Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FAMILY ASSISTANCE LEGISLATION AMENDMENT (CHILD CARE BUDGET MEASURES) BILL
2010
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Early Childhood Education,
Child Care and Youth, the Honourable Kate Ellis MP)
FAMILY ASSISTANCE LEGISLATION AMENDMENT (CHILD CARE BUDGET MEASURES) BILL
2010
OUTLINE
This Bill amends the A New Tax System (Family Assistance) Act 1999 to set
the annual child care rebate limit at $7,500 for four income years starting
from 1 July 2010, with the first indexation of this amount occurring on 1
July 2014.
FINANCIAL IMPACT
Net savings of $86.3m over 4 years (2010 - 11, 2011 - 12, 2012 - 13 and
2013 - 14).
FAMILY ASSISTANCE LEGISLATION AMENDMENT (CHILD CARE BUDGET MEASURES) BILL
2010
NOTES ON CLAUSES
Clause 1 - Short title
Provides for the Act to be cited as the Family Assistance Legislation
Amendment (Child Care Budget Measures) Act 2010 (this Act).
Clause 2 - Commencement
Clause 2 specifies that this Act commences on the day on which it receives
Royal Assent.
Clause 3 - Schedule(s)
Provides that each Act 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repealed as set out in the applicable items in the Schedule and that any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.
For ease of description, this explanatory memorandum uses the following
abbreviations:
'CCB' means child care benefit.
'CCR' means child care rebate.
'Family Assistance Act' means the A New Tax System (Family Assistance) Act
1999.
'JETCCFA' means Jobs Education and Training Child Care fee assistance.
Schedule 1- Amendments
Summary
This Schedule makes amendments to the Family Assistance Act to set the
annual CCR limit at $7,500 for four income years starting from 1 July 2010,
with the first indexation of this amount occurring on 1 July 2014.
Background
CCR is a payment assisting eligible individuals with the cost of child care
fees for care provided by an approved child care service. The amount of CCR
an individual may receive for a child for an income year is 50% of the
difference between the amount that the individual is liable to pay for care
provided to the child and the sum of the individual's CCB entitlement (if
any) and JETCCFA (if any) relating to that child, up to the maximum of
$7,500 (CCR limit). The CCR limit amount is indexed on 1 July each year.
The indexation on 1 July 2009 increased the CCR limit for the income year
2009 - 10 to $7,778.
Explanation of the changes
A New Tax System (Family Assistance) Act 1999
Item 1 - Subsection 84F(1)
As a consequence of the amendment made by Item 3, which repeals subsection
84F(2), Item 1 amends section 84F to omit the redundant reference to
subsection (1).
Item 2 - At the end of subsection 84F(1)
Section 84F specifies the amounts of the child care rebate limit applicable
in respect of a child and an income year. These amounts are relevant to the
calculation of the amount of CCR for a quarter (under section 84AA) and for
an income year (under section 84A) and the amount of CCR relating to CCB in
substitution (under section 84DA).
For an income year ending on 30 June 2009, paragraph 84F(1)(c) specifies
the limit of $7,500. This amount was indexed on 1 July 2009 to $7,778.
Item 2 adds paragraphs (d), (e) and (f) to subsection 84F(1), which will
become section 84F as a result of the amendment made by Item 1.
New paragraph (d) specifies the limit of $7,778 for the income year ending
on 30 June 2010 (preserving the effect of the indexation that occurred on 1
July 2009).
New paragraph (e) specifies the limit of $7,500 for income years ending on
30 June 2011, 30 June 2012, 30 June 2013 and 30 June 2014.
New paragraph (f) specifies that for a later income year (that is, an
income year ending on 30 June 2015 and subsequent income years) the amount
of the limit is the indexed amount substituted under Schedule 4 on 1 July
of that later income year for the previous income year. Schedule 4 provides
for an annual indexation of the amount of the limit on 1 July and the
substitution of the indexed amount for the previous year's amount.
Item 3 - Subsection 84F(2)
Subsection 84F(2) provides that the CCR limit (as specified for the income
year ending on 30 June 2009) is indexed annually under Schedule 4 from 1
July 2009. Item 3 repeals this subsection as it is made redundant as a
result of the amendments made by Item 2.
Item 4 - After subclause 3(6) of Schedule 4
Schedule 4 contains provisions relating to indexation and adjustment of
amounts. Clause 2, table item 22, specifies the CCR limit amount as the
amount to be indexed. Subclause 3(1), table item 22, specifies, among other
things, that the day on which this amount is indexed is 1 July. Subclause
3(6) specifies that the first indexation of the CCR limit is to take place
on 1 July 2009.
Item 4 inserts new subclause 3(6A), which provides that the CCR limit is
not to be indexed on the following indexation days: 1 July 2010, 1 July
2011, 1 July 2012 and 1 July 2013. This amendment ensures that the limit of
$7,500 specified in new paragraph 84F(f) (inserted by Item 2) continues to
apply through to the income year 2013-14.
A note at the end of new subclause (6A) clarifies for the reader that the
indexation of the CCR limit resumes on 1 July 2014.
Item 5 - Transitional
Item 5 is a transitional provision operating for the purpose of clause 4 of
Schedule 4. Clause 4 provides a method statement for working out the
indexed amount that is to be substituted for the amount to be indexed. The
amount to be indexed is the 'current figure' for the amount immediately
before the indexation day'. Item 5 makes it clear that the 'current amount'
for the CCR limit amount immediately before that day is taken to be $7,500.