Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
SOCIAL SECURITY AND FAMILY ASSISTANCE LEGISLATION AMENDMENT (WEEKLY
PAYMENTS) BILL 2010
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Requests for amendments to be moved on behalf of the Government
(Circulated by the authority of the
Minister for Families, Housing, Community Services and Indigenous Affairs,
the Hon Jenny Macklin MP)
SOCIAL SECURITY AND FAMILY ASSISTANCE LEGISLATION AMENDMENT (WEEKLY
PAYMENTS) BILL 2010
OUTLINE
These Government amendments address implementation issues in the new family
tax benefit (FTB) Part A participation requirements for 16 to 20 year olds,
arising from the delay in introduction of the youth allowance reforms until
1 July 2010. The participation requirements for FTB children aged 16 to 20
were introduced by the Family Assistance Legislation Amendment
(Participation Requirement) Act 2009 (the amending Act) late last year.
The amendments do not affect the substantive elements of this Bill - the
introduction of weekly payments in the social security and family
assistance systems. Rather, they change the application, to different
parts of the family assistance law, of some of the amendments made by the
amending Act. The amending Act introduced a participation requirement for
FTB children aged 16 to 20 years. A new FTB activity test commenced on 1
January 2010 but has progressive application.
These new amendments amend the application and transitional provisions of
the new FTB Part A participation requirements so these requirements will
not affect, until 1 July 2010, existing FTB instalment customers who
claimed their FTB before 1 January 2010. The new rules continue to apply
to people who became new customers from 1 January 2010.
This delay is due to the introduction of the youth allowance reforms,
particularly the changes to the youth allowance parental income test.
Financial impact statement
The estimated financial impact of changing the start date of the
participation requirement to 1 July 2010 for existing customers is $21.3
million in Total Resourcing over four years from 2009-10.
SOCIAL SECURITY AND FAMILY ASSISTANCE LEGISLATION AMENDMENT (WEEKLY
PAYMENTS) BILL 2010
Government Amendments
The following amendments add a new Schedule 3 to the Bill and make
consequential changes to the commencement provision in clause 2 of the
Bill. The new Schedule 3, in turn, amends the application and transitional
rules in Schedule 1 to the amending Act.
Changes to Youth Allowance included in the Social Security and Other
Legislation Amendment (Income Support for Students) Bill 2009 (the Students
Bill) were expected to come into effect on 1 January 2010.
The changes to the youth allowance parental income test, included in the
Students Bill, would have resulted in around 65,000 FTB Part A children
aged 16-20 becoming eligible for youth allowance.
The youth allowance legislation has not yet passed through Parliament and
amended legislation with a new start date of 1 July 2010 is expected to be
debated in the 2010 Autumn sitting.
Of the 65,000 FTB children who were expected to move to youth allowance
from 1 January 2010 as a result of the changes to the youth allowance
parental income test, around 10,000 are thought to be undertaking a
combination of study and work activities. With a 1 May start date for the
FTB Part A participation requirement, these young people will lose
eligibility for FTB Part A and need to wait two months until they can
access youth allowance under the new parental income test.
To ensure these FTB children continue to be eligible for government
assistance, it is proposed to postpone the start date to 1 July 2010 to
align with the introduction of the youth allowance amendments.
A postponement will also mean around 8,300 young people who will not meet
the participation requirement will remain eligible for FTB Part A until
1 July 2010.
NOTES ON AMENDMENTS
Amendment 1 amends the commencement provision in clause 2 of the Bill.
Schedules 1 and 2 (weekly payments) will continue to commence on Royal
Assent. Schedule 3 will commence immediately after the commencement of
Schedule 1 to the amending Act (1 January 2010). However, the changes made
by Schedule 3 are to the application and transitional provisions in the
amending Act and will not affect the entitlement of FTB instalment
customers who claimed their FTB before 1 January 2010 before 1 July 2010.
Amendment 2 adds a new Schedule 3 to the Bill.
New Schedule 3 makes three amendments to the application and transitional
rules in Part 2 of Schedule 1 to the amending Act.
The first amendment is to replace the current reference to 1 May 2010 in
subitem 13(2) with a reference to 1 July 2010. This amendment ensures that
the FTB participation measure will not affect until 1 July 2010 those
existing FTB instalment customers who claimed their FTB before 1 January
2010.
The second amendment is a similar consequential change to subitem 14(1).
The third amendment is to subitem 14(3) to extend the transition period so
that it applies from 1 January 2010 until 30 June 2010 (instead of the
current 30 April 2010). This change will enable the Secretary to require
the provision of information or production of a document relevant to the
new FTB activity test up to the time that the measure starts applying to
FTB instalment customers who claimed their FTB before 1 January 2010.
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