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1998-1999-2000-2001
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
FAMILY ASSISTANCE ESTIMATE TOLERANCE
(TRANSITION)
BILL 2001
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Family and
Community Services,
Senator the Hon Amanda Vanstone)
FAMILY ASSISTANCE
ESTIMATE TOLERANCE (TRANSITION)
BILL 2001
OUTLINE
AND FINANCIAL IMPACT STATEMENT
This Bill enables effect to be given to the Government’s
decision to allow a $1,000 tolerance for family tax benefit (FTB) and child care
benefit (CCB) overpayments because of incorrectly estimated income or shared
care in the 2000-2001 income year. Under the decision, up to $1,000 of an
overpayment will be waived to help families make the transition to the new FTB
and CCB system, which completed its first year of operation on
30 June 2001.
The decision will be put into effect through a
disallowable instrument, in keeping with the model for dealing with class debts
under the family assistance law. The Bill provides the enabling capacity for
that instrument.
Date of effect: Royal Assent.
Financial
impact: The financial impact from the Bill itself is nil because the Bill merely
provides the enabling capacity for the Government’s decision to be put
into effect through a disallowable instrument. However, when the proposed
disallowable instrument is made, an estimated $220 million in higher than
expected recoveries will be forgone.
FAMILY ASSISTANCE ESTIMATE TOLERANCE
(TRANSITION)
BILL 2001
NOTES ON
CLAUSES
PRELIMINARY
Clause 1 of the Bill sets out how the Bill, when enacted, is
to be cited.
Clause 2 specifies that the Bill commences on Royal
Assent.Clause 3 gives effect to the Schedule to the Bill, which contains
the two amending items.
Summary of proposed changes
This Schedule contains two items amending section 102 of the A New
Tax System (Family Assistance) (Administration) Act 1999 (the Family
Assistance Administration Act).
The purpose of the amendments is to
enable effect to be given to the Government’s decision to allow a $1,000
tolerance for FTB and CCB overpayments because of incorrectly estimated income
or shared care in the 2000-2001 income year. Under the decision, up to $1,000
of an overpayment will be waived to help families make the transition to the new
FTB and CCB system, which completed its first year of operation on
30 June 2001.
The decision will be put into effect through a
disallowable instrument, in keeping with the model for dealing with class debts
under the family assistance law. The Bill provides the enabling capacity for
that instrument.
Explanation of the changes
Items 1 and 2 amend section 102 of the Family Assistance
Administration Act. Section 102 is the existing family assistance waiver
provision that allows debts to be waived if they are included in a class of
debts specified by the Minister in a disallowable instrument. It is the most
appropriate legislative avenue for implementing the Government’s tolerance
decision.
However, section 102 needs to be adapted to allow for the
Government’s decision to be put into effect
comprehensively.
Firstly, section 102 currently allows only whole debts
to be waived, not parts of debts. Therefore, as the section stands, it would
not be possible to waive only $1,000 of a debt that exceeds that amount. Also,
if one debt has a part covered by the Government’s decision (eg, resulting
from underestimated income) and another part resulting from a completely
different entitlement matter (eg, an FTB child leaving the debtor’s care),
it would not be possible to waive only that part covered by the
Government’s decision.
Secondly, the provision in section 102 that
enables the Minister to make a disallowable instrument currently allows only the
class of debts to be prescribed, not conditions and/or limitations on the
waiver. Therefore, for example, although the Minister would be able to specify
that the class of debts constitutes debts arising from incorrectly estimated
income or shared care in the 2000-2001 income year, it would not be possible to
specify that only up to $1,000 of a debt falling in the class of debts is to be
waived.
Section 102 is therefore being amended so that it
allows:
• parts of debts, as well as whole debts, to be waived if
they are included in a class of debts specified by the Minister in a
disallowable instrument; and
• conditions and/or limitations on the
waiver to be specified by the Minister in the instrument.
Therefore, the
amendments will make it possible for the Government’s tolerance decision
to be detailed comprehensively in the disallowable instrument so that the waiver
can be applied to individual families by delegates of the Secretary under
section 102.
As soon as possible after the commencement of this measure,
the Minister will make a disallowable instrument so that the Government’s
decision may be applied.
The amendments to section 102 commence on Royal
Assent.