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2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FAMILY ASSISTANCE LEGISLATION AMENDMENT
(CHILD CARE MEASURES) BILL (NO. 2) 2014
EXPLANATORY MEMORANDUM
(Circulated by authority of the Assistant Minister for Education,
the Honourable Sussan Ley MP)
FAMILY ASSISTANCE LEGISLATION AMENDMENT
(CHILD CARE MEASURES) BILL (NO. 2) 2014
OUTLINE
This Bill amends the A New Tax System (Family Assistance) Act 1999 to
maintain the Child Care Benefit (CCB) income thresholds at the amounts
applicable as at 30 June 2014 for three income years, starting from
1 July 2014, with the first indexation of these amounts recommencing on
1 July 2017.
As a result of this amendment, families' CCB income thresholds will remain at
the amounts applicable on 30 June 2014 for the three income years starting
from 1 July 2014 and ending on 30 June 2017.
The CCB standard hourly rate, the minimum hourly amount and the multiple
child loadings related to the CCB will continue to be indexed by the Consumer
Price Index (CPI) on 1 July each year. These amounts are not affected by this
measure.
Maintaining the CCB income thresholds for three years from 1 July 2014 is a
2014-15 Budget savings measure.
FINANCIAL IMPACT STATEMENT
This measure is expected to deliver net savings of $230.4 million over four
years (2014-15, 2015-16, 2016-17, and 2017-18).
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011
Family Assistance Legislation Amendment (Child Care Measures) Bill
(No. 2) 2014
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.
Background
The Child Care Benefit (CCB) is a means-tested payment that provides
financial assistance to help families with child care costs. The CCB upper and
lower income thresholds are used as part of calculating the rate of an
individual's CCB. The lower and upper CCB income thresholds are currently
$41,902 and $97,632 respectively and are indexed each year on 1 July in line
with CPI increases.
The Child Care Rebate (CCR) is a payment that provides assistance for
families who use approved child care by covering half of all their out-of-pocket
fees (after CCB), up to a maximum limit per child per income year.
Overview of the Bill
The Bill will maintain the CCB income thresholds at the amount applicable as
at 30 June 2014, for the three income years to 30 June 2017. The Bill amends
Schedule 4 to the A New Tax System (Family Assistance) Act 1999 to
maintain the CCB income thresholds at the amounts in place as at
30 June 2014.
Human Rights Implications
The Bill engages the following human rights:
Rights of the child
The rights of the child are contained in the Convention of the Rights of the
Child (CRC).
Article 3 of the CRC requires that in all actions concerning children, the best
interests of the child shall be a primary consideration.
To the extent that the Bill engages the rights of the child, it does not limit
those rights as it maintains the provision of payments to assist the affordability
of child care for families.
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Right to social security
In the context of providing additional payments to families for child care the
Bill also engages the right to social security contained in Article 9 of the
International Covenant on Economic, Social and Cultural Rights (ICESCR), as
well as article 26 of the CRC, which specifically recognises the right of a child
to benefit from social security.
Article 9 of the ICESCR requires amongst other things that a country must,
within its maximum available resources, ensure access to a social security
scheme that provides a minimum essential level of benefits to all individuals
and families. Article 26 of the CRC requires countries to recognise the right of
the child to benefit from social security. Benefits should take into account the
resources and the circumstances of the child and persons having
responsibility for the maintenance of the child.
The right to social security is not absolute and may be subject to permissible
limitations. The UN Committee on Economic, Social and Cultural Rights has
said that the right to social security includes the right not to be subject to
arbitrary and unreasonable restrictions of existing social security coverage.[1]
Any removal in entitlements must be justified in line with Article 4 of the
ICESCR (limitations are to be determined by law, be compatible with the
nature of these rights and be solely for the purpose of promoting the general
welfare in a democratic society) in the context of the full use of the maximum
available resources of the State party.[2]
The Government considers that the overall effect of maintaining the CCB
income thresholds until 30 June 2017 will, in relation to the families whose
children attend approved child care, be limited by continued indexation of the
CCB standard hourly rate, the minimum hourly amount and the multiple child
loadings, which are not affected by this measure. For many of the families
impacted by maintaining the CCB income thresholds, half of their additional
out-of-pocket child care costs will be met by CCR.
To the extent the Bill limits the right to social security, this limitation is
reasonable and proportionate to achieving a legitimate aim.
Conclusion
To the extent that the Bill engages the rights of the child and to the extent it
engages and places any limitation on the right to social security, such
limitation is reasonable, necessary and proportionate to achieving a legitimate
aim.
The Bill is compatible with human rights.
[1]
Committee on Economic, Social and Cultural Rights, General Comment No. 19, `The right to social
security (art 9)', paragraph 9.
[2]
Ibid, paragraph 42.
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FAMILY ASSISTANCE LEGISLATION AMENDMENT
(CHILD CARE MEASURES) BILL (NO. 2) 2014
NOTES ON CLAUSES
Clause 1 - Short title
This clause provides that the name of the Bill, when enacted, is the Family
Assistance Legislation Amendment (Child Care Measures) Act (No. 2) 2014
(the Act).
Clause 2 - Commencement
This clause provides that the Act will commence on 1 July 2014.
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule is amended
or repealed as set out in the applicable items in the Schedule concerned and
that any other item in a Schedule to the Bill 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.
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Schedule 1 Amendments
Summary
This Schedule makes amendments to the Family Assistance Act to maintain
the Child Care Benefit (CCB) income thresholds at the rate applicable as at
30 June 2014, starting from 1 July 2014 for three income years, with the
indexation of this amount recommencing in line with CPI on 1 July 2017.
Background
CCB is a means tested payment that provides financial assistance to help
families with child care costs. To qualify for CCB, recipients need to meet an
income test, with the maximum rate currently payable for adjusted taxable
income under $41,902. The legislation currently provides for the CCB income
thresholds to be indexed by the Consumer Price Index on 1 July each year.
Explanation of the changes
A New Tax System (Family Assistance) Act 1999
Item 1 - New subclause 3(5B) of Schedule 4
This item inserts a new heading and a new subclause 3(5B) of Schedule 4, to
provide that the CCB lower income threshold and the CCB upper income
threshold are not to be indexed on 1 July 2014, 1 July 2015 and 1 July 2016.
A note to subclause 3(5B) states that indexation of the income thresholds
resumes on 1 July 2017.
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