers of the SSAT on review of a
decision.
The SSAT must either affirm or vary the decision or set it
aside. Where a decision is set aside, the SSAT must either substitute a new
decision or send the matter back to the Secretary for reconsideration in
accordance with the SSAT’s directions or
recommendations.
Subsection 114(2) requires the SSAT, if it sets
aside and substitutes a decision that a person is entitled to a social security
payment, to assess the rate of that payment or ask the Secretary to assess the
rate. The latter might be done, for example, where complex rate calculations
are involved.
Subsection 114(3) enables an event that did not
occur to be deemed to have occurred if a decision has been set aside by the SSAT
and the Secretary or the SSAT (as the case may be) is satisfied that the event
would have occurred but for the decision having been taken in the first
place.
Section 115 provides that the SSAT may, for the purpose of
reviewing a decision under the family assistance law, exercise all the powers
and discretions that are conferred.
Subsection 116(1) states the general proposition that, subject to
this section, a decision of the SSAT comes into operation immediately on the
giving of the decision.
Subsection 116(2) states that the if the
SSAT specifies that the decision is to come in to operation on a later day that
is specified in the decision, then the decision comes into operation on that
later day.
Subsection 116(3) states that if the SSAT varies or
sets aside and substitutes a decision that is under review, the date of effect
of the review decision is taken to be the date of effect that would have applied
if the original decision maker had made the review decision.
However,
subsection (3) only has effect subject to subsection (4)
and any regulations under subsection 236(4).
Subsection
116(4) states that the SSAT may declare that subsection (3) does not
apply to a decision by the SSAT on review and that subsections (1) and
(2) apply instead.
Subsection 117(1) states that applications to the SSAT may be made
in writing and sent to an office of the SSAT, the Department or an office of an
approved agency. Alternatively, an application can be made orally at, or by
telephoning, an office of the SSAT.
Subsection 117(2) provides
that if a person receives an oral application, the person is required to make a
written record of that application, including the date of the application. Such
a written record is deemed to be a written application delivered to the SSAT on
the day of the oral application.
Subsection 117(3) states that
person may include a statement of reasons for seeking a review of the decision
in his or her application for review.
Subsection 117(1) provides that any variation by an officer to a
decision that is being reviewed by the SSAT does not deprive the SSAT of its
jurisdiction to hear the matter. The application to review the decision
proceeds as if it were an application for review of the varied
decision.
Subsection 117(2) makes a similar provision to
subsection (1) except that it applies where an officer sets a decision
aside and substitutes a new one.
Subsection 117(3) provides that a
person may either proceed with the review or withdraw the application where a
decision is varied or set aside and substituted by an officer while the
application for review is before the SSAT. This provision contemplates cases
where an applicant will be satisfied with the decision after it is varied or set
aside and there will be no longer any reason to proceed with the review by the
SSAT.
Subsection 119(1) details who may be a party to a review. It
provides that the head of an agency may be a party in cases where an officer of
their respective agency has made the decision that is subject to
review.
Any person whose interests are affected by a decision that is the
subject of an application for review may apply in writing to the Executive
Director to be made a party to the review. The Executive Director may order
that that person be joined as a party to the review (subsections 119(2) to
(4) refer).
Division 3 – Procedures for review by the SSAT
Subsection 120(1) provides that, where an application for review
is sent to an office of the Department or another agency, the Secretary is
responsible for ensuring that it is sent to the SSAT as soon as practicable but
in any case no later than 7 days after the Department or Agency received
it.
Subsection 120(2) provides that the Executive Director must
give both the applicant and the Secretary written notice that an application has
been received.
Subsection 120(3) requires the Secretary to provide
the SSAT with a statement about the decision under review. The statement must
set out the findings of fact, refer to the evidence and give the reasons for the
decision. The Secretary is also required to provide the Executive Director with
all documents relevant to the decision under review. This will, in practice, be
a transfer of the applicant’s file. These requirements have to be
complied with within 28 days of the Secretary receiving a notice of the
application for review.
Subsection 120(4) provides that, where the
Executive Director asks the Secretary to send the statement and documents
earlier than the date specified in subsection 120(3), the Secretary must
take reasonable steps to comply with this request. The Executive Director might
issue a request under this subclause in cases in which financial hardship could
occur pending the determination of the appeal.
Subsection 120(5)
provides for the situation where relevant documents come into the
Secretary’s possession after the statement has been prepared and sent,
with the file, to the Executive Director. The Secretary is required to send a
copy of the later documents to the Executive Director as soon as practicable
after receiving them.
Subsection 121(1) requires the Executive Director to give each
party to the review (other than the Secretary) a copy of the Secretary’s
statement of reasons. This does not extend to documents supplied by the
Secretary.
Subsection 121(2) enables the Executive Director to
order the person receiving the above copy not to disclose any information from
the statement or any information other than as specified in the
order.
Subsection 121(3) requires this order to be in writing and
subsection 121(4) binds the person to comply with the order. A penalty
of imprisonment for 2 years applies for a failure to comply with the
order.
Subsection 122(1) requires the Executive Director to fix a date,
time and place for the hearing of an application for review.
Under
subsection 122(2), this must be done as quickly as possible if a
declaration under section 113 is in force.
Subsection 122(3)
and (4) require the Executive Director to give written notice to the
applicant about the details of the hearing a reasonable time before the date
fixed.
Subsection 123(1) provides that reasonable steps must be taken by
the Executive Director to give written notice of the application to another
person whose interests are, in the Executive Director’s opinion, affected
by the decision.
Subsection 123(2) requires the above notice,
which may be given at any time before the review is determined, to also set out
the person’s right to be joined as a party under section 119.
Under subsection 122(3), each party is to be given a copy of the
notice.
Section 124 sets out how submissions to the SSAT by parties to a
review of a decision, other than agency heads, may be made.
Subsection 124(2) allows a party to the review to make submissions
either orally or in writing or both. This subsection is subject to section
126 (hearings on written submissions only).
Subsection 124(3)
allows a party to have another person make submissions to the SSAT on his or her
behalf.
Subsection 124(4) enables the Executive Director to accept
submissions by either the party or their representative by telephone or other
electronic communications equipment.
Subsection 124(5) outlines
some of the situations where the Executive Director may decide that submissions
may be made by telephone or other electronic communications
equipment.
Subsection 124(6) provides that if a party is not
proficient in English, the Executive Director may direct that communication
proceed through an interpreter.
Section 125 provides that a head of an agency that is party to a
review of a decision may make written submissions only to the SSAT.
Subsection 126(1) provides that the Executive Director may direct
that the hearing proceed without oral submissions from the parties who would
normally be allowed to make oral submissions, if the Executive Director
considers that the review hearing could be determined fairly on the basis of all
the parties’ written submissions.
If the Executive Director gives a
direction that the hearing is to proceed without oral submissions, the Executive
Director must give each of the parties to the review a written notice informing
them of that direction, invite each party to make written submissions and
specify the address to which such submissions are to be delivered and by when.
Parties must be given a reasonable period to make written submissions
(subsections 126(2) and (3)).
Despite subsection 126(1),
the SSAT, as constituted for the hearing, may, if it considers it necessary
after considering the written submissions, make an order allowing the parties
(other than the head of an agency) to make oral submissions (subsection
126(4)).
Section 127 provides for hearings without oral submissions from a
party to a review of a decision (other than the head of an
agency).
Subsection 127(2) provides that the SSAT may proceed
without oral submissions from a party where that party has advised that he or
she does not intend making oral submissions.
Subsection 127(3)
provides that the Executive Director may authorise the SSAT to proceed without
oral submissions from a party where the Executive Director had decided to have
oral submissions from that party by telephone or other electronic communications
equipment and the presiding member had made reasonable efforts to contact the
party or the party’s representative but was unable to do
so.
Subsection 127(4) provides that the Executive Director may
authorise the SSAT to proceed without oral submissions from a party where there
has been no determination that submissions from that party may be made by
telephone or other electronic communications equipment and the party does not
attend the hearing.
Subsection 127(5) provides that the SSAT may
proceed to hear the application where the Executive Director has given an
authorisation under either subsection 127(3) or
(4).
Subsection 127(6) allows the Executive Director to
revoke an earlier authorisation made under subsection 127(3) or
(4). This may arise where contact is made with a party after the
authorisation was made.
Section 128 enables the SSAT to take evidence on oath or
affirmation for the purposes of a review of a decision.
Section 129 enables the Executive Director to ask the Secretary to
provide any further information or a document that is in the Secretary’s
possession that is relevant to the review. The Secretary must comply as soon as
practicable, and in any event within 14 days.
Exercise by the
Secretary of powers under section 155
Section 130 enables the
Executive Director to ask the Secretary to take all reasonable steps to obtain
information from a person by issuing a notice under section 155
(Secretary’s general power to obtain information) where the Executive
Director is satisfied that a person has information or has custody or control of
a document that is relevant to the review. The Secretary must comply as soon as
practicable, and in any event within 7 days.
Subdivision C – The hearing
Hearing procedure
Section 131 provides that the SSAT
is not bound by technicalities, legal forms or rules of evidence, and is to act
as speedily as possible but still ensure that the review receives proper
consideration, having regard to the SSAT objectives set out in section
110. The SSAT is also free to inform itself on any matter relevant to a
review in any manner it considers appropriate.
Hearing in
private
Subsection 132(1) sets out the general rule that the
hearing of a review is to be in private.
Subsection 132(2)
provides the Executive Director with a discretion to issue directions in writing
or otherwise as to who may be present at any hearing of a
review.
Subsection 132(3) provides that the Executive Director, in
exercising his discretion under subsection 132(2), must have regard to
the wishes of the parties and the need to protect their privacy.
New
evidence
Subsection 133(1) provides that if an applicant for a
review provides the SSAT with evidence that was not available to the original
decision-maker, or to a person who reviewed that original decision, the SSAT may
refer the decision to the Secretary for review and may adjourn the
hearing.
Subsection 133(2) provides that if the SSAT is satisfied
that the applicant had reasonable grounds for not providing such information to
the original decision-maker or a person who reviewed the original decision, the
SSAT may determine the review.
Restrictions on disclosure of
information obtained at hearing
Subsection 134(1) gives the
Executive Director a power to make orders that persons who are present at a
hearing are not to disclose information obtained in the course of the hearing,
or may only disclose information as specified in the order.
Subsection
134(2) provides that a person must not contravene such an order. The
penalty for failure to comply is 2 years’ imprisonment.
Subdivision D – Other procedural matters
Adjournment of SSAT hearings
Subsection 135(1) gives
the SSAT the power to adjourn a hearing from time to time.
The factors
that may, among others, be relevant to a decision to refuse to adjourn are set
out in subsection 135(2).
Subsection 136(1) provides that an applicant for a review of a
decision may withdraw the application at any time.
Subsection
136(2) provides that where the withdrawal is in writing, it may be sent to
an office of the Department or the SSAT, or an office of another agency where
the Secretary has approved the office for this purpose, and, where the
withdrawal is oral, it may be communicated to the SSAT either personally or by
telephone.
Subsection 136(3) requires the person to whom the oral
withdrawal is communicated to make a written record of that withdrawal,
including the date of the withdrawal.
Subsection 136(4) provides
that where the withdrawal is lodged at an office of an agency, the head of the
agency must send the Executive Director a written notice of the withdrawal.
This must be done as soon as practicable and, in any case, within
7 days.
Dismissal of an application
Subsection
137(1) gives the Executive Director the power to dismiss an application
where he or she is satisfied that the applicant does not intend to proceed with
the application, either after the applicant has communicated an intention not to
proceed with the application, or if the Executive Director has made reasonable
attempts to contact the applicant and there has been no
contact.
Subsection 137(2) states that an application dismissed
under this section is taken to have been withdrawn on the date of the
dismissal.
Chairperson for each SSAT hearing
Section
138 sets out who is to preside at a hearing.
Decisions of
questions before SSAT
Section 139 provides that questions
before the SSAT are to be decided by majority. Where the opinions of the
members are equally divided, the presiding member will decide the
question.
Directions as to procedure for
hearings
Section 140 provides for directions to be given as to
the procedures to be adopted by the SSAT on reviews. The directions may be
general, or specific to a particular review.
Costs of
review
Subsection 141(1) sets out the general rule that each
party must bear their own expenses incurred in connection with the
review.
Subsection 141(2) provides that the SSAT may specify in a
determination that a party is to be reimbursed by the Commonwealth for
reasonable costs that are incurred by the party for travel and accommodation
expenses in relation to the review.
Subsection 141(3) provides
that the SSAT may determine that the Commonwealth pay the costs of a medical
service that the SSAT arranges for a party to a review.
Subsection
141(4) provides that where a determination is made under subsection
141(2) or (3), the costs specified in the determination are payable
by the Commonwealth.
Subdivision E – Notification of decisions
Procedure following SSAT decision
Subsection 142(1)
requires the SSAT, after it makes its decision, to prepare a statement which
sets out the decision, the reasons for the decision and the findings on material
questions of fact, and refers to the evidence or other material on which the
findings are based.
This statement must be given to all parties to the
review within 14 days after the making of the decision, and the documents
provided by the Secretary must be returned. Copies of any other documents
containing information on which the findings of fact are based must also be
provided to the Secretary.
Subsection 142(2) requires the
Executive Director to give to each party (other than the head of an agency) a
notice to the effect that, if still dissatisfied, the party may appeal to the
AAT. However, subsection 142(3) provides that the validity of a decision
by the SSAT is not affected by a failure to comply with subsection
142(2).
This Division is substantially the same as the equivalent provisions in
the Social Security (Administration) Bill 1999. The only major
difference is that this Division specifically provides for certain decisions,
relating to the approval of child care services and registered carers for child
care benefit, to be reviewable by the AAT. This is necessary because such
decisions are not reviewable by the SSAT, and therefore do not come within the
jurisdiction of the AAT through the usual review provisions.
Subsection 143(1) provides that an application for review may be
made to the AAT in respect of a decision that has been affirmed, varied or set
aside by the SSAT.
Subsection 143(2) clarifies that the
“decision” made by the SSAT as referred to above is to be taken to
be the decision as varied or affirmed, or the new decision if the original one
was set aside, or the directions or recommendations of the SSAT if the decision
was sent back to the Secretary.
Subsection 143(3) clarifies that
subsection 143(1) is subject to section 29 of the
Administrative Appeals Tribunal Act 1975 (the AAT
Act).
Subsection 143(4) applies to decisions set aside by the AAT
under this section and allows the Secretary to deem an event to have occurred if
satisfied that it would have occurred if not for the decision reviewed.
Subsection 144(1) provides that, where a decision is varied by an
officer after an application for review has been made to the AAT under
section 143 but before the application is determined, the application is
to be treated as if the decision as varied had been affirmed by the SSAT and the
decision under review is the varied decision rather than the original
decision.
Subsection 144(2) has the same effect for decisions set
aside and substituted.
Subsection 144(3) makes it clear that an
applicant has a choice as to whether to proceed with the application for review
under section 143 or to withdraw where an officer varies the decision
under review or sets the decision aside and substitutes a new decision.
As mentioned in the introduction to this Division, subsection
145(1) provides that applications for review may be made to the AAT in
respect of certain decisions relating to the approval of child care services and
registered carers for child care benefit. This is necessary because such
decisions are not reviewable internally, nor by the SSAT, and therefore do not
come within the jurisdiction of the AAT through section
143.
Subsection 145(2) clarifies that subsection 145(1)
is subject to section 29 of the AAT Act.
Subsection 145(3)
applies to decisions set aside by the AAT under this section and allows the
Secretary to deem an event to have occurred if satisfied that it would have
occurred if not for the decision reviewed.
Subsection 146(1) provides that, where a decision is varied by an
officer after an application for review has been made to the AAT under
section 145 but before the application is determined, the application is
to be treated as if the decision as varied had been affirmed by the SSAT and the
decision under review is the varied decision rather than the original
decision.
Subsection 146(2) has the same effect for decisions set
aside and substituted.
Subsection 146(3) makes it clear that an
applicant has a choice as to whether to proceed with the application for review
under section 145 or to withdraw where an officer varies the decision
under review or sets the decision aside and substitutes a new decision.
Subsection 147(1) provides that, if AAT proceedings relate to the
recovery of a debt, the Secretary and the other parties to the proceedings may
agree to settle the matter. Any agreement must be in
writing.
Subsection 147(2) provides that, if the proceedings are
settled and the Secretary gives the AAT a copy of the agreement to settle the
proceedings, the application for review that is the subject of the proceedings
is taken to have been dismissed.
Section 148 modifies subsection 29(11) of the AAT Act for the
purposes of an application under section 143 so that all parties to the
SSAT review of the decision, except the party making the application to the AAT,
receive notice that there has been an application to the AAT for review of the
decision made by the SSAT.
This section modifies paragraph 30(1)(b) of the AAT Act so that the
parties to a review by the AAT under section 143 are the same as the
parties to the review by the SSAT.
Subsection 150(1) modifies section 37 of the AAT Act for the
purposes of an application under section 143 so that the original
decision maker will be responsible for providing the AAT with a statement of
reasons and documents.
Subsection 150(2) provides that, for the
purposes of the Secretary meeting his or her obligations under
paragraph 37(1)(a) of the AAT Act in respect of an application under
section 143, the statement provided by the SSAT under
paragraph 142(1)(a) will be sufficient.
Subsection
150(3) clarifies that the AAT’s powers under section 38 of the
AAT Act to obtain an additional statement is not limited by the operation of
subsection 150(2).
Power of AAT to obtain additional
information
Section 151 modifies section 38 of the AAT
Act so that the person who is required to provide any additional statements
under that section to the AAT is the Executive Director.
Operation and
implementation of the decision under review
Subsection 152(1)
modifies subsection 41(4) of the AAT Act for the purposes of an application
under section 143 so that, where a party applies to the AAT for an order
staying or otherwise affecting the operation or implementation of a decision
made by the SSAT, each party to the review before the SSAT will be able to make
submissions to the AAT.
Subsection 152(2) clarifies that the
“decision” referred to in section 41 of the AAT Act for the purposes
of an application under section 143 is to be taken to be the original
decision and: the decision as varied by the SSAT if it was varied; the
new decision if the original one was set aside; or any decision made as a result
of the matter being sent back to the Secretary with directions or
recommendations.
Subsection 152(3) clarifies that, for this
purpose, “original decision” means the decision reviewed by the
SSAT.
Failure of party to appear
Part 6—Provisions relating to information
Section 154 provides that this Division binds the Crown in all its
capacities This will ensure that all Commonwealth departments, authorities and
agencies (Commonwealth, State, Territory and Norfolk Island) are bound to comply
with this Division.
The section also extends the operation of the
Division to acts, omissions, matters and things outside Australia, whether or
not in a foreign country; and all persons, irrespective of their nationality or
citizenship.
However, a person is not required to comply with this
Division to the extent that doing so would contravene a law of the Commonwealth
(other than a law of a Territory).
The Division does not make the Crown
liable to be prosecuted for an offence.
Section 155 provides that the Secretary may request a person to
give information, or to produce a document that is in his or her custody or
control, to an officer.
The Secretary may only make such a request if it
is considered that the information or document may be relevant to a
person’s current or past entitlement to be paid family
assistance.
“Family assistance” is defined in section
3 of the Bill as meaning family tax benefit, child care benefit, maternity
allowance and maternity immunisation allowance.
Power to obtain
information from a person who owes a debt to the
Commonwealth
Section 156 allows the Secretary to obtain
certain information from a person who owes a debt to the Commonwealth under or
as a result of the family assistance. Such a person may be requested to give an
officer information, or to produce documents that are in the person’s
custody or control, concerning the person’s financial situation. The
person may also be required to notify of a change of address (if relevant)
within 14 days of moving to the new address.
Section 157 deals with information or documents that would help
the FAO locate a person who owes a debt under or as a result of the family
assistance law or that is relevant to the debtor’s financial situation.
The Secretary may require a person who may have such information or documents to
give the information or documents to an officer.
“Family assistance
law” is defined in section 3 as meaning this Bill and the Family
Assistance Act.
Subsection 158(1) enables the Secretary to obtain certain
information about a class of persons for the purposes of detecting cases where
amounts of family assistance have been paid to persons not entitled to them and
to verify the eligibility of persons who have made claims for family
assistance.
Subsection 158(2) specifies the types of information
that may be requested about a person included in a class of persons. The list
specified in this subsection is the maximum extent of information that may be
sought.
The types of information included in the list are matters
relevant in determining a person’s entitlement to family assistance.
Student details, for example, are relevant in determining whether an individual
is an FTB child for the purposes of eligibility for FTB.
The Secretary
may specify a class of persons in the notice regardless of whether or not the
Secretary can identify any of the persons in that class as being person who have
been paid, are entitled to or have made claims for family assistance
(subsection 158(3) refers).
Subsection 158(4) gives the
Secretary 13 weeks in which to decide which (if any) of the information is
relevant to the matters specified in subsection 158(1). Under
subsections 158(5) and (6), the information must be destroyed if the
information is not found to be relevant or if a decision has not been made as to
its relevance.
Any requirement made of a person under this Division must be made in
writing (subsection 159(1) refers).
Subsections 159(2) to (5)
inclusive set out the requirements of the notice.
The notice may be
given personally or by post or by any other manner approved by the Secretary.
The notice must specify how the person is to give the information or produce the
document to which the requirement relates, within what period of time, to whom
and the authority for the notice.
A person must be given at least
14 days within which to provide the information requested.
The
notice may require a person to give the information by appearing before a
specified officer to answer questions. If this is the case, a person may not be
required to attend before the end of 14 days after the notice is
given.
Under section 160, a person must not refuse or fail to comply with
a notice to the extent that the person is able to comply. The penalty for such
a refusal or failure is imprisonment for 12 months.
Section 161 provides that no State or Territory law may operate to
prevent a person from giving information, producing a document or giving
evidence, that the person is required to give or produce to an officer for the
purposes of the family assistance law.
Under the new family assistance regime, personal information about
customers (“protected information”) will be confidential and
therefore protected against unauthorised recording, disclosure and use.
Division 2 protects personal customer information by restricting what can
be done with such information and providing offences for unauthorised recording,
disclosure or use of customer information. These rules need to be read in
conjunction with additional rules on personal information contained in the
Privacy Act 1988.
Section 162 provides that nothing in the Division prevents a
person from disclosing information to another person if it is disclosed for the
purposes of the Child Support (Registration and Collection)
Act 1988 or the Child Support (Assessment)
Act 1989.
This section also provides that the provisions of
the Division relating to the disclosure of information don’t affect the
operation of the Freedom of Information
Act 1988.
Protection of personal
information
The definition of “protected information” for
the purposes of the confidentiality provisions in this Bill is modelled on a
similar definition in the Social Security Act. It relates to
information about a person as held in the records of a number of agencies and is
in effect ‘all encompassing’ beyond the definition of personal
information as defined in the Privacy Act 1988. The adoption of a
common definition across these agencies will afford this information a
consistent level of protection under family assistance and social security
laws.
“Protected information” is defined in section 3
of this Bill as meaning information about a person that was or is held in the
records of the Department or Centrelink and information about a person that was
or is held in the records of the Australian Tax Office and the Health Insurance
Commission that was collected for the purposes of the family assistance law.
Information that there is no information about a person is also
“protected information” within this definition.
There are,
however, some purposes for which protected information can be obtained,
recorded, disclosed or used.
Protected information can only be obtained
for the purposes of the family assistance law (subsection 163(1)
refers).
Protected information can be recorded, disclosed or used for the
purposes of the family assistance law and other prescribed purposes, that is,
disclosure for the purposes of sections 168 (production of
documents or disclosure of information to a court, tribunal, authority or person
for the purposes of the family assistance law) or section 169
(disclosure by the Secretary in the public interest, to the head of another
agency or by express or implied authority from the customer).
Section
163 enables officers from the agencies involved in the administration of the
family assistance law (Centrelink, the ATO and HIC) to obtain information from
the pool of “protected information” for the purposes of performing
their duties or exercising their powers and functions under the family
assistance law. This, in effect, allows the interchange of protected
information between the agencies involved in administering the new family
assistance regime if the interchange is for the purposes of the family
assistance law.
It is an offence for a person to intentionally obtain information that
the person is not authorised under the family assistance law or any other lawful
authority to obtain, and the person knows or ought reasonably to know that the
information is protected information (section 164 refers).
It is an offence for a person to intentionally record, disclose or
otherwise make use of information that the person is not authorised or required
under the family assistance law to record, disclose or use, and the person knows
or ought reasonably to know that the information is protected information
(section 165 refers).
It is an offence for a person to solicit the disclosure of protected
information where the disclosure would be in contravention of this Division and
the person knows or ought reasonably to know that the information is protected
information (section 166 refers).
Under this provision, it makes
no difference whether any protected information is actually disclosed.
Under section 167, it is an offence for a person
to:
• offer to supply (whether to a particular person or otherwise)
information, knowing it to be protected information;
• hold himself
or herself out as being able to supply (whether to a particular person or
otherwise) information, knowing that the information is protected
information.
An officer acting in the exercise or performance of his or
her duties, functions or powers under the family assistance law cannot be guilty
of an offence under this provision.
Protection of certain documents
etc from production to court etc
Section 168 prevents an
officer from having to respond to a request to divulge information collected as
part of his or her duties where the request is made by a court, tribunal,
authority or person that has the power to request the production of documents or
other information and that request is not for the purposes of the family
assistance law.
This provision ensures, for example, that confidential
customer information cannot be used in civil proceedings such as debt
recovery.
Disclosure of information by Secretary
Section
169 allows information to be released in certain circumstances even though
the release would normally be “barred”.
The grounds for
release are:
• if the Secretary certifies that it is in the public
interest to do so – in the public interest; or
• to the
Secretary or head of a Commonwealth Department or authority for the purposes of
that Department or authority; or
• with the express or implied
authority of the person to whom the information relates.
Examples of a
public interest releases of information that can occur under similar provisions
in the Social Security Act are where a police authority requires
the whereabouts of a person suspected of committing a serious indictable
criminal offence (such as armed robbery) or where disclosure of the information
would assist in locating an abducted child or protecting the well being or
health of a child. It is envisaged that similar releases of protected
information would allowed under section 169.
The Secretary when
giving certificates allowing releases of information in the public interest, is
required to act in accordance with guidelines that have been issued by the
Minister under section 170.
Similarly, when disclosing information
to the Secretary or head of a Commonwealth Department or authority; the
Secretary is required to act in accordance with guidelines that have been issued
by the Minister under section 170.
Guidelines for exercise of
Secretary’s disclosure powers
Section 170 obliges the
Minister to set guidelines for the exercise of the Secretary’s power to
give certificates to allow releases of personal information on grounds of public
interest or to allow releases of personal information to a Secretary or head of
a Commonwealth Department or authority for the purposes of that Department or
authority.
The provision also allows the Minister to revoke or vary those
guidelines.
The guidelines are subject to disallowance by the
Parliament.
Officer’s declaration
Section 171
provides that an officer must make a declaration in a form approved by the
Minister or Secretary if required to do so by the Minister or Secretary. The
declaration in section 171 relates to the confidentiality provisions and
ensures that officers are made aware of their obligations regarding protected
information.
Division 3 – False Statements etc
Division 3 of the Bill deals with offences under the family
assistance law. It is divided into Divisions that deal with preliminary
matters, the offences themselves, the applicable penalties, procedural matters
and the liability of corporations, employers and principals for
offences.
The provisions are closely modelled on the offence provisions
contained in Part 8.1 of the Social Security Act.
Section 172 provides for the extra-territorial application of
Division 3.
Subdivision B contains offence provisions relating to the giving
of information or production of documents and payment related offences.
(An example of another person committing an offence is where a tax agent,
when making a claim for his/her client for family assistance through the
taxation system, knowingly or recklessly makes a false or misleading statement
in relation to that claim.)
• knowingly or recklessly makes a false
or misleading statement in order to deceive an officer acting under the family
assistance law or to affect an entitlement to, or the rate of, a family
assistance payment (section 174); or
• knowingly or
recklessly makes or presents to an officer a statement, or document, that is
false in any way (section 175).
Under section 176, a person must not knowingly or recklessly obtain
any family assistance payment (including a payment of FTB by instalment) to
which the person has no entitlement, or only a partial entitlement.
Under
section 177, it would be an offence for a person knowingly or recklessly
to obtain any family assistance payment by means of a false or misleading
statement made knowingly or recklessly; impersonation, or fraud.
The penalty for a person who contravenes any of the provisions of
Subdivision C is
12 months’ imprisonment (section 178
refers).
If a person is convicted of an offence against section 178,
section 179 provides that a court may impose a penalty and also order the
person to pay reparation to the Commonwealth for the amount of family assistance
paid as a consequence of the act, failure or omission that constituted the
offence. In this sense, an amount of family assistance is taken to be paid to a
person even if the amount is used to reduce or extinguish a person's, or another
person's, primary tax liability, a family assistance or social security
debt.
The new section would, however, prevent the imprisonment of a
person who fails to comply with a reparation order made under its
authority.
Section 180 provides that, if a person is convicted of more than
one offence against section 178, the court may choose to impose one
penalty for all of the offences involved. However, the penalty must not exceed
the total of the maximum penalties that could have been imposed if each offence
were dealt with separately.
Section 181 enables more than one charge against a person for
offences against section 178 to be dealt with as one complaint,
information or declaration. However, this may only occur if those charges
either: are founded on the same facts; form a series of offences of the same or
similar character; or are part of a series of offences of the same or similar
character.
Under section 182, if two or more charges are set out in the same
complaint, information or declaration, the particulars of each offence charged
must be set out in a separate paragraph.
Section 183 provides that, if charges are joined, they must be
tried together, unless the court considers that it would be just to try them
separately and makes an order to that effect.
Section 184 stipulates that, for the purposes of the court’s
power to order the payment of reparation, a certificate signed by the Secretary
is evidence of the matters set out in the certificate. The certificate would
specify the person to whom an amount of family assistance has been paid in
consequence of an act, failure or omission for which any person has been
convicted of an offence under section 178, the amount concerned and
the act, failure or omission concerned.
Section 185 makes it clear that, if a reparation order under these
provisions is filed by certificate in any court that has civil jurisdiction to
the extent of the reparation amount (including the court that made the order),
it is enforceable for all purposes as a final judgment of that court.
The provisions in Part 7 work in conjunction with the offence
provisions in the Bill. In proceedings against corporations and
non-corporations, these provisions operate to identify individuals who are to be
responsible for the actions or omissions of those bodies and, where an offence
involves consideration of the state of mind of a person, the individuals to whom
that consideration is relevant.
Section 186 elaborates on the meaning of a person’s state of
mind, according to standard Commonwealth criminal law principles.
Under section 187, a director of a corporation includes, for this
Division, a constituent member if the corporation is incorporated for a public
purpose under Commonwealth, State or Territory law.
Again, this section 188 provides a standard Commonwealth criminal
law rule to the effect that a reference to engaging in conduct includes a
reference to failing or refusing to engage in conduct.
Section 189 makes it clear that a reference in this Division to an
offence against the Family Assistance Administration Act includes a reference to
offences created by any of the specified Crimes Act 1914
provisions as applicable to the Family Assistance Act.
Division 2 – Proceedings against corporations
Under section 190, the state of mind of a corporation, in relation
to conduct engaged in by the corporation, may be established, in proceedings for
an offence against the Family Assistance Act, by showing that a director,
employee or agent of the corporation: engaged in the conduct; in doing so,
acted within authority; and had the state of mind.
Similarly, this section 191 provides that conduct engaged in by a
director, employee or agent of a corporation, on behalf of the
corporation and within authority, is regarded for these purposes as conduct
engaged in by the corporation. However, this would not be so if the corporation
could establish that it took due measures to avoid the conduct.
Section 192 is the equivalent for a person other than a
corporation of section 190 for a corporation. The state of mind of
the person, in relation to conduct engaged in by the person, may be established,
in proceedings for an offence against the Family Assistance Act, by showing that
an employee or agent of the person: engaged in the conduct; in doing so,
acted within authority; and had the state of mind.
Section 193 is the equivalent for a person other than a
corporation of section 191 for a corporation. Conduct engaged in by
an employee or agent of the person, on behalf of the person and within
authority, is regarded for these purposes as conduct engaged in by the person.
However, this would not be so if the person could establish that he or she took
due measures to avoid the conduct.
Under section 194, imprisonment is ruled out as a penalty for an
offence if the person would not have been convicted but for sections 192 and
193.
Eligibility for child care benefit (CCB) under Subdivisions A, B and C of
the Family Assistance Act depends on sessions of care being provided by an
‘approved child care service’ and eligibility for CCB under
Subdivision D of that Act depends on sessions of care being provided by a
‘registered carer’.
Part 8 includes provisions dealing
with the approval of child care services (in Division 1) and
registered carers (in Division 2).
Division 1 deals with the approval procedures, conditions of
approval, sanctions for breaches of the conditions of approval and with
allocations of child care places.
Section 195 covers the procedure for the application, by a person
(an individual or a body) who operates, or proposes to operate, a child care
service, for approval as a service of one of the four kinds - a centre based
long day care service, a family day care service, an occasional care service or
an outside school hours care service.
‘Approved child care
service’, ‘approved centre based long day care service’,
‘approved family day care service’, ‘approved occasional care
service’ and ‘approved outside school hours care service’ are
defined in section 3 in Part 2. The other terms are defined by
reference to approval under Division 1 of Part
8.
Subsection 195(2) prevents registered carers from applying
for approval as an approved child care service. ‘Registered carer’
is defined in section 3 in Part 2 by reference to approval under
Division 2 of Part 8.
Subsection 195(3) provides
that the application for approval as an approved child care service must be made
in a form and manner required by the Secretary, must state which kind of child
care service the service is, and must be accompanied by any information,
documents and fees (if any) required by the Secretary. Fees may only be
prescribed in respect of applications lodged during the period of time during
which a determination under section 207 is in force (under section
207, the Minister may determine guidelines relating to the allocation of
child care places). Subsection 236(2) provides that regulations may
prescribe fees for the making of application under section 195 (the fees
must not be such as to amount to taxation).
Section 196 specifies the requirements that a child care service
has to meet to become approved as a service of a particular kind.
The
common requirements are that a service has to make an application for approval,
be of the kind stated in the application, and satisfy rules, determined by the
Minister under section 206, relating to the eligibility of child care
services to become approved as a service of a particular kind (paragraphs
(a), (b) and (c) refer). ‘Eligibility rules’ are defined in
section 3 in Part 2 as rules made under subsection
206(1).
If a service applies for approval when a ministerial
determination under section 207 (relating to the allocation of child care
places) is in force, the pre-requisite is that the service will have child care
places allocated by the Secretary under section 208 (paragraph (d)
refers). If the Secretary would not allocate child care places to the service,
had the service been approved, the service cannot be approved as an approved
child care service.
Subsection 196(2) provides that the Secretary
may refuse to approve a service as an approved child care service of a
particular kind if the service was previously approved and, while previously
approved, the service was convicted of an offence under this Act or the
Secretary took action against the service under section 201(1)
(section 201(1) specifies the consequences of a breach of conditions
of approval).
Subsection 196(3) provides that if the Secretary
approves the service, the Secretary must give the applicant a certificate of
approval, stating the kind of child care service that has been approved.
Sections 197 to 200 specify conditions that have to be met by an
approved child care service to continue to be approved.
Subsection
197(1) imposes a condition that an approved child care service satisfy any
eligibility rules determined by the Minister under paragraph 206(1)(b),
relating to the eligibility of child care services to continue to be approved as
a service of a particular kind. ‘Eligibility rules’ are defined in
section 3 in Part 2 as rules made under
subsection 206(1).
Subsection 197(2) imposes a common
condition that the service comply with obligations imposed on the service by the
family assistance law. ‘Family assistance law’ is defined in
section 3 in Part 2 as this Act, the Family Assistance Act or
regulations under this Act (‘Family Assistance Act’ is defined in
section 3 in Part 2 as the A New Tax System (Family
Assistance) Act 1999).
Subsection 197(3) imposes a common
condition that the service must meet the requirements of the laws of the
Commonwealth, or of the State or Territory, relating to child
care.
Section 198 provides that if a ministerial determination
under section 207 (relating to the allocation of child care places) is in
force, it is a condition of continuing approval that the service has child care
places allocated to it by the Secretary under section 208 and does not
exceed the allocation.
Section 199 allows the Minister to
determine conditions for continued approval for a class of child care services;
the services must comply with the determination.
Section 200
allows the Secretary to impose conditions for continued approval on individual
child care services; the services must comply with the conditions.
Section 201 lists sanctions that may be imposed by the Secretary
if a service breaches conditions of continued approval.
Under
subsection 201(1), the Secretary may vary the conditions imposed under
subsection 200(2), impose additional conditions, reduce the number of
places allocated to the service under section 208 and suspend or cancel
the service’s approval. Subsection 201(2) provides that the
Secretary must give notice to the service of any sanction imposed under
subsection 201(1).
Subsection 201(3) provides that the
suspension of approval may be revoked by the Secretary with effect from the day
specified by the Secretary.
In exercising his powers in relation to the
imposition of sanctions or revocation of suspension of a service’s
approval, subsection 201(4) requires the Secretary to have regard to
ministerial determinations under subsection 201(5). Subsection
201(5) allows the Minister to determine factors to be taken into account in
imposing sanctions and in specifying the date of effect of a revocation of
suspension.
Section 202 specifies procedure to be followed by the Secretary
before a sanction is imposed on a service. Under subsection 202(1) the
Secretary must notify the service that a sanction is being considered, and set
out the grounds for this and summarise the evidence on which the grounds are
based. The Secretary must also summarise the effect of the sanction on
entitlement to CCB and give the service an opportunity to make written
submissions on why the sanction should not be imposed.
Under
subsection 202(2) the Secretary must have regard to any submissions made by
the service in deciding whether to impose the sanction.
Section 203 lists further circumstances in which a service’s
approval may or must be cancelled.
An approval must be cancelled if the
Secretary is satisfied that the service should not have been approved or if the
service fails to provide child care for a continuous period of 3 months unless
special circumstances exist (subsections 203(3) and (4) refer,
respectively).
Subsection 203(5) provides that the Secretary must
give notice to a child care service of a cancellation of approval under this
section.
The Secretary may cancel an approval on a service’s
request (subsection 203(2) refers). If, under subsection 203(7),
the Minister determines factors to be taken into account in determining whether
to grant the request, the Secretary has to have regard to those factors
(subsection 203(6) refers).
Procedure for
cancellation
Section 204 sets out the procedure to be followed
before cancellation of an approval under subsections 203(3) or (4).
Under subsection 204(1) the Secretary must notify the service that
cancellation is being considered, and set out the grounds for this and summarise
the evidence on which the grounds are based. The Secretary must also summarise
the effect of the notice on entitlement to CCB and give the service an
opportunity to make written submissions on why the approval should not be
cancelled.
Under subsection 204(2) the Secretary must have regard
to any submissions made by the service in deciding whether to cancel the
approval.
Section 205 imposes an obligation on an approved child care
service to notify the Secretary of any matter occurring before the
service’s approval as a result of which the service should not have been
approved or of any matter occurring after the service’s approval as a
result of which a condition of approval has been breached.
The
notification has to be made in writing and as soon as practicable after the
service becomes aware of the occurrence of the matter. The penalty for
non-compliance with the obligation under this section is 20 penalty
units.
Eligibility rules for child care services
Section
206 deals with eligibility rules.
Subsection 206(1) allows the
Minister to determine rules relating to the eligibility of any of the four kinds
of child care services to become approved and rules relating to eligibility to
continue to be so approved.
Subsection 206(2) provides that the
rules under subsection 206(1) may specify requirements to be met by
operators and staff of child care services, including requirements relating to
individual suitability to provide child care. The rules may also specify
requirements to be met by the operator if the service is transferred to another
operator.
Subsection 206(3) gives the Secretary power to exempt a
child care service, or a class of child care services from one or more
eligibility rules.
Section 207 provides the Minister with a discretionary power to
determine guidelines in relation to the allocation of child care places. In
particular, the Minister may determine procedures relating to the allocation of
child care places, matters to be taken into account (by the Secretary under
section 208) in working out the number (if any) of places to be allocated
to an approved child care service and the maximum number of places that can be
allocated to approved child care services in a specified class (eg the number of
centre based long day care places in a particular locality).
If the Minister makes a determination under section 207, the
Secretary must make an allocation of child care places (initial allocation) to
each approved child care service in accordance with the Minister’s
determination (subsection 208(1) refers).
A service which has an
initial allocation of places may apply to the Secretary for an additional
allocation of places (subsection 208(2) refers).
Subsection
208(3) provides that the application for additional allocation of places
must be made in a form and manner required by the Secretary, and must be
accompanied by any information, documents and fees (if any) required by the
Secretary. Subsection 236(2) provides that regulations may prescribe
fees for the making of application under section 208 (the fees must not
be such as to amount to taxation).
The Secretary’s decision
relating to the additional allocation of places is to be made in accordance with
the Minister’s determination under section 207 (subsection
208(4) refers). The Secretary must give the applicant notice of the
decision, and if the decision is to grant the application, the Secretary must
allocate the additional places to the applicant (subsection 208(5)
refers).
Section 209 provides that determination under subsections
199(2), 201(5), 203(7), or 206(1), paragraph 206(3)(b) or
section 207 is a disallowable instrument for the purposes of the
Acts Interpretation Act 1901.
Division 2 deals with approval procedures, conditions of approval
and sanctions for breaches of conditions of approval for registered
carers.
Section 210 specifies who may apply for approval as a registered
carer and how an application is made.
Subsection 210(1) provides
that that an individual who provides care or proposes to provide care, for a
child or children may apply to the Secretary to be approved as a registered
carer.
Subsection 210(2) prevents an individual from applying for
approval as a registered carer if the individual operates an approved child care
service or provides child care under a contract with an approved family day care
service. This subsection also provides a bar on application by an individual
who operates a child care service which receives Commonwealth funding to assist
with its operational costs, and the funding is administered by the
Department.
Subsection 210(3) provides that the application for
approval must be made in a form and manner required by the Secretary and must be
accompanied by any information or documents required by the Secretary.
Section 211 specifies the circumstances in which the Secretary
must approve an individual as a registered carer (subsection 211(1)
refers).
The Secretary must approve an individual as a registered carer
if the individual has made an application for approval, has turned 18 (or the
age specified by the Minister in a determination under subsection
211(3)), or meets qualification requirements specified by the Minister under
subsection 211(4), and the Secretary is satisfied that the individual
meets the tax file number requirement under section 212.
If the
Secretary approves the individual, subsection 211(5) requires the
Secretary to issue a certificate of approval.
Section 212 sets out the tax file number requirements which must
be met by an applicant seeking approval as a registered carer. Applicants are
not required to quote their tax file number but they must have a tax file
number. The Secretary may ask the Commissioner of Taxation for information on
whether a person has a tax file number.
Section 213 provides that the approval of an individual as a
registered carer takes effect from the day on which the Secretary considers that
the applicant was first eligible to be approved but not earlier than 12 months
before the day of the application for approval. If an applicant seeks approval
for a past period and the Secretary is satisfied that that the applicant was not
eligible for approval during a period or periods in the past, the Secretary may
determine that the approval is not to have had effect during that period or
those periods.
Section 214 deals with conditions of continued approval as a
registered carer.
Subsection 214(1) imposes a condition that the
provision of care by an individual meets the requirements of the laws of the
Commonwealth, or of the State or Territory, relating to child
care.
Subsection 214(2) allows the Secretary to impose other
conditions on the continued approval of an individual.
Subsection
214(3) allows the Minister to impose other conditions for the continued
approval of all registered carers.
Section 215 lists sanctions that may be imposed by the Secretary
if a registered carer breaches conditions of continued approval.
Under
subsection 215(1), the Secretary may vary the conditions imposed under
subsection 214(2), impose additional conditions, suspend or cancel the
carer’s approval. Subsection 215(2) provides that the Secretary
must give notice to the carer of any sanction imposed under subsection
215(1).
Subsection 215(3) provides that the suspension of
approval may be revoked by the Secretary with effect from the day specified by
the Secretary.
In exercising his powers in relation to the imposition of
sanctions or revocation of suspension of a carer’s approval, subsection
215(4) requires the Secretary to have regard to ministerial determinations
under subsection 215(5). Subsection 215(5) allows the Minister to
determine factors to be taken into account in imposing sanctions and in
specifying the date of effect of a revocation of suspension.
Section 216 specifies procedure to be followed by the Secretary
before a sanction is imposed on a registered carer. Under subsection
216(1) the Secretary must notify the carer that a sanction is being
considered, and set out the grounds for this and summarise the evidence on which
the grounds are based. The Secretary must also summarise the effect of the
sanction on entitlement to CCB and give the carer an opportunity to make written
submissions on why the sanction should not be imposed.
Under
subsection 216(2) the Secretary must have regard to any submissions made by
the carer in deciding whether to impose the sanction.
Section 217 lists further circumstances in which a carer’s
approval must be cancelled.
An approval must be cancelled if the carer
requests the cancellation of the carer’s approval or if Secretary is
satisfied that the carer should not have been approved (subsections 217(2)
and (3) refer, respectively).
Subsection 217(4) provides that
the Secretary must give notice to a carer of a cancellation of approval under
this section.
Section 218 sets out the procedure to be followed before
cancellation of an approval under subsections 217(3). Under
subsection 218(1) the Secretary must notify the carer that cancellation
of the approval is being considered, and set out the grounds for this and
summarise the evidence on which the grounds are based. The Secretary must also
summarise the effect of the notice on entitlement to CCB and give the carer an
opportunity to make written submissions on why the approval should not be
cancelled.
Under subsection 218(2) the Secretary must have regard
to any submissions made by the carer in deciding whether to cancel the
approval.
Section 219 imposes an obligation on a registered carer to notify
the Secretary of any matter occurring before the carer’s approval as a
result of which the carer should not have been approved or of any matter
occurring after the carer’s approval as a result of which a condition of
approval has been breached.
The notification has to be made in writing
and as soon as practicable after the carer becomes aware of the occurrence of
the matter. The penalty for non-compliance with the obligation under this
section is 20 penalty units.
Section 220 provides that a determination under subsections
211(3) or (4), 214(3) or 215(5) is a disallowable instrument for the
purposes of the Acts Interpretation Act 1901.
Part 9 – Other Matters
General administration of family assistance law
Under
section 221, the Secretary to the Department of Family and Community
Services is responsible for the general administration of the family assistance
law (ie, the Family Assistance Act and this Bill). Accordingly, most of the
powers and functions under the family assistance law rest with the
Secretary.
The exercise of this responsibility is subject to any
direction of the Minister for Family and Community
Services.
Delegation
The Family Assistance Office,
comprising officers from Centrelink, the ATO and HIC (Medicare offices), will
administer the family assistance law. To enable this to happen, the Secretary
is given the power to delegate the Secretary’s powers under the family
assistance law to “officers” (section 222 refers).
An
“officer” is defined to mean the head, an officer or employee of an
agency or any other person engaged by an agency under contract or otherwise.
Notably, an “agency” includes Centrelink, the ATO and HIC as well as
the Department of Family and Community Services. The relevant definitions are
contained in section 3.
The exercise of the delegation power will,
for example, allow the Commissioner of Taxation, as delegate of the Secretary,
to accept claims, make payments and perform other functions under this
Bill.
The Secretary is required to consult with the head of an agency
before delegating powers under the family assistance law to an officer or
employee of that agency (see subsection 222(2)).
The only
restriction on the Secretary’s power of delegation relates to the
Secretary’s power to release confidential customer information to the head
of another agency under paragraph 169(1)(b). Due to the sensitive nature
of that power, it can only be delegated to the head of an agency by virtue of
subsection 222(3).
Decisions to be in
writing
Section 223 provides that decisions made under the
family assistance law must be in writing, and that a decision under the family
assistance law is to be taken to be in writing if it is made or recorded by
means of a computer.
Decisions taken by computer
Section
224 deals with the situation where a computer program generates a decision
about a person’s rate of payment or their entitlement to be paid a family
assistance payment. Where this happens, the computer decision is taken to be a
decision of the Secretary at the time the change was made.
This provision
ensures that a computer generated decision is subject to review by deeming it to
be a decision by the Secretary.
Notice of
decisions
Section 225 makes it clear that a notice of a
decision affecting a person’s entitlement to be paid family assistance
(such as a decision that a person is entitled to be paid FTB by instalment or a
variation decision) is to be taken to have been given to the person if it is
delivered to the person personally, or left at, or sent by prepaid post to, the
address of the place of residence or business of the person last known to the
Secretary.
A notice of a decision affecting a person’s entitlement
to be paid family assistance may be given to a person by properly addressing,
prepaying and posting the document as a letter. If this procedure is followed,
then the notice is taken to have been given to the person at the time at which
the notice would be delivered in the ordinary course of post unless the contrary
is proved.
Other notices of decision (such as a notice requiring a person
to provide information) will be subject to the rules in sections 28A and 29
of the Acts Interpretation Act 1901.
Payments to
Commissioner of Taxation
Section 226 obliges the Secretary to
make deductions from family assistance payments made to a person if
section 218 of the Income Tax Assessment Act 1936
applies. Section 218 of that Act gives the Commissioner of Taxation the
discretionary power to require a person who owes money to, or holds money on
behalf of, a taxpayer to pay to the Commissioner the amount due by the
taxpayer.
Section 227 allows the Commissioner of Taxation to apply some or
all of a person’s family assistance entitlement (with the exception of
child care benefit) to reduce or extinguish his or her “primary tax
debt”. This provision mirrors section 87, which allows the
Commissioner of Taxation to apply an income tax refund to reduce or extinguish a
person’s family assistance debt.
A “primary tax debt”
is any amount due to the Commonwealth directly under a taxation law and includes
any such amount that is not yet payable.
Subsection 227(1)
provides that if a person is entitled to an amount of family assistance (other
than child care benefit), and the person is also liable for an amount of primary
tax, then the Commissioner of Taxation may offset the family assistance payment
against the primary tax liability.
Subsection 227(2) provides that
where the Commissioner offsets the family assistance payment under subsection
(1), the amount of the person’s entitlement and liability are reduced
accordingly. Also, where there has been an offset under subsection (1),
the person is taken to have paid the amount credited by the Commissioner, at the
time when the Commissioner credits the amount, or at any earlier time that the
Commissioner determines. The “amount credited by the Commissioner”
refers to family assistance credits. The effect of this subsection is that the
person is taken to have paid the amount of the primary tax liability that is
offset by the amount of the family assistance entitlement.
Subsection
227(3) states that this section has effect in spite of anything in any other
Act or any other law of the Commonwealth.
Subsection 228(1) provides that if a person is entitled to an
amount by way of arrears of family assistance, and the person incurs a debt
under this Act, then the Secretary may determine that the whole or a part of the
entitlement to arrears is to be set off against the debt.
Subsection
228(2) makes special provision for child care benefit. It provides that
under subsection (1), the Secretary may offset a person’s arrears
of child care benefit only against a debt that the person incurs in relation to
child care benefit.
Subsection 228(3) provides that if the
Secretary makes a determination under subsection (1), the amount of
the person’s entitlement to an amount of arrears of family assistance and
the amount of the debt are reduced accordingly.
Subsection 229(1) provides that where a person (the debtor) incurs
a debt under this Act, and another person (the consenting person) is entitled to
an amount by way of arrears of family assistance, and for the purposes of the
recovery of the debtor’s debt, the consenting person consents to the
deduction of an amount from their arrears, the Secretary may determine that the
whole or a part of the entitlement to arrears is to be set off against the
debt.
Subsection 229(2) makes specific provision for child care
benefit. It provides that where the consenting person is entitled to an amount
of arrears of child care benefit, the Secretary cannot offset the debtor’s
debt against this amount.
Subsection 229(3) provides that if the
Secretary makes a determination under subsection (1), the
person’s entitlement to an amount of arrears of family assistance and the
amount of the debt are reduced accordingly.
Subsection 229(4)
provides that the consenting person may revoke their consent at any
time.
Judicial notice of certain matters
Subsection
230(1) requires all courts to accept a signature that purports to be
attached or appended to any official document if the signature is of a person
who is or was an officer. The term “officer” is defined in
section 3 to include the head of an agency.
Subsection
230(2) requires all courts to accept that such a signature signifies that
the person is or was in fact an officer.
Documentary
evidence
Subsection 231(1) establishes a general evidentiary
rule requiring all courts to accept official documents signed by an officer as
prima facie evidence of the facts and statements contained within the
documents.
Subsection 231(2) establishes the evidentiary rule that
a written statement, signed by an officer, that a person was entitled to, or had
received, a family assistance payment on a certain date and of a particular
amount shall be received by the courts as prima facie evidence that the person
was entitled to, or in receipt of, the payment at that time and at that
rate.
Application of family assistance law to unincorporated
bodies
Section 232 provides that a “person” for
the purposes of the family assistance law, includes an unincorporated body. The
provision also identifies individuals within the unincorporated body on which
obligations can be imposed, who can discharge those obligations and who is to be
responsible for any offences committed under the family assistance law. An
individual will not be held to be responsible for an offence if he or she was
not involved in any way (by act or omission) in the commission of the
offence.
The need for this provision arises because a
“person” as defined in the Acts Interpretation Act
1901 does not include an unincorporated body.
A number of
provisions in the Bill are expressed to apply in relation to a person. The
Secretary has the power, for example, to require a person to provide information
relevant in determining entitlement to FTB. Also, there are offences where a
person provides false or misleading information. These and other provisions
should have the potential to apply to unincorporated bodies as well as other
persons.
Annual report
Section 233 provides that, as
soon as practicable after 30 June each year, the Secretary must prepare and
give to the Minister a report on the administrative operation of the family
assistance law during the year that ends on that 30 June.
The Minister is
obliged to make sure that a copy of the report is presented to each House of
Parliament within 15 sitting days of that house after the day on which the
Minister receives the report.
Appropriation
Section
234 provides that payments of family assistance, must be made out of the
Consolidated Revenue Fund, which is appropriated
accordingly.
Agreements on administrative arrangements
FTB
will be administered by the Family Assistance Office comprising officers from
three agencies, the Centrelink, the ATO and HIC. The Secretary to the
Department of Family and Community Services is responsible for the
administration of the new family assistance regime. In view of this structure,
subsections 235(2) and (3) provide for the making of administrative
arrangements between the Secretary and Commissioner for Taxation and Managing
Director of the HIC so that respective roles and responsibilities are clear.
Similar administrative arrangement can be incorporated into the Service
Agreement between the Department and Centrelink.
Subsection 235(1)
enables the Secretary and the Executive Director of the Social Security
Appeals Tribunal to enter into administrative arrangements regarding the
administration of the review and appeals provisions in this
Act.
Regulations
Section 236 provides that the
Governor General may make regulations that are consistent with the
provisions in this Act setting out matters that are:
• required or
allowed by this Act to be prescribed; or
• necessary or convenient
for carrying out or giving effect to provisions in this Act.
The
regulations may prescribe penalties up to a specified maximum number of penalty
units for any breach of the regulations.
The regulations may also
prescribe fees that apply in relation to an application
for:
• approval as an approved child care service;
and
• additional allocation for child care places.
The
regulations may deal with matters relating to the proof of making or withdrawing
a claim or application or the doing of any other thing that is required or
permitted to be done under the family assistance law.
The regulations may
provide for specified decisions of the Secretary, an authorised review officer,
the SSAT or the AAT only to have effect from a specified day before the decision
is made. This regulation power in subsection 236(4) applies to decisions
which create or increase an entitlement to FTB. The effect of the provision is
that the regulations may provide that that such decisions may only be backdated
for a limited period.
Subsection 236(5) provides that if
regulations for the making of determinations under paragraph 49(1)(a)
(conditional eligibility for CCB by instalment to an approved child care
service) are made before the provisions under which the regulations are made
come into operation, the determinations may be made as soon as the regulations
have been made. However, the determinations cannot have effect before the
substantive commencement of the provisions under which the regulations are made.
The effect of this is to enable determinations relating to conditional
eligibility for CCB to be made in advance, in preparation for the introduction
of the new child care payment.
A NEW TAX SYSTEM (FAMILY ASSISTANCE) (CONSEQUENTIAL AND RELATED MEASURES) BILL (No. 2) 1999
PRELIMINARY
Clause 1 of the A New Tax System (Family Assistance)
(Consequential and Related Measures) Bill (No. 2) 1999 sets out how the
amending Act is to be cited.
Clause 2 provides for the commencement of
the amending Act and the Schedules in the amending Act. The various provisions
generally start either on Royal Assent or on the commencement of other family
assistance amendments, or related legislative amendments, on which the
provisions in the amending Act depend or to which they are linked in some
technical way. One transitional provision (inserted by item 2 of
Schedule 11) could start as early as 1 January 2000
– this is to enable the correspondence with current customers about the
transition to the new scheme to be handled in sufficient time for the
commencement of the new arrangements.Clause 3 provides that each Act that
is specified in a Schedule to the amending Act is amended or repealed in
accordance with the applicable items in those Schedules.
Several
abbreviated terms will be used widely throughout this Explanatory Memorandum in
relation to this Bill. The abbreviations are:
• the Social
Security Act 1991 (the Social Security Act);
• the A
New Tax System (Family Assistance) Act 1999, currently still a Bill
before the Parliament (the Family Assistance Act);
• the A
New Tax System (Family Assistance) (Administration) Act 1999, currently
still a Bill before the Parliament (the Family Assistance Administration
Act);
• the A New Tax System (Family Assistance)
(Consequential and Related Measures) Act (No. 1) 1999, currently still a
Bill before the Parliament (the First Consequential Act).
Other
abbreviations used not so widely will be indicated in relevant parts of the
Explanatory Memorandum.
Schedule 1 – Social Security Act 1991
Background
This Schedule amends the Social Security Act to make various amendments that
are consequential on the new family assistance structure and the repeal of the
current forms of assistance to families. The Schedule is divided into Parts
that group related amendments together.
Explanation of the amendments
Part 1
– Amendments relating to family allowance
Items 1, 27 to 45, 48, 51, 53, 54, 56, 59, 60, 62, 63, 65, 66, 67, 69,
71, 72, 73, 75, 76, 79, 80, 81, 83, 84, 85, 88, 89, 90, 92, 94, 95, 96, 98, 99,
101, 103, 104, 105, 106, 107, 109, 110, 111, 112 and 113 are to omit
existing references in the Social Security Act relating to family allowance and
substitute equivalent references to the new family assistance structure.
Generally, the Part A rate of family tax benefit under the Family Assistance Act
will take the place of family allowance. The amendments made by items 62,
83, 84, 98, 103 and 110 to rent assistance provisions also clarify the
operation of the provisions in the case of a person who is a member of an
illness separated couple, a respite care couple or a temporarily separated
couple. Such people should have their rent assistance qualification assessed
independently from the rent assistance qualification of their
partners.
In a related vein, items 2 to 14, 22, 23, 24, 25, 26, 46,
47, 49, 50, 52, 53 (note only), 55, 57, 58, 64, 70, 77, 78, 86, 87, 115, 116,
117, 118, 119, 120, 121, 122, 123, 124, 125, 127, 128, 129, 130, 132, 133, 134,
135, 136, 137, 138, 141, 142, 143, 144 and 145 are simply to omit references
to family allowance and maternity allowance in provisions in the Social Security
Act in which they will no longer be appropriate because of the family assistance
changes, or to omit whole provisions that have been relevant only for payments
that will now be covered by the family assistance legislation. Some of these
omissions are of notes or examples, which are no longer required in the Social
Security Act to the extent that they have been previously.
Items 15,
126, 131, 139 and 140 make amendments for the purposes of the method
statement in point 1210-A1 of the Social Security Act. This deals with the
calculation of a person’s international agreement portability rate and
relies in part on the person’s “notional family allowance
rate”. This is currently specified to be the amount worked out by adding
the standard family allowance rate and the guardian allowance and subtracting
the minimum standard family allowance rate. Rather than try to preserve this
link by translating the concept to the family assistance equivalent (because
this would be difficult to achieve accurately), the link is to be severed and
replaced with a specific amount that will perform the same function and preserve
international undertakings.
Accordingly, new steps 5 and 6 of the method
statement will now deal with the person’s “additional child amount
or amounts” to the same effect in the method statement as the current
notional family allowance rate construction. These additional child amounts
will be provided by new point 1210-A1A. Instead of being reached by link
to the family assistance structure, the three amounts, ranging from $37.00 to
$105.10, are specified in a table and differ depending on the age of the child
and on whether the person concerned has a partner. These amounts as specified
in the Bill are correct as at the time of introduction. However, a special
transitional indexation provision allows the rates to be updated ready for the
commencement of the new rule should this need to happen because of movement in
the source family assistance figures on which the amounts are based.
In
the longer term, provision is made for the routine indexation of the amounts so
that they keep pace with the source figures.
Items 16, 17, 18,
19, 20, 21 and 61 add to appropriate provisions in the Social Security Act
new references to family assistance payments and concepts, including definitions
of those new elements and legislative references. In particular, item 18
adds to subsection 23(1) the definition “family assistance law”
as an abbreviated way of referring to both principal pieces of family assistance
legislation - the Family Assistance Act and the Family Assistance Administration
Act.
Items 68, 74, 82, 91, 97, 100, 102, 108 and 114 insert a new
remote area allowance provision in each rate calculator to allow an additional
amount of remote area allowance to be paid in respect of an FTB child who has
died, for 14 weeks after the death. This rule replaces an existing family
allowance rule, which increases the amount of bereavement payment for a deceased
child if the family allowance recipient also received remote area allowance when
the child died. This rule has not been incorporated into the bereavement
provisions that apply to family tax benefit.
Item 146 repeals
clauses 50, 51, 52, 53, 54 and 69 of Schedule 1A to the Social Security Act.
These are current savings provisions that are either no longer applicable
because of the repeal of family allowance or that are no longer appropriate
under the new family assistance regime, the object of which is to rationalise
and make more equitable programs for payments to families. Some of those
pensioners affected by the repeal of clause 54 may be able to opt for an
agreement payment that would include the additional child amount. The savings
currently provided by clauses 52 and 53 will be reinstituted through a
regulation to be made under section 4 of the First Consequential Act.
Part 2 – Amendments relating to family tax payment
The amendments made by this Part are to omit references to family tax
payment in provisions in the Social Security Act in which they will no longer be
appropriate because of the family assistance changes, or to omit whole
provisions that have been relevant only for family tax payment.
Part 3 – Amendments relating to maternity allowances
This Part contains two amendments that are to omit a reference to
maternity allowance and a whole paragraph relating to maternity allowance and
maternity immunisation allowance from provisions in the Social Security Act that
will no longer need to reflect those payments because of their movement to the
family assistance structure.
Part 4 – Amendments relating to parenting payment
The three items in this Part omit some existing references to PP
(partnered) and replace them with references to benefit PP (partnered). This is
done because one of the two elements of the existing PP (partnered), non-benefit
PP (partnered), is being removed as part of the family assistance measures,
leaving only benefit PP (partnered), which may now be spelled out in full in the
relevant provisions. Two of the amendments are of provisions inserted by the
Further 1998 Budget Measures Legislation Amendment (Social Security) Act
1999, currently still a Bill before the Parliament (see item 14 of
Schedule 2 and item 53 of Schedule 3).
Part 5 – Amendments relating to the introduction of child care benefit
As the heading to this Part indicates, the amendments contained in this
Part generally relate to the introduction of the child care benefit element of
family assistance.
Item 157 amends the definition of
“protected information” in subsection 23(1) of the Social Security
Act, which is used for the confidentiality provisions. This is to make the
definition mirror the equivalent definition that is to apply for the family
assistance confidentiality provisions.
Essentially, the pool of
information to be accessed, and protected, both by the family assistance and by
the social security confidentiality provisions will be the same. It will
comprise information about a person that is or was held in the records of the
Department or Centrelink, or information about a person obtained by an officer
under the family assistance law that is or was held in the records of the
Australian Taxation Office or the Health Insurance Commission. It will also
cover information that there is no information about a person held in the
records of any one or more of these bodies. However, it will be possible to
obtain, disclose, record or otherwise use that information only for
relevant purposes (ie, generally, for the purposes of either of the two
legislative systems).
Item 158 makes a minor technical correction
to section 1261.
Items 159, 160, 161, 162, 164, 165 and 166 make
minor amendments to several confidentiality provisions in the Social Security
Act to remove reference to the Child Care Payments Act 1997, which
will be repealed by the First Consequential Act. In these cases, it is not
necessary to replace this reference with a reference to the new family
assistance equivalent – the revised definition of “protected
information” (see item 157 above) will have the effect of
protecting child care benefit information, along with other family assistance
information, so that it may be obtained, recorded, disclosed or otherwise used
only for relevant social security purposes.
However, item 163 does
replace the Child Care Payments Act 1997 reference in paragraph
1312B(b) with a reference to the family assistance law. This is to make sure
that a person performing family assistance duties does not technically commit an
offence under section 1312B of the Social Security Act in disclosing protected
information (which, under the revised definition discussed under item 157
above may include information obtained under the family assistance law) if that
disclosure is authorised or required by the family assistance law. Again, this
mirrors the equivalent family assistance confidentiality provision.
Part 6 – Amendments relating to overpayments and debt recovery
This Part contains two amendments that include reference to the new
family assistance structure in relevant debt recovery provisions in the Social
Security Act.
The first, made by item 167, is to make sure that a
person’s family assistance debt may be recovered by deductions from the
person’s social security entitlement if he or she has one (consistent with
the treatment of debts under various other Acts and schemes).
The second,
made by item 168, is complementary to this, recognising that recovery by
deductions from a person’s social security entitlement does not have to be
pursued if the amount is recovered under the family assistance debt recovery
provisions.
Part 7 – Amendments relating to commencement of the Youth Allowance Consolidation Act 1999
This Part makes amendments to provisions inserted into the Social
Security Act, or substituted, by the Youth Allowance Consolidation Act
1999, currently still a Bill before the Parliament (the YA Act). (The
YA Act is expected to commence before the family assistance
package.)
Items 169 to 174 are to adjust concepts used in the
youth allowance family actual means test inserted into the Social Security Act
by Schedule 3 to the YA Act (the test formerly having been provided by
regulation).
The family actual means test relies in part on identifying
the value of the increase in the tax free threshold that is available to the
family of a young person affected by the test. However, the family assistance
changes remove this increase as a method of assisting families and replace it
with direct family assistance. Accordingly, these items reflect the family
assistance changes as they affect the test.
Items 175 and 176
amend section 1127 (relating to the disposal of assets more than 5 years
ago), after it is repealed and substituted by item 25 of Schedule 4 to the YA
Bill. The amendments are simply to remove references to family allowance since
it will no longer be a payment under the Social Security Act.
Part 8 - Miscellaneous amendment
This Part contains only one amendment. It is to omit a no longer
relevant parenting allowance reference in section 1190 relating to
indexation.
Schedule 2 – A New Tax System (Family Assistance) Act 1999
Background
This Schedule amends the Family Assistance Act to clarify
certain aspects of the new family assistance structure.
Explanation of the amendments
Item 1 amends the definition of “family assistance”
contained in the Family Assistance Act to include reference to the family tax
benefit advance, which is provided by the Family Assistance Administration
Act.
Item 2 repeals a definition that was set up in the Family
Assistance Act but that is no longer necessary for the family assistance
provisions.
Items 3 to 8, 10, 34 and 35 make technical changes to
references in the Family Assistance Act to the various types of child care
service that will be relevant for the new child care benefit. The changes are
basically to add the word “approved” to the descriptions of the
various types of service. This is to align the references already included in
the earlier legislation with the later drafting of the substantive provisions in
the Family Assistance Administration Act relating to the approval of these
services.
A number of provisions in the Family Assistance Act relating to
eligibility for CCB and affecting an individual’s entitlement to CCB refer
to a ‘calendar year’. As, in most cases, the calculation of a CCB
rate is based on an individual’s (and his/her partner’s) taxable
income, amendments are made to align the working of the CCB rate and eligibility
provisions so that they operate in respect of the same period. To achieve this,
items 9, 18, 19, 22, 24, 30 and 31 amend paragraphs 10(4)(c),
45(2)(a), 46(1)(a), subsections 53(6), 53(7), 55(4, 55(5) and paragraphs
71(3)(c) and 71(4)(b) respectively to change the references to ‘calendar
year’ occurring in those provisions to ‘financial
year’.
Items 11 and 26 make minor technical corrections to
the drafting of subsection 24(5) and paragraphs 66(b) and
67(b).
Item 12 amends subsection 30(1) of the Family Assistance
Act by omitting the words “at the same time” and replacing them with
“on the same day”. This amendment clarifies that only one
individual is eligible for family tax benefit in respect of a child on any given
day. A consequential amendment is also made to the heading of section 30
to reflect the provision as amended.
Section 33 of the Family Assistance
Act deals with the situation where, due to the death of an individual, there is
an unpaid amount of FTB. The provision allows another individual to be eligible
for that unpaid amount in certain circumstances. Items 13 to 15 provide
that the other individual cannot claim any unpaid amounts relating to a period
before the beginning of the income year preceding the income year in which the
individual died. This is consistent with the restrictions on claiming that
would have applied to the deceased person had that person not died and a claim
for the unpaid amount was made.
Item 16 repeals and replaces
subsection 42(2). The new subsection provides that the statement under
paragraph 42(1)(b) (statement of amount of CCB for eligibility by instalment)
must set out the amount of CCB applicable under section 70 (rate of CCB for care
provided by an approved child care service). If the amount is calculated in a
case where Schedule 2 applies (CCB rate in normal circumstances), the CCB
percentage specified in the determination under paragraph 42(1)(a) is to be used
(the CCB percentage is not used for calculation of the special circumstances CCB
rate).
Item 17 repeals and replaces paragraph 42(3)(b). The new
paragraph provides that the sessions of care which are relevant for the purposes
of the calculation under subsection 42(2) are sessions for which a person would
be eligible for CCB under section 43 (eligibility for past periods),
disregarding the aspects of section 43 which are not relevant to eligibility
under section 42 (immunisation requirements and the requirement that a person
must not be conditionally eligible for CCB for the same period).
Items
20 and 21 amend section 52, which provides for a 20 hours per week CCB
eligibility limit.
Item 20 amends subsection 52(1) to provide that
the CCB eligibility limit of 20 hours’ child care per week does not apply
to sessions of care provided outside school hours.
Under subsection
52(2), the Secretary determines which sessions of care in the week will give
rise to eligibility for CCB. Item 21 amends subsection 52(2) to provide
that, where the length of sessions of care provided in a week exceeds 20 hours,
a person is only eligible for CCB for sessions of care worked out in accordance
with a Ministerial determination under subsection (2A). The new subsection
52(2A) requires the Minister to determine how to work out which sessions of care
in the week will give rise to eligibility for CCB.
Item 23 amends
section 54, which provides for a 50 hour per week CCB eligibility limit. Under
subsection 54(2), the Secretary determines which sessions of care in the week
will give rise to eligibility for CCB. The amended subsection 54(2) now
provides that, where the length of sessions of care provided in a week exceeds
50 hours, a person is only eligible for CCB for sessions of care worked out in
accordance with a Ministerial determination under subsection (2A). The new
subsection 54(2A) requires the Minister to determine how to work out which
sessions of care in the week will give rise to eligibility for
CCB.
Item 25 repeals and replaces section 56, which requires
determinations to be made in accordance with rules made by the Minister under
subsection 56(2). The new section 56 applies to determinations of the Secretary
or an approved child care service. The section no longer applies to
determinations of the Minister, as it is not necessary for this provision to
apply to Ministerial determinations. Item 25 also inserts a new section
56A, which replaces the previous subsection 56(3). New section 56A provides
that a determination under subsection 52(2A), 53(1), 54(2A) or 56(2) is a
disallowable instrument.
Items 27 to 29 and 32 amend section 71
(CCB rate in special circumstances). Item 27 amends paragraph
71(1)(a) to cross-refer to subsection 42(2) (section 42 deals with eligibility
of an individual for CCB by instalment). This is to make it clear that section
71 does not apply in calculating the CCB rate in cases of eligibility under
section 43 for lump sum CCB for a past period.
Items 28 and 29
makes consequential amendments to paragraph 71(1)(b) to make it clear that
the child or individual referred to in the provision is the child or individual
in respect of whom the CCB rate is calculated under section 42.
Item
32 makes a further consequential amendment to subparagraph 71(4)(c)(iii)
which inserts a cross-reference to subparagraph (1)(b)(ii) (as amended by
item 29). Again this is to make it clear that the provision only applies
where an individual is the individual in respect of whom the CCB rate is
calculated under section 42.
Item 33 effectively exempts a person
whose adjusted taxable income exceeds the higher income free area (under clause
2 of Schedule 1 to the Family Assistance Act) from the income test during any
period of receipt by the person or partner of a social security pension, a
social security benefit or a service pension.
This is done by providing
in the substituted paragraphs (a) and (b) of subclause 1(2) of that Schedule
that an individual’s Part A rate of family tax benefit is worked out under
Part 2 of the Schedule if the individual or partner is receiving income support,
regardless of the individual’s income. Clause 17 of that Part will then
operate automatically to exempt the individual from the income
test.
Items 36 and 37 add an extra indexation provision for child
care benefit, relating to the $11 and $32 multiple child loadings that form part
of the calculation of the rate of child care benefit (see the Maximum weekly
benefit table in clause 11 of Schedule 2 to the Family Assistance Act). These
loadings will now be indexed along with other components of the child care
benefit rate calculation process that are already accommodated in the indexation
provisions.
Schedule 3 - Child Care Act 1972
Background
This Schedule amends the Child Care Act 1972 (the Child Care
Act) to make amendments that are consequential on the new family assistance
structure and the repeal of the current forms of assistance to
families.
Explanation of the amendments
The Child Care Act will continue in force despite the family assistance
changes. It will continue to deal with matters relating to capital grants to
child care providers. One of the portions of the Act that will still operate is
Part IIIA relating to confidentiality. There are several provisions in this
Part that refer to a person or an officer being authorised or required to
disclose information, or performing duties or functions, under a specified law.
The law specified in each case is “this Act” or the Social Security
Act.
The amendments made by this Schedule remove references to the Social
Security Act that appear throughout these provisions. This reference is no
longer appropriate, given the reduced scope of the Child Care Act and new
administrative arrangements.
Instead of this reference, the amendments
insert reference to the “family assistance law”, defined to mirror
the term used in the family assistance legislation. This is because information
about the approval of child care services for the purposes of the new family
assistance legislation will also be relevant for the capital grant function of
the Child Care Act – information must be allowed to flow
accordingly.
Schedule 4 – Child Support (Assessment) Act 1989
Background
This Schedule amends the Child Support (Assessment) Act 1989
(the Child Support Act) to make various amendments that are consequential on the
new family assistance structure and the repeal of the current forms of
assistance to families.
Explanation of the amendments
The amendments made by this Schedule are to replace current references to
family allowance in the Child Support Act with equivalent references to family
tax benefit under the new family assistance structure, to maintain the effect of
the Act. This includes referring, as appropriate, to new structures within the
family assistance provisions such as standard FTB rate and base FTB
rate.
Furthermore, certain notes in the current legislation that are no
longer necessary are simply to be repealed.
Schedule 5 – Data-matching Program (Assistance and Tax) Act 1990
Background
This Schedule amends the Data-matching Program (Assistance and Tax) Act
1990 (the Data-matching Act) to make amendments that are consequential
on the new family assistance structure and the repeal of the current forms of
assistance to families.
Explanation of the amendments
Items 1 and 2 amend the definition of “income data” in
subsection 3(1) of the Data-matching Act to exclude reference to family tax
assistance since family tax assistance is being abolished and replaced by family
tax benefit, one of the forms of the new family assistance.
Item 3
amends the definition of “personal assistance” in the same
subsection, which lists various income support-type payments for the purposes of
the Act. The amendments make sure that family assistance will be covered as a
form of personal assistance under the Act. They also make it clear that the two
superseded forms of assistance with child care costs are properly reflected in
the definition. (Even though these will no longer exist under the new system,
the data-matching program still needs to cover them, consistent with the
position on superseded forms of social security payment, for example.)
Schedule 6 – Farm Household Support Act 1992
Background
This Schedule amends the Farm Household Support Act 1992 (the
Farm Household Support Act) to make various amendments that are consequential on
the new family assistance structure and the repeal of the current forms of
assistance to families.
Explanation of the amendments
This Schedule makes several amendments as a consequence of the repeal of
family allowance and basic parenting payment.
Family allowance is
currently used as a reference point in the Farm Household Support Act in working
out one of the components of the rate of exceptional circumstances relief
payment under subsection 24A(1) (see paragraph (c)). Under the new family
assistance structure, it is appropriate merely to repeal that paragraph. As a
consequence, certain definitions that operate solely for that paragraph are also
to be repealed.
Also, amendments are made to the definition of
“income support payment rate” in each of subsections 24A(1A) and
24B(2), the latter section applying to the rate of restart income support. The
amendments are to repeal the paragraph in each case referring to non-benefit PP
(partnered).
These amendments will achieve the correct conversion to the
family assistance structure for these Farm Household Support Act
programs.
Schedule 7 – Health Insurance Act 1973
Background
This Schedule amends the Health Insurance Act 1973 (the
Health Insurance Act) to make various amendments that are consequential on the
new family assistance structure and the repeal of the current forms of
assistance to families.
Explanation of the amendments
This Schedule makes several amendments as a consequence of the repeal
of family Allowance.
Family Allowance is currently used as a
reference point in the Health Insurance Act 1973 (the HIA) in working out
who should be declared as a disadvantaged person. The purpose of these
amendments is to ensure that the changes achieved by the A New Tax System
(Family Assistance) Bill 1999 (the Family Assistance Bill) do not have the
undesired consequence that:
• people who meet the current criteria
of a disadvantaged person become ineligible; and
• people who do
not currently meet the criteria are declared eligible.
The amendments
change terms and definitions contained in HIA that were relevant prior to the
abolition of family allowance. Those provisions are changed so that the terms
and definitions now reflect those introduced by the Family Assistance
Bill.
Schedule 8 - Health Insurance Commission Act 1973
Background
This Schedule amends the Health Insurance Commission Act 1973
(the HIC Act) to make various amendments that are consequential on the child
care benefit element of the new family assistance structure.
Explanation of the amendments
The HIC Act contains several references to the Commission’s
“child care cash rebate functions”. These functions currently arise
(through section 8BA of the HIC Act) under the Childcare Rebate Act
1993, which is to be repealed altogether under the family assistance
package (see item 3 of Schedule 2 to the First Consequential
Act).
Because of that repeal, this Schedule also repeals the references
in the HIC Act to those functions.
Although there will still be some
transitional functions for the Commission in this area for a number of months
after the commencement of the family assistance package, this will be dealt with
by regulation, along with other transitional matters.
Schedule 9 – Veterans’ Entitlements Act 1986
Background
This Schedule amends the Veterans’ Entitlements Act 1986
(the Veterans’ Act) to make various amendments that are consequential on
the new family assistance structure and the repeal of the current forms of
assistance to families.
Explanation of the amendments
The amendments made by this Schedule are to replace existing references in
the Veterans’ Act relating to family allowance with equivalent references
under the new family assistance structure, to omit various provisions or
references to family allowance that will no longer be appropriate, or to add to
appropriate provisions in the Veterans’ Act new references to family
assistance payments and concepts, including definitions of those new elements
and legislative references.
Schedule 10 – Income tax laws
The Family Assistance Act contains the eligibility
criteria and rate calculators used for determining the amount of family tax
benefit a family is eligible to claim from the Family Assistance Office (FAO).
The FAO is a joint venture between the Australian Taxation Office (ATO),
Centrelink and the Health Insurance Commission (HIC).
The First
Consequential Act, which accompanied the Family Assistance Act, contains
amendments relating to the repeal of the various tax, child care and social
security benefits that are being replaced by the new family assistance payments.
Specifically, the First Consequential Act repeals family tax assistance,
dependent spouse rebate (with child), sole parent rebate, child care rebate,
child care assistance, family tax payment, family allowance, maternity
allowance, maternity immunisation allowance and part of the parenting
payment.
The proposed amendments contained in Schedule 10 to this
Bill, which are explained here, are consequential to the replacement of the tax,
child care and social security benefits with payments under the new family
assistance scheme. The Bill also contains amendments to correct technical
errors that occurred in the Child Care Payments (Consequential Amendments
and Transitional Provisions) Act 1997 and the A New Tax System
(Bonuses for Older Australians) Bill 1999.
People entitled to family tax benefit who choose to obtain their benefit
through the tax system in a lump sum may also choose to claim reduced
fortnightly tax instalment deductions (TIDs) in anticipation of their benefit at
the end of the year of income. Under the current law, provisional tax is a
counterpart to the TID system. Generally, where a taxpayer is able to reduce
their TIDs in anticipation of a benefit, they may also have the benefit taken
account of in the determination of their provisional tax liability.
As
foreshowed by the Government on 13 August 1998 in its tax reform policy
document, Tax Reform: not a new tax, a new tax system: The Howard
Government’s Plan for a New Tax System, the provisional tax system
will be replaced by the income tax instalment aspects of the new Pay-As-You-Go
(PAYG) system from 1 July 2000. On account of this, consequential amendments to
the provisional tax provisions in the Income Tax Assessment Act
1936 have not been made. However, the new system will allow taxpayers
claiming the family tax benefit through the tax system to have the benefit taken
into account in determining their PAYG instalment liability.
Explanation of the amendments
Amendments to the Fringe Benefits Tax Assessment Act 1986 (FBTAA)
Section 47 of the FBTAA specifically exempts a number of residual benefits
from fringe benefits tax. Certain recreational or child care facilities
provided by employers, or an associate of an employer, for the benefit of
employees, and certain contributions to secure priority of access to child care
facilities, are exempt residual benefits under section 47.
Items 1 to
6 amend paragraph 47(8)(a) as a result of the repeal of the Child Care
Payments Act 1997 and replace the types of care covered by the exemption
with relevant references to the Family Assistance Administration Act. The
proposed amendments ensure that the provision of residual benefits in the form
of priority access to child care facilities under both the former child care
scheme and the new family assistance scheme remain exempt from fringe benefits
tax.
Item 8 inserts new paragraph 16(4)(fb) to enable the Commissioner,
Second Commissioner, Deputy Commissioner or person authorised by him to
communicate information relating to income tax to the Secretary of the
Department of Family and Community Services for the purpose of the
administration of the Family Assistance Administration Act.
New paragraph
16(4)(fb) will allow the ATO to give information to Centrelink and the HIC, who
are partners with the ATO in the FAO joint venture, for the purpose of
administering the new family assistance scheme.
The free flow of
information between participating joint venture agencies will ensure that the
new scheme is administered efficiently and accurately by the FAO. For example,
there is an income test for the new family assistance that is based on taxable
income. Since taxable income cannot be accurately determined until after the
end of a tax year, claims made during a year can use an estimate of taxable
income. This then requires a reconciliation of actual taxable income against
the estimate to work out whether a person was paid too little, or too much,
family assistance. Details of taxable income ascertained by the ATO after
processing of tax returns will be used to reconcile payments at the end of the
income year to which claims relate.
Item 7 amends paragraph
16(4)(fa) to correct a technical error which occurred as a result of amendments
to this paragraph by the Child Care Payments (Consequential Amendments and
Transitional Provisions) Act 1997. The amendment will restore paragraph
16(4)(fa) to its former position by allowing the Commissioner to provide
information to the HIC as to whether a registered carer within the meaning of
the Childcare Rebate Act 1993, or an application for
registration as a registered carer has a tax file number. The paragraph does
not authorise the provision of tax file numbers to the
HIC.
The proposed amendment also ensures
information in relation to registered carers under the former childcare rebate
scheme will be able to be provided to the HIC despite the repeal of the
childcare rebate.
Items 9 to 16 propose to amend section 23AF, section 23AG and
section 156 to exclude references in those sections to family tax
assistance, since family tax assistance is being abolished and replaced by the
new family tax benefit.
“Separate net income” is a concept
used in tax law (different from taxable income) in relation to dependant and
certain other rebates. A taxpayer’s entitlement to certain rebates (such
as the medical expenses rebate) will depend, amongst other things, on the level
of “separate net income” of the taxpayer’s
dependants.
Items 17 to 21 make consequential amendments to
the definition of “separate net income” in subsection 159J(6) of the
ITAA36 as a result of the replacement of certain social security payments listed
in the definition by the new family assistance payments.
Item 18
specifically excludes family assistance payments, that is, child care benefit,
family tax benefit, maternity allowance and maternity immunisation allowance,
from the definition of “separate net income”. The amendment ensures
that a payment of family assistance to a taxpayer’s spouse will not be
included in the calculation of the spouse’s separate net income for the
purpose of determining the taxpayer’s entitlement to other rebates such as
the medical expenses and zone rebates.
Items 17, 18, 19, 20 and 21
further amend the definition of “separate net income” to enable
amounts of family tax payment, maternity allowance, maternity immunisation
allowance, family allowance, family allowance supplement, non-benefit PP
(partnered) and certain exempt parts of benefit PP (partnered) paid after 1 July
2000, for a period of entitlement before this date, to continue to be excluded
from the definition of “separate net income”. Item 20 also
repeals references to child care assistance and child care rebate paid under the
Child Care Payments Act 1997 from the definition as these
benefits were never paid under this Act.
Item 22 inserts new paragraph 202(m) to allow a tax file number
system to be established to facilitate the administration of the Family
Assistance Administration Act. This will allow the FAO to collect tax file
numbers from persons who lodge a claim for family assistance payments. The use
of tax file numbers will facilitate data-matching of information between the
ATO, Centrelink and the HIC.
The sharing of information between the joint
venture agencies will ensure the seamless operation of the FAO. It will also
facilitate the reconciliation of family assistance payments after the end of the
income year to ensure that correct payments have been made.
Tax file
number and bonuses for older Australians
Item 22 also inserts
new paragraph 202(n) to allow a tax file number system to be established to
facilitate the administration of the A New Tax System (Bonuses for Older
Australians) Act 1999 (the Bonus Act). The proposed amendment corrects
the omission of the amendment in the Bonus Act. That Act (which is still in the
form of a Bill presently before Parliament) will provide for the payment of
special bonuses to older Australians to preserve the value of their savings.
There are three agencies that will pay bonuses, the ATO, Centrelink and the
Department of Veterans’ Affairs. This amendment will allow tax file
numbers to be collected with claims for bonuses. Subsequent data-matching
between the ATO, Centrelink and the Department of Veterans’ Affairs will
ensure that claims are not made with more than one agency.
Currently, subsection 251R(5) of the ITAA36 establishes that where
parents of a child are living separately the child is treated as a dependant of
the parent who is entitled to receive family allowance. Item 23 amends
this subsection to replace the reference to family allowance with the new family
tax benefit. The amendment will ensure that where parents of a child are living
separately, the child will be treated as a dependant for Medicare levy purposes
of the parent who is entitled to receive family tax benefit.
Items 28 and 29 amend the list of tax offsets in section 13-1 of
the ITAA97 to exclude the references to the sole parent rebate as a consequence
of the repeal of the rebate.
Exempt income refers to amounts of ordinary income and statutory income
which are specifically excluded from income tax. Item 46 inserts new
Subdivision 52-G in the ITAA97. New section 52-150 provides that payments of
family tax benefit, child care assistance, maternity immunisation allowance and
maternity allowance are exempt from income tax.
Section 11-15 contains a
list of ordinary income and statutory income which is exempt if derived by
certain entities. Item 24 amends this section to include references to
the new family assistance payments which are exempt from income tax under new
section 52-150.
The table contained in section 52-10 outlines the income
tax treatment of social security payments. Section 52-15 contains a table which
helps you work out the exempt portion of supplementary amounts of social
security payments. The table contained in section 52-40 lists the provisions of
the Social Security Act under which exempt or partially exempt social
security payments are made.
Items 31 to 44 amend the tables in
sections 52-10, 52-15 and 52-40 to delete references to family allowance, family
tax payment, parenting payment (non-benefit PP (partnered)), maternity
allowance, maternity immunisation allowance and certain amounts of parenting
payment (benefit PP (partnered)) as a consequence of their replacement with the
new family assistance payments. Sub-item 69(1) ensures that if any of
these payments are received after 30 June 2000 in respect of an entitlement
before that date, the amount will remain exempt from income tax.
Section
53-10 and paragraph 53-15(c) provide that so much of the part of an exceptional
circumstances relief payment as is included because of paragraph 24A(1)(c)
of the Farm Household Support Act 1992, which related to family
allowance, is exempt from income tax. Items 47 and 48 repeal
paragraph 53-15(c) as a result of the repeal of paragraph 24A(1)(c) of the
Farm Household Support Act 1992. Sub-item 69(1) ensures
that where one of these payments is received after 30 June 2000 in respect
of an entitlement before that date, the amount will remain exempt from income
tax.
Section 52-120 currently provides that payments of child care
assistance and child care rebate under the Child Care Payments Act
1997 are exempt from income tax. Item 45 proposes to
repeal this section as these payments were never made under this Act. As
explained earlier, the child care benefit, which replaces these two payments,
will be exempt from income tax by proposed new section 52-150. As the table in
section 11-15 currently includes references to these payments, items 25 and
26 propose to omit these references.
One option for people entitled to the new family assistance is to obtain
their benefit through the tax system. Many taxpayers use tax advisers to help
them lodge their tax returns. Fees for tax return preparation and for advice
related to a person’s tax affairs more generally, are tax deductible. It
is proposed to provide a tax deduction for fees related to family tax benefit
claimed through the tax system.
Item 30, inserts proposed new
section 25-7 in the ITAA97. Section 12-5 of the ITAA97 list the
provisions that contain rules about specific types of deductions.
Item 27 amends this section to insert a reference to new section
25-7. This will direct a user to new section 25-7 when they wish to know if
they are able to claim a deduction for advice in relation to family tax
benefit.
New section 25-7 will allow taxpayers to claim a tax deduction
in respect of a fee or commission they incur for obtaining advice from a
recognised tax adviser in relation to their claim for family tax benefit. To be
entitled to the deduction the claim must be lodged with the ATO for
determination.
The cost of obtaining advice from a recognised tax adviser
in relation to a review of a determination for family tax benefit made by the
ATO will also be deductible under the new section.
A “recognised
tax adviser” is defined in section 995-1 of the ITAA97 and includes a
registered tax agent, a solicitor and a barrister enrolled with the federal
court, or a court of a state or territory.
Items 47 to 52 omit references to family tax assistance from the
primary producer averaging provisions in Division 392 of the
ITAA97.
Items 53 and 54 amend section 405-5, which provides for a
special rate of income tax on above-average special professional income, to omit
a reference to family tax assistance.
Items 55 to 62 make consequential amendments to the ITRA to omit
references to family tax assistance as a result of its repeal.
Item 63 corrects a technical error that occurred in an amendment
to paragraph 12(8)(a) of the ITRA in the ITRAA. The amendment commences
immediately after the commencement of item 2 of Schedule 1 to the ITRAA. This
enables the further amendment contained in item 56 to the definition of
“B” in paragraph 12(8)(a) of the ITRA to be made.
Item 64 repeals section 52-5 which relates to the exemption of
payments of child care assistance and child care rebate under the Child
Care Payments Act 1997 under section 52-120. As previously
explained, section 52-120 is being repealed by item 45.
Section 8 of the MLA provides relief to certain low income earners from
the Medicare levy. Item 65 amends subsection 8(6) of the MLA to replace
the reference to family allowance with family tax benefit. This
amendment will allow sole parents to increase the family income threshold by
$2,100 for each child or student considered a dependant under section 159J of
the ITAA36 for whom they receive family tax benefit.
A penalty is imposed under sections 8WA and 8WB of the TAA for the
unauthorised collection, recording, use or disclosure of a tax file number,
unless the use of a tax file number is specifically authorised under these
sections.
Items 66 and 67 make consequential amendments to
paragraphs 8WA(1)(b), 8WB(1)(d) and 8WB(1)(e) of the TAA as a result of
insertion of proposed new paragraphs 202(m) and 202(n) in the ITAA36 by
item 22.
As explained earlier, paragraph 202(m) will
allow a tax file number system to be established to facilitate the
administration of the Family Assistance Administration Act. Paragraph 202(n)
will allow a tax file number system to be established to facilitate the
administration of the A New Tax System (Bonuses for Older Australians) Act
1999.
The proposed amendments to sections 8WA and 8WB will ensure
that officers of the FAO joint venture agencies and the Department of
Veterans’ Affairs, family tax claimants, bonus claimants and recognised
tax advisers who record, collect, use or disclose tax file numbers for the
purposes of administering or complying with obligations under the family
assistance and bonuses for older Australians schemes will not be in breach of
sections 8WA and 8WB.
The amendments, except for those relating to the provision of
information to the HIC, apply to assessments in relation to the 2000-2001 year
of income and later years of income. [Sub-item 68(1)]
Sub-item
68(2) ensures that the Commissioner can continue to provide information to
the HIC relating to registered carers under the childcare rebate scheme after
8 December 1997, which is the date from which the technical error in
paragraph 16(4)(fa) applied. As discussed in the preceding paragraphs
relating to item 7, the proposed amendment ensures the Commissioner will be
able to continue to provide information to the HIC to maintain the effective
administration of the childcare rebate scheme.
Schedule 11 – Other Acts
Background
This Schedule amends four other Acts to make various amendments that are
consequential on the new family assistance structure and the repeal of the
current forms of assistance to families, and to make two specific transitional
provisions.
Explanation of the amendments
A New Tax System (Family Assistance) (Consequential and Related
Measures) Act (No. 1) 1999
Item 1 adds a new paragraph (c)
to section 4 of the First Consequential Act, which is the transitional
regulation making provision for the family assistance package. The new
paragraph is to put beyond doubt that transitional regulations may be made in
respect of the making of regulations under the Family Assistance Administration
Act as well as in respect of the enactment of that Act (and the amendments made
by, or enactment of, the three other Acts specified in section
4).
Item 2 inserts a new section 5 into the First Consequential
Act.
The new section provides a special rule to give legal authority to
the use or disclosure of information about a person, but only if this is done
for the purposes of the transition to the new family assistance package. Such
legal authority will prevent a breach of the Information Privacy Principles set
out in the Privacy Act 1988 in the transitional period for family
assistance. Certain information may need to be exchanged between the three
agencies that will be involved in setting up the new family assistance structure
(Centrelink, the Australian Taxation Office and the Health Insurance
Commission). These agencies may need to compare current customer lists to
identify customers who are shared between one or more of the agencies so that
those customers receive only one letter about the new structure instead of,
potentially, three.
This new section will commence earlier than the rest
of the family assistance package to enable the transitional correspondence to be
handled in sufficient time for the commencement of the new arrangements. It
will commence either on 1 January 2000, immediately after the commencement of
section 4 of the First Consequential Act or on Royal Assent to this Bill,
whichever happens later.
Bankruptcy Act 1966
Item
3 omits some words from the definition of “income” in section
139L of the Bankruptcy Act 1966. The words, relating to family
allowance, occur in the provisions relating to the income contributions scheme.
Under this scheme, bankrupts who earn income above a threshold amount are
required to contribute to their bankrupt estate. In determining this amount,
certain amounts are currently excluded – one of them is a payment of
family allowance.
This amendment simply omits that reference. A
regulation under paragraph (b)(v) of the definition of “income” in
section 139L will deal with the question of which forms of family assistance
should be excluded from income for this purpose. This regulation will be made
and tabled before the commencement of the family assistance
package.
Safety, Rehabilitation and Compensation Act
1988
Item 4 repeals a paragraph in this Act referring to
family allowance and substitutes a paragraph referring to the equivalent under
the family assistance structure, family tax benefit Part
A.
Seafarers Rehabilitation and Compensation Act
1992
Item 5 repeals a paragraph in this Act referring to
family allowance and substitutes a paragraph referring to the equivalent under
the family assistance structure, family tax benefit Part A. It also repeals and
substitutes two adjacent paragraphs to make the provisions work
correctly.