House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Family and Community Services, Senator the Honourable Jocelyn Newman)

Schedule 1 - Amendments relating to double orphan pension

Schedule 1 contains the following measures in relation to double orphans:

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Amendments to guarantee the rate of family allowance in relation to double orphans at the rate that was applicable at the time the child became a double orphan, with retrospective effect from 1 July 1998, when the problem was first identified - Part 2 and Part 3 of the Schedule (items 3 to 7 inclusive).

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This is to be achieved by the payment of an additional component of double orphan pension to those double orphan pension (DOP) customers who are means tested out of the family assistance system. It will also be payable to DOP customers who receive less family assistance for an orphaned child than was received for the child by the child's original family;

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The additional component will be equal to the difference between the carers entitlement to family assistance for the orphaned child and the family assistance entitlement for the orphaned child in their original family;

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Part 2 operates to give the amendment both current and retrospective operation, while Part 3 ensures that the amendment will be integrated into the new family tax benefit which commences on 1 July 2000, under the auspices of the A New Tax System (Family Assistance) Act 1999 ;

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An amendment to expand the definition of "long term prisoner", - Part 1 (item 2);

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A technical amendment - Part 1 (item 1).

Part 1 - Amendments commencing on Royal Assent

Part 1 of Schedule 1 contains an amendment to expand the definition of "long term prisoner", and a technical amendment.

Item 1 - Technical

Note 6 to section 994 is misleading and is removed by this technical amendment.

Item 2 - "long term prisoner"

This item provides for an additional circumstance where a child may qualify as a double orphan.

At present, section 993 of the Act provides (among other things) that a child is a double orphan if one parent is dead and the other is a long term prisoner. Section 996 of the Act provides that a person is a is a long-term prisoner if the person has been convicted of an offence, has been sentenced to imprisonment for life or for a term of at least 10 years.

It is proposed that the definition of a double orphan in subsection 993(2) of the Social Security Act 1991 (the Act) be expanded to include the situation where one parent is dead and the other parent is a long term remandee.

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Recently, a case was brought to the attention of Department of Family and Community Services of a child whose mother had died. The childs father had been charged with murder and was being held in custody. However, the child could not attract payment of double orphan pension as a double orphan as the childs father had not been tried and, therefore, was not a long term prisoner.

Part 2 - Amendments taken to have commenced on 1 July 1998

Part 2 of Schedule 1 contains amendments to guarantee the rate of family allowance in relation to double orphans at the rate that was applicable at the time the child became a double orphan, with retrospective effect to include those children who became double orphan on or after 1 July 1998.

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Part 2 operates to give the amendment both current and retrospective operation, as provided for in items 3, 4 and 5, while Part 3 ensures that the amendment will be integrated into the new family tax benefit which commences on 1 July 2000, under the auspices of the A New Tax System (Family Assistance) Act 1999 - as to which see items 6 and 7.

Items 3, 4 and 5 - Rate of double orphan pension

This measure will ensure that where a child becomes a double orphan, the rate of family allowance that was applicable in respect of the child immediately before that event will be guaranteed as a minimum to a person who assumes care of the child and is entitled to family allowance in that regard.

Item 3

This item repeals and replaces section 1010 of the Act, to provide for the introduction of an additional component of double orphan pension, which is to be calculated as the amount which equals the difference between the prior amount of family allowance and the current rate of family allowance.

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Subsection (3) provides that the additional amount is not available to approved care organisations.

Item 4

This item adjusts the indexation provisions in the Act to take account of the renumbering occasioned by these amendments.

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It is not necessary to provide that the additional amount itself be indexed; since it is defined as the difference between the previous amount and the current amount of benefit, it is effectively "self-indexing".

Item 5

This Item is an application clause to apply the new provisions to children who became double orphans on or after 1 July 1998.

Part 3 - Amendment commencing on 1 July 2000

Part 3 of the Schedule contains amendments to guarantee the rate of family tax benefit in relation to double orphans. These amendments are complementary to those contained in items 3, 4 and 5 of Part 2 of the Schedule.

These amendments commence on 1 July 2000.

Item 6

This item repeals and replaces section 1010, to make complementary amendments to ensure that the measure guaranteeing the rate of double orphan pension is continued and integrated into the new family tax benefit system which commences with effect from 1 July 2000, under the same conditions as apply under the present family allowance provisions (see Part 1 of the Schedule, items 3 to 5 inclusive).

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see the A New Tax System (Family Assistance) Act 1999.

Item 7

This Item is an application clause to apply the new provisions to children who became double orphans on or after 1 July 1998.