Commonwealth of Australia Explanatory Memoranda

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SOCIAL SERVICES LEGISLATION AMENDMENT (FAMILY PAYMENTS STRUCTURAL REFORM AND PARTICIPATION MEASURES) BILL 2015

                      2013-2014-2015




THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




             HOUSE OF REPRESENTATIVES




     SOCIAL SERVICES LEGISLATION AMENDMENT
    (FAMILY PAYMENTS STRUCTURAL REFORM AND
        PARTICIPATION MEASURES) BILL 2015




    SUPPLEMENTARY EXPLANATORY MEMORANDUM




  Amendments to be moved on behalf of the Government




              (Circulated by the authority of the
 Minister for Social Services, the Hon Christian Porter MP)

                 SOCIAL SERVICES LEGISLATION AMENDMENT
                (FAMILY PAYMENTS STRUCTURAL REFORM AND
                    PARTICIPATION MEASURES) BILL 2015

             Amendments to be moved on behalf of the Government

OUTLINE

Removal of measures

These Government amendments remove from the Bill the following Schedules:

      Schedule 1 (Payment rates); and
      Schedule 3 (Family tax benefit supplements).

Further, Government amendments are made to Schedule 2 to remove amendments
that would:

      increase the standard rate by $1,000.10 per year for families with a youngest
       child aged under one; and
      introduce a reduced standard rate of $1,000.10 per year for single parent
       families with a youngest child aged 13 to 16 (currently $2,737.50), and extend
       this rate to grandparent carers with a youngest FTB child in this age range.

The measures being removed from this Bill will be reintroduced in a separate Bill.

Reforms to family tax benefit Part B

The measure currently provided by Schedule 2 (Family tax benefit Part B rate)
to remove family tax benefit Part B for couple families (other than grandparents) with
a youngest child aged 13 or over from 1 July 2016 will proceed in this Bill. It will also
be made clear that great-grandparent couple families, as well as grandparent couple
families, will not be affected by the measure.

Therefore, single parents, grandparents and great-grandparents caring for a
youngest child aged 13 to 18 will continue to be eligible for the family tax benefit
Part B standard rate of $2,737.50 (excluding the end-of-year supplement). However,
the standard rate of family tax benefit Part B for families with a youngest child aged
under one will also not be increased by $1,000.10 per year.

Financial impact statement

The net savings from the removed measures will not be realised in this Bill.

The revised financial impact of the reforms to family tax benefit Part B in this Bill is a
saving of $525.5 million over the forward estimates (indicative, fiscal balance, whole
of Government).

                SOCIAL SERVICES LEGISLATION AMENDMENT
               (FAMILY PAYMENTS STRUCTURAL REFORM AND
                   PARTICIPATION MEASURES) BILL 2015


            Amendments to be moved on behalf of the Government

NOTES ON AMENDMENTS

Amendment 4 omits Schedule 1 from the Bill. Schedule 1 provides for an increase
in family tax benefit Part A fortnightly rates and certain social security rates for
under-18 year olds. Amendment 1 makes a consequential amendment to the long
title of the Bill to remove the reference to social security.

Amendment 10 omits Schedule 3 from the Bill. Schedule 3 provides for the phasing
out of the family tax benefit Part A and Part B supplements.

Amendments 2 and 3 are consequential amendments that remove the
commencement provisions relating to Schedules 1 and 3 from the table in clause 2
of the Bill.

Under the current rules, an FTB child who has turned 16 is disregarded for the
purposes of family tax benefit Part B unless they are a senior secondary school child
(as defined in section 22B of the Family Assistance Act) and the calendar year in
which the child turned 18 has not ended. The amendments made by items 1 to 3 of
Schedule 2 to the Bill modify these rules so that an FTB child is disregarded for the
purposes of family tax benefit Part B unless they are a senior secondary student and
the calendar year in which the child turns 16 has not ended. Amendment 5 omits
these items. The effect is to restore the current rules to single parent families and
grandparent and great-grandparent carers.

Amendments 6 and 7 insert references to great-grandparents into relevant
provisions in new clause 28D, as inserted by item 4 of Schedule 2. This will ensure
that great-grandparents (as well as grandparents) can continue to access family tax
benefit Part B after their youngest FTB child has turned 13.

Items 5 to 9 in Schedule 2 to the Bill insert a new standard rates table for family tax
benefit Part B and make other related amendments. Amendment 8 omits these
items. This means that the standard rate (Part B) for single parent families and
grandparent or great-grandparent carers with a youngest child who is at least
13 years of age will be the same as the rate attracted by a youngest child who is
aged five to 12. There will be no new reduced rate for a youngest FTB child who has
turned 13. However, the standard family tax benefit Part B rate for a youngest child
aged under one will also not be increased.

Amendment 9 makes a consequential amendment to the application provision to
remove subitem 10(2).
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