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1998-99
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
YOUTH ALLOWANCE CONSOLIDATION BILL 1999
EXPLANATORY MEMORANDUM
(THIS EXPLANATORY MEMORANDUM TAKES ACCOUNT
OF
AMENDMENTS TO THE BILL MADE BY
THE HOUSE OF REPRESENTATIVES)
(Circulated by the authority of the Minister for Family and
Community Services,
Senator the Hon Jocelyn Newman)
ISBN: 0642 39198X
YOUTH ALLOWANCE CONSOLIDATION BILL 1999
OUTLINE AND FINANCIAL IMPACT STATEMENT
This Bill follows up the 1998 youth allowance legislation package,
which comprised:
• the Social Security Legislation Amendment
(Youth Allowance) Act 1998;
• the Social Security
Legislation Amendment (Youth Allowance Consequential and Related Measures) Act
1998;
• the Social Security (Fares Allowance) Rules
1998 (a disallowable instrument);
• the Social
Security Student Financial Supplement Scheme 1998 (also a disallowable
instrument); and
• the Social Security (Family Actual Means
Test) Regulations 1998.
The Bill has two purposes. The first is
to incorporate into the Social Security Act 1991 provisions
currently contained in the three major pieces of subordinate legislation
mentioned above. As a general principle, those provisions are to be moved
without making any change in their effect. Those provisions themselves were
originally set up with the intention of preserving the effect of the
pre-existing AUSTUDY provisions so that students did not suffer any disruption
to their payments because of the youth allowance changes, which happened half
way through the academic year.
The other main purpose of the Bill is to
deal with any technical issues identified during the implementation of the youth
allowance package.
The Bill will also make consequential amendments to
reflect the new placement and structure of the relocated provisions and as a
consequence of the commencement of youth allowance.
Schedule 1 – Fares allowance
This Schedule amends the Social Security Act 1991 to
incorporate the provisions currently contained in the Social Security
(Fares Allowance) Rules 1998.
Date of effect: Royal
Assent
Financial
impact: 1998-99 Nil
1999-00 Nil
2000-01 Nil
Schedule 2 – Student financial supplement scheme
This Schedule amends the Social Security Act 1991 to
incorporate the provisions currently contained in the Social Security
Student Financial Supplement Scheme 1998.
Date of effect: Royal
Assent
Financial
impact: 1998-99 Nil
1999-00 Nil
2000-01 Nil
Schedule 3 – Family actual means test
This Schedule amends the Social Security Act 1991 to
incorporate the provisions currently contained in the Social Security
(Family Actual Means Test) Regulations 1998.
Date of
effect: Royal AssentFinancial
impact: 1998-99 Nil
1999-00 Nil
2000-01 Nil
Schedule 4 – Youth allowance and austudy payment
This Schedule amends the Social Security Act 1991 to make
various amendments addressing technical issues identified during the
implementation of the youth allowance package.
Date of effect: Various
datesFinancial impact: 1998-99 Negligible
1999-00 $0.31m.
(savings)
2000-01 $1.16m. (savings)
Schedule 5 – Youth allowance and the student financial supplement scheme
This Schedule amends the Data-matching Program (Assistance and Tax)
Act 1990, the Income Tax Assessment Act 1936, the
Taxation (Interest on Overpayments and Early Payments) Act 1983
and the Taxation Administration Act 1953 to reflect the new
placement and structure of the provisions relocated by Schedule 2. It
also amends the Farm Household Support Act 1992 as a consequence
of the commencement of youth allowance.
Date of effect: Various
datesFinancial impact: 1998-99 Nil
1999-00 Nil
2000-01 Nil
PRELIMINARY
Clause 1 of the Youth Allowance Consolidation Bill 1999 sets
out how the amending Act is to be cited.
Clause 2 specifies that the
amending Act commences on Royal Assent, subject to certain exceptions
specified.Clause 3 provides that each Act that is specified in a Schedule
to the amending Act is amended or repealed in accordance with the applicable
items in those Schedules.
Schedule 1 – Fares allowance
1. Summary of proposed changes
This Schedule amends the Social Security Act 1991 (the Social
Security Act) to incorporate the student fares allowance provisions currently
contained in the Social Security (Fares Allowance) Rules 1998 (the
Fares Allowance Rules). Those Rules will lapse on the repeal by this Schedule
of the present enabling provision.
2. Background
As a general principle, the fares allowance provisions are to be moved in
this way without making any change in their effect. Those provisions themselves
were originally set up with the intention of preserving the effect of the
pre-existing AUSTUDY provisions so that students did not suffer any disruption
to their payments because of the youth allowance changes, which happened half
way through the academic year.
However, the new fares allowance provisions
have been drafted on the basis that:
• the drafting style and
structure of the new provisions be more in keeping with the rest of the Social
Security Act, including the standard provisions already set up
there;
• modifications be made to certain of the provisions to
improve their structure and clarify their intent; and
• certain
technical and other minor changes be made to ensure that the original AUSTUDY
provisions are correctly reflected and to refine certain aspects of the
provisions, as outlined in detail below.
For the most part, there is no
change in effect between the provisions of the Fares Allowance Rules and those
of the new Part 2.26. Only the following technical and minor departures have
been made:
1 The provisions have been restructured on the basis of the
student’s qualification for each qualifying journey, rather than
“blanket” qualification for a range of journeys made within a
qualifying period (the change is in line with the pre-existing AUSTUDY
provisions).
2 A standard Social Security Act provision has been included
relating to claims by telephone, facsimile or computer to allow a student some
leeway when claiming close to the annual claim deadline of 1
April.
3 Provisions have been introduced to enable the Minister to update
the applicable rates of fares allowance by disallowable instrument. Such a
provision was not necessary previously since the rates, along with all other
provisions, were already included in subordinate legislation.
4 The
hardship test for the payment of fares allowance in advance of the journey has
been removed (in line with the pre-existing AUSTUDY provisions).
5 The
payment rules have been relaxed to allow a person who is qualified for fares
allowance but who is no longer receiving a student payment (fares allowance may
be paid some time after the study ceases) to have the allowance paid into a bank
account of his or her choice, rather than into the account into which the
student payment was paid.
6 The rule about the payment of fares allowance
after the student’s death has been relaxed so that this may occur even if
the student had not actually claimed the allowance before death (in line with
the pre-existing AUSTUDY provisions).
7 Because of 1 above, it has not
been necessary to retain a provision under which information may be gathered to
establish a student’s qualification – existing information gathering
arrangements will be sufficient.
3. Clauses and Schedule involved in the changes
Clause 2: provides the commencement rules for this
Schedule.
Clause 3: provides that each Act that is specified in
this Schedule is amended as set out in the Schedule.
Schedule 1 – Fares allowance
Items 1 and 2: make new entries in the index of definitions in
section 3.
Items 3 and 4: amend subsection
4(6A).
Item 5: inserts a new section 19AA to house fares
allowance definitions for the purposes of new Part 2.26, which is substituted by
item 8.
Items 6 and 7: repeal/substitute and insert,
respectively, relevant definitions in subsection 23(1).
Item
8: repeals existing Part 2.26 and substitutes a new, more comprehensive Part
comprising the detailed fares allowance provisions.
Items 9 to
28: amend relevant debt recovery provisions between sections 1222A and
1235.
Items 29 and 30: amend relevant information gathering
provisions, sections 1304 and 1307.
Item 31: amends section
1347.
Item 32: inserts a new clause 126 into Schedule 1A.
4. Explanation of the changes
Background
Fares allowance is available to a person who is either a full-time or
concessional study-load tertiary student and who is receiving either youth
allowance, austudy payment or pensioner education supplement. The allowance
comprises an amount to cover the cost of travel between a person’s
permanent home and his or her educational institution at the beginning and end
of the course and for certain journeys during the course of the study
year.
New section 19AA – Fares allowance definitions
Item 5 sets up a new section 19AA containing the definitions used
in new Part 2.26, which is substituted by item 8.
The definitions
contained in new subsection 19AA(2) are generally drawn from the Dictionary in
the Fares Allowance Rules.
New subsections 19AA(3) to (5) define a
person’s “permanent home”, drawn from section 1.5 in the Fares
Allowance Rules. The permanent home of a youth allowance recipient who is not
independent is the home of the parent whose income is assessed for the purpose
of determining the recipient’s rate of youth allowance. If the recipient
becomes independent during the study year due to turning 25, or meeting the
self-supporting criteria for independence, then the recipient’s permanent
home will continue to be the home of the parent whose income was assessed before
the recipient became independent.
If a parent has more than one home,
then the permanent home will be taken to be the home that the parent uses most
frequently. If the parent spends equal amounts of time in two or more homes,
then the youth allowance recipient must nominate one home as the permanent
home.
In all other situations, a person’s permanent home is the
person’s usual place of residence.
New subsection 19AA(7) provides
that a person is taken to be “required to live away from his or her
permanent home” if the person is not independent, does not live at his or
her permanent home and needs to live away in order to undertake the
person’s course.
New Part 2.26 – Fares allowance
Item 8 repeals the old Part 2.26, under which the Fares Allowance
Rules were made, and substitutes a new Part 2.26. Accordingly, the Rules will
lapse and will be replaced with the substantive provisions contained in the new
Part.
Division 1 – Qualification for fares allowance
This Division sets down the qualification criteria for fares
allowance.
First, the person must be undertaking an approved tertiary
course at an educational institution in Australia.
Second, the person
must be receiving either youth allowance, austudy payment or pensioner education
supplement. If the person is receiving youth allowance, it must be because the
person satisfies the activity test either by undertaking full-time study or by
complying with a Youth Allowance Activity Agreement, the only requirement of
which is to undertake an approved course of education or study. This latter
requirement ensures that only youth allowance recipients who are full-time or
concessional study-load students (as opposed to those who, for example, are
seeking work) are qualified for fares allowance.
Third, the person must
meet certain criteria relating to personal circumstances. The person’s
permanent home must be in Australia. As the first qualification criterion
provides that the educational institution must also be in Australia, fares
allowance will be available only for travel within
Australia.
Furthermore, the person must be someone who is required to
live away from his or her permanent home in order to undertake his or her course
of study. If the person is a youth allowance recipient, then the person must be
not independent and “required to live away from home” in order to be
qualified. If the person fitted into this category, and then during the study
year became independent because of turning 25 or meeting the self-support
criteria for independence, then the person will be qualified for fares
allowance, but only (in that capacity) for the remainder of that study
year.
Independent students will be qualified for fares allowance if they
live away from their permanent homes in order to undertake their course, but
must have a partner or dependent child who continues to live at that permanent
home. Also, a person who is enrolled as an external student
qualifies.
Fourth, the journey that attracts fares allowance must be a
journey specified in the Division. For a person who is not an external student,
this must be a journey from the person’s permanent home to his or her
educational institution to start the course, a journey from the person’s
educational institution to his or her permanent home on completing or
discontinuing the course, or a specified return journey during the study year
between the person’s permanent home and the educational institution. An
external student who must attend the institution as part of the course is
entitled to one return journey during the study year.
The last
qualification criterion is that the journey must have already been made or, if
not, that the Secretary is satisfied that the person intends to make it and that
the travel is to be provided by a commercial operator.
Division 2 – Making and determination of claim for fares allowance
This Division explains how a claim for fares allowance is made, and is
based on similar provisions for all payment types in the
Social Security Act.
A person who wants to be granted fares
allowance must make a proper claim for the allowance, that is, one that is in
writing, in an approved form and lodged with the Department or at an approved
place or with an approved person. If the claim is lodged after an earlier
enquiry, including by telephone, facsimile or computer, in relation to claiming
fares allowance, the claim is taken to have been lodged on the day of the
enquiry.
A person must lodge a claim for fares allowance, in respect of a
study year, before 1 April in the year following that study year. A claim
may be accepted after that date if the claimant took reasonable steps to ensure
that it would be lodged by the due date, or if circumstances beyond the
person’s control prevented the person from taking reasonable steps to
lodge the claim in time, and the person then lodged the claim as soon as
practicable after the circumstances stopped.
Either the claimant or a
person on his or her behalf may withdraw (orally or in writing) a claim for
fares allowance that has not been determined, in which case the claim is taken
not to have been made.
The Secretary must determine that a claim for
fares allowance is to be granted if satisfied that the person is qualified for
the allowance.
Division 3 – Amount of fares allowance
This Division sets down the amount of fares allowance that is to be paid
for a particular journey. The rates and general rules are the same as those set
down in the Fares Allowance Rules. However, there is now also a provision under
which the Minister may update the rates by disallowable instrument.
Division 4 – Payment of fares allowance
This Division specifies when and how fares allowance is to be paid to a
person.
Fares allowance is generally to be paid after the journey is
made, to the person to whom the substantive student payment is or was paid.
However, if, as described in new Division 1, the Secretary is satisfied that a
person intends to make the journey and that the travel is to be provided by a
commercial operator, then the fares allowance is to be paid in advance to the
commercial operator.
Fares allowance will generally be paid to the
account into which the substantive student payment is or was paid, or into a
nominated account if the student payment is not paid into an account. However,
the Secretary may direct that fares allowance be paid in a different way, eg, if
a person who is qualified for fares allowance is no longer receiving a student
payment and would prefer the allowance to be paid into a separate
account.
There is provision for the payment of fares allowance after the
student’s death, including when the student had not claimed fares
allowance before death. The Secretary may pay the allowance to the person who,
in the Secretary’s opinion, is best entitled to it, as long as the
application for payment was made within 6 months of the student’s death.
Also, in the case of the allowance not having been claimed before death, the
person applying must do so within the student’s original claim lodgment
period.
Division 5 – Protection of fares allowance
This Division replicates standard provisions in the
Social Security Act which provide that fares allowance is absolutely
inalienable and for the effect of a garnishee or attachment
order.
Items 3 and 4 amend subsection 4(6A) of the Social Security
Act, which modifies the meaning of “member of a couple” for
non-independent youth allowance recipients and their partners.
That
subsection operates to the effect that a person who is the partner of a youth
allowance recipient who is not independent, while still a member of a couple for
most purposes in the Act, is not a member of a couple in a range of specified
provisions relating to the income, assets and liquid assets tests and
compensation recovery provisions and in any provision that operates for the
purposes of one of those specified provisions. Furthermore, the non-independent
youth allowance recipient himself or herself is also not a member of a couple in
a similar respect for youth allowance, nor would be any other person who has
claimed youth allowance and is not independent.
Thus, if two people are
in a marriage-like relationship which has lasted for less than one year, and one
of them is a youth allowance recipient who is not independent on any other
ground, then the relationship is (if all the usual member of a couple criteria
are met) recognised for most purposes for each of their payments, including
setting maximum basic rate, pharmaceutical allowance, rent assistance, etc (to
the extent that it is relevant). However, the relationship is effectively
disregarded for all purposes specified. This is largely beneficial. The
rationale for it is that the youth allowance recipient, being not independent,
is subject to the parental means test and therefore should not also be subject
to the partner income and assets tests. As a matter of consistency, if the
partner's income and assets are not to be taken into account for the youth
allowance recipient, nor should the youth allowance recipient's for the
partner.
The refinement made by these items is to add fares allowance to
the list of provisions in which the modified meaning of member of a couple
applies. This reflects subsection 1.6(4) of the Fares Allowance Rules and is
relevant in establishing the fares allowance claimant’s qualification, in
the sense that the person will qualify if he or she, while required to live away
from his or her permanent home to study, has a partner still living at that
permanent home.
Items 6 and 7 provide definitions in subsection
23(1) of “fares allowance” and “Social Security (Fares
Allowance) Rules 1998” so that provisions in the new Part as well
as elsewhere in the Social Security Act operate correctly in view of the
transition between the Rules and the new Part. This is particularly necessary
for the information gathering and debt recovery provisions of the Social
Security Act, as amended by this Schedule.
Items 9 to 28 amend
relevant debt recovery provisions in the Social Security Act to make sure that
fares allowance debts may be raised and recovered as appropriate. For example,
a debt may be raised against a person if an amount of fares allowance has been
paid and the person was not qualified for the amount; if two amounts have been
paid for the same journey (that is, a duplicate payment) or if an amount of
fares allowance has been calculated, and therefore paid, incorrectly. In these
situations, and others, an amount is a debt due to the Commonwealth by the
person in respect of whom fares allowance was paid. These provisions were
previously free-standing in Part 7 of the Fares Allowance Rules. However, now
that the substantive provisions will appear in the Social Security Act itself,
the mainstream debt recovery provisions are to apply directly.
Similarly,
items 29, 30 and 31 amend the relevant information gathering provisions
in the Social Security Act (sections 1304 and 1307) and the provision that
provides an offence when payment is knowingly obtained by a person who is not
entitled to it (section 1347) to make sure that fares allowance is appropriately
covered.
Item 32 inserts a new clause 126 into Schedule 1A to the
Social Security Act to deal with the transition from fares allowance under the
Fares Allowance Rules to fares allowance under new Part 2.26.
New Part
2.26 will apply in respect of claims for fares allowance made after the
commencement of the new Part in respect of journeys made after that
commencement. A claim made either before or after that commencement for fares
allowance in respect of a journey made before that commencement, will be
determined under the Fares Allowance Rules, which are continued in force for
that purpose.
If a person has made a journey before the commencement of
the new Part, for which he or she is qualified for fares allowance under the
Fares Allowance Rules as they continue in force, then a claim must be determined
for that journey under the Fares Allowance Rules before a claim under the new
Part, for a journey made after its commencement, will be determined. This rule
ensures that a person finalises any outstanding entitlement under the Fares
Allowance Rules so that his or her qualification under the new Part may be
assessed properly, taking into account all journeys made for the
year.
5. Commencement
This Schedule will commence on Royal Assent.
Schedule 2 – Student financial supplement scheme
1. Summary of proposed changes
This Schedule amends the Social Security Act 1991 (the Social
Security Act) to incorporate the student financial supplement provisions
currently contained in the Social Security Student Financial Supplement
Scheme 1998 (the Financial Supplement Scheme). That Scheme will lapse
on the repeal by this Schedule of the present enabling provision.
2. Background
As a general principle, the financial supplement provisions are to be moved
in this way without making any change in their effect. Those provisions
themselves were originally set up with the intention of preserving the effect of
the pre-existing AUSTUDY provisions so that students did not suffer any
disruption to their payments because of the youth allowance changes, which
happened half way through the academic year.
However, the new financial
supplement provisions have been drafted on the basis that:
• the
drafting style and structure of the new provisions be more in keeping with the
rest of the Social Security Act, including the standard provisions already set
up there;
• modifications be made to certain of the provisions to
improve their structure and clarify their intent; and
• certain
technical and other minor changes be made to ensure that the original AUSTUDY
provisions are correctly reflected and to refine certain aspects of the
provisions, as outlined in detail below.
For the most part, there is no
change in effect between the provisions of the Financial Supplement Scheme and
those of the new Chapter 2B. Only the following technical and minor departures
have been made:
1 The tax file number provisions have been put into the
standard Social Security Act form. It had previously been necessary to split
these provisions between the Social Security Act and the Financial Supplement
Scheme because of restrictions imposed by the Privacy Commissioner’s Tax
File Number Guidelines.
2 An incorrect provision has been eliminated that
allowed a student to apply for financial supplement after the eligibility period
(the change is in line with the pre-existing AUSTUDY provisions).
3 It
has been clarified that the minimum amount of financial supplement of $500
applies in respect of the full year. This will take account of a person’s
eligibility as either a category 1 student (a current student payment recipient)
or a category 2 student (a person excluded from youth allowance on the grounds
of the parental income test or family actual means test) or both categories at
different times in the year. Thus, a person who becomes a category 2 student
part way through the year, with a consequent lesser amount of eligibility, will
not have to establish $500 worth of eligibility anew – the previous
category 1 eligibility will be counted. (This is in line with the pre-existing
AUSTUDY provisions.)
4 The payment rules have been relaxed to allow
financial supplement to be paid into a nominated bank account and not
necessarily the same account into which the student payment was or is
paid.
5 The requirement has been omitted to Gazette the minimum,
intermediate and maximum prescribed amounts for debt recovery purposes. This
requirement is superfluous because existing provisions already clearly establish
how those amounts are calculated relative to AWE.
6 The separate
confidentiality provisions that currently exist for officers acting under the
recovery phase of the scheme undertaken by the Australian Taxation Office have
been omitted. The mainstream Act confidentiality provisions will
apply.
7 A special rule has been included relating to the status as
evidentiary certificates of certain documents relating to financial supplement
(in line with the pre-existing AUSTUDY provisions).
3. Clauses and Schedule involved in the changes
Clause 2: provides the commencement rules for this
Schedule.
Clause 3: provides that each Act that is specified in
this Schedule is amended as set out in the Schedule.
Schedule 2 – Student financial supplement scheme
Part 1 – Amendments commencing on Royal
Assent
Item 1: makes new entries in the index of definitions
in section 3.
Item 2: inserts a new section 19AB to house
financial supplement definitions for the purposes of new Chapter 2B, which is
substituted by item 6.
Items 3 to 5: repeal/substitute
and amend, variously, relevant definitions in subsection 23(1).
Item
6: repeals existing Chapter 2B and substitutes a new, more comprehensive
Chapter comprising the detailed financial supplement provisions.
Item
7: inserts a new section 1361A.
Part 2 – Amendments
commencing on 1 July 1999
Item 8: omits an entry from the
index of definitions in section 3.
Item 9: repeals a definition
from new section 19AB, which is inserted by item 2.
Items 10
and 11: amend subsections 1061ZZAK(2) and 1061ZZAO(2) in new Chapter 2B,
which is inserted by item 6.
4. Explanation of the changes
Background
The Student Financial Supplement Scheme is a loan scheme that gives
tertiary students the option of borrowing money to help cover their living
expenses while studying. Financial supplement is paid fortnightly in
instalments by a participating financial corporation, under a formal contract,
to a person who is eligible to obtain financial supplement. To be eligible, a
person must be a full-time tertiary student to whom youth allowance is payable
or to whom youth allowance would be payable if not for the parental income test
or family actual means test. Alternatively, the person must be a full-time or
concessional study-load tertiary student to whom austudy payment or pensioner
education supplement is payable.
If an eligible person takes up the
option of obtaining an amount of financial supplement within the allowable
limits and enters into a contract for that purpose with a participating
corporation, the person may vary the amount of financial supplement obtained at
any time during the year or part of the year as long as it is within the limits
specified on the supplement entitlement notice given to the person when his or
her eligibility was determined.
The financial supplement instalments are
paid to a person by a participating corporation in accordance with an agreement
with the Commonwealth. The person is not liable to the corporation for
interest, but the Commonwealth pays to the corporation a subsidy that includes
an amount for interest. At the end of the contract period, the Commonwealth
pays to the corporation any amount outstanding under the contract and is
assigned the further rights - repayments will eventually be made by the person
to the Commonwealth. The amount of financial supplement that will eventually
have to be repaid is indexed each 1 June and the increase flowing from the
indexation will be added to the person's debt to the
Commonwealth.
Repayments of financial supplement are not required before
the fifth year after 1 June in the calendar year following the year in
which the contract was entered into, eg, a person who entered into a contract on
1 March 1994 will not have to start repayments until at least June 1999; a
person whose contract date was 1 July 1994 will have the same prospective
repayment date. Even so, the loan repayment actually commences only when the
person's taxable income exceeds average earnings, at which point recovery
through the tax system commences (along the lines of the Higher Education
Contribution Scheme). However, the person may choose to make repayments
earlier, whether within the period of the contract, or after that period but
before repayments must commence. If the financial supplement debt is repaid in
full within the period of the contract, the person has to pay only 85% of the
debt.
Part 1 – Amendments commencing on Royal Assent
New section 19AB – Student financial supplement definitions
Item 2 sets up a new section 19AB containing the definitions used
in new Chapter 2B, which is substituted by item 6.
The
definitions contained in new subsection 19AB(2) are generally drawn from the
Dictionary at the end of the Financial Supplement Scheme.
New subsections
19AB(3) and (4) define a person’s “austudy payment general
rate” and “youth allowance general rate” respectively. Under
the former AUSTUDY, the living allowance formed the basis of financial
supplement eligibility, and amounts such as pharmaceutical allowance were paid
as separate components. However, for youth allowance and austudy payment, the
separate components (pharmaceutical allowance, remote area allowance and, for
youth allowance, rent assistance) are included in a person’s rate of
payment along with the maximum basic rate, which is the social security
equivalent of the living allowance. Therefore, to achieve the AUSTUDY effect,
those components are notionally excluded from the person’s rate for the
purposes of financial supplement eligibility.
Accordingly, a
person’s youth allowance or austudy payment general rate is the rate that
would be payable to the person if no amount were included under the Rate
Calculator as one of the separate components. This rule will apply in working
out the person’s eligibility to obtain financial supplement under Division
2 and in working out the maximum amount available under Division 6.
New
subsection 19AB(5) makes it clear that the question of whether a person is
“intending to undertake a course” or “undertaking a
course” is to be worked out as far as possible as it would be under
section 541B in working out whether a person is undertaking study.
New Chapter 2B – Student Financial Supplement Scheme
Item 6 repeals the old Chapter 2B, under which the Financial
Supplement Scheme was made, and substitutes a new Chapter 2B. Accordingly, the
Scheme will lapse and will be replaced with the substantive provisions contained
in the new Chapter.
Part 2B.1 – Establishment of
scheme
Division 1 - Preliminary
This Division records that the object of the Chapter is to establish a
Student Financial Supplement Scheme and outlines the provisions of the
scheme.
Division 2 – Eligibility to obtain financial supplement
This Division sets down the eligibility criteria for a person to obtain
financial supplement for the person’s eligibility period.
First,
the person must be undertaking or intending to undertake a tertiary course at an
educational institutional throughout the eligibility period.
Second, the
person must not also at that time be undertaking a primary or secondary
course.
Third, the person must fall within the description of either a
category 1 student or a category 2 student in respect of the eligibility
period. A category 1 student is a person to whom either youth allowance,
austudy payment or pensioner education supplement is payable throughout the
eligibility period. For youth allowance and austudy payment, the concept of
payable means payable at a notional general rate described in new subsection
19AB(3) or (4) of more than zero (if the allowance or payment were payable at a
rate that constituted only one or more of the additional payment components,
then this would not be sufficient for financial supplement eligibility).
Furthermore, for youth allowance, it must be payable because the person is
undertaking full-time study (this excludes people who are receiving youth
allowance on other grounds).
A category 2 student is a person to whom
youth allowance is not payable, but would be payable if not for the operation of
either the parental income test or the family actual means test. Furthermore,
the person’s combined parental income under the Youth Allowance Rate
Calculator, or the person’s family actual means under the Social Security
(Family Actual Means Test) Regulations 1998, as applicable, must be less than
the threshold amount. The threshold amount is worked out in a similar way to
the parental income free area (although starting with a much higher basic amount
of $54,949, subject to indexation) and is increased by additional amounts for
any children in the family other than the category 2 student. Also, the person
must be undertaking full-time study.
The fourth eligibility criterion is
that the amount of financial supplement that the person is eligible to obtain
for the year (ie, the calendar year that is or includes the eligibility period)
is not less than the minimum amount prescribed in new Division 6 ($500). Thus,
a person who changes status from category 1 to category 2 part way through the
year will not have to achieve $500 worth of eligibility all over again in the
new category, but may build on the “credit” of the category 1
eligibility.
Under this Division, a person who is a category 2 student
must also, to be eligible, satisfy the standard Social Security Act provisions
that relate to a request for a tax file number in respect of the person or a
parent. Category 1 students, including those with partners, are already covered
by the standard tax file number requirements under their substantive student
payment.
Division 3 - Decision and notice about eligibility to obtain financial supplement
This Division explains how a finding that a person is eligible to obtain
financial supplement is given effect.
There is no claim as such for
financial supplement. The process commences with a claim by the person for one
of the three target substantive payments (youth allowance, austudy payment and
pensioner education supplement). In the process of determining that claim, the
Secretary will also decide whether the person is eligible to obtain financial
supplement for the eligibility period, whether as a category 1 student or a
category 2 student.
Furthermore, the Secretary must make a new decision
about the eligibility of a person who is continuing his or her tertiary course
into a new calendar year.
If the decision in either case is that the
person is eligible, the Secretary must give the person a supplement entitlement
notice to that effect. The notice must include a statement of the minimum and
maximum amounts that the person may obtain.
If a decision that a person
is eligible, or that certain minimum or maximum amounts apply, is varied or
revoked under the review of decisions provisions of the Social Security Act
after the person has been given a supplement entitlement notice, then that
notice is also revoked and may not be used to apply for financial supplement.
Similarly, a decision about a person’s eligibility, or amounts, must lead
to the Secretary giving the person a statement to that effect and, if
appropriate, a new supplement entitlement notice, including the amounts
available.
This Division includes a transitional rule to make it clear
that, if a person held a supplement eligibility notice under the Financial
Supplement and had not used the notice to apply for financial supplement, then
the notice is taken to be a supplement entitlement notice under this instrument
and the person is eligible under this instrument. Also, whether or not the
notice had been used in an application, it is taken to be a supplement
entitlement notice given under this Division.
Division 4 – Agreements between Commonwealth and financial corporations
This Division makes it clear that financial supplement is available to a
person only from a financial corporation that has entered into an agreement with
the Commonwealth to pay the supplement in accordance with this instrument.
Having entered into such an agreement, the corporation will be a
“participating corporation” for new Chapter 2B. The Division lays
down certain formal rules for the agreement. A special rule is included to make
sure that any financial supplement contract entered into under an agreement
under the Financial Supplement Scheme remains valid despite the change in
arrangements.
Division 5 - Application for financial supplement
This Division establishes how and when to apply for financial supplement.
A person who is eligible to obtain financial supplement may apply to a
participating financial corporation during the person’s eligibility
period.
The only way of applying for financial supplement is by
completing an application form approved by the Secretary (which will be
available from the participating corporation) and lodging the form with the
supplement entitlement notice at a branch office of the corporation.
Once
a person has applied for financial supplement of a particular amount, he or she
may lodge another application to increase or decrease the amount of financial
supplement obtained (within the limits of his or her minimum and maximum
amounts).
Division 6 - Amount of financial
supplement
Subdivision A - Category 1 students
This Subdivision sets down the maximum amount of financial supplement
available to an eligible person who is a category 1 student.
If the
person has an eligibility period of one year, the maximum amount is either
$7,000 or a proportion of that amount worked out as specified, whichever is
less.
The proportional amount is worked out by establishing the total
amount of the person’s substantive payment (based on the youth allowance
or austudy payment general rate if applicable) that would be payable for the
eligibility period if no financial supplement were to be sought. Then certain
amounts are deducted: any amount of advance payment deductions to be made in
the period; any amount of overpayments recoverable for the period; any amount of
compulsory tax deductions to be made for the period; and any amount of the
substantive payment already paid to the person for the period. The result of
this equation is then doubled (since the amount of financial supplement
available is double the amount by which a person’s payment is to be
reduced) and rounded up to the nearest dollar.
Before applying this
calculation, it is necessary to work out the person’s “eligibility
period”. This is the period for which the person satisfies the
eligibility criteria (see Division 2), ie, generally, the period for which the
substantive payment is payable and the study requirement satisfied.
If
the person’s eligibility period is less than one year, then the maximum
amount of financial supplement is the lesser of the proportional amount worked
out as above and an amount worked out as a proportion of the $7,000 relative to
the length of the person’s eligibility period.
Subdivision B -
Category 2 students
This Subdivision sets down the maximum amount of
financial supplement available to an eligible person who is a category 2
student.
If the person is not undertaking, or intending to undertake, a
short course, and has an eligibility period of one year, the maximum amount of
financial supplement is $2,000.
If the person is undertaking, or
intending to undertake, a short course, or if the person is not undertaking, or
intending to undertake, a short course and has an eligibility period of less
than a year, then the maximum amount of financial supplement is the amount
worked out as a proportion of the $2,000 relative to the length of the
person’s eligibility period.
Once again, as for a category 1
student, it is first necessary to work out the person’s eligibility
period. This is generally the period for which the person satisfies the
eligibility criteria (see Division 2), ie, generally, the period for which the
substantive payment is payable and the study requirement
satisfied.
However, for a category 2 student who is not undertaking, or
intending to undertake, a short course, a different, shorter eligibility period
will be used if the person applied for financial supplement after 31 May in a
year but before 1 October. Consistently, an even shorter eligibility
period will be used if the person applied on or after 1 October. However,
in each case, the Secretary may decide not to change the original eligibility
period if satisfied that the person took reasonable steps to apply within 4
weeks of being given a supplement entitlement notice, but could not do so for
reasons beyond his or her control, and applied as soon as possible after
that.
A category 2 student who is undertaking, or intending to undertake,
a short course has a similar modification imposed, although it is imposed if the
person applied for financial supplement more than 4 weeks after being given the
supplement entitlement notice and after the usual eligibility period would have
started. The Secretary has the same discretion to waive this rule.
Subdivision C – Provisions applying to both category 1 and category 2 students
The minimum amount of financial supplement in respect of a person is
$500. In keeping with Division 2, this figure applies to a person in respect of
any tertiary study undertaken during the year, whether in category 1 or category
2. If the person’s eligible amount is not at least $500 overall, then the
person is not eligible for financial supplement.
Also under this
Subdivision, if a person undertakes, or intends to undertake, more than one
tertiary course in the same period in a year, the person’s maximum amount
of financial supplement is the maximum amount worked out under the Division for
one of the courses.
Division 7 - Trading in youth allowance, austudy
payment or pensioner education supplement for financial
supplement
Financial supplement is generally made available to a
person in exchange for a reduction in the rate of the person’s substantive
payment. This is called trading in the payment.
This Division provides
that the amount by which the person’s rate of payment is reduced is half
the amount of financial supplement paid for the same instalment
period.
Because a category 2 student does not have a substantive payment
to trade in, this Part applies only to category 1 students.
Division 8 - Obtaining or increasing financial supplement by trading back youth allowance, austudy payment or pensioner education supplement
This Division provides for a person who is eligible to obtain financial
supplement to repay some or all of the substantive payment already paid to the
person, in order to obtain, or to obtain a higher amount of, financial
supplement. This is called trading back the payment.
Once again, since a
category 2 student will not have been paid any substantive payment that could be
traded back, this Part applies only to category 1 students. It is quite likely
that such a student will both trade in future payments under Division 7 and
trade back past payments under this Division to obtain the required amount of
financial supplement.
The payment that may be traded back must have been
payable to the person originally during the “payment period” (ie,
the period 1 January to 31 May in a year or the period 1 July to 30 September in
a year). The trade back, for a person who is not currently obtaining financial
supplement, must generally also be made within that payment period, although it
may be made after that period if the person took reasonable steps to make it on
time but could not do so for reasons beyond his or her control and makes it as
soon as practicable after the period and within the year.
If an amount is
traded back, it is taken never to have been paid to the person. This ensures
that the amount of financial supplement calculated under Division 6 to be
available to the person is not limited by the original payment of the amount.
In effect, the person is put in the same position as a person who is only
trading in his or her payment.
However, it is made clear that trade back
does not affect the operation of the debt recovery provisions of the Social
Security Act in respect of the substantive payment.
Division 9 - Financial supplement contracts
This Division describes the legal relationship between the participating
corporation and the person.
If a person who is eligible to obtain
financial supplement applies to the corporation under Division 5 for the
supplement, the corporation must accept the application in writing - this forms
the contract. A special transitional rule ensures that contracts entered into
under the former AUSTUDY arrangements or under the Financial Supplement Scheme
remain valid and are covered by the new provisions.
There are certain
requirements that the contract must meet. It must: be for the making of a loan
under this Division; be for the amount for which the person asks (within the
limits of his or her entitlement); allow but not compel early repayments; and
name a termination date (which is the last day of the contract period, which in
turn is the period starting when the contract is made and ending on 31 May in
the fifth year after the year in which the contract was made).
This
Division gives the corporation the right to rely on advice given by the
Commonwealth so that any amount paid by the corporation under the contract on
the basis of advice from the Commonwealth constitutes financial supplement,
regardless of the person’s actual eligibility or otherwise. However, Part
2B.2 (which authorises the early recovery of certain amounts if there has been a
specified contravention of the rules, or similar) may override this.
The
Division also deals with the relationship between the contract and certain other
laws (eg, relating to bankruptcy). It also makes it clear that the contract is
valid on its own terms regardless of the person’s not having been eligible
to obtain financial supplement when the contract was made, or later becoming
ineligible. However, Part 2B.2 may have certain related effects in some of
these cases.
The Division also includes provisions relating to the
cooling off period under the scheme.
A person has a right to cancel a
financial supplement contract if he or she lodges written notice to this effect
at a branch office of the corporation, within 14 days of the contract’s
having been made. Generally, the corporation is not to make any payments to the
person within the cooling off period. However, if it does so, or if it makes
any payments after the period and if the person has exercised the right to
cancel the contract, then the payments are taken not to be financial supplement
if repaid within 7 days by the person. Otherwise, the payments will
proceed to eventual recovery through the usual five or so year
process.
Alternatively, the person may waive the right to cancel the
contract by specified written notice given to the corporation immediately after
the contract is made.
The last rules in this Division are that State or
Territory credit type laws do not apply to a financial supplement contract, and
that the contract or application is generally not affected by State or Territory
tax laws.
Division 10 - Payment of financial supplement
This Division comprises machinery provisions about the payment of
financial supplement, modelled on sections 559A and 559C to 559F of the Social
Security Act for youth allowance.
Financial supplement is to be paid by
instalments for periods, and at times, determined by the Secretary. An
instalment is to be rounded off as described. Then, it is to be paid to the
person specified. For a category 1 student, this will be to whomever the young
person’s substantive payment is, or was, being paid. Generally, this will
be the young person himself or herself. However, for non-independent under 18
year old youth allowance recipients, this will usually be the young
person’s parent. Alternatively, the Secretary might have decided to make
the payment to someone else on the young person’s behalf.
Financial
supplement for a category 2 student is to be paid to the person to whom the
young person’s youth allowance would have been paid had youth allowance
been payable.
However, even if the payments of financial supplement are
made to someone other than the young person, the liability eventually to make
repayments under the scheme will still be the young
person’s.
Financial supplement is to be paid into a bank account
nominated and maintained by the person to whom it is to be paid.
Division 11 - Protection of financial supplement
This Division constitutes relevant equivalents of youth allowance
sections 560 and 560A.
It is made clear that financial supplement, in
common with social security payments, is absolutely inalienable.
Also, a
certain protection from garnishment is given to financial supplement paid into
an account. The amount protected is, in keeping with the usual social security
payment arrangement, the amount of financial supplement paid into the account
within the 4 weeks before the order came into force, minus any amount
withdrawn from the account in that time.
Division 12 – Obligations of category 2
students
Subdivision A – Statements about tax file
numbers
This Subdivision provides the standard social security tax file number
provisions under which the Secretary may request a person who is obtaining
financial supplement to give a statement of the person’s or the
parent’s tax file number.
As indicated under Division 2 above,
these provisions are applicable only to category 2 students because
category 1 students are already subject to such rules under their substantive
payments. It should also be noted that, apart from a category 2 student’s
own TFN, it would be relevant to the Commonwealth to seek the TFN of only the
student’s parent and not his or her partner - a category 2 student will
never have a partner because he or she must be precluded from youth allowance on
the basis of the parental income test or the family actual means test, and this
can only happen if he or she is not independent; having a partner would make him
or her independent.
Subdivision B – Notice of events or changes in circumstances
On a similar basis to Subdivision A, it is necessary to provide the
standard social security range of information gathering powers for category 2
students only. Category 1 students will already be adequately covered by the
equivalent provisions for their substantive payments, since the factors that
govern financial supplement eligibility and entitlement are the same as those
that govern the payment of their substantive payments.
Accordingly, this
Subdivision provides for the Secretary to give a category 2 student a notice
that requires the person to notify a stated event or change of circumstances, or
to notify becoming aware that such an event or change is likely to happen (this
is the “recipient notification notice”).
Similarly, a notice
may be given to the person requiring a statement about a matter that might
affect the payment of financial supplement (the “recipient statement
notice”).
These provisions are based on sections 561B and 561C of
the Social Security Act for youth allowance.
Division 13 - Early repayments of financial supplement
The rules for this Division are taken from Part 13 of the Financial
Supplement Scheme. They provide for a person to make voluntary repayments of
financial supplement before the end of the contract period. If the person takes
up this option, there are certain discounts given on the total debt.
The
first part of the process is to calculate the amount outstanding under the
contract at any particular time. This is basically done by adding together the
amount of the repayments and the discounts and subtracting the result from the
principal sum. After the first year, the effect of indexation on the debt is
built into the equation.
The person must be given each 1 June a notice
recording what the amount outstanding is at that date.
Should the person
accidentally pay more than the amount outstanding, the balance must be repaid by
the corporation to the person.
There is provision to work out the amount
to be repaid by the person, taking into account the amount repaid, the discount
and the effects of indexation.
The discount is worked out using two
separate formulae which provide a lower rate of discount if less than the full
amount outstanding is repaid, and a higher rate if the full amount is
repaid.
If the whole debt is repaid in this way, the corporation’s
rights and liabilities are transferred to the Commonwealth immediately after the
repayment. Otherwise, the standard end of contract arrangements apply which are
also provided by this Division.
These are that, at the end of the
contract period, the Commonwealth assumes the corporation’s rights under
the contract and pays to the corporation any outstanding amount of the principal
sum. The Commonwealth then proceeds with the recovery process directly with the
person. A termination notice is to be given to the person, stating certain
formal matters, including what FS debt or FS debts the person now owes to the
Commonwealth, that the person is entitled to make repayments of those amounts at
any time and that any balance will be recovered through the taxation
system.
Since the notice forms the basis of the recovery of the debt, it
is important, and provisions are made, to ensure that both parties agree about
the details.
Part 2B.2 - Payments of financial supplement under scheme to stop in certain circumstances
This extensive Part is taken from Part 14 of the Financial Supplement
Scheme. Ordinarily, payments of financial supplement will continue during the
course of the contract and recovery will occur some five years or more into the
future. However, this Part deals with when payments of financial supplement
should stop during the course of the contract and when payments should be
subject to immediate recovery action.
There are five circumstances in
which payments should stop. The corporation will be bound in accordance with
its agreement with the Commonwealth to stop making payments
accordingly.
Then there are certain further provisions, in respect of
three of these cessation provisions, which call for recovery of certain amounts
paid. These recovery provisions will operate if there has been some kind of
contravention (either a failure to comply with an information gathering notice
or the provision of false or misleading information) that had caused payments to
be made, or to be made for too high an amount.
The three Divisions that
contain recovery provisions, and the recovery provisions that they contain,
are:
Division 2 - Payments to stop if the maximum amount of financial
supplement is reduced to the amount already paid or a lesser
amount
Subdivision A – Notice that payments are to
stop
Subdivision B - Original amount paid because person failed to
notify change of circumstances
Subdivision C - Original amount
paid because of false or misleading information
Division 3 -
Payments to stop if person ceases to be eligible to obtain financial
supplement
Subdivision A – Notice that payments are to
stop
Subdivision B - Financial supplement paid because person
failed to notify change of circumstances
Division 4 - Payments to
stop if person is found never to have been eligible for financial
supplement
Subdivision A – Notice that payments are to
stop
Subdivision B - Financial supplement paid because of false or
misleading information
In each of the discrete circumstances
addressed by these three Divisions, the process is similar. First, the
Secretary must give the person and the corporation a notice about stopping the
payments. The corporation is discharged from having to make further payments
but, if it should continue to make payments, the payments are taken not to be
financial supplement and are recoverable between the person and the corporation.
In the normal course of events, the FS debt will be recovered eventually through
the tax system.
However, should one of the recovery provisions operate
because of a specified contravention (including under the Financial Supplement
Scheme mentioned by the special transitional rules), then a further notice must
be given to the person and the corporation. The effect of this second notice is
that the Commonwealth assumes the corporation’s rights under the contract,
the Commonwealth must pay to the corporation the amount of financial supplement
paid that is attributable to the contravention (in the case of Division 4, this
is the whole amount of financial supplement paid), and the person becomes liable
to the Commonwealth for that amount plus interest. Any remaining legitimate FS
debt will be recovered in the usual longer term way.
In addition, there
are two provisions to stop the payment of financial supplement, but where
recovery provisions are not appropriate - these apply when the person asks for
the payments to stop and when the person dies.
In the first of these two
cases, the person may simply give a notice to the corporation in order to stop
the payments and the corporation is discharged from having to make any further
payments (although, as above, if it does so, it may recover the amounts directly
from the person).
In the second case, the Secretary must give notice to
the corporation if he or she becomes aware that the person has died. The
corporation’s liability to make further payments is discharged as usual
and any excess payments are recoverable by it from the person’s estate.
The Commonwealth assumes the corporation’s rights and, in return, must pay
the corporation a representative amount. Lastly, the liability of the person
under the contract is discharged.
Part 2B.3 – Repayment of financial supplement through taxation system after termination date
This Part is based on Part 15 of the Financial Supplement Scheme. It
provides for the recovery through the tax system of a person’s financial
supplement debt at the end of 4 years beginning on 1 June in the year following
the year the contract was made.
Division 2 establishes what an FS debt
and an accumulated FS debt are. An FS debt is the outstanding amount at the
termination date, indexed as applicable. An accumulated FS debt is incurred on
1 June in a year if the person had or has an FS debt, or FS debts, at that date
that was/is not, or did/do not include, an FS debt that existed on the previous
1 June. If the person had or has an FS debt on 1 June that did/does
include a previous FS debt, then the accumulated FS debt is incurred on the
later 1 June.
Division 3 requires the Secretary to give notice to the
Commissioner of Taxation, as soon as practicable after a termination date, about
a person who has an FS debt. The information contained in the notice will allow
the Commissioner to proceed with the recovery of the debt through the tax
system. The notice must be updated if believed not to be correct in any way and
the Secretary must give a written certificate further to the information
required in the statement if the Commissioner so requires.
Division 4
continues the option available throughout the scheme for a person to make
voluntary payments to reduce the debt. However, by this stage, the payments
must be made to the Commissioner.
Division 5 sets down in detail when and
by how much a person must make payments to reduce his or her debt. It is
compulsory for the person to make such payments only if his or her taxable
income for a tax year is more than the minimum prescribed amount ($29,307 for
the year ending 30 June 1998 and indexed by AWE for subsequent years) and if the
person had an accumulated FS debt on 1 June immediately before his or her income
is assessed for that tax year.
The amount required to be repaid is 2% of
taxable income if the person’s income is no more than the intermediate
prescribed amount for that year ($33,305 for the year ending 30 June 1998 and
indexed by AWE for subsequent years). The amount required is 3% if taxable
income is more than the intermediate amount but not more than the maximum
prescribed amount ($46,629 for the year ending 30 June 1998 and also indexed for
subsequent years). The amount required is 4% if taxable income is more than the
maximum prescribed amount.
Division 6 records the application of certain
pieces of related taxation legislation. It is these pieces of legislation that
provide the process of recovery. Division 7 gives the Commissioner the power to
make assessments for the purposes of this Part and to serve notice about these
assessments along with a person’s normal income assessment notice.
Division 8 sets down the powers of the Commissioner to delay making an
assessment under this Part, or amend an assessment, in response to a written
application by a person, if hardship would otherwise be caused to the person, or
for other special reasons. There are also formal notice and review requirements
attached to decisions under Division 8. Division 9 provides that there is an
avenue of appeal to the Administrative Appeals Tribunal in relation to a
decision of the Commissioner.
Division 10 records that financial
supplement payments are generally not taxable, although the corporation may be
liable to taxation for certain amounts paid to it under this instrument. Other
formal matters are dealt with, including to make it clear that the death of a
person who owes a debt, other than an FS assessment debt, under this Part
discharges the debt.
Part 2B.4 - Miscellaneous
This Part deals with general matters, namely: how the Bankruptcy Act
1966 applies; how the setting aside or variation of a decision under Chapter
6 of the Social Security Act affects this instrument; that there is a general
requirement to give written notice when the rights of a participating financial
corporation are transferred to the Commonwealth and that such a transfer or
anything else done under the instrument is not subject to State or Territory
tax.
Item 3 provides a new definition of “financial
supplement” so that provisions in the new Chapter and elsewhere in the
Social Security Act operate correctly in view of the transition between the
Financial Supplement Scheme and the new Chapter.
Items 4 and 5
make minor consequential amendments to reflect the new category 2 student
information gathering provisions in the definitions of “recipient
notification notice” and “recipient statement notice” in
subsection 23(1).
Item 7 inserts a new section 1361A relating to
the status as evidentiary certificates of certain documents relating to
financial supplement (in line with subsection 51(2) of the Student
Assistance Act 1973 for the identical student financial supplement
scheme that operates in that Act).
Part 2 – Amendments
commencing on 1 July 1999
Part 2 of the Schedule makes minor
amendments commencing on 1 July 1999 to reflect the changes made by the
Social Security and Veterans’ Affairs Legislation Amendment (Payment
Processing) Act 1998. Those changes introduced a 14 day fortnight basis
(instead of 10 day) for social security payments. The same change needs to be
reflected for financial supplement so that, in working out the maximum amount
that a person is eligible to obtain, the correct result is achieved.
Accordingly, the current “weekday” basis to the calculation is to be
eliminated.
5. Commencement
This Schedule will commence on Royal Assent, except for the amendments
made by Part 2, which will commence on 1 July 1999.
Schedule 3 – Family actual means test
1. Summary of proposed changes
This Schedule amends the Social Security Act 1991 (the Social
Security Act) to incorporate youth allowance family actual means test provisions
currently contained in the Social Security (Family Actual Means Test)
Regulations 1998 (the FAMT Regulations). Those Regulations will lapse
on the repeal by this Schedule of the present enabling provision.
2. Background
As a general principle, the family actual means test provisions are to be
moved in this way without making any change in their effect. Those provisions
themselves were originally set up with the intention of preserving the effect of
the pre-existing AUSTUDY provisions so that students did not suffer any
disruption to their payments because of the youth allowance changes, which
happened half way through the academic year.
However, the new family actual
means test provisions have been drafted on the basis that:
• the
drafting style and structure of the new provisions be more in keeping with the
rest of the Social Security Act, including the standard provisions already set
up there;
• modifications be made to certain of the provisions to
improve their structure and clarify their intent; and
• certain
technical and other minor changes be made to ensure that the original AUSTUDY
provisions are correctly reflected and to refine certain aspects of the
provisions, as outlined in detail below.
For the most part, there is no
change in effect between the provisions of the FAMT Regulations and those of the
new Module G of the Youth Allowance Rate Calculator. Only the following
technical and minor departures have been made:
1 For the definition of
“designated parent”, the various criteria are to be measured against
the base tax year (ie, the tax year ending in the calendar year before the
current one), rather than the appropriate tax year (which may be the base tax
year or the following tax year). (This is in line with the pre-existing AUSTUDY
provisions.)
2 The definition of the “after-tax income
concession” for a secondary student has been redefined to reflect more
succinctly the longstanding policy intent. The intent is to identify the costs
of boarding a secondary student away from home, ie, the difference between the
away from home and the at home rates, taking into account tax and Medicare levy.
This figure is used in an exclusion from a person’s actual
means.
3 The rule about spending by a person other than a family member
of a student for the benefit of the student being taken to be spending by the
student (and therefore to be included in actual means) has been refined (in line
with the pre-existing AUSTUDY provision).
3. Clauses and Schedule involved in the changes
Clause 2: provides the commencement rules for this
Schedule.
Clause 3: provides that each Act that is specified in
this Schedule is amended as set out in the Schedule.
Schedule 1 – Family actual means test
Item 1: makes new entries in the index of definitions in
section 3.
Item 2: inserts a new section 10B to house family
actual means test definitions for the purposes of new Module G of the Youth
Allowance Rate Calculator, which is substituted by
item 3.
Item 3: repeals existing Module G of the Youth
Allowance Rate Calculator and substitutes a new, more comprehensive Module
comprising the detailed family actual means test provisions.
4. Explanation of the
changes
Background
One of the elements of the rate calculation process for youth allowance
under the Youth Allowance Rate Calculator in section 1067G of Social Security
Act is the family actual means test. This test may apply to a youth allowance
claimant or recipient who is not independent (within the meaning of section
1067A of the Social Security Act).
The effect of the family actual means
test on a person's youth allowance rate is described at Steps 10, 11 and 13(c)
and (d) of the overall rate calculation method statement in point 1067G-A1. If
the person is not independent and the family actual means test is applicable,
the person's reduction for actual means is worked out under Module G and taken
away from the maximum payment rate to give the actual means test reduced rate.
If this rate should be nil, then youth allowance is not payable to the person.
The person's youth allowance rate is assessed under both the family actual means
test and the parental income test under Module F. Whichever of these would
produce the lower youth allowance rate is the test that is applied to the
person.
The new Module G provides the details necessary for the operation
of the family actual means test.
New section 10B – Family actual means test definitions
Item 2 sets up a new section 10B containing the definitions used
in new Module G of the Youth Allowance Rate Calculator, which is substituted by
item 3.
The definitions contained in new subsection 10B(2) are
generally drawn from FAMT Regulation 4.
New subsection 10B(3) contains
the definition of “designated parent”, which is drawn from FAMT
Regulation 5. The definition is necessary for new point 1067G-G2, which
specifies to whom the family actual means test applies. (It applies to a person
who claims or receives youth allowance, is not independent and has a parent who
is a designated parent.) A parent of a youth allowance customer is a designated
parent if one of a number of circumstances applies. These circumstances are
indicators that the parent might have financial means that should be taken into
account in working out the young person’s youth allowance entitlement, eg,
having an interest in assets outside Australia or in a company, deriving certain
income from a source outside Australia, being able to claim a tax deduction for
a business loss or being self-employed or a member of a partnership.
New
subsection 10B(4) contains the meaning of “income assistance”, drawn
from FAMT Regulation 6. This is a term needed for new point 1067G-G9 in which
certain amounts are excluded from a person’s actual means. It means a
specified kind of income support, whether youth allowance, austudy payment, an
untaxable social security or veterans’ affairs payment, a payment under a
Student Financial Supplement Scheme, ABSTUDY or the Assistance for Isolated
Children Scheme, a payment of the former AUSTUDY, a scholarship or a State or
Territory education payment.
New subsection 10B(5) defines
“savings”, drawing on the former definition in FAMT Regulation 7.
Savings are normally part of a person’s actual means under new
point 1067G-G8. The definition makes it clear that savings include certain
amounts, although they are not limited to these amounts. The amounts included
are a person’s share in any profit retained by a company or partnership of
which the person is a director, shareholder or member (respectively) if the
person has a substantial influence over the distribution of the profit that
could potentially benefit the person or a member of the family. Similarly,
savings includes any undistributed trust profit if the trust is attributable to
the person or if the person is a trustee or beneficiary of the trust who has
specified controlling powers under the trust or substantial influence over the
potentially beneficial distribution of the trust profit. New subsection 10B(6)
describes for this purpose when a person “controls” a trust.
New Module G – Family actual means test
Item 3 repeals the old Module G of the Youth Allowance Rate
Calculator, under which the FAMT Regulations were made, and substitutes a new
Module G. Accordingly, the Regulations will lapse and will be replaced with the
substantive provisions contained in the new Module.
Submodule 1 - Preliminary
This new Submodule describes the overall structure of the family actual
means test, in which it is necessary to work out: whether the test applies to a
person; the appropriate tax year that applies in respect of the person; the
actual means of the person’s family for that year; the person’s
family actual means free area; and the person’s reduction for family
actual means.
Submodule 2 – Persons to whom family actual means test applies
This new Submodule provides that the family actual means test applies to
a person who claims or receives youth allowance, is not independent (as provided
by section 1067A) and has a parent (as provided by paragraph (b) of the
definition of “parent” in subsection 5(1)) who is a
“designated parent” (as provided by new
subsection 10B(3)).
However, certain people are excluded from the
application of the family actual means test. The test does not apply while a
family member of the person is receiving an exceptional circumstances relief
payment under the Farm Household Support Act 1992. Nor does it
apply for the remainder of the calendar year after the relief payment stops. In
this sense, “exceptional circumstances relief payment” includes the
former drought relief payment.
Submodule 3 - Identification of appropriate tax
year
The appropriate tax year is the period in respect of which a person’s
family actual means are calculated. The same period applies under the youth
allowance parental income test in Module F of the Youth Allowance Rate
Calculator. Under new point 1067G-G4, the appropriate tax year for a
particular youth allowance payment period is generally the “base tax
year”. The latter term (defined in parental income test
point 1067G-F5) is the tax year that ended on 30 June in the calendar
year that came immediately before the calendar year in which the youth allowance
payment period ends. However, if a determination of the appropriate tax year
has been made by the Secretary under point 1067G-G6, the tax year so determined
is the appropriate tax year.
If new point 1067G-G5 applies to a person,
then the person may, under new point 1067G-G6, request the Secretary to
determine that the appropriate tax year is the tax year following the base tax
year. This is designed to allow a person the benefit of having a lower family
actual means figure taken into account if that lower figure would result from
using the tax year following the base tax year as the basis for the
assessment.
For this concession to be available, it must first be the
case either that youth allowance would not be payable because of the rate being
nil under the family actual means test or that the rate would be reduced under
the test.
The person must give evidence or an estimate that his or her
amount of family actual means is substantially less in the year following the
base tax year than it was in the base tax year for one of three reasons -
because of an event that is beyond the control of the person and family, because
the person or a family member is undertaking full-time study in the tax year
following the base tax year or because a designated parent has ceased to fall
within one of the specified categories of the definition of “designated
parent”.
The person must give evidence of the reason mentioned
above and, if the decrease in actual means is based on an estimate, give an
agreement to have his or her rate of youth allowance recalculated if the actual
means for the tax year ends up being more than the amount estimated.
The
amount of family actual means must be unlikely to increase beyond that reduced
evidenced or estimated level for 2 years following the specified date.
It
is also made clear that an expected decrease in the profitability of a business
is not ordinarily to be taken to be an event that is beyond control, for the
purposes of one of the acceptable reasons for the application of this
Submodule.
Lastly, the request must be made in accordance with an
approved form.
If the Secretary receives such a request, he or she must
determine the person’s appropriate tax year to be the tax year following
the base tax year for a youth allowance payment period specified. However, if
the request is based on an estimate, the Secretary may not make such a
determination unless he or she is satisfied that the estimate is current and
reasonable.
Submodule 4 - Actual means of person’s
family
New point 1067G-G7 explains the basic principle that the actual means of the
family of a person (known here as the “claimant/recipient”) is
worked out by first calculating, under this Submodule, the individual actual
means of the claimant/recipient and of each person who is a family member of the
claimant/recipient. (Having done that, the formula in new subpoint 1067G-G13(1)
provides for each individual amount of actual means to be added together to form
part of the calculation of the actual means of the family of the
claimant/recipient.)
Accordingly, the following provisions of the new
Submodule generally apply equally to any “relevant person”, ie, the
claimant/recipient or a family member.
New point 1067G-G8 lays down the
meaning of the “actual means” of a relevant person (again, a person
who is either the youth allowance customer or a family member of customer). The
actual means of a relevant person for the appropriate tax year is the total
amount of the spending and savings of the person in that tax
year.
Furthermore, an amount of spending or savings is taken to have been
spent or saved in the appropriate tax year if the Secretary considers that the
amount should be so taken.
New point 1067G-G9 adds to the meaning of
actual means laid down above by recording certain amounts that are not to
be included in a person’s actual means for the appropriate tax
year.
Not to be included are amounts such as spending or savings from any
“income assistance” (see new subsection 10B(4)) received in the
appropriate tax year, maintenance payments, certain costs of boarding away from
home a family member who is studying, money spent to assist with a disability,
money spent from any arm’s length loan received in that year, any loan
repayments (or interest payments) on another kind of loan, spending or savings
from certain liquidation proceeds or from a windfall gain that is not a gift,
spending or savings of up to $6,000 from certain tax-exempt income and spending
or savings from a tax-exempt part of a compensation payment.
Further, the
amount of the income or resources of a business of the relevant person that is
tax deductible as an expense necessarily incurred in carrying on the business is
not to be included in actual means. However, certain amounts are not drawn into
this exemption - any business losses carried forward from a previous tax year
and any superannuation contribution from the business that exceeds a specified
level for an employee or for a person engaged other than as an
employee.
Nor is the amount of any reduction in liquid assets held by the
person at the beginning of the appropriate tax year and not already taken into
account above to be included in actual means.
New point 1067G-G10
provides a further exclusion from actual means for the appropriate tax year for
a person who is a particular family member of a youth allowance customer (a
family member described in one of three particular subparagraphs of the
definition of “family member” in subsection 23(15) of the
Social Security Act). This exclusion is spending or savings of up to $6,000
from any income of that family member from “independent employment”
(defined in new subsection 10B(2)).
New point 1067G-G11 is to
specify what the term “after-tax income concession” for a secondary
student means. This term is used in subparagraph 1067G-G9(2)(d)(v) in
calculating the amount of spending, in certain cases of boarding away from home
a family member who is a secondary student, that is excluded from actual means.
The concession is worked out under a formula that aims to identify the costs of
boarding a secondary student away from home, ie, the difference between the
away-from-home and the at-home rates of youth allowance, taking into account tax
and Medicare levy. To do this, the after-tax income of the family is compared
to a notional after-tax income that would apply if the student were not boarded
away from home.
New point 1067G-G12 gives the Secretary a discretion to
consider whether an amount of spending that would otherwise be included in a
relevant person’s actual means represents fair market value. If not so
satisfied, the Secretary must assess the fair market value of the matter - the
resulting amount is the amount that will be included in the person’s
actual means.
Furthermore, the Secretary has the discretion to consider
whether spending by someone other than a family member of a relevant person is
spending for the benefit of the relevant person. If so satisfied, the Secretary
must assess the fair market value of the spending - the resulting amount will be
included in the relevant person’s actual means.
Having worked out,
under the preceding points, the individual actual means of the youth allowance
customer and of each family member, new point 1067G-G13 provides the culminating
rule of how to calculate the family actual means of the youth allowance
customer.
It is worked out using a formula which has regard to the
following factors: GAM, being the sum of the actual means of each person in the
family; TNITML, being the sum of the notional amounts of tax and medicare levy
payable by each parent to achieve an after-tax income of half of GAM; TFTI,
being a percentage of the family tax assistance increased tax-free threshold
calculated under the Income Tax Rates Act 1986; and NPBL, being
any “net passive business loss” (which takes its meaning from
parental income test subpoint 1067G-F11(4)) of each parent.
Submodule 5 - Family actual means free area
This new Submodule is to identify the amount of family actual means a
person may have without it affecting his or her youth allowance entitlement.
The free area in this case is exactly the same as the parental income free area
under Module F of the Youth Allowance Rate Calculator. Thus, the relative
outcomes under both tests may be compared to ascertain which one should apply to
the person (ie, the one that would produce the lower rate of youth
allowance).
Submodule 6 - Reduction for family actual means
This new Submodule provides for a youth allowance customer’s rate
of payment to be reduced for excess family actual means. A person’s
“family actual means excess” for the appropriate tax year (ie, the
difference between the actual means of the person’s family for that year
and the free area) is divided by 4 and rounded down as described. The result is
then converted to a fortnightly figure for the youth allowance rate
calculation.
5. Commencement
This Schedule will commence on Royal Assent.
Schedule 4 – Youth allowance and austudy payment
1. Summary of proposed changes
This Schedule amends the Social Security Act 1991 (the Social
Security Act) to address certain technical issues identified during the
implementation of the youth allowance package.
2. Background
The technical amendments made by this Schedule generally make minor drafting
clarifications and technical refinements to ensure that the youth allowance
package operates in line with the original policy intentions, including the
alignment where appropriate with the pre-existing AUSTUDY
provisions.
3. Clauses and Schedule involved in the changes
Clause 2: provides the commencement rules for this
Schedule.
Clause 3: provides that each Act that is specified in
this Schedule is amended as set out in the Schedule.
Schedule 4 – Youth allowance and austudy payment
Part 1 – Amendments commencing on Royal
Assent
Item 1: repeals paragraphs 551C(1)(c) and (d) and
substitutes new paragraphs.
Item 2: amends paragraph
552(b).
Item 3: inserts a new paragraph
552A(1)(aa).
Items 4 and 5: repeal subsections 561B(1) and 561C(1)
and substitute new subsections.
Item 6: inserts a new Subdivision
EA in Division 9 of Part 2.11 relating to youth allowance.
Item
7: amends paragraph 569D(4)(a).
Item 8: inserts a new
subsection 569H(6A).
Items 9 and 10: repeal the table and notes in
each of points 1066A-B1 and 1066B-B1 and substitute a new table and notes in
each case.
Items 11 and 12: amend subsection
1067A(10).
Items 13 and 14: repeal paragraphs 1067F(1)(b) and
(2)(b) respectively.
Item 15: inserts a new paragraph
1067G-B4(d).
Item 16: repeals the table in point 1067G-B4 and
substitutes a new table.
Items 17 and 18: repeal paragraphs
1067K(1)(a) and (2)(a) respectively.
Item 19: repeals points
1067L-B2 and –B3 and substitutes new points.
Items 20 and
21: amend point 1069-F2 to add a new subpoint (4).
Item
22: amends paragraph 1069-H30(c).
Item 23: amends paragraph
1123(2)(a).
Item 24: inserts new sections 1126A and
1126B.
Item 25: repeals section 1127 and substitutes a new
section.
Item 26: repeals section 1128.
Items 27 and
28: repeal sections 1198A and 1198B and substitute a new
section 1198B.
Item 29: repeals subsections 1223(3) and (4)
and substitutes new subsections.
Part 2 – Amendments commencing
on 1 July 1998
Item 30: amends the index of definitions in
section 3.
Items 31 to 34: amend the definitions of
“homeless person”, “independent young person”,
“parent” and “prescribed educational scheme” in
subsection 5(1).
Item 35: repeals the definition of
“receiving full-time education at a school, college or university”
in subsection 5(1).
Item 36: repeals paragraph
540A(1)(a).
Item 37: repeals subsection 543A(2) and substitutes a
new subsection.
Item 38: amends paragraph 550A(a).
Items
39 and 40: amend section 552A.
Item 41: amends paragraph
569D(4)(c).
Item 42: amends paragraph 576A(a).
Items 43
and 44: amend section 578A.
Items 45 and 46: amend section
614.
Items 47 and 48: amend subparagraphs 737(1)(b)(i) and
738(1)(b)(i) respectively.
Item 49: repeals section 833 and
substitutes a new section.
Item 50: inserts a new subsection
887(5C).
Item 51: repeals subparagraph 1067A(9)(a)(iii) and
substitutes a new subparagraph.
Item 52: repeals paragraph
1067A(10)(c) and substitutes a new paragraph.
Item 53: amends
paragraph 1067F(1)(d).
Item 54: amends point
1067G-F3.
Item 55: amends paragraph 1067G-F8(d).
Item
56: amends the table in Module L of the Youth Allowance Rate
Calculator.
Item 57: adds a new entry to the table in Module L of
the Youth Allowance Rate Calculator.
Item 58: amends paragraph
1067K(1)(d).
Item 59: repeals paragraphs 1068(1)(a) and (b) and
substitutes new paragraphs.
Items 60 to 68: amend point
1068-B1.
Item 69: repeals paragraph 1068-D2(a).
Item
70: amends the definition of “FA child” in subsection
1132A(1BB).
Items 71 and 72: amend subparagraphs 1157E(1)(c)(ii)
and 1157F(1)(c)(iv) respectively.
Item 73: repeals section 1169
and substitutes a new section.
Items 74 and 75: amend table
entries in section 1190.
Items 76 and 77: insert and amend,
respectively, table entries in subsection 1191(1).
Item
78: repeals subsection 1192(6).
Item 79: amends paragraph
1236(1B)(a).
Item 80: renumbers a clause of Schedule 1A to the
Social Security Act.
Item 81: amends subclause 111A(2) of Schedule
1A to the Social Security Act.
Part 3 – Amendment commencing on
20 September 1998
Item 82: renumbers a clause of Schedule 1A
to the Social Security Act.
Part 4 – Amendments commencing on 1
January 1999
Items 83 to 86: amend subsections 543A(2), (2A)
and (2B), including repealing and substituting substantial
passages.
Part 5 – Amendment commencing on 1 July
1999
Item 87: repeals section 584A and substitutes a new
section.
Part 6 – Amendments commencing on 1 January
2000
Items 88 and 89: insert new paragraphs 552A(1)(da) and
578A(1)(da) respectively.
4. Explanation of the changes
Part 1 – Amendments commencing on Royal Assent
Item
1 amends the youth allowance administrative exclusion provision so that it
also applies if a person does not attend as directed a particular place for a
particular purpose (eg, a jobs network office), in line with the equivalent
newstart allowance provision.
Items 2 and 3 include reference to
the Assistance for Isolated Children Scheme in the list of payments receipt of
which will preclude a young person from youth allowance and austudy
payment.
Items 4 and 5 clarify that information gathering notices
may be given to a youth allowance recipient regardless of whether the allowance
is being paid to the young person, a parent or a nominee (currently, the latter
is unintentionally excluded).
Items 6 and 29 consolidate the
provisions under which debts arise:
(a) where a youth allowance
recipient’s combined parental income or family actual means exceed the
amount estimated as the basis for the rate calculation; and
(b) where the
person’s combined parental income increases by 25% or more.
Item
7 relaxes the requirement for a statement to be given about a person’s
substantial physical disability for the purpose of 25% concessional study-load
status, so that an appropriate medical officer may give the statement as an
alternative to the Commonwealth Rehabilitation Service.
Item 8
clarifies the overall time for which a student may attract austudy payment if
the student becomes a 25% concessional study-load student after doing some of
the study on another basis. This is consistent with the rules for students who
change status the other way around.
Items 9, 10, 27 and 28 align
the rates of under 21 year old disability support pension with youth allowance
rates instead of with newstart allowance rates, which are no longer applicable
to this age group, including the correct indexation treatment.
Items
11 and 12 clarify the period over which a person must have supported himself
or herself through paid employment to meet the test of independence and remove
the requirement for that employment to have been in Australia.
Items
13 to 19 provide special rates of:
(a) youth allowance and austudy
payment for partnered long-term income support students; and
(b) austudy
payment for sole parents with youth allowance recipient children;
in line
with pre-existing AUSTUDY rates. These people have continued to be paid the
correct rates since 1 July 1998 on an ex-gratia basis, pending this
legislation.
Items 20 and 21 clarify that guardian allowance is
not to be included in the family allowance rate of a family whose only FA child
or children are over 16, as is the case with rent assistance, and in keeping
with the original policy intention.
Item 22 clarifies for the
family allowance income test that only a youth allowance recipient child aged
under 18 may be an FA child for the income free area. This is consistent
with the treatment given to child recipients of other relevant student
payments.
Items 23, 24 and 25 extend the standard disposal of
assets provisions to family members of non-independent youth allowance
recipients and claimants for the purposes of the youth allowance family assets
test. This is on a similar basis to the treatment for all payments of partners
who dispose of assets, with the overall result that the full value of assets
disposed of beyond the disposal limit are taken into account under the
test.
Item 26 makes a minor technical correction.
Part 2
– Amendments commencing on 1 July 1998
Items 31 and 32
clarify the reduced application of the definitions of “homeless
person” and “independent young person” now that the youth
allowance definition of “independent” covers much of the
field.
Items 34, 39, 40 and 43 to 46 correct existing references
to the ABSTUDY Scheme to reflect the current structure.
Item 36
omits the requirement for a person who has claimed disability support pension to
be subject to the youth allowance activity test, or be exempted from it, before
youth allowance may be accessed while the disability support pension assessment
proceeds.
Item 37 clarifies the Government’s intention that
16, or 15 if independent, is the youngest that a person may be to receive youth
allowance, to close a technical loophole.
Items 38 and 42 relax
the youth allowance and austudy payment activity test breach provisions to allow
for a reasonable excuse.
Items 47 and 48 make a beneficial
technical correction to clarify that 16 rather than 18 remains the relevant age
for the purpose of excluding a student from special benefit if the person is not
a homeless person.
Item 49 brings family allowance qualification
for a student child into line with youth allowance study criteria for
consistency.
Item 50 consolidates provisions allowing a higher
rate of family allowance to be paid to a family as an alternative to youth
allowance with effect from the date of an earlier youth allowance claim. This
will ensure that the provisions apply for subsequent FA children as well as for
the first FA child in the family (as currently provided).
Item 51
refines the drafting (without any change in effect) of a provision inserted as a
non-Government amendment during passage of the youth allowance package relating
to independence on the ground of it being unreasonable to live at home due to a
lack of stable accommodation.
Item 52 corrects, in the
self-support test of youth allowance independence, the existing reference to the
18 month period in respect of which a Commonwealth training award applies as a
measurement of self-support. This will ensure that customers may get the
benefit of the provision where appropriate.
Items 53 and 58
clarify the duration of the 39 week period over which a person’s status as
a long term income support student is measured for youth allowance and austudy
payment rate purposes.
Item 57 adds austudy payment to the list of
payments receipt of which by a young person’s partner will exempt the
young person from the youth allowance assets test, and by a young person’s
parent will exempt the young person from the youth allowance parental income
test.
Items 59 to 69 make a series of technical amendments to
Benefit Rate Calculator B to reflect the fact that the rate of a former newstart
or sickness allowance recipient aged under 21 is now worked out under the Youth
Allowance Rate Calculator.
Items 70, 71 and 72 make technical
amendments to include reference to youth allowance in provisions relating to the
family allowance income hardship provisions and fringe benefits provisions, in
view of the fact that youth allowance has subsumed many of the student and youth
payments previously covered for young people.
Item 73 amends the
existing provision that dictates the order in which compensation reductions and
various means test rate reductions are made to accommodate the youth allowance
parental income test and family actual means test.
Items 74 to 77
make technical corrections to a number of indexation provisions to ensure the
correct operation and drafting of those provisions.
Items 30, 33, 35,
41, 54, 55, 56, 78, 79, 80 and 81 make certain minor technical
corrections.
Part 3 – Amendment commencing on 20 September
1998
Item 82 makes a minor technical
correction.
Part 4 – Amendments commencing on 1 January
1999
Items 83 to 86 refine the drafting (without any change in
effect) of provisions inserted as non-Government amendments during the passage
of the youth allowance package. The provisions relate to the exemption for a
person under 18 from the full-time study requirement, and will be refined with
effect from the commencement of those amendments.
Part 5 –
Amendment commencing on 1 July 1999
Item 87 amends the payment
by instalments provision for austudy payment to bring it into line with
amendments made by the Social Security and Veterans’ Affairs
Legislation Amendment (Payment Processing) Act 1998 to other social
security programs.
Part 6 – Amendments commencing on 1 January
2000
Items 88 and 89 include reference to the Ready Reserve
Education Assistance Scheme in the list of payments receipt of which will
preclude a young person from youth allowance and austudy payment.
5. Commencement
The amendments in this Schedule will commence on Royal Assent or on such
other date as is specified in the heading of the Part in which they appear.
Schedule 5 – Youth allowance and the student financial supplement scheme
1. Summary of proposed changes
This Schedule amends legislation other than the Social Security Act
1991 (the Social Security Act) to reflect the new placement and
structure of the student financial supplement scheme provisions (see Schedule
2 to this Bill) and as a minor consequence of the commencement of youth
allowance.
2. Background
This Schedule is strictly technical, as indicated under 1 above.
3. Clauses and Schedule involved in the changes
Clause 2: provides the commencement rules for this
Schedule.
Clause 3: provides that each Act that is specified in
this Schedule is amended as set out in the Schedule.
Schedule 5 – Youth allowance and the student financial supplement scheme
Part 1 – Amendments commencing on Royal
Assent
Data-matching Program (Assistance and Tax) Act
1990
Item 1: repeals paragraph (cb) of the definition of
“personal assistance” in subsection 3(1) and substitutes a new
paragraph.
Income Tax Assessment Act 1936
Item
2: repeals paragraphs (a) and (b) of the definition of
“FS assessment debt” in subsection 163B(10) and substitutes new
paragraphs.
Item 3: repeals paragraph 202(ha) and substitutes a
new paragraph.
Item 4: repeals paragraphs (a) and (b) of the
definition of “FS assessment debt” in subsection 221ZY(1) and
substitutes new paragraphs.
Taxation (Interest on Overpayments and
Early Payments) Act 1983
Item 5: repeals paragraphs (a)
and (b) of the definition of “FS assessment debt” in subsection
3(1) and substitutes new paragraphs.
Part 2 – Amendments
commencing on 1 July 1998
Farm Household Support Act
1992
Item 6: repeals paragraph 24A(1)(a) and substitutes
a new paragraph.
Item 7: amends paragraph (b) of the definition of
“income support payment rate” in subsection 24A(1A).
Item
8: repeals paragraph 24B(1)(a) and substitutes a new
paragraph.
Item 9: amends paragraph (b) of the definition of
“income support payment rate” in subsection
24B(2).
Taxation Administration Act 1953
Item
10: repeals paragraph 8WA(1)(b) and substitutes a new
paragraph.
Item 11: amends paragraphs 8WB(1)(d) and
(e).
Part 3 – Amendment commencing on 1 July
1999
Taxation Administration Act 1953
Item
12: repeals the definition of “FS assessment debt” in
section 8AAZA and substitutes a new definition.
4. Explanation of the changes
Items 1, 2, 3, 4, 5, 10, 11 and 12 are all to reflect in relevant
data-matching and tax legislation the new structure and location of the
provisions relating to the student financial supplement scheme provided by the
Social Security Act. Those provisions have been relocated by Schedule 2
to this Bill from a disallowable instrument under the Social Security Act into
the Act itself. Item 12 amends a provision introduced in the Taxation
Laws Amendment (No. 5) Bill 1998, and so this amendment is expressed as an
amendment to the yet to be enacted provision.
Items 6, 7, 8 and 9
make minor amendments to the farm household support legislation as a consequence
of the commencement of youth allowance. Youth allowance is being reflected,
alongside newstart allowance in that legislation, as a determinant of the rate
of exceptional circumstances relief payment and restart income support, now that
the younger newstart allowance group is covered by the youth allowance
provisions.
5. Commencement
The amendments in this Schedule will commence on Royal Assent or on such
other date as is specified in the heading of the Part in which they appear.