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2004
THE
PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
FAMILY
ASSISTANCE LEGISLATION AMENDMENT (ADJUSTMENT OF CERTAIN FTB CHILD RATES) BILL
2004
EXPLANATORY
MEMORANDUM
(Circulated
by authority of the
Minister for Family and
Community Services,
Senator the Hon Kay
Patterson)
FAMILY ASSISTANCE LEGISLATION
AMENDMENT (ADJUSTMENT OF CERTAIN FTB CHILD RATES) BILL 2004
OUTLINE AND FINANCIAL IMPACT
STATEMENT
This Bill amends the family tax benefit (FTB) adjustment
provisions in clause 7 of Schedule 4 to the A New Tax System (Family
Assistance) Act 1999 that apply in relation to the FTB under 13 and age
13-15 child rates.
Under the adjustment
arrangements provided for in this Bill, if the FTB under 13 child rate (as
CPI indexed) is less that the amount worked out using the formula “CPC
rate x 16.6%”, the FTB under 13 child rate is increased to the amount
determined under the formula. The position is similar in relation to the FTB
age 13-15 child rate, except that the formula is “CPC rate x
21.6%”.
The new arrangements are
consistent with the pre 1 July 2004 adjustment arrangements for the FTB under 13
and age 13-15 child rates.
The total financial
cost of these changes
is:
2004-05 $0.0m
2005-06 $0.0m
2006-07 $1.4m
2007-8 $24.5m
FAMILY ASSISTANCE LEGISLATION AMENDMENT
(ADJUSTMENT OF CERTAIN FTB CHILD RATES) BILL 2004
Clause 1 sets out how the Act is to be cited,
that is, the Family Assistance Legislation Amendment (Adjustment of Certain
FTB Child Rates) Act 2004.
Clause 2
provides a table that sets out the commencement dates of the various sections
in, and Schedule to, the Act.
Clause 3
provides that each Act that is specified in a Schedule is amended or repealed as
set out in that Schedule.
Summary
Schedule 1 amends the A New Tax System
(Family Assistance) Act 1999 (the Family Assistance Act) to provide new
adjustment arrangements for the FTB under 13 and age 13-15 child
rates.
Background
Clause 7 of Schedule 4 to the Family Assistance Act
provides for certain FTB child rates to be adjusted in accordance with a
prescribed formula where the amount of the relevant FTB child rate would be less
under CPI indexation. Clause 7 applies to the FTB under 13 child rate and to
the FTB age 13-15 child rate.
With effect from
1 July 2004, the formulae for these FTB child rates were amended to take account
of the introduction of the FTB Part A supplement. The supplement is a separate
and additional amount that is added to an individual’s maximum and base
rates in respect of an FTB child. The supplement is subject to CPI indexation
on 1 July 2004 and each subsequent 1
July.
Schedule 1 replaces these
adjustment arrangements for the FTB under 13 and age 13-15 child
rates.
Explanation of changes
Clause 7 of Schedule 4 to the Family Assistance Act
provides for the adjustment of the FTB under 13 and age 13-15 child rates in
accordance with a specified formula where the relevant FTB child rate would be
less under CPI indexation.
Item 1
repeals the formula in subclause 7(1) that applies in relation to the FTB under
13 child rate and replaces it with the formula “CPC rate x
16.6%”.
“CPC rate” is defined
in subsection 3(7) of the Family Assistance Act by reference to the combined
pensioner couple maximum basic rate plus pension
supplement.
Item 2 repeals the formula
in subclause 7(3) that applies in relation to the FTB age 13-15 child rate
and replaces it with the formula “CPC rate x
21.6%”.
Item 3 makes a technical
amendment by repealing subclause 7(6) of Schedule 4. Subclause 7(6)
defines “FTB gross supplement amount” for the purposes of clause 7
of Schedule 4. The amendments made by items 1 and 2 make this
definition superfluous. It is therefore repealed by item
3.
Item 4 provides that the
amendments made by Schedule 1 apply in relation to FTB for the 2003-04 income
year or later income years.