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2019-2020
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FAMILY ASSISTANCE LEGISLATION AMENDMENT
(IMPROVING ASSISTANCE FOR VULNERABLE AND
DISADVANTAGED FAMILIES) BILL 2020
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Education,
the Honourable Dan Tehan MP)
1
FAMILY ASSISTANCE LEGISLATION AMENDMENT
(IMPROVING ASSISTANCE FOR VULNERABLE AND
DISADVANTAGED FAMILIES) BILL 2020
OUTLINE
The purpose of this Bill is to address feedback from the child care sector regarding
access to Additional Child Care Subsidy (ACCS) (child wellbeing) in the context of
the Child Care Package implementation that occurred on 2 July 2018 and more
recently in submissions to the Senate Inquiry into the Family Assistance Legislation
(Building on the Child Care Package) Bill 2019.
The Bill makes changes to ACCS (child wellbeing) to improve assistance to
vulnerable and disadvantaged families and clarify and better reflect policy intent in
several areas.
Separately, also included in this Bill, are changes to the calculation method used
when an individual whose relationship status changes throughout the year meets
the Child Care Subsidy (CCS) reconciliation conditions (section 103A of A New Tax
System (Family Assistance) (Administration) Act 1999 (Family Assistance
Administration Act)). The amendments better ensure that the calculation applied at
CCS reconciliation reflects the individual's actual personal and combined income(s)
throughout the year.
The Bill also makes two other minor technical amendments.
The Bill comprises two Schedules.
Schedule 1 - Amendments relating to ACCS (child wellbeing) and technical
amendments
The Bill includes amendments, which specify that a provider's eligibility for ACCS
(child wellbeing) also applies where a child is a member of a class prescribed by
the Minister's rules. It is anticipated that children in formal foster care arrangements
(under state and territory child protection legislation) will be in this prescribed class.
Currently, in order to be eligible for ACCS (child wellbeing), providers must satisfy
the requirement (among others) that the provider is not able to identify an individual
who is eligible for CCS for the session of care for the child. These amendments will
allow the provider to instead satisfy the requirement (among others) that the child is
a member of the prescribed class. Provider eligibility for ACCS (child wellbeing) for
children in the prescribed class is only available for up to 13 weeks, which includes
the timeframe encompassing both the certificate and determination. This will mean
that providers can receive ACCS (child wellbeing) on behalf of a child who is at risk
of serious neglect or abuse ('at risk') for up to 13 weeks without having to wait for a
foster family to work out its CCS eligibility and therefore will ensure these children
have streamlined access to, and continuity of, child care. It is expected that the
provider will work with the foster family to ensure that an eligible person is identified
and a complying written arrangement is in place prior to the expiry of the provider
eligible period (maximum of 13 weeks).
2
The Bill also includes amendments to extend the backdating of ACCS (child
wellbeing) certificates and determinations from the current period of 28 days to up
to 13 weeks in exceptional circumstances to be prescribed in Minister's rules. This
will mean gaps in ACCS (child wellbeing) will be avoided for providers when a child
is identified as 'at risk' and it takes longer than 28 days for the provider to provide a
certificate or apply to the Secretary for a determination due to exceptional
circumstances. The exceptional circumstances are anticipated to be circumstances,
which are outside the provider's control and made it impractical for the provider to
provide the certificate or apply for a determination within the required timeframes.
The Secretary will assess each backdating application and make a decision on the
appropriate length of time (up to 13 weeks) that the certificate or determination
should be backdated. This measure better facilitates the access to quality early
learning and child care by children who are at 'at risk'.
Further amendments will extend the period that an ACCS (child wellbeing)
determination can be in place from 13 weeks to up to 12 months for classes of
children to be prescribed in the Minister's rules. It is anticipated that children on
long term child protection orders, including those in foster care, will be prescribed in
the Minister's Rules made for this purpose. This will reduce the administrative
burden on providers, families and state and territory governments by no longer
requiring them to apply to Services Australia with supporting evidence every 13
weeks to extend the ACCS (child wellbeing) determination, in circumstances where
the child's situation results in them continuing to be 'at risk' for up to 12 months.
Finally, the amendments under this Schedule will address minor technical drafting
errors to:
provide exceptions to when the Secretary may vary the approval of an
approved provider to remove an approved service under
paragraph 197G(1)(b) of the Family Assistance Administration Act; and
correct the omission of the civil penalty amount (50 civil penalty units) in
subsection 204K(6) of the A New Tax System (Family Assistance) Act 1999
(Family Assistance Act).
Schedule 2 - Amendments relating to adjusted taxable income for individuals
with part year partners
The Bill includes new subsections 105E(4) to (7) of the Family Assistance
Administration Act which modify how CCS entitlements are reviewed when an
individual who is a member of a couple for some but not all of the CCS fortnights in
an income year, meets the CCS reconciliation conditions.1 There are no changes to
how CCS is calculated and paid during the income year based on estimates for the
individual's ATI, and these amendments only affect the review of determinations
made in the previous income year once the individual meets the CCS reconciliation
conditions and accurate information about their actual ATI is available.
Specifically, new subsection 105E(4) provides that if an individual is a member of a
couple for some, but not all of the CCS fortnights in a year, then new subsections
105E(5) and (6) apply to the review of child care decisions that relate to the
individual, at CCS reconciliation.
1
See section 103A of the Family Assistance Administration Act.
3
New subsection 105E(5) provides that Part 1 of Schedule 2 to the Family
Assistance Act applies as though paragraph 3AA(2)(b) of Schedule 3 to the Family
Assistance Act had not been enacted. This removes the requirement for an amount
to be added to the individual's ATI at CCS reconciliation that was equal to the
percentage of a partner's ATI that corresponded to the percentage of CCS
fortnights that the partner was a member of the couple.
New paragraph 105E(6)(a) provides that for any CCS fortnight where an individual
was a member of a couple on the first Monday of a CCS fortnight, then Part 1 of
Schedule 2 of the Family Assistance Administration Act applies as if the individual's
ATI included the partner's ATI.
New paragraph 105E(6)(a) amends paragraph 1(3)(b) of Schedule 2 to the Family
Assistance Act, with application in those CCS fortnights where the individual was a
member of a couple on the first Monday of the CCS fortnight. It has the effect that,
for those CCS fortnights where the annual cap applies to the individual, the annual
cap is reached for a child for an income year if: the amount of CCS the individual
and the other member of the couple are entitled to be paid for sessions of care
provided to the child, when added together equal the annual cap.
The intention of subclause 1(3) of Schedule 2 is to avoid couples circumventing the
annual cap limit through changing which member of the couple is the CCS claimant
in respect of a child.
The outcome from the above amendments ensures that periods of time an
individual who is a member of a couple for less than the full income year, is single
or partnered are essentially assessed separately as periods of time composed of
CCS fortnights, and are not averaged into an annual amount and apportioned
throughout the year based on when the individual was a member of the couple.
This ensures an individual's CCS entitlement more accurately reflects the
individual's income capacity during each of the relevant periods. This methodology
is also applied to couples where either the individual or the individual's partner
passes away during the year.
4
FINANCIAL IMPACT STATEMENT
There will be IT implementation financial implications across all elements. The total
estimated costs for Services Australia to deliver all changes to the Child Care
Subsidy System is $22.3 million (from 2019-20 to 2023-24).
Amendments in the Bill will result in more accurate calculation of families'
entitlements through the reconciliation process where relationship status changes
have occurred. This will result in $24 million in savings over the forward estimates.
5
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
FAMILY ASSISTANCE LEGISLATION AMENDMENT
(IMPROVING ASSISTANCE FOR VULNERABLE AND
DISADVANTAGED FAMILIES) BILL 2020
This Bill is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The purpose of this Bill is to address feedback from the child care sector regarding
access to Additional Child Care Subsidy (ACCS) (child wellbeing) in the context of
the Child Care Package implementation that occurred on 2 July 2018 and more
recently in submissions to the Senate Inquiry into the Family Assistance Legislation
(Building on the Child Care Package) Bill 2019.
The Bill makes changes to ACCS (child wellbeing) to improve assistance to
vulnerable and disadvantaged families and clarify and better reflect policy intent in
several areas.
Separately, also included in this Bill, are changes to the calculation method used
when an individual whose relationship status changes throughout the year meets
the Child Care Subsidy (CCS) reconciliation conditions (section 103A of A New Tax
System (Family Assistance) (Administration) Act 1999 (Family Assistance
Administration Act)). The amendments better ensure that the calculation applied at
CCS reconciliation reflects the individual's actual personal and combined income(s)
throughout the year.
The Bill also makes two other minor technical amendments.
The Bill comprises two Schedules.
Schedule 1 - Amendments relating to ACCS (child wellbeing) and technical
amendments
The Bill includes amendments, which specify that a provider's eligibility for ACCS
(child wellbeing) also applies where a child is a member of a class prescribed by
the Minister's rules. It is anticipated that children in formal foster care arrangements
(under state and territory child protection legislation) will be in this prescribed class.
Currently, in order to be eligible for ACCS (child wellbeing), providers must satisfy
the requirement (among others) that the provider is not able to identify an individual
who is eligible for CCS for the session of care for the child. These amendments will
allow the provider to instead satisfy the requirement (among others) that the child is
a member of the prescribed class. Provider eligibility for ACCS (child wellbeing) for
children in the prescribed class is only available for up to 13 weeks, which includes
6
the timeframe encompassing both the certificate and determination. This will mean
that providers can receive ACCS (child wellbeing) on behalf of a child who is at risk
of serious neglect or abuse ('at risk') for up to 13 weeks without having to wait for a
foster family to work out its CCS eligibility and therefore will ensure these children
have streamlined access to, and continuity of, child care. It is expected that the
provider will work with the foster family to ensure that an eligible person is identified
and a complying written arrangement is in place prior to the expiry of the provider
eligible period (maximum of 13 weeks).
The Bill also includes amendments to extend the backdating of ACCS (child
wellbeing) certificates and determinations from the current period of 28 days to up
to 13 weeks in exceptional circumstances to be prescribed in Minister's rules. This
will mean gaps in ACCS (child wellbeing) will be avoided for providers when a child
is identified as 'at risk' and it takes longer than 28 days for the provider to provide a
certificate or apply to the Secretary for a determination due to exceptional
circumstances. The exceptional circumstances are anticipated to be circumstances,
which are outside the provider's control and made it impractical for the provider to
provide the certificate or apply for a determination within the required timeframes.
The Secretary will assess each backdating application and make a decision on the
appropriate length of time (up to 13 weeks) that the certificate or determination
should be backdated. This measure better facilitates the access to quality early
learning and child care by children who are at 'at risk'.
Further amendments will extend the period that an ACCS (child wellbeing)
determination can be in place from 13 weeks to up to 12 months for classes of
children to be prescribed in the Minister's rules. It is anticipated that children on
long term child protection orders, including those in foster care, will be prescribed in
the Minister's Rules made for this purpose. This will reduce the administrative
burden on providers, families and state and territory governments by no longer
requiring them to apply to Services Australia with supporting evidence every 13
weeks to extend the ACCS (child wellbeing) determination, in circumstances where
the child's situation results in them continuing to be 'at risk' for up to 12 months.
Finally, the amendments under this Schedule will address minor technical drafting
errors to:
provide exceptions to when the Secretary may vary the approval of an
approved provider to remove an approved service under
paragraph 197G(1)(b) of the Family Assistance Administration Act; and
correct the omission of the civil penalty amount (50 civil penalty units) in
subsection 204K(6) of the A New Tax System (Family Assistance) Act 1999
(Family Assistance Act).
7
Schedule 2 - Amendments relating to adjusted taxable income for individuals
with part year partners
The Bill includes new subsections 105E(4) to (7) of the Family Assistance
Administration Act which modify how CCS entitlements are reviewed when an
individual who is a member of a couple for some but not all of the CCS fortnights in
an income year, meets the CCS reconciliation conditions.2 There are no changes to
how CCS is calculated and paid during the income year based on estimates for the
individual's ATI, and these amendments only affect the review of determinations
made in the previous income year once the individual meets the CCS reconciliation
conditions and accurate information about their actual ATI is available.
Specifically, new subsection 105E(4) provides that if an individual is a member of a
couple for some, but not all of the CCS fortnights in a year, then new subsections
105E(5) and (6) apply to the review of child care decisions that relate to the
individual, at CCS reconciliation.
New subsection 105E(5) provides that Part 1 of Schedule 2 to the Family
Assistance Act applies as though paragraph 3AA(2)(b) of Schedule 3 to the Family
Assistance Act had not been enacted. This removes the requirement for an amount
to be added to the individual's ATI at CCS reconciliation that was equal to the
percentage of a partner's ATI that corresponded to the percentage of CCS
fortnights that the partner was a member of the couple. In plain terms, the removal
of the application of paragraph 3AA(2)(b) addresses an issue which was causing
inconsistent outcomes at CCS reconciliation for individuals who were members of a
couple for only part of the income year.
New paragraph 105E(6)(a) provides that for any CCS fortnight where an individual
was a member of a couple on the first Monday of a CCS fortnight, then Part 1 of
Schedule 2 of the Family Assistance Administration Act applies as if the individual's
ATI included the partner's ATI.
New paragraph 105E(6)(a) amends paragraph 1(3)(b) of Schedule 2 to the Family
Assistance Act, with application in those CCS fortnights where the individual was a
member of a couple on the first Monday of the CCS fortnight. It has the effect that,
for those CCS fortnights where the annual cap applies to the individual, the annual
cap is reached for a child for an income year if: the amount of CCS the individual
and the other member of the couple are entitled to be paid for sessions of care
provided to the child, when added together equal the annual cap.
The intention of subclause 1(3) of Schedule 2 is to avoid couples circumventing the
annual cap limit through changing which member of the couple is the CCS claimant
in respect of a child.
The outcome from the above amendments ensures that periods of time an
individual who is a member of a couple for less than the full income year, is single
or partnered are essentially assessed separately as periods of time composed of
CCS fortnights, and are not averaged into an annual amount and apportioned
throughout the year based on when the individual was a member of the couple.
This ensures an individual's CCS entitlement more accurately reflects the
2
See section 103A of the Family Assistance Administration Act.
8
individual's income capacity during each of the relevant periods. This methodology
is also applied to couples where either the individual or the individual's partner
passes away during the year.
Analysis of human rights implications
The Bill does not represent a material departure from the overall policy objectives of
the measures introduced in the Family Assistance Legislation Amendment (Jobs for
Families Child Care Package) Act 2017, or the amendments made by the Family
Assistance Legislation Amendment (Building on the Child Care Package) Act 2019.
The rights of parents and children
Article 3 of the Convention on the Rights of the Child (CRC) recognises that in all
actions concerning children, the best interests of the child shall be a primary
consideration. Article 19 of the CRC requires that appropriate measures are taken
to protect the child from all forms of physical or mental violence, injury or abuse,
neglect or negligent treatment, maltreatment or exploitation.
Early learning and child care play a vital role in the development of Australian
children. Their preparation for school and access to this care is also one of the most
effective early intervention strategies to break the cycle of poverty. The Bill supports
one of the primary objectives of the Child Care Package - to support families to
access quality child care.
The Bill supports this objective by reducing the administrative burden for providers
and families needing to access additional support through the ACCS (child
wellbeing) payment. The Commonwealth's ACCS (child wellbeing) payment, which
provides additional financial support to meet the cost of child care, is in particular
designed to remove cost as a barrier for families with children in certain vulnerable
situations, to ensure they are able to access quality child care.
The measures in this Bill continue to advance this right by:
clarifying the capacity for child care providers to be eligible for ACCS (child
wellbeing) in certain limited and appropriate circumstances, such as where
children are in foster care arrangements;
extending backdating provisions for ACCS (child wellbeing) beyond 28 days
in exceptional circumstances to ensure there are no gaps in entitlement
where a child has been identified as 'at risk'; and
extending the length of a determination for up to 12 months (as opposed to
13 weeks) for children in a class prescribed by the Minister's rules - which is
anticipated to include children on long term child protection orders.
Right to adequate standard of living
Article 27 of the CRC requires that State Parties recognise the right of every child to
a standard of living adequate for the child's physical, mental, spiritual, moral and
social development. The Bill advances this right through amendments that help
ensure children have access to an adequate amount of child care to aid
socialisation and development. For example, the amendments relating to ACCS
(child wellbeing) discussed above, promote this right by reducing barriers to access
early learning and child care.
9
Right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises the right of everyone to social security. Under the Child Care
Package, families who meet basic eligibility criteria are eligible for Commonwealth
child care subsidies as long as they meet (or are exempt from) an activity test and
their combined annual income is less than $352,453. Additionally, children at risk of
serious abuse or neglect, families experiencing temporary financial hardship and
families transitioning from income support to work, are eligible for further support
through the Commonwealth's ACCS, which ensures children in these families have
access to adequate child care.
The amendments at Schedule 1 to the Bill extend the access of vulnerable children
and families to ACCS (child wellbeing) where appropriate and reduce the current
administrative barriers to this access. This better enables vulnerable children and
families to receive this form of social security.
The amendments at Schedule 2 to the Bill will allow individuals whose partnership
status changes throughout the year, to receive fairer determinations of their CCS
entitlements at CCS reconciliation due to a modified calculation of the individual's
adjusted taxable income, which incorporates their partner's ATI throughout the year
in a manner that is fairer and more consistent.
Conclusion
The Bill is compatible with human rights. The amendments in this Bill improve on
the child care package through minor policy refinements and clarifications on
access to ACCS (child wellbeing). The Bill also allows for a fairer and more
consistent calculation of an individual's adjusted taxable income, where the
individual's partnership status changes throughout the year. The measures in this
Bill continue to advance rights human rights under the CRC and ICESCR through
the child care package and subsequent child care legislative amendments by
streamlining administrative processes for providers and families and making the
scheme more efficient for the Commonwealth to administer.
10
FAMILY ASSISTANCE LEGISLATION AMENDMENT
(IMPROVING ASSISTANCE FOR VULNERABLE AND
DISADVANTAGED FAMILIES) BILL 2020
NOTES ON CLAUSES
Clause 1 - Short title
This clause provides for the Act to be the Family Assistance Legislation
Amendment (Improving Assistance for Vulnerable and Disadvantaged Families) Act
2020.
Clause 2 - Commencement
The table in subclause 2(1) sets out when the Act's provisions will commence. The
table provides that:
Sections 1 to 3, and anything else in the Act not covered elsewhere in the
table comes into effect on the day the Act receives the Royal Assent;
Schedule 1, items 1 to 6, commence on 1 July 2021;
Schedule 1, item 7 commences on 13 December 2019, immediately after
Schedule 2 to the Family Assistance Legislation Amendment (Building on the
Child Care Package) Act 2019 commenced;
Schedule 1, item 8 commences on 16 December 2019, immediately after
Part 1 of Schedule 1 to the Family Assistance Legislation Amendment
(Building on the Child Care Package) Act 2019 commenced;
Schedule 2 commences on the first day on the first CSS fortnight (within the
meaning of the Family Assistance Act) that begins after the Act receives the
Royal Assent.
Subclause 2(2) provides that information in column 3 of the table at subclause 2(1)
is not part of the Act and information may be inserted into column 3 or information
in it may be edited in any published version of the Act.
A note to subclause 2(1) states that the table relates only to the provisions of the
Act as originally enacted. It will not be amended to deal with any later amendments
of the Act.
Clause 3 - Schedules
This clause provides that any legislation that is specified in a schedule is amended
or repealed as set out in the applicable items in the schedule and that any other
item in a schedule has effect according to its terms.
11
ABBREVIATIONS USED IN THIS EXPLANATORY MEMORANDUM
ACCS means Additional Child Care Subsidy
ATI means adjusted taxable income
CCS means Child Care Subsidy
Family Assistance Act means the A New Tax System (Family Assistance)
Act 1999
Family Assistance Administration Act means the A New Tax System
(Family Assistance) (Administration) Act 1999
Family Assistance Law means the Family Assistance Act and the Family
Assistance Administration Act and subordinate legislation made under either
of those Acts
Minister's rules means the Child Care Subsidy Minister's Rules 2017 (being
the rules made by the Minister under subsection 85GB(1) of the Family
Assistance Act)
12
Schedule 1 -ACCS (child wellbeing) and
technical amendments
OVERVIEW
This Schedule includes amendments, which specify that a provider's eligibility for
ACCS (child wellbeing) also applies where a child is a member of a class
prescribed by the Minister's rules. It is anticipated that children in formal foster care
arrangements (under state and territory child protection legislation) will be in this
prescribed class. Provider eligibility for ACCS (child wellbeing) for children in the
prescribed class is only available for up to 13 weeks.
This Schedule also includes amendments to extend the backdating of ACCS (child
wellbeing) certificates and determinations from the current period of 28 days to up
to 13 weeks in exceptional circumstances to be prescribed in Minister's rules. The
exceptional circumstances are anticipated to be circumstances, which are outside
the provider's control and made it impractical for the provider to provide the
certificate or apply for a determination within the required timeframes.
Further amendments in this Schedule extend the period that an ACCS (child
wellbeing) determination can be in place from 13 weeks to up to 12 months for
classes of children to be prescribed in the Minister's rules. It is anticipated that
children on long term child protection orders, including those in foster care, will be
prescribed in the Minister's Rules made for this purpose.
Finally, the amendments under this Schedule address minor technical drafting
errors to:
provide exceptions to when the Secretary may vary the approval of an
approved provider to remove an approved service under Section 197G(1)(b)
of the Family Assistance Administration Act; and
correct the omission of the civil penalty amount (50 civil penalty units) in
section 204K(6) of the Family Assistance Act.
Detailed explanation
Clarification of the provider eligible provisions
Subsection 85CA(2) of the Family Assistance Act sets out the circumstances where
an approved provider may be eligible for ACCS (child wellbeing). One of the
requirements that must be met is that, at the time the session of care is provided,
the provider is not able to identify an individual who is eligible for CCS for the
session of care.3
Amendments to the Family Assistance Act will have the effect that the provider may
either satisfy the above mentioned requirement, or may, alternatively, satisfy the
requirement that, at the time the session of care is provided, the child is a member
of a class prescribed by the Minister's rules.
3
See subparagraph 85CA(2)(b)(i) of the Family Assistance Administration Act.
13
It is envisaged that the class of children prescribed by the Minister's rules will
include children in formal foster care arrangements under state and territory child
protection legislation.
This amendment is intended to facilitate continuity of care to children in short term
foster care arrangements, where the person responsible for the child may change
frequently or at short notice, making it difficult to identify a fixed person as the
individual who is eligible for CCS, or ACCS (child wellbeing) in respect of the child.
However, where a provider satisfies the new alternate requirement that the child is
a member of a prescribed class, any certificate and determinations given in respect
of the child while the provider is eligible for ACCS (child wellbeing) in respect of the
child can only be in place for a maximum of 13 weeks in total.
The reason for this 13 week limit is that it is anticipated that the nature of the
"classes of children" that will be prescribed are such that within the 13 week time
limit, an individual who is eligible for ACCS (child wellbeing) for the child (i.e. a
carer or guardian) should be able to be identified. This would mean that, to the
extent that the child remains at risk of serious abuse or neglect after the 13 week
time limit, the child's carer or guardian, and not the provider, would now be eligible
for ACCS (child wellbeing) in respect of the child and be entitled to ACCS (child
wellbeing) for sessions of care provided to the child.
Further, it is expected that the provider will work with the foster family to ensure that
a CCS eligible person is identified and a Complying Written Arrangement is in place
with the eligble person prior to the expiry of the provider eligible period (maximum
of 13 weeks).
Item 1 repeals paragraph 85CA(2)(b) and replaces it with a new paragraph
85CA(2)(b) setting out the alternative requirements that the provider may meet -
that is, at the time the session of care is provided, either the provider is not able to
identify an individual who is eligible for CCS for the session of care; or the child is a
member of a class prescribed by the Minister's rules.
The new paragraph 85CA(2)(ba) simply restates what was previously in
subparagraphs 85CA(2)(b)(ii) and (iii). These subparagraphs are now set out in a
separate paragraph for ease of readability.
Item 2 updates a cross reference in subsection 85CA(3), which previously referred
to the old subparagraph 85CA(2)(b)(ii) to now refer to its replacement provision,
subparagraph 85CA(2)(ba)(i).
Items 4 and 5 give effect to the 13 week total limit that applies to certificates and
determinations given where the provider satisfied the provider eligibility requirement
at subparagraph 85CA(2)(b)(ii), that the child is a member of a prescribed class.
Subparagraph 85CE(5)(b)(ii) specifies that a determination cannot be in effect for
more than 13 weeks. Item 4 amends this subparagraph to specify that is does not
apply where the new subsection 85CE(5A) applies.
14
Item 5 inserts a new subsection 85CE(5A), which states that if a child is a member
of the prescribed class, the unbroken period of weeks for which a determination and
any of the following have effect cannot exceed 13 weeks:
a certificate in relation to the child;
one or more other determinations under this section that relate to the child.
The new subsection 85CE(5A) refers to an "unbroken period" of up to 13 weeks, as
where the child is a member of a prescribed class, the nature of the child's situation
is such, that if the child is 'at risk' is it intended that there will be no gap in the time
that a certificate, and any determinations given in respect of the child, are in effect.
Subsection 85CE(6) allows the Secretary to make a consecutive determination if
the Secretary is satisfied that the child will still be at risk after the previous
determination ceases to have effect. The effect of the new subsection 85CE(5A) is
to prevent the Secretary from making a consecutive determination which would
exceed the 13 week limit that applies to a determination (and any immediately
preceding certificate and other determinations) made in relation to a child who is in
a prescribed class for the purpose of subparagraph 85CA(2)(b)(ii).
Item 6 amends paragraph 67CH(1)(c) of the Family Assistance Administration Act
to align the preconditions that must be met for the Secretary to make a
determination on the provider's entitlement to be paid ACCS (child wellbeing), to
the amendments made by this Bill to the provider eligibility requirements at
paragraph 85CA(2)(b) of the Family Assistance Act.
Subsection 67CH(1) sets out the preconditions that must be met before the
Secretary must make a determination of a provider's entitlement to be paid ACCS
(child wellbeing). The requirement at paragraph 67CH(1)(c) aligns with the provider
eligibility requirement set out at subparagraph 85CA(2)(b)(i) of the Family
Assistance Act, that the provider was not able to identify an individual who was
eligible for CCS for the session of care. Item 6 repeals paragraph 67CH(1)(c) and
substitutes a new precondition to align with the amended paragraph 85CA(2)(b)
with the effect that the provider must have given the Secretary a declaration:
where a certificate or determination is in effect because of subparagraph
85CA(2)(b)(i) of the Family Assistance Act--that the provider has made
reasonable endeavours to identify an individual who is eligible for CCS (child
wellbeing) for the sessions of care and has not been able to identify anyone;
or
where a certificate or determination is in effect because of subparagraph
85CA(2)(b)(ii) of the Family Assistance Act--that the child is in a class
prescribed for the purposes of that subparagraph.
Enabling backdating of ACCS (child wellbeing) certificates and determinations
beyond 28 days in exceptional circumstances
Section 85CA of the Family Assistance Act sets out the requirements that must be
met for an individual or an approved provider to be eligible for ACCS (child
wellbeing) for a session of care provided to a child. One requirement is that either:
a certificate given under section 85CB of the Family Assistance Act; or
a determination made under section 85CE of the Family Assistance Act,
15
must be in effect in relation to the child for the week in which the session of care
occurred.
Section 85CB of the Family Assistance Act sets out the circumstances where an
approved provider may give a certificate for ACCS (child wellbeing) in respect of a
child, and sets out the requirements that apply to the certificate. One of these
requirements is that the certificate cannot take effect more than 28 days before the
day the certificate is given.4
Similarly, section 85CE of the Family Assistance Act sets out the circumstances
where an approved provider may apply to the Secretary for a determination for
ACCS (child wellbeing) in respect of a child, and sets out the requirements that
apply to the determination. One of these requirements is that the determination
cannot take effect more than 28 days before the application for the determination
was made.5
Amendments in the Bill enable the backdating of ACCS (child wellbeing) certificates
and determinations beyond the standard 28 day timeframe to up to 13 weeks, if the
Secretary is satisfied that exceptional circumstances, as prescribed in the Minister's
Rules, apply.
The provider would apply for the extended backdating of a certificate or a
determination (as applicable), providing reasons and the Secretary would determine
whether the extended backdated period should apply; and the length of the
extended backdated period.
It is envisaged that the exceptional circumstances to be prescribed in the Minister's
Rules will include circumstances which were beyond the provider's control and
made it impracticable for the provider to give the certificate or apply for a
determination in a timely manner. For example, exceptional circumstances where
there has been a delay in confirming CCS eligibility that may result in a gap
between the backdating of CCS and ACCS (child wellbeing).
The rationale for these amendments is to avoid vulnerable children and families
from being disadvantaged and having their access to quality early learning and care
compromised if circumstances beyond the provider's control prevented the provider
from giving a certificate or applying for a determination in a timely manner.
Item 3 inserts a new subsection (2A) to section 85CB. The new subsection
85CB(2A) provides that the Secretary may extend the period of 28 days, which is
specified in paragraph 85(2)(c) as the maximum time period that a certificate can be
backdated to, to a period of no more than 13 weeks. However, the Secretary may
only extend the time period if satisfied that an exceptional circumstance prescribed
by the Minister's rules exists.
Item 5 inserts a new subsection (5B) to section 85CE. The new subsection
85CE(5B) provides that the Secretary may extend the period of 28 days, which is
specified in paragraph 85CE(5)(a) as the maximum time period that a determination
can be backdated to, to a period of no more than 13 weeks. However, the Secretary
4
See paragraph 85CB(2)(c) of the Family Assistance Administration Act.
5
See paragraph 85CE(5)(a) of the Family Assistance Administration Act.
16
may only extend the time period if satisfied that an exceptional circumstance
prescribed by the Minister's rules exists.
ACCS (child wellbeing) determination length for children in formal foster care
arrangements and under long term child protection order
Subparagraph 85CE(5)(b)(ii) of the Family Assistance Act provides that an ACCS
(child wellbeing) determination cannot have effect for more than 13 weeks.
Subsection 85CE(6) of the Family Assistance Act enables the Secretary to make a
consecutive determination, to take effect on the Monday immediately after the
earlier determination ceases to have effect, if the Secretary is satisfied that the child
will still be at risk of serious abuse and neglect after the previous determination
ceases to have effect.
Amendments in the Bill give the Secretary the discretion to extend the period of
time that an ACCS (child wellbeing) determination can be in place from 13 weeks to
up to 12 months if the Secretary is satisfied that a circumstance prescribed by the
Minister's rules exists in relation to the child.
It is envisaged that the Minister's rules will specify circumstances such as where a
child is in a formal foster care arrangement or the subject of a protection order or
welfare order under state and territory child welfare legislation, which is in place for
up to and exceeding 12 months.
The rationale for this amendment is that such formal foster care arrangements or
protection orders are often long term. The Australian Government wishes to reduce
the administrative burden on child care providers, child protection agencies and
families and provide greater continuity of access to child care for such children, by
allowing a longer determination to be made for them, rather than requiring
consecutive determinations to be made for them every 13 weeks.
Item 5 inserts a new subsection (5C) to section 85CE, which gives the Secretary
the discretion to extend the period of 13 weeks referred to in subparagraph
85CE(5)(b)(ii), to a period of no more than 12 months, if the Secretary is satisfied
that a circumstance prescribed by the Minister's rules exists in relation to the child.
Corrections to technical drafting errors
Section 197G of the Family Assistance Administration Act allows the Secretary to
vary the approval of an approved provider to remove an approved child care service
from the provider's approval if:
the service fails to provide child care for a continuous period of 3 months;6
and
none of the circumstances at paragraph 197G(1)(b) apply.
Item 7 repeals and substitutes subparagraphs 197G(1)(b)(ii) and (iii) to correct
minor technical drafting errors as follows:
6
See paragraph 197G(1)(a) of the Family Assistance Administration Act.
17
the substituted subparagraph (b)(ii) clarifies that the determination made
under section 195C (that the service need not operate for the period), must
apply only to the service that the Secretary is considering removing from the
provider's approval, and not to all the provider's services;
the substituted subparagraph (b)(iii) clarifies that the Secretary must be
satisfied that because of special circumstances, the provider's approval,
should not be varied, and not cancelled.
This amendment commences immediately after the two subparagraphs it amends
took effect. This retrospective commencement is appropriate given that this
amendment is necessary to allow section 197G to operate effectively and fairly for
both the Australian Government and approved providers. This amendment also
gives effect to the original policy intention of the measure when paragraph
197G(1)(b) was amended under Family Assistance Legislation Amendment
(Building on the Child Care Package) Act 2019.
Item 8 reinserts the civil penalty amount of 50 penalty units, at the end of
subsection 204K(6) of the Family Assistance Administration Act. This amount was
inadvertently repealed when section 204K was amended under the Family
Assistance Legislation Amendment (Building on the Child Care Package) Act 2019.
This amendment commences immediately after it was inadvertently repealed to
ensure that there is no gap in the period of time that the civil penalty amount applies
to subsection 204K(6). This retrospective commencement is appropriate given that
the amendment reinstates what was previously in the legislation and was
unintentionally repealed. It also ensures that there is certainty for the Australian
Government, approved providers and individuals about the amount of the civil
penalty that would apply if subsections 204K(1) or (3) were contravened. This is
important given that section 204K imposes requirements on approved provided to
give notice to appropriate State and Territory support agencies where a child is at
risk of serious abuse or neglect.
18
Schedule 2 - Review of certain CCS decisions
OVERVIEW
This Schedule includes new subsections section 105E(4) to (7) of the Family
Assistance Administration Act which modify how CCS entitlements are reviewed
when an individual who is a member of a couple for some but not all of the CCS
fortnights in an income year, meets the CCS reconciliation conditions. There are no
changes to how CCS is calculated and paid during the income year based on
estimates for the individual's ATI, and these amendments only affect the review of
determinations made in the previous income year once the individual meets the
CCS reconciliation conditions and accurate information about their actual ATI is
available.
New subsection 105E(4) provides that if an individual is a member of a couple for
some, but not all of the CCS fortnights in a year, then new subsections 105E(5) and
(6) apply to the review of child care decisions that relate to the individual, at CCS
reconciliation.
New subsection 105E(5) provides that Part 1 of Schedule 2 to the Family
Assistance Act applies as though paragraph 3AA(2)(b) of Schedule 3 to the Family
Assistance Act had not been enacted.
New paragraph 105E(6)(a) provides that for any CCS fortnight where an individual
was a member of a couple on the first Monday of a CCS fortnight, then Part 1 of
Schedule 2 of the Family Assistance Administration Act applies as if the individual's
ATI included the partner's ATI. New paragraph 105E(6)(a) amends paragraph
1(3)(b) of Schedule 2 to the Family Assistance Act with the effect that, for those
CCS fortnights where the annual cap applies to the individual, the annual cap is
reached for a child for an income year if the amount of CCS the individual and the
other member of the couple are entitled to be paid for sessions of care provided to
the child in CCS fortnights starting in the income year together equal the annual
cap.
Detailed explanation
CCS reconciliation and relevance of ATIs
Currently all CCS claimants' entitlement to CCS is calculated using the
methodology in Schedules 2 and 3 of the Family Assistance Act.
An individual's ATI is one of the inputs used to calculate the amount of CCS an
individual is entitled to. During the year, individuals provide estimates of their ATI
(where it is not known) and on this basis their estimated CCS entitlement is paid
throughout the year.
CCS reconciliation occurs after the income year, when the individual meets the
CCS reconciliation conditions, which in simple terms, they can do by lodging their
tax return or notifying the Secretary they are not required to lodge one. At that point,
the Secretary reviews all entitlement determinations made throughout the year in
respect of that individual, using the person's actual ATI (and other information
19
relevant to the individual's entitlement) and remakes all entitlement determinations.
This can result in individuals owing a debt or being paid more CCS.7
The issue the amendment seeks to address
A category of individuals, who the Australian Government was concerned was not
receiving a fair entitlement result at CCS reconciliation is individuals who are in
relationships with their partner for less than the full income year (in other words who
have a "part year partner"). Part year partnerships cover both separations and the
death of a member of the couple before the end of the income year.
Currently, as set out in clause 3AA(2)(b) of Schedule 3 to the Family Assistance
Administration Act, the ATI of an individual with a part year partner is determined by
calculating a percentage of the partner's income for the year that corresponds to
the period of time the couple was together, and adding that to the individual's own
ATI.
This methodology has had unfair consequences for individuals in the annual cap
result and applicable percentage result that is reached for these individuals
throughout the year, resulting in some cases, in these individuals owing debts at
CCS reconciliation. The concepts of "annual cap" and "applicable percentage" are
explained below.
The annual cap (currently $10,373) applies to an individual for an income year if
their ATI for the income year exceeds the "annual cap income threshold" (currently
$188,163).
Where the individual's ATI exceeds the annual cap income threshold - in other
words where the annual cap "applies to them" - they can only be paid up to the
CCS annual cap amount in an income year. Any amounts in excess of the annual
cap are recovered as debts at CCS reconciliation.
Where the individual's ATI is below the annual cap income threshold - in other
words where the annual cap "does not apply to them" - there is no upper limit of
CCS that can be paid to them in an income year.8
An individual's "applicable percentage" is an input used in determining the hourly
rate of CCS the person is entitled to for a session of care.9 An individual's
applicable percentage will generally be either 0%, 20%, 50% or 85% determined by
reference to the individual's ATI, where the higher the individual's ATI is, the lower
their applicable percentage is.
The hourly rate of CCS the individual is entitled to for a session of care is the lower
of the two amounts, when the individual's applicable percentage is applied to:
the hourly session fee for the individual (as set by the child care provider); or
the CSS hourly rate cap for the session (a legislated limit set out in clause 2
of Schedule 2).
7
See sections 103A - 103C and 105E of the Family Assistance Administration Act.
8
See subclause 1(2) of Schedule 2 to the Family Assistance Act.
9
See clauses 2 and 3 of Schedule 2 to the Family Assistance Act.
20
This means that where an individual's ATI for the income year is artificially inflated
on account of the current calculation of their ATI, when they have a part year
partner, the annual cap may apply to them when it should not have and they may
have received a lower hourly rate of CCS.
Intended effect of the amendments
The amendments made by this Bill to section 105E of the Family Assistance
Administration Act are intended to have the following effect:
The annual cap will not apply to CCS fortnights where the individual was
single and their actual personal ATI was under the annual cap income
threshold. This applies regardless of:
o when in the year the individual was single and their ATI was under the
annual cap income threshold;
o whether the annual cap income threshold applied to other CCS
fortnights in the year; or
o whether the annual cap was reached in those fortnights where the
individual's ATI when combined with their part year partner's ATI
(combined ATI) exceeded the annual cap income threshold.
The annual cap will apply to CCS fortnights where the individual's actual
personal, or combined ATI, exceeds the annual cap income threshold.
When during CCS fortnights where the annual cap applied, an individual is
paid up to the annual cap amount, no more CCS is payable to them for the
remainder of that period; or during any subsequent periods that the
individual's personal or combined ATI exceeds the annual cap income
threshold.
For the purpose of determining the individual's applicable percentage, their ATI will
also be considered across CCS fortnights, depending on whether or not the
individual was single or in a relationship with a part year partner.
New subsections 105E(4) to (7)
Item 1 inserts new subsections105E(4) to (7) in order to provide this fairer outcome
at CCS reconciliation for individuals with part year partners.
For the purposes of the new subsections, whether or not the individual was a
member of a couple in a CCS fortnight is determined based on whether the
individual was a member of a couple on the first Monday in the CCS fortnight.
New subsection 105E(4) provides that if an individual is a member of a couple on
one or more, but not all, of the first Mondays in CCS fortnights that start in an
income year - in other words, if the individual has a part year partner - then, when
reviewing child care decisions that relate to the individual under subsection 105E(1)
to (3), the Secretary must review those decisions in accordance with new
subsections 105E(5) and (6).
Part 1 of Schedule 2 of the Family Assistance Act sets out the methodology for
determining the amounts of CCS an individual is entitled to for a session of care
provided in a week.
New subsection 105E(5) provides that the Secretary must apply Part 1 of Schedule
2 to an individual with a part year partner, in relation to each CCS fortnight that start
21
in an income year, as if paragraph 3AA(2)(b) of Schedule 3 to the Family
Assistance Act had not been enacted. Paragraph 3AA(2)(b) provides that the ATI of
an individual with a part year partner is determined by calculating a percentage of
the partner's income for the year that corresponds to the period of time the couple
was together, and adding that to the individual's own ATI. The effect of applying
Part 1 of Schedule 2 to an individual with a part year partner as if paragraph
3AA(2)(b) of Schedule 3 to the Family Assistance Act had not been enacted is that
for the purpose of calculating the individual's ATI for the income year:
in those CCS fortnights that the individual was single, only their own
personal ATI counts towards their ATI for the income year; and
as per new subparagraph 105E(6)(a), in those CCS fortnights where the
individual was a member of the couple with the part year partner, the
individual's ATI for the year includes both their own ATI as well as the other
member of the couple's ATI for the income year.
The individual's ATI will be used to determine whether the annual cap applies to the
individual in each CCS fortnight and the individual's applicable percentage (see
above explanation of these concepts and why they are important).
Subsection 105E(6) amends paragraph 1(3)(b) of Schedule 2 to the Family
Assistance Act, with the amendments applying in those CCS fortnights that start in
an income year where the individual had a part year partner. It has the effect that,
for those CCS fortnights where the annual cap applies to the individual, the annual
cap is reached for a child for an income year if the following amounts together equal
the annual cap:
the amount of CCS the individual is entitled to be paid for sessions of care
provided to the child in CCS fortnights starting in the income year; and
the amount of CCS the other member of the couple is entitled to be paid for
sessions of care provided to the same child in those fortnights.
The intention of subclause 1(3) of Schedule 2 is to avoid couples "double dipping"
and switching who is the CCS claimant in respect of the child in order to circumvent
the annual cap limit. The above amendment ensures that this provision continues to
apply to individuals with part year partners, as appropriate.
Subsection 105E(7) states that subsections 105E(5) and (6) have effect despite
Part 1 of Schedule 2. This is to ensure that these subsections have effect when the
Secretary reviews entitlement decisions of individuals with part year partners at
CCS reconciliation.
For the avoidance of doubt, the effect of the above amendments is that, at CCS
reconciliation, for individuals with part year partners:
paragraph 3AA(2)(b) of Schedule 3 to the Family Assistance Act is taken to
not have been enacted; and
when determining the amounts of CCS the individual was entitled to:
o for the CCS fortnights the individual was a member of the couple -
Part 1 of Schedule 2 applies subject to the few amendments in
subsection 105E(6); and
o for the CCS fortnights the individual was single - Part 1 of Schedule 2
continues to apply unamended.
22
Subitem 2(1) states that the amendments made by item 1 apply in relation to
reviews, at CCS reconciliation, of child care decisions made in relation to sessions
of care provided in CCS fortnights starting in the 2019-2020 income year, and in
later income years.
This enables the fairer, amended entitlement methodology, to be applied in respect
of CCS payable for sessions of care provided in the 2019-2020 financial year and
thereafter.
Subitem 2(2) states that the amendment made by item 1 has no effect to the extent
(if any) to which it would:
result in an acquisition of property (within the meaning of paragraph 51 (xxxi)
of the Constitution) from a person otherwise than on just terms (within the
meaning of that paragraph); or
impose taxation (within the meaning of section 55 of the Constitution).
These standard Constitutional savings provisions are included as a precautionary
measure, in case they may be needed.
23
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