Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS AND OTHER
LEGISLATION AMENDMENT
(2009 MEASURES) BILL 2009
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Families, Housing, Community Services and Indigenous Affairs,
the Hon Jenny Macklin MP)
FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS AND OTHER
LEGISLATION AMENDMENT
(2009 MEASURES) BILL 2009
OUTLINE
This bill will amend various pieces of portfolio legislation to provide for
several non-Budget measures.
Scheduling of land
Several parcels of land in the West MacDonnell National Park, Loves Creek
and Tennant Creek regions of the Northern Territory are added to Schedule 1
to the Aboriginal Land Rights (Northern Territory) Act 1976, enabling the
land to be granted to relevant Aboriginal Land Trusts.
Income management regime
The income management provisions in the social security law are amended to:
. enable income management in Cape York of age pension and carer
payment;
. close a loophole by allowing any residual amounts from a past period
of income management, for a person who starts a new period of income
management, to be paid into the Special Account for the person instead
of being paid to the person; and
. allow the residual amount for a deceased customer to be paid to an
appropriate person.
Social Security Appeals Tribunal
The bill makes amendments to improve the operation of the Social Security
Appeals Tribunal (SSAT) across its social security, family assistance and
child support jurisdictions. For example, the bill:
. makes changes to titles for Tribunal members, such as renaming the
Executive Director to Principal Member;
. removes the requirement for the Principal Member to chair panels on
which he or she sits by enabling the Principal Member to determine who
will be the presiding member; and
. allows the SSAT to convene a pre-hearing conference for social
security and family assistance law appeals - if parties reach
agreement at the pre-hearing conference, the SSAT is empowered to make
a decision in accordance with the agreement.
Disposal of assets
An amendment will clarify that a gift that has been returned does not have
to be assessed as a deprived asset under the social security disposal of
assets provisions.
Controlled private trusts
The bill will clarify, for the purposes of the means test treatment of
private trusts, the requirements for an individual to pass the control test
in relation to a controlled private trust.
Baby bonus
The bill introduces a new requirement for an individual to notify if a
child for whom baby bonus is paid leaves the individual's care within 26
weeks beginning on the day of the child's birth or the day the child is
entrusted to care.
Other amendments
The bill includes further amendments to portfolio legislation to address
minor anomalies and technical errors.
Financial impact statement
The measures in the bill have nil or negligible financial impact.
FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS AND OTHER
LEGISLATION AMENDMENT
(2009 MEASURES No. 1) BILL 2009
NOTES ON CLAUSES
Clause 1 sets out how the Act is to be cited, that is, as the Families,
Housing, Community Services and Indigenous Affairs and Other Legislation
Amendment (2009 Measures) Act 2009.
Clause 2 provides a table that sets out the commencement dates of the
various sections in, and schedules 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.
This explanatory memorandum uses the following abbreviations:
. '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;
. 'Social Security Act' means the Social Security Act 1991; and
. 'Social Security Administration Act' means the Social Security
(Administration) Act 1999.
Schedule 1 - Scheduling of land
Summary
This schedule adds several parcels of land in the West MacDonnell National
Park, Loves Creek and Tennant Creek regions of the Northern Territory to
Schedule 1 to the Aboriginal Land Rights (Northern Territory) Act 1976
(ALRA), enabling the land to be granted to relevant Aboriginal Land Trusts.
Background
The Northern Territory Government has reached agreement with the Central
Land Council that three additional parcels of land should be given to
relevant Land Trusts as Aboriginal land under the ALRA, pursuant to
sections 10 and 12. Government policy is that land should be added to
Schedule 1 to the ALRA where agreement to do so has been reached between
the Northern Territory Government and the relevant Land Council. The three
additional parcels to be granted are Alice Valley Extension (East), Loves
Creek and Patta (near Tennant Creek).
The Loves Creek parcel of land is subject to a partially-heard land claim
under the ALRA. The Central Land Council and the Northern Territory
Government have agreed to resolve the claim by having the land included in
Schedule 1 to the ALRA so that it can be granted to an Aboriginal Land
Trust.
Patta (near Tennant Creek) is also the subject of an agreement between the
Central Land Council and the Northern Territory Government. It has been
agreed that the land will be granted under the ALRA as part of an agreement
for settling broader native title claims.
The Alice Valley Extension (East) parcel of land will be leased by the Land
Trust to the Territory as an extension of the West MacDonnell National
Park.
The amendments made by this schedule commence on the day after Royal
Assent.
Explanation of the changes
Item 1 amends Part 4 of Schedule 1 to the ALRA by including Loves Creek in
the Northern Territory as land to be granted as Aboriginal land.
Item 1 also amends Part 4 of Schedule 1 to the ALRA by including various
portions of land near Tennant Creek in the Northern Territory as land to be
granted as Aboriginal land.
Item 2 amends Part 5 of Schedule 1 to the ALRA by including Alice Valley
Extension (East) as land to be granted as Aboriginal land.
Schedule 2 - Income management regime
Summary
This schedule amends the income management provisions in the social
security law to:
. enable income management in Cape York of age pension and carer
payment;
. close a loophole by allowing any residual balance from a past period
of income management, for a person who starts a new period of income
management, to be paid into the Special Account for the person instead
of being paid to the person; and
. allow the residual amount for a deceased customer to be paid to an
appropriate person.
Background
Income management in Cape York of age pension and carer payment
Currently, for the purposes of income management in Cape York, if a person
or their partner is an eligible recipient of a category P or category R
welfare payment, the person may be subject to income management, provided
the Family Responsibilities Commission (the Commission) has issued a
relevant notice and all the other conditions under section 123UF of the
Social Security Administration Act have been met. However, only welfare
payments paid to a customer that also fall within the definition of a
category Q or category S welfare payment can be income managed as a result
of an order by the Commission. Age pension and carer payment do not
currently fall into either of these categories. This schedule makes
amendments to enable income management in Cape York of those payments.
Treatment of residual balance when person again becomes subject to income
management
If a person ceases to be subject to the income management regime, and is
not likely to return to income management within a prescribed period,
section 123WJ of the Social Security Administration Act governs the return
of the credit balance of the person's income management account to the
person.
Where a person subsequently becomes subject to income management again,
after the Secretary has determined that section 123WJ applies to the
person, but before the residual balance has been paid in full to that
person, there is currently no provision which allows the Secretary to stop
paying residual amounts back to the person.
The intention is that, if a person once again becomes subject to the income
management regime, no further payments should be made to the person under
section 123WJ and the residual balance that remains at the time that the
person becomes subject to the income management regime again, should be
retained in the person's income management account in such a way that it is
able to be disbursed under Division 6 of Part 3B of the Social Security
Administration Act. This schedule ensures this intention is achievable.
Payment of residual amount after the person's death
Currently, if a person who is subject to the income management regime dies,
subsection 123WL(3) of the Social Security Administration Act provides for
the residual amount to be paid to the person's legal personal
representative. Often, customers subject to income management will not
have a legal personal representative, even when they have more than $500 in
assets.
Where the residual amount is equal to or less than $500,
subsection 123WL(3) provides that, in the absence of a legal personal
representative, the Secretary is able to pay the amount to any person
carrying out an appropriate activity in relation to the estate or affairs
of the deceased person. However, in situations where there is more than
one person carrying out these activities, it has sometimes proven difficult
to determine to whom the residual amount should be paid. The amendments
provide a range of options to disburse the residual amount.
The amendments made by this schedule commence on the day after Royal
Assent.
Explanation of the changes
Income management in Cape York of age pension and carer payment
Item 1 amends the definition of a category P welfare payment in
section 123TC of the Social Security Administration Act by removing the
exclusion of age pension and carer payment. Category P and category R
welfare payments are the payments that determine the eligibility of the
person to be income managed, but it is only a category Q or category S
welfare payment that becomes subject to income management. Because
category P payments are a subset of category Q payments, this amendment
enables people in receipt of age pension or carer payment in Cape York to
have those payments income managed.
Item 2 amends the definition of category R welfare payment in section 123TC
of the Social Security Administration Act by removing age pension and carer
payment as these references are now redundant, being included in the
definition of a category P welfare payment.
Item 3 amends paragraphs 123UF(1)(b) and (2)(c) of the Social Security
Administration Act to allow the Commission to issue a notice to the
Secretary of Centrelink, requiring a person to be subject to income
management under section 123UF, rather than at the subsection level. This
will enable a person who has been ordered by the Commission to be subject
to income management to transfer from a category R welfare payment to a
category P welfare payment and remain on income management without the
Commission having to issue a fresh notice.
Treatment of residual balance when person again becomes subject to income
management
Item 4 inserts a new heading and a new subsection at the end of
section 123WJ of the Social Security Administration Act. This amendment
makes section 123WJ subject to the new section 123WJA.
Item 5 inserts a new provision which gives power to the Secretary to cease
making payments out of a person's residual balance once they become subject
to income management again. This is to ensure that the remaining residual
balance is treated as part of the person's income management account and
that it is disbursed, in accordance with, Division 6 of Part 3B of the
Social Security Administration Act. This provision takes precedence over
any determination made under subsection 123WJ(4).
Payment of residual amount after the person's death
Item 6 repeals and replaces subsection 123WL(3) of the Social Security
Administration Act as well as inserting new subsection 123WL(3A). These
new provisions assist in disbursing money that remains in a person's income
management account after their death. Irrespective of the balance that
remains in the deceased person's income management account, the Secretary
is able to pay the funds to any person carrying out an appropriate activity
in relation to the estate or affairs of the deceased person.
The new provision provides a range of options to disburse the residual
amount, including paying funds to the person carrying out the affairs of
the deceased person or paying directly into the deceased person's bank
account (nominated for the purposes of subsection 55(2) of the Social
Security Administration Act), as well as the option to pay the funds to the
deceased person's legal representative, where one exists. This provision
is also broad enough to allow a direct payment to a funeral director to
cover the deceased person's funeral costs. The Secretary determines the
amount that is to be paid and that amount will be paid as a lump sum on a
day determined by the Secretary.
These provisions also allow for the deceased person's income management
account balance to be disbursed by way of a number of different payments,
or even by more than one lump sum payment in relation to a particular
paragraph. For example, if there were a number of people who were
conducting appropriate activities under new paragraph 123WL(3)(b), then it
may be that several payments could be made under that one paragraph. Or,
where a person carried out several different appropriate activities, then
it may be possible for more than one lump sum payment to be made to that
person.
Item 7 amends subsection 123WL(4) of the Social Security Administration Act
so that the day determined by the Secretary under subsection 123WL(3) to
pay out funds from the deceased person's income management account, for any
of the purposes listed in subsection 123WL(3), occurs within 12 months of
the person's death.
Item 8 amends subsection 123WM(1) of the Social Security Administration Act
to make it clear as to the manner in which funds are to be paid to a person
for the purposes of paragraph 123WL(3)(a) or (b).
Item 9 is an application provision, which states that the new
section 123WJA of the Social Security Administration Act applies to people
who cease to be subject to income management before, on or after the
subsection commences and who subsequently become subject to income
management regime again before, on or after that commencement.
Subitem 9(2) provides that, when determining the application of new
section 123WJA to a person who ceased income management, but then came back
onto income management prior to the commencement of this schedule, the time
referred to in new paragraph 123WJA(1)(d) is the commencement of the
schedule, rather than the date otherwise calculated under that paragraph.
This means that, if a person ceased income management and then recommenced
income management prior to the commencement of the schedule, and he or she
had any remaining residual balance in their income management account on
the day the schedule commences, then that remaining residual amount can
become subject to the operation of new section 123WJ.
This measure applies prospectively taking past facts into account. The
measure does not operate retrospectively.
Item 10 is an application provision which states that the new
subsections 123WL(3), 123WL(4) and 123WM(1) of the Social Security
Administration Act apply in relation to customers who die on or after the
subsection commences. It also applies to those customers who die prior to
the date this subsection commences, where a determination has not been made
by Secretary to pay the whole of the deceased person's residual balance to
their legal personal representative as one lump sum.
Schedule 3 - Social Security Appeals Tribunal
Summary
This schedule makes amendments to improve the operation of the Social
Security Appeals Tribunal (SSAT) across its social security, family
assistance and child support jurisdictions. For example, the bill:
. makes changes to titles for Tribunal members, such as renaming the
Executive Director to Principal Member;
. removes the requirement for the Principal Member to chair panels on
which he or she sits by enabling the Principal Member to determine who
will be the presiding member; and
. allows the SSAT to convene a pre-hearing conference for social
security and family assistance law appeals - if parties reach
agreement at the pre-hearing conference, the SSAT is empowered to make
a decision in accordance with the agreement.
Background
The SSAT is a statutory body established under the Social Security
Administration Act. The SSAT conducts merits review of administrative
decisions made under the social security law, the family assistance law,
child support legislation and various other pieces of legislation. The
Social Security Administration Act, the Family Assistance Administration
Act and the Child Support Registration and Collection Act 1988 (Child
Support Registration and Collection Act) set out the powers, functions and
procedures of the SSAT.
Changes in titles of SSAT members
The Social Security Administration Act currently provides that the SSAT
consists of an Executive Director, Directors and other Members. The titles
commonly used in other similar Commonwealth tribunals are Principal Member,
Senior Member and Member.
This measure would replace all references to Executive Director and
Director in the Social Security Administration Act, Family Assistance
Administration Act and Child Support Registration and Collection Act with
the new titles of Principal Member and Senior Member to bring the SSAT into
line with other Commonwealth tribunals.
Power to obtain information or documents
Currently, the Executive Director of the SSAT may request the Secretary to
provide information or a document that the Secretary has in his or her
possession or control. To obtain information or a document that is held by
a person other than the Secretary, the Executive Director may obtain the
information through the Secretary, by asking the Secretary to obtain such
information or document from the third party.
This measure would empower the Principal Member to require a person
directly, without going through the Secretary, to give information or a
document that is relevant to a review.
Pre-hearing conferences
In reviews under the child support jurisdiction, the Executive Director may
convene pre-hearing conferences, if he or she considers that it would
assist in the conduct and consideration of the review to do so. Currently,
in relation to reviews under the social security and family assistance
laws, there is no provision to allow for a pre-hearing conference.
This measure would bring SSAT operations under the social security and
family assistance jurisdictions more into line with the child support
jurisdiction. It would allow the SSAT to convene a pre-hearing conference
at any stage before the commencement of a hearing. Further, if parties
reach agreement at the pre-hearing conference, the SSAT is empowered to
make a decision in accordance with the terms of the agreement without
holding a hearing.
Presiding members
Currently, if the Executive Director is on a panel of members, the
Executive Director must preside at the hearing of the review. Similarly,
if a Director is on the panel of members (and the Executive Director is not
on the panel), the Director must preside at the hearing of the review. The
Executive Director has the power to designate the presiding member only in
cases where there is no Executive Director or Director sitting on a panel.
This measure would empower the Principal Member to designate any member of
the panel to be the presiding member in multi-member panels. This would
allow the Principal Member, or Senior Member, to sit on the panel without
having to be the presiding member.
Single member panels
Currently, there is no specific provision in the social security law or
family assistance law for single member panels. However, there is nothing
within either the social security law or family assistance law to prevent
the constitution of a single member panel. This measure makes various
amendments to clarify that the SSAT may be constituted by a single-member
for the purposes of the review of a decision.
Correction of errors in decisions or statements of reasons
In the child support jurisdiction, the Executive Director is empowered to
make correction of obvious errors in decisions or statements of reasons,
but there are not similar provisions in the social security law or family
assistance law.
This measure would extend this power to the social security and family
assistance jurisdictions, by enabling the Principal Member, or the
presiding member to make corrections of obvious errors, in decisions or
statements of reasons.
New position of Assistant Senior Member
This measure would create by statute a new position within the composition
of the SSAT, of 'Assistant Senior Member'. This new position has already
been created administratively and is recognised in the latest determination
by the Remuneration Tribunal.
Items 1 to 36, 40 to 115, 119 to 134 and 136 to 163 of this schedule
commence 28 days after this Act receives the Royal Assent.
Items 37 to 39, 116 to 118, and 135 of this schedule commence on the later
of 28 days after this Act receives the Royal Assent or immediately after
the commencement of Schedule 1 to the Families, Housing, Community Services
and Indigenous Affairs and Other Legislation Amendment (Miscellaneous
Measures) Act 2009. However, if Schedule 1 to that Act does not commence
then these items do not commence at all. At the time of introduction of
this bill, that Act is still a bill before the Parliament. It contains
amendments to provisions also amended by the items mentioned here.
Explanation of the changes
Part 1 - Main amendments
Family Assistance Administration Act
Items 1 to 5 amend the Family Assistance Administration Act to give effect
to these measures.
Power to obtain information or documents
Item 1 inserts new sections 128A, 128B and 128C into the Family Assistance
Administration Act.
New section 128A provides that, if the Principal Member believes on
reasonable grounds that a person has information or a document that is
relevant to a review, the Principal Member is empowered to require, by
written notice, that person to give the information or document to the
SSAT. The written notice must give the person at least 14 days to comply.
Subsection 128A(4) makes failure to comply with the notice a criminal
offence, punishable by imprisonment for six months.
This item does not commence until 28 days after the amending Act receives
Royal Assent. Accordingly, there is sufficient time for individuals to
become aware of the new offence created by this provision before it comes
into effect.
New subsection 128A(5) requires the Principal Member, when sending a notice
to a person, requiring them to provide information or a document, to notify
the person of the effect of the offence provisions in subsection 128A(4)
and in sections137.1 and 137.2 of the Criminal Code.
New section 128B makes it clear that any of the members making up the panel
for the purposes of the review, or a member of the staff of the SSAT, may
inspect a document produced in accordance with section 128A and may make
and retain copies of the whole or a part of the document.
New section 128C provides that any of the members making up the panel for
the purposes of the review, or a member of the staff of the SSAT, may
retain a document produced for as long as necessary. However, provision is
made for the SSAT to supply a certified copy to the person otherwise
entitled to possession of the document. Until a certified copy is
supplied, the SSAT must provide the person with reasonable access to the
document, to allow the person to inspect and make copies of the document.
Subsection 128C(3) provides that the certified copy provided by the SSAT is
to be accepted in all courts and tribunals as evidence as if it were the
original document.
Pre-hearing conferences
Item 2 inserts new Subdivision BC into Division 3 of Part 5 of the Family
Assistance Administration Act, which comprises new sections 129A and 129B.
New section 129A empowers the Principal Member to convene a conference
before the hearing of the review if they consider that it would assist in
the conduct and consideration of that review. At the pre-hearing
conference, the Principal Member may fix a day, or days, for the hearing,
give directions about the time within which submissions are to be made,
give directions about the time within which evidence is to be brought, and
give directions about what evidence is to be brought before the tribunal.
Further, the Principal Member may make an order directing a party who is
present at a conference not to disclose information obtained at the
conference. This is in line with existing section 133, which provides for
orders to be made restricting disclosure of information obtained in the
course of the hearing.
Section 129A(5) provides that a breach of the non-disclosure order made
under subsection 129A(4) will be a criminal offence, punishable by
imprisonment for two years, in line with existing non-disclosure provisions
in the Child Support Registration and Collection Act. This item does not
commence until 28 days after the Act receives Royal Assent. Accordingly,
there is sufficient time for individuals to become aware of the new offence
created by this provision before it comes into effect.
New section 129B provides that, if:
. parties to a review reach agreement about all or part of the review;
and
. before the hearing commences, they lodge written and signed terms of
agreement; and
. the SSAT has the power to make a decision in line with the agreement;
then the SSAT can make a decision in accordance with the terms of agreement
without the need to hold a hearing.
If the terms of the agreement relate to only part of the matter to be
reviewed, then the SSAT can make those terms part of their decision and not
deal with those aspects of the review in the balance of the hearing.
Presiding members
Item 3 repeals current section 137 and substitutes a new section 137, which
provides that, if the SSAT is constituted by two or more members, the
Principal Member must designate one of those members as the member who is
to preside at the hearing of the review.
Without specifically providing for what is to occur in the case of one
member panels, it is intended that, where the SSAT is constituted by only
one member, that member would be the presiding member.
Single member panels
Item 4 inserts subsection 138(1A) before subsection 138(1). Currently,
section 138 sets out how differences of opinion between members of the
panel are to be settled. New subsection 138(1A) provides that section 138
is to apply only if the SSAT is constituted by two or more members.
The amendments in items 3 and 4 make it explicit that these provisions only
apply in the case of multi-member panels. This is to avoid any possible
interpretation that the legislation presumes there must always be two or
more members on a panel.
Correction of errors in decisions or statements of reasons
Item 5 inserts Subdivision F into Division 3 of Part 5, which creates new
section 141B. Subsection 141B(1) provides that, if the presiding member at
a review, or the Principal Member, is satisfied that there is an obvious
error in the text or written statement of reasons for an SSAT decision,
either the presiding member or the Principal Member may alter the text of
the decision or statement of reasons. Subsection 141B(2) provides that the
altered text of a decision, or statement, is taken to be the decision or
the statement of reasons of the SSAT.
Subsection 141B(3) provides examples of what might constitute obvious
errors in the text of a decision or statement of reasons, such as obvious
clerical or typographical errors, or inconsistency between the decision and
the statement. These examples are not intended to be exhaustive.
Social Security Administration Act
Power to obtain information or documents
Item 6 inserts new sections 165A, 165B and 165C into the Social Security
Administration Act, which empowers the Principal Member to require a person
to give information or document to the SSAT. New sections 165A to 165C
mirror new sections 128A to 128C, inserted by item 1 of this schedule into
the Family Assistant Administration Act, and the effect of these provisions
are explained above.
Pre-hearing conferences
Item 7 inserts new Subdivision BC into Division 4 of Part 4, which is made
up of new sections 166A and 166B. New section 166A and section 166B mirror
new section 129A and section 129B. inserted by item 2 of this schedule into
the Family Assistance Administration Act, and the effect of these
provisions is explained above.
Presiding members
Item 8 repeals section 173 and substitutes a new section 173, which
provides that, if the SSAT is constituted by two or more members, the
Principal Member must designate one of those members as the member who is
to preside at the hearing of the review.
Without specifically providing for what is to occur for one member panels,
it is intended that, in cases where the SSAT is constituted by only one
member, that member would be the presiding member.
Single member panels
Item 9 inserts subsection 174(1A) before subsection 174(1). Currently,
section 174 sets out how differences of opinion between members of the
panel are to be settled. New subsection 174(1A) provides that section 174
would apply only if the SSAT is constituted by two or more members.
The amendments in items 8 and 9 make it explicit that the provisions apply
only in the case of multi-member panels. This is to avoid any possible
interpretation that the legislation presumes that there must always be two
or more members on a panel.
Correction of errors in decisions or statements of reasons
Item 10 inserts new Subdivision F at the end of Division 4 of Part 4, which
consists of new section 177A. New section 177A mirrors new section 141B,
inserted by item 5 of this schedule into the Family Assistance
Administration Act, and the effect of that provision is explained above.
Single member panels
Items 11 to 13 amend subclauses 10(1) to (3) of Schedule 3, which provides
for the constitution of the SSAT for each hearing. The amendments replace
references to 'members who are', to 'member who is, or members who are', to
recognise the possibility that the SSAT may be constituted by a single
member for the purposes of a particular review.
Item 14 repeals subclause 12(1) of Schedule 3 and substitutes new
subclauses 12(1), 12(1A) and 12(1B). These new subclauses set out what is
to occur when a hearing of a review has been commenced or completed and a
member of the panel hearing a review ceases to be a member, or is otherwise
unable to continue to hear the review.
Where the review was being heard by a single member panel and the Principal
Member reconstitutes the panel under existing clause 10, the Principal
Member can direct that the reconstituted panel either complete the hearing
and the determination, or make the determination if the hearing has been
completed. Alternatively, the Principal Member can direct the new panel to
rehear the review. The directions that the Principal Member makes will
depend on the circumstances of the particular matter and the availability
of appropriate material to enable the reconstituted panel to complete the
hearing or make a determination.
If the unavailable member was one of a multi-member panel, the Principal
Member does not have to reconstitute the panel. If no direction is made
under clause 10 for a new panel, then the remaining member or members must
complete the hearing and/or determination.
If the Principal Member does reconstitute the panel, then the review must
be reheard by the reconstituted panel. This provision ensures that all
members of the panel have the same benefit of hearing the parties and
asking any necessary questions.
Items 3, 4, 8, 9, 11, 12, 13 and 14 are intended to make it clear that the
SSAT may be constituted by a single member for the purposes of a review.
Protection of SSAT members
Item 15 inserts subclause 21(1A) after subclause 21(1) of Schedule 3, to
provide that a person who is or has been a member of the SSAT must not be
required to give evidence to a court in relation to any SSAT review of a
decision. The subclause contains an expansion of the definition of court,
to include a tribunal, authority or person having the power to require the
production of documents or the answering of questions. This provision is
similar to the protection given to members of the Administrative Appeals
Tribunal and ensures the confidentiality of reviews at the SSAT level.
Application
Subitem 16(1) provides that the amendments made by items 1 to 4 and 6 to 9
apply in relation to applications for review that are made on or after the
commencement of those items, which will occur 28 days after the Act
receives the Royal Assent.
Subitem 16(2) provides that the amendments made by items 5 and 10 apply in
relation to decisions made on or after the commencement of those items,
which will occur 28 days after the Act receives the Royal Assent.
Subitem 16(3) provides that the amendment made by item 14 applies in
relation to hearings that commence on or after the commencement of that
item, which will occur 28 days after the Act receives the Royal Assent.
Saving - directions for constituting the SSAT
Item 17 provides that the amendments made by items 11, 12 and 13 do not
affect the validity of a direction given under subclause 10(1) of Schedule
3 to the Social Security Administration Act before the commencement of
those items.
Part 2 - Other amendments
Part 2 of this schedule contains amendments to the Family Assistance
Administration Act, the Child Support Registration and Collection Act and
the Social Security Administration Act, to put into effect changes to
titles of Executive Members and Directors, and the new position of
Assistant Senior Members.
Changes in titles of SSAT members
Items 18 to 130 and items 132 to 156 make amendments to the nomenclature
used in the legislation to reflect changes to the titles of SSAT members.
References to the Executive Director in the Family Assistance
Administration Act, Child Support Registration and Collection Act and the
Social Security Administration Act are all replaced with the new title of
'Principal Member'. References to Directors are replaced with the new
title of 'Senior Member' in the Family Assistance Administration Act, Child
Support Registration and Collection Act and the Social Security
Administration Act. These changes in nomenclature bring the titles used
for SSAT members into line with the titles used in other Commonwealth
tribunals such as the Administrative Appeals Tribunal.
New position of Assistant Senior Member
Item 131 inserts paragraph 1(ba) into Schedule 3 to the Social Security
Administration Act to provide that the SSAT also consists of such number of
Assistant Senior Members as are appointed in accordance with that Act.
Part 3 - Transitional provisions
Item 157 provides for definitions of the terms to be used in this part of
the amending schedule.
Existing members of the SSAT
Item 158 ensures that the changes in this bill will not impact on the
continued appointment of those individuals currently holding the offices of
Executive Director, Director or Assistant Director.
Subitem 158(1) provides that a person holding office as the Executive
Director of the SSAT is to be taken to have been appointed as Principal
Member on the commencement day (that is, 28 days after this Act receives
Royal Assent), for the balance of the person's term of appointment, and on
the same terms and conditions.
Subitem 158(3) provides that a person holding office of Director of the
SSAT is to be taken to have been appointed as a Senior Member on the
commencement day, for the balance of the person's term of appointment, and
on the same terms and conditions.
Subitem 158(5) provides that, if a person was appointed as a member of the
SSAT and was described in the instrument of appointment as an Assistant
Director of the SSAT, then the person is taken to have been appointed as an
Assistant Senior Member on the day this part of the amending schedule
commences, for the balance of the person's term of appointment, and on the
same terms and conditions.
Subitems 158(2), 158(4) and 158(6) make it clear that there is nothing
preventing amendments being made to the terms and conditions of appointment
of the Principal Member, Senior Members and Assistant Senior Members on or
after the commencement of this Act.
Operation of laws
Item 159 inserts a transitional provision. Subitems 159(1) and 159(2)
provide that, if a thing was done by the Executive Director or a Director
before the commencement day, the thing is taken to be done by the Principal
Member or Senior Member, as appropriate, for the purposes of the operation
of any law of the Commonwealth on or after the commencement day.
Subitem 159(3) provides that the Minister may, by writing, determine that
subitems 159(1) or 159(2) do not apply in relation to a specified thing
done.
Subitem 159(4) provides definitions of doing for the purposes of this item,
which includes the making of an instrument.
Subitem 159(5) provides that a determination made under subitem 159(3) is
not a legislative instrument. This provision is included to assist
readers, as the determination is not a legislative instrument within the
meaning of section 5 of the Legislative Instruments Act 2003. In other
words, this provision is merely declaratory of the law.
References in instruments
Item 160 inserts transitional provisions relating to instruments.
Subitem 160(1) provides that, where an instrument was in force prior to
commencement of this schedule and the instrument refers to the Executive
Director, the instrument has effect from the commencement of this schedule
as if the reference were a reference to the Principal Member. In a similar
way, subitem 160(2) provides that a reference to a Director in an
instrument is taken to be a reference to a Senior Member after the
commencement of this schedule.
Subitem 160(3) provides that the Minister may determine, in writing, that
subitems 160(1) and 160(2) do not apply to a specified reference.
Subitem 160(4) provides that a determination made under subitem 160(3) is
not a legislative instrument. This provision is included to assist
readers, as the determination is not a legislative instrument within the
meaning of section 5 of the Legislative Instruments Act 2003. In other
words, this provision is merely declaratory of the law
Substitution of Principal Member or Senior Member as a party to a legal
proceeding
Subitem 161(1) provides that, if the Executive Director was a party to any
proceedings pending in a court or tribunal before the commencement day, the
Principal Member is substituted for the Executive Director, from the
commencement day, as a party to the proceedings. Likewise, subitem 161(2)
provides that, if a person was a party to any proceedings, in their
capacity as a Director, pending in a court or tribunal before the
commencement day, the person in the capacity as a Senior Member is
substituted for the Director, from the commencement day, as a party to the
proceedings.
Reviews by SSAT
Item 162 provides that, if, before the commencement day, a person who was
the Executive Director or a Director was one of the members who constituted
the SSAT for the purposes of the review of a decision, and the SSAT had not
yet made its decision on the review, then, from the commencement day, that
person is taken to be one of the members who constitute the SSAT for the
purposes of the review in the capacity as the Principal Member or a Senior
Member as the case may be.
Regulations
Subitem 163(1) provides that the Governor-General may make regulations
prescribing matters required or permitted by this part of the amending
schedule to be prescribed or necessary or convenient to be prescribed for
carrying out or giving effect to the part. Subitem 163(2) provides that
the Governor-General may make regulations prescribing matters of a
transitional nature relating to amendments made by Part 2 of the amending
schedule.
Schedule 4 - Disposal of assets
Summary
This schedule will clarify that a gift that has been returned does not have
to be assessed as a deprived asset under the social security disposal of
assets provisions.
Background
Division 2 of Part 3.12 of the Social Security Act provides special rules
for the disposal of assets by a social security recipient under certain
circumstances.
Where a person disposes of one or more assets, with a total value in a
single year of more than $10,000, or $30,000 over a five-year period, the
value of the disposed asset is assessed as a deprived asset for means test
purposes. The deprived asset is deemed to earn income and the value of the
deprived asset is included in the person's assets, for assets test
purposes, for five years from the date of the disposal.
In circumstances where a disposed asset was subsequently returned to the
person, or the person later received adequate consideration for the asset,
it may be a harsh outcome for the person if the deprived asset were to
continue to be assessed in relation to the earlier disposal. This is
because the deprived asset would continue to be assessed for five years
from the date of the disposal, together with the returned asset or the
value of the consideration received being assessed from the date the person
received or reacquired it.
This schedule makes amendments to make it clear that, where the disposed
asset, or consideration for the value of the asset, is returned to the
person, deprivation should not apply. In addition, where a person
partially reacquires an asset that was previously disposed of by the
person, deprivation should not apply in relation to the portion of the
asset that has been reacquired.
The amendments made by this schedule commence on the day after Royal
Assent.
Explanation of the changes
Amendments of the Social Security Act
Items 1, 2 and 5 to 10 make consequential amendments to various provisions
of the social security law to take account of the fact that, where a person
has previously disposed of an asset for less than its full value, and this
disposal has been held against the person for the purposes of the social
security assets test, by virtue of any of sections 1126AA, 1126AB, 1126AC
and 1126AD, then it is possible that, subsequently, the assets test
treatment of this original disposal may have been affected by the operation
of new section 1126E.
Item 3 adds a note at the end of each of subsections 1126AA(2), 1126AB(2),
1126AC(2), 1126AD(2), 1126C(2) and 1126D(2), directing the reader to
section 1126E, which modifies the disposal of assets provisions in Division
2 of Part 3.12 of the Social Security Act.
Item 4 inserts new section 1126E into Division 2 of Part 3.12 of the Social
Security Act. New Section 1126E provides rules for modifying the disposal
of assets provisions in Division 2 in respect of certain assets that have
previously been assessed as deprived assets.
Subsection 1126E(1) applies in relation to an asset that has been disposed
of (the relevant disposal) by a person under Division 2 of Part 3.12 of the
Social Security Act if, because of this disposal, the amount (the current
amount) of the disposal (including an amount assessed under the new
section) is included in the value of the assets of a person (the affected
person). For the relevant purposes, during the five-year period referred
to in subsection 1126AA(2), 1126AB(2), 1126AC(2), 1126AD(2), 1126C(2) or
1126D(2), one of the following events must occur:
. the person referred to in subsection 1126AA(1) or 1126AB(1) reacquires
the asset or receives consideration for the asset for the purpose of
section 1126AA or 1126AB;
. the person referred to in paragraph 1126AC(1)(a) or 1126AD(1)(a), or
the person's partner, individually or jointly with the partner
reacquires the asset or receives consideration for the asset for the
purpose of section 1126AC or 1126AD;
. the relevant person referred to in subsection 1126C(1) or 1126D(1)
reacquires the asset or receives consideration for the asset for the
purpose of section 1126C or 1126D.
The Secretary must be notified, in writing, of the event during that five-
year period.
Subsection 1126E(2) provides that the Secretary may, having regard to the
event, determine in writing that:
. from the start of the day on which the person notified the Secretary,
section 1126AA, 1126AB, 1126AC, 1126AD, 1126C or 1126D ceases to apply
in respect of the relevant disposal; or
. from the start of the day on which the person notified the Secretary,
the current amount is no longer to be included in the value of the
affected person's assets and, until the end of the five-year
deprivation period, the balance of the amount of the relevant disposal
(that is, the amount of the relevant disposal less the consideration
received or the value of the portion of the asset reacquired) is to be
included in the value of the affected person's assets. Paragraph
1126E(2)(b) provides for those situations where a person receives
partial consideration for the value of the disposed asset, so that the
deprivation provisions in Division 2 of Part 3.12 of the Social
Security Act cease to apply for the portion of the asset reacquired.
Subsection 1126E(3) provides that the Secretary must give the affected
person written notice of the determination.
Subsection 1126E(4) provides that a determination under subsection 1126E(2)
is not a legislative instrument. This provision is included to assist
readers, as the instrument is not a legislative instrument within the
meaning of section 5 of the Legislative Instruments Act 2003. In other
words, this provision is merely declaratory of the law.
Item 11 deals with the application of new section 1126E and provides that
section 1126E applies where consideration is received or a portion of the
disposed asset reacquired on or after the commencement of the amendment
(whether the original disposal referred to in paragraph 1126E(1)(a)
occurred before, on or after that commencement, noting that the
retrospective element in this application provision is beneficial to
customers).
Schedule 5 - Controlled private trusts
Summary
This schedule will clarify, for the purposes of the means test treatment of
private trusts, the requirements for an individual to pass the control test
in relation to a controlled private trust.
Background
Currently, under the trusts and companies rules in Part 3.18 of the Social
Security Act and Part IIIB of the Veterans' Entitlements Act 1986
(Veterans' Entitlements Act), paragraph 1207V(2)(d) of the Social Security
Act and paragraph 52ZZH(2)(d) of the Veterans' Entitlements Act provide
that an individual passes the control test if the aggregate of the
beneficial interests in the corpus or income of the trust held by the
individual (whether directly or indirectly), together with the beneficial
interests in the corpus or income of the trust held by associates of the
individual (whether directly or indirectly), is 50 per cent or more.
In the decision of the Federal Court, Elliot v Secretary, Department of
Education, Employment and Workplace Relations [2008] FCA 1293, the Federal
Court found that the beneficiary could not be said to have 'beneficial
interests' in the corpus or income of the trust under paragraph 1207V(2)(d)
of the Social Security Act (the equivalent of paragraph 52ZZH(2)(d) of the
Veterans' Entitlements Act). As this has the capacity to adversely affect
the operation of the trusts and companies rules, the Department of
Families, Housing, Community Services and Indigenous Affairs appealed the
decision to the Full Court of the Federal Court.
The Full Federal Court upheld the Federal Court's decision in Secretary,
Department of Families, Housing, Community Services and Indigenous Affairs
v Elliott [2009] FCAFC 37 (24 March 2009). The decision placed a
significant emphasis on the fact that, where a trust is discretionary and
non-exhaustive, it is not possible to measure the collective interests of
all existing members of the class (as the power to accumulate might be
exercised by the trustee), and that paragraph 1207V(2)(d) effectively
requires a measurement to be made of these collective interests.
It was always the intention of the trusts and companies rules that the
beneficiaries of a discretionary trust would pass the control test where a
group of beneficiaries, who are also 'associates', hold 50 per cent or more
of the interest in the corpus or income of the trust. For instance, in the
Elliott case, the trust was set up under a will by Mr Elliott's father for
the benefit of Mr Elliott and his wife or any grandchildren and their
descendants (the Elliotts have a daughter).
Although there are three (or more) possible beneficiaries, where, say, two
of those beneficiaries are associates and have an aggregate of 50 per cent
interest in the trust, though this may not be as strong as a 'beneficial
interest', the intention has always been that those beneficiaries would
pass the control test, even where, as in the Elliott case, the trustees
appear to have had an absolute discretion whether or not to make a
distribution of any kind.
This schedule also clarifies that similar situations as that in Cocks;
Secretary, Department of Family and Community Services [2002] AATA 1179
(1 November 2002), where a discretionary trust has been set up to look
after a particular person, but also provides an interest to a number of
other beneficiaries who do not receive a distribution of any kind, the
person would be considered to pass the control test. That is, in
determining whether an individual or associate has a 50 per cent interest
in the income or corpus of a trust, the person's interest at the time the
calculation is being done is the relevant interest.
These amendments clarify that, where a social security customer or
veterans' affairs pensioner is the beneficiary of a discretionary trust,
and the trustee of that trust has a duty to provide for the maintenance of
that customer or pensioner, even if the customer or pensioner receives a
social security payment or veterans' affairs pension, then the trust should
be assessed as being a controlled private trust in respect of that
beneficiary. It should not be relevant that there are other future
beneficiaries of the trust, when those parties are not currently receiving
any benefits from the trust.
The amendments made by this schedule commence on the day after Royal
Assent.
Explanation of the changes
Amendments of the Social Security Act
Item 1 inserts new paragraph 1207V(2)(ca) into subsection 1207V(2) of the
Social Security Act. Paragraph 1207V(2)(ca) provides that an individual
passes the control test in relation to a trust if the individual could
reasonably expect that, if the individual could not meet his or her
reasonable living expenses (within the meaning of 'reasonable costs of
living' in subsection 19C(5) of the Social Security Act), the trustee would
make an application to the individual of the corpus or income of the trust.
This provision is intended to cover circumstances in which an individual
could reasonably expect to receive an application of the corpus or income
of the trust made by a single trustee (where there is only one trustee) or
all of the trustees (where there are multiple trustees).
It is intended that paragraph 1207V(2)(ca) cover all trusts where the
trustee has the capacity to, and would be expected to, make a payment to
the relevant individual if that individual were in need. It is also
intended to capture situations where the terms of a trust were such that an
individual knowing the terms of the trust would reasonably have the
relevant expectation, but where the individual did not actually know about
those terms.
Item 2 inserts new paragraph 1207V(2)(da) into subsection 1207V(2) of the
Social Security Act. Paragraph 1207V(2)(da) provides that an individual
passes the control test in relation to a trust if the aggregate of the
individual, or individual and associates together, total 50 per cent or
more of the beneficiaries who are eligible to receive an application of the
corpus or income of the trust. The purpose of this provision is to ensure
that an individual will meet the control test where there is no beneficial
interest that can be quantified (for example, because the trustee is not
required to make applications of corpus or income), but the individual and
his or her associates together total more than 50 per cent of the eligible
beneficiaries at any particular point in time.
Item 3 inserts new subsections 1207V(2A) to 1207V(2E) into section 1207V of
the Social Security Act, which are intended to clarify what is meant by an
individual being eligible to receive an application of the corpus or income
of the trust for the purposes of new paragraph 1072V(2)(da).
New subsection 1207V(2A) provides that, if the trustee of the trust has a
discretion to make an application of the corpus or income of the trust to
the entity then, for the purposes of paragraph 1207V(2)(da), an entity is
eligible to receive an application of the corpus or income of the trust.
New subsection 1207V(2B) provides that, when an assessment is being made as
to whether an individual meets the requirements of subparagraph (2)(da)(i),
for the purposes of applying new paragraph (2)(da), the decision-maker
should look only at whether the individual in question was eligible to
receive an application of the corpus or income of the trust at a particular
time in the current year (only up to and including that particular time)
and the preceding financial year. The purpose of this subsection is to
ensure that a person is not so eligible at a point in time if a trustee
will only be able to exercise a discretion to make an application of the
corpus or income of the trust to the person from a particular point in time
in the future (for example, where a person becomes eligible to receive an
application of the corpus or income when another beneficiary dies or when
that person is born).
New subsection 1207V(2C) provides that, when an assessment is being made as
to whether an entity is an associate of an individual, for the purposes of
new subparagraph (2)(da)(ii), then the decision-maker should look only at
whether the entity in question was eligible to receive an application of
the corpus or income of the trust at a particular time in the current year
(only up to and including that particular time) and the preceding financial
year and was an associate of the individual in these same periods. The
purpose of new subsection 1207V(2B) is to ensure that a person is not so
eligible at a point in time if a trustee will only be able to exercise a
discretion to make an application of the corpus or income of the trust to
the person from a particular point in time in the future (for example,
where a person becomes eligible to receive an application of the corpus or
income when another beneficiary dies or when that person is born).
New subsection 1207(2D) provides that, when an assessment is being made
under new paragraph (2)(da) and part of this process requires an assessment
as to the number of entities that were eligible to receive an application
of the trust's corpus or income at any point in time, then the decision-
maker should take into account only these entities who were eligible for
such an application at any point in time during the current year (only up
to and including that particular time) or preceding financial year. This
means that a future beneficiary, who was not entitled to receive an
application in the two financial years in question, should not be taken
into account for the purposes of making the determination required by new
paragraph 2(da).
This subsection also covers those entities who are, according to the trust
deed, eligible to receive the corpus or income of the trust in stages. For
example, beneficiary A is entitled to receive an application of the corpus
or income of the trust in January, beneficiary B in February and
beneficiary C in March, etc. In these circumstances, beneficiaries A, B
and C would all be assessed as being eligible to receive an application of
the corpus or income of the trust during the current year (only up to and
including that particular time) and preceding financial year.
New subsection 1207V(2E) provides that none of the paragraphs in subsection
1207V(2) limits the interpretation of the other paragraphs in that
subsection.
Amendments of the Veterans' Entitlements Act
Item 4 inserts new paragraph 52ZZH(2)(ca) into subsection 52ZZH(2) of the
Veterans' Entitlements Act. Paragraph 52ZZH(2)(ca) provides that an
individual passes the control test in relation to a trust if the individual
could reasonably expect that, if the individual could not meet his or her
reasonable living expenses, the trustee would make an application to the
individual of the corpus or income of the trust. This provision is
intended to cover circumstances in which an individual could reasonably
expect to receive an application of the corpus or income of the trust made
by a single trustee (where there is only one trustee) or all of the
trustees (where there are multiple trustees).
It is intended that paragraph 52ZZH(2)(ca) cover all trusts where the
trustee has the capacity to, and would be expected to, make a payment to
the relevant individual if that individual were in need. It is also
intended to capture situations where the terms of a trust were such that an
individual knowing the terms of the trust would reasonably have the
relevant expectation, but where the individual did not actually know about
those terms.
Item 5 inserts new paragraph 52ZZH(2)(da) into subsection 52ZZH(2) of the
Veterans' Entitlements Act. Paragraph 52ZZH(2)(da) provides that an
individual passes the control test in relation to a trust if the aggregate
of the individual, or individual and associates together, total 50 per cent
or more of the beneficiaries who are eligible to receive an application of
the corpus or income of the trust. The purpose of this provision is to
ensure that an individual will meet the control test where there is no
beneficial interest that can be quantified (for example, because the
trustee is not required to make applications of the corpus or income), but
the individual and his or her associates together total more than
50 per cent of the eligible beneficiaries at any particular point in time.
Item 6 inserts new subsections 52ZZH(2A) to 52ZZH(2E) into section 52ZZH of
the Veterans' Entitlements Act, which are intended to clarify what is meant
by an individual being eligible to receive an application of the corpus or
income of the trust for the purposes of new paragraph 52ZZH(2)(da).
New subsection 52ZZH(2A) provides that, if the trustee of the trust has a
discretion to make an application of the corpus or income of the trust to
the entity then, for the purposes of paragraph 52ZZH(2)(da), an entity is
eligible to receive an application of the corpus or income of the trust.
New subsection 52ZZH(2B) provides that, when an assessment is being made as
to whether an individual meets the requirements of subparagraph (2)(da)(i),
for the purposes of applying new paragraph (2)(da), the decision-maker
should look only at whether the individual in question was eligible to
receive an application of the corpus or income of the trust at a particular
time in the current tax year (only up to and including that particular
time) and the preceding tax year. The purpose of this subsection is to
ensure that a person is not so eligible at a point in time if a trustee
will only be able to exercise a discretion to make an application of the
corpus or income of the trust to the person from a particular point in time
in the future (for example, where a person becomes eligible to receive an
application of corpus or income when another beneficiary dies or when that
person is born).
New subsection 52ZZH(2C) provides that, when an assessment is being made as
to whether an entity is an associate of an individual, for the purposes of
new subparagraph (2)(da)(ii), then the decision-maker should look only at
whether the entity in question was eligible to receive an application of
the corpus or income of the trust at a particular time in the current tax
year (only up to and including that particular time) and the preceding tax
year and was an associate of the individual in these same periods. The
purpose of new subsection 52ZZH(2B) is to ensure that a person is not so
eligible at a point in time if a trustee will only be able to exercise a
discretion to make an application of the corpus or income of the trust to
the person from a particular point in time in the future (for example,
where a person becomes eligible to receive an application of the corpus or
income when another beneficiary dies or when that person is born).
New subsection 52ZZH(2D) provides that, when an assessment is being made
under new paragraph (2)(da) and part of this process requires an assessment
as to the number of entities that were eligible to receive an application
of the trust's corpus or income at any point in time, then the decision-
maker should take into account only these entities who were eligible for
such an application at any point in time during the current tax year (only
up to and including that particular time) or preceding tax year. This
means that a future beneficiary, who was not entitled to receive an
application in the two tax years in question, should not be taken into
account for the purposes of making the determination required by new
paragraph 2(da).
This subsection also covers those entities who are, according to the trust
deed, eligible to receive the corpus or income of the trust in stages. For
example, beneficiary A is entitled to receive an application of the corpus
or income of the trust in January, beneficiary B in February and
beneficiary C in March, etc. In these circumstances, beneficiaries A, B
and C would all be assessed as being eligible to receive an application of
the corpus or income of the trust during the current tax year (only up to
and including that particular time) and preceding tax year.
New subsection 52ZZH(2E) provides that none of the paragraphs in subsection
52ZZH(2) limits the interpretation of the other paragraphs in that
subsection.
Schedule 6 - Baby bonus
Summary
This schedule introduces a new requirement for an individual to notify if a
child for whom baby bonus is paid leaves the individual's care within
26 weeks beginning on the day of the child's birth or the day the child is
entrusted to care.
Background
Baby bonus is a per-child payment that recognises the extra costs
associated with a newborn child, an adopted child or a child entrusted to
the care of an individual. Baby bonus is generally paid in 13 equal
fortnightly instalments.
Under this schedule, an individual who is granted payment of baby bonus for
a child will be required to notify the Secretary if the child leaves the
individual's care within 26 weeks of the child's birth or being entrusted
to care, with the result that the child is no longer an FTB child of the
individual.
This new notification requirement will apply to parents of the child as
well as individuals into whose care a child is entrusted.
The notification requirement will assist the Secretary to review the amount
of baby bonus payable to an individual where there is a change of care that
results in another individual also being eligible for baby bonus for the
same child. The individual's payment will be reassessed when a decision is
made that another individual is also eligible for baby bonus for the child
under subsection 37(3) of the Family Assistance Act. The Secretary will
determine each individual's percentage of baby bonus. If an individual is
timely in complying with the requirement to notify a change in care, this
will help to reduce the risk of being overpaid.
The amendments made by this schedule commence on 1 July 2010 or the day
after Royal Assent, whichever is the later.
Explanation of the changes
Amendment of the Family Assistance Administration Act
Item 1 inserts a new section 47B, which sets out a new notification
requirement for baby bonus.
New subsection 47B(1) sets out the circumstances where an individual is
subject to the new notification requirement. This is where:
. an individual who is a parent or has been entrusted with the care of a
child claims baby bonus;
. there is a change in care within 26 weeks of the child's birth or
being entrusted to care, which has the effect that the child is no
longer an FTB child of the individual; and
. the individual is determined to be entitled to baby bonus, and is
notified of his or her entitlement either before or after the change
in care.
Under subparagraph 47B(2)(b)(i), if that change in care occurs before the
claimant is notified of his or her entitlement to baby bonus, then the
individual is required to notify the Secretary of the change in care as
soon as practicable after receiving the entitlement notice. Under
subparagraph 47B(2)(b)(ii), if that change in care occurs after
notification of entitlement, then the individual is required to notify the
Secretary of the change in care as soon as practicable after that change in
care.
New section 47C is also inserted by item 1. This section provides that the
manner of notification must be approved by the Secretary, with the
requirement that the Secretary notify, by written notice, the individual of
the approved manner of notification. The individual is required to notify
the Secretary of the change in care in the manner set out in the written
notice given under new section 47C (new paragraph 47B(2)(a) refers).
The amendment made by item 1 (the new notification requirement) applies in
relation to claims made on or after commencement of the new requirement
(item 2 refers).
Schedule 7 - Other amendments
Summary
This schedule makes further amendments to portfolio legislation to address
minor anomalies and technical errors.
Consequential amendments are made to maintenance income definitions in the
Family Assistance Act flowing from the Same-Sex Relationships (Equal
Treatment in Commonwealth Laws-General Law Reform) Act 2008 (Same-Sex Act).
Consequential amendments are made to the concept of receiving in the Family
Assistance Act to take account of the family tax benefit (FTB) Part B
income test.
A minor amendment is made to the Family Assistance Administration Act to
streamline the process for claiming FTB for a past period.
This schedule also makes a number of minor and technical amendments to the
Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act),
to notes at the end of the method statements at the beginning of Pension
Rate Calculators A, C and D of the Social Security Act to rectify some
outdated references, and to repeal some redundant, or no longer required,
provisions in the social security law.
Background
Amendments of the Family Assistance Act
The Same-Sex Act amended various Commonwealth laws to address
discrimination against same-sex couples and their children. Part 2 of
Schedule 6 amended provisions in the Family Assistance Act and the Family
Assistance Administration Act from 1 July 2009.
The terms relationship child and relationship parent were introduced and
then incorporated, as appropriate, into specific family assistance
provisions. These terms are defined in subsection 3(1) of the Family
Assistance Act by reference to the Social Security Act. Under subsection
5(25) of the Social Security Act, if someone is a child of a person because
he or she is a child of the person within the meaning of the Family Law Act
1975 and he or she is not a biological or adopted child of the person, then
the child is the relationship child of the person and the person is the
relationship parent of the child.
However, there are also a number of maintenance-related definitions in the
Family Assistance Act that currently refer to a parent or a natural or
adopted child but not a relationship child or relationship parent.
Amendments are made to address this anomaly.
The definitions of maintenance income and disability expenses maintenance
are also amended to remove erroneous references to maintenance income
received from a partner. The intended policy is for these definitions to
refer to maintenance income received from a former partner, and the
reference to a current partner is not intended.
The other amendments to the Family Assistance Act made by this schedule
relate to the concept of receiving and the application of the FTB Part B
income test in clause 28B of Schedule 1 to the Family Assistance Act.
Clause 28B provides that an individual's FTB Part B rate is nil where the
primary earner in a couple, or a sole parent, has adjusted taxable income
of more than $150,000. However, this rule does not apply where the
individual or their partner is receiving a social security pension, a
social security benefit, a service pension or an income support supplement.
A similar exemption applies in relation to the FTB Part A income test for
Methods 1 and 3 (as set out in clauses 1 and 38L of Schedule 1).
The concept of receiving is defined in subsection 3(1) of the Family
Assistance Act. Generally, a person is receiving a social security payment
from the earliest to the latest day on which the payment is payable.
However, for the purposes of clauses 1 and 38L (and other specified
provisions), there is an extended meaning such that a person can still be
receiving a social security pension or a social security benefit where
employment income precludes payment, where a compliance penalty period
applies and where payment has been suspended because the person has not
complied with a schooling requirement under Part 3C of the Social Security
Administration Act. Amendments are made so that the extended meaning also
applies in relation to the FTB Part B income test.
These amendments commence on the day after Royal Assent.
Amendment of the Family Assistance Administration Act
This schedule makes a minor amendment to section 10 of the Family
Assistance Administration Act to streamline the process for claiming FTB
for a past period.
New section 32AE of the Family Assistance Administration Act will commence
on 1 July 2010 (item 6 of Schedule 2 to the Family Assistance Amendment
(Further 2008 Budget Measures) Act 2009 refers). This section will apply
where a claimant has three subsection 28(2) variations and they and/or
their partner have not lodged income tax returns for the relevant years.
Where this occurs, the claimant and partner (while partnered with the
claimant) will not be entitled to receive FTB based on an estimate of
income. For those years when the claimant is not entitled to be paid based
on an estimate of income, they can be paid FTB based on actual income if
they make a past period claim following the end of the income year.
Section 10 of the Family Assistance Administration Act provides for
restrictions on claims for FTB for a past period. Subsection 10(4)
provides that a claim for a past period is not effective unless the claim
is accompanied by a claim for payment of FTB by instalment where a claimant
and/or their partner received a social security benefit, social security
pension, service pension or income support supplement (income support
payments) during the past period and, at the time the past period claim is
made, they are receiving an income support payment, they are eligible for
FTB and they are not prevented by section 9 of the Family Assistance
Administration Act from making an effective claim for payment of FTB by
instalment.
This may result in an administrative anomaly for claimants who are income
support payment recipients and are not entitled to FTB based on an estimate
because of the application of section 32AE. These claimants are required
under subsection 10(4) to make an instalment claim with their past period
claim for FTB in order to be paid for the past period, despite the fact
that the instalment claim cannot be granted. An amendment is made to
section 10 that addresses this anomaly.
This amendment commences on 1 July 2010 (when section 32AE also commences)
or the day after Royal Assent, whichever is the later.
Amendments of the Corporations (Aboriginal and Torres Strait Islander)
Act 2006 (CATSI Act)
Some of the amendments in this schedule are minor corrections to the
CATSI Act. These amendments are mainly technical and correct faulty cross-
references, numbering and grammatical errors, and similar problems. The
remaining amendments to the CATSI Act address minor anomalies, as described
below.
These amendments commence on the day after Royal Assent. There are express
application provisions for three items to ensure there is no retrospective
effect caused by these items.
Amendments of the social security law
The other amendments in this schedule are technical amendments to the
social security law to repeal redundant, or no longer required, provisions
and references, and to correct certain cross-references. For example,
minor amendments to notes at the end of the method statements at the
beginning of Pension Rate Calculators A, C and D are needed to simplify the
reference to section 1210 and to remove unnecessary references to how
remote area allowance is added in the rate calculation process.
These amendments commence on the day after Royal Assent.
Explanation of the changes
Amendments of the Family Assistance Act
The concept of maintenance income, as defined in subsection 3(1) of the
Family Assistance Act, includes child maintenance and direct child
maintenance that is received from a parent of the child or the partner or
former partner of a parent of the child, but does not include disability
expenses maintenance. In this context, 'parent' takes on its ordinary
meaning, which would not include a relationship parent as defined in the
Social Security Act.
Items 1 and 3 insert references to relationship parent into paragraphs (a)
and (c) of the definition of maintenance income so that any child
maintenance or direct child maintenance received from a relationship parent
or a former partner of a relationship parent of the child is also
maintenance income.
As a matter of policy, the maintenance income test is not intended to refer
to child maintenance or partner maintenance received from their partner or
to direct child maintenance received by an FTB child from the partner of
the individual. The intended policy is for these definitions to refer to
maintenance income received from a former partner, and the reference to a
current partner is not intended. The amendments made by items 1 to 3 also
remove relevant references to partner in the definition of maintenance
income to reflect this.
The concept of disability expenses maintenance is defined in subsection
19(3) of the Family Assistance Act. The concept covers payments or
benefits provided for expenses directly arising from a disability or
learning difficulty. Paragraph (d) of the definition refers to a payment
or benefit received from a parent of the child or the partner or former
partner of a parent of the child. Payments or benefits received from a
relationship parent or the former partner of a relationship parent are not
currently included in that definition. Item 6 reworks paragraph 19(3)(d)
so that it applies to relationship parents in the same way as parents.
Further, the definition will no longer refer to payments or benefits
received from the partner of a parent, consistent with the policy described
above.
Deductible child maintenance expenditure reduces the amount of an
individual's adjusted taxable income. Under subclause 8(2) of Schedule 3,
an individual incurs child maintenance expenditure where, among other
things, a payer provides a payment or benefits in respect of the payer's
natural or adopted child. Item 7 broadens this provision so that it also
includes a payment or benefits in respect of the payer's relationship
child.
The FTB Part B income test in clause 28B of Schedule 1 does not apply to an
individual where the individual or their partner is receiving a social
security pension, a social security benefit, a service pension or an income
support supplement.
Items 4 and 5 amend the concept of receiving, as it applies in relation to
the FTB Part B income test. A reference to clause 28B is inserted into
paragraph (b) of the definition of receiving in subsection 3(1) and also
into paragraph 3AA(1)(b). The effect is that an individual will be taken
to be receiving a social security pension or benefit from the first to the
last day on which it is payable and also where employment income precludes
payment, where a compliance penalty period applies and where payment has
been suspended because the person has not complied with a schooling
requirement under Part 3C of the Social Security Administration Act.
Amendment of the Family Assistance Administration Act
Item 8 inserts a new subsection 10(5) into the Family Assistance
Administration Act. New subsection 10(5) provides that an instalment
claim, as currently required under paragraph 10(4)(f) of that Act, will not
be required if, at the time that a claimant makes a claim for a past
period, they are not entitled to be paid FTB based on an estimate of income
because of the application of subsection 32AE(2) or (3) of that Act.
Amendments of the CATSI Act
Item 9 corrects four cross-references in subsection 1-10(1) of the CATSI
Act. The cross-references become sections 516-1, 521-1, 526-35 and 526-40
of the CATSI Act, instead of subsections within those sections.
Item 10 corrects an error in paragraph 42-10(1)(a) of the CATSI Act by
substituting 'the person's' for 'his or her'. Aboriginal and Torres Strait
Islander corporations may have corporate members. The amended paragraph
confirms that a corporate member may specify its consent in the application
for registration and become a member on registration of the corporation.
Items 11 and 12 correct a cross-reference in the table in section 57-5 of
the CATSI Act, which lists the internal governance rules in the Act. The
provision reference for item 9 (Resolution of disputes) in the table is
corrected to 'subsection 66-1(3A)'. This item also becomes item 1A in the
table to maintain item order by provision reference.
Item 13 corrects an error in paragraph 138-1(1)(b) of the CATSI Act by
substituting 'the person's' for 'his or her'. Aboriginal and Torres Strait
Islander corporations may have corporate members. The amended paragraph
confirms that a body corporate may become a member of an Aboriginal and
Torres Strait Islander corporation if the body corporate agrees to become a
member of the corporation after the corporation's registration and the name
of the body corporate is entered in the corporation's register of members.
Item 14 corrects an error in subsection 138-1(2) of the CATSI Act by
substituting 'the person's' for 'his or her'. Aboriginal and Torres Strait
Islander corporations may have corporate members. The amended subsection
confirms that a body corporate becomes a member of an Aboriginal and Torres
Strait Islander corporation when its name is entered on the corporation's
register of members.
Item 15 corrects an error in paragraph 150-20(1)(b) of the CATSI Act by
substituting 'the person's' for 'his or her'. Aboriginal and Torres Strait
Islander corporations may have corporate members. The amended paragraph
confirms that the membership of a corporate member may be cancelled if the
body corporate member has not paid its membership fees (if any).
Item 16 inserts subsection 150-35(5) which makes the offence in the
previous subsection an offence of strict liability. It is appropriate for
this offence to be made an offence of strict liability. It is a minor
offence which does not involve dishonesty or serious imputation affecting a
person's reputation. It may be difficult for the prosecution to prove
fault by the directors in question. It provides a stronger incentive for
the directors to inform a person that their membership has been cancelled
for misbehaviour.
It also brings this offence into line with similar offences in
subsections 150-25(5) and 150-30(5) of the CATSI Act, where failure by the
directors to notify a person of the cancellation of their membership as
soon as practicable after the removal resolution has been passed are
offences of strict liability.
The application provision in subitem 26(1) provides for this amendment to
apply to membership cancellations occurring on or after the commencement of
item 16.
Item 17 corrects 'contact officer' to 'contact person' in paragraph 201-
25(1)(d) of the CATSI Act. Aboriginal and Torres Strait Islander
corporations registered as small or medium size corporations must have a
contact person.
Item 18 corrects the cross-reference in subsection 220-10(7) of the CATSI
Act to 'subsection (3), (4) or (5)' by substituting 'subsection (3), (5) or
(6)'.
Item 19 corrects the reference in section 262-1 of the CATSI Act to
'section 558G' of the Corporations Act 2001 to 'section 588G' of that Act.
Item 20 inserts the missing word 'Islander' in subsection 279-1(1) of the
CATSI Act after the words 'managing Aboriginal and Torres Strait'.
Item 21 corrects '1 June' to '1 July' in subparagraphs 333-5(4A)(a)(i) and
(ii) of the CATSI Act. Subsection 333-5(4A) makes provision for the first
financial year for an existing body corporate registering under the Act.
For reporting purposes, the first financial year should commence on 1 July
for these corporations. This will be consistent with the financial year
reporting scheme under the Act.
The application provision in subitem 26(2) provides for this amendment to
apply to registrations of existing bodies corporate occurring on or after
the commencement of item 21.
Item 22 removes the second occurring 'or', which is extraneous, in
paragraph 456-10(1)(a) of the CATSI Act.
Item 23 corrects 'general return' to 'general report' in two places in
paragraph 546-5(1)(a) of the CATSI Act. Aboriginal and Torres Strait
Islander corporations prepare and lodge a general report each year.
Item 24 inserts ', the Australian Capital Territory' after 'of a State' in
subsection 589-5(8) of the CATSI Act. The same limits made in
subsection 589-5(8) to the jurisdiction of the courts of a State or the
Northern Territory concerning the CATSI Act should apply to the courts of
the Australian Capital Territory.
Item 25 substitutes 'this Act' for the reference to 'section 658-10' in
section 604-20 of the CATSI Act. All consultants engaged under the Act
(not just those engaged under section 658-10) will have an obligation to
protect 'protected information' from unauthorised use or disclosure by
them.
As contravention of section 604-20 of the CATSI Act is an offence
punishable by imprisonment of up to two years, the application provision in
subitem 26(3) ensures that item 25 does not have retrospective effect.
Item 25 applies to uses and disclosures of protected information on or
after its commencement (whether the persons were engaged as consultants
before, on or after that commencement).
Item 26 expressly provides when the amendments made by items 16, 21 and 25
will take effect. This ensures that these amendments do not have
retrospective effect and no person's rights are adversely affected by
retrospectivity.
Amendments of the Social Security Act
Item 27 repeals subsection 94(4A) and subsection 94(4B). These subsections
currently provide for making, and complying with, guidelines about certain
matters under section 94 (qualification for disability support pension).
The subsections are now repealed in light of the Job Capacity Assessment
Review 2008, which recommended that no guidelines be put in place. No
guidelines have ever been made, nor are proposed, under these subsections.
Accordingly, the two subsections are no longer required and are repealed to
avoid confusion.
Items 28, 30 and 32 repeal Note 2 from each of the method statements at the
beginning of Pension Rate Calculators A, C and D and add a new Note 2. The
new note simplifies the signposting of section 1210 by stating that
section 1210 deals with the application of income and assets test
reductions.
Items 29, 31 and 33 repeal notes from the method statements at the
beginning of Pension Rate Calculators A, C and D that dealt with how remote
area allowance is to be added in the rate calculation process. These notes
are unnecessary because the final steps in each of those Pension Rate
Calculators state clearly how remote area allowance is to be treated in the
rate calculation process.
Amendments of the Social Security Administration Act
Items 34 and 35 repeal, respectively, the redundant paragraphs 129(4)(b)
and 144(l). Both of those paragraphs had formerly operated solely for the
purposes of subection 129(2) (relating to giving notice to another party of
an application for internal review of a decision under subsection 91A(3) of
the Child Support (Assessment) Act 1989). However, subsection 129(2) was
repealed in 2000 when the subject area for review moved from the social
security law to the new family assistance law. Accordingly,
paragraphs 129(4)(b) and 144(l) were redundant and are now repealed.