Revised Explanatory Memorandum
(Circulated by the authority of the Minister for Social Services, the Hon Christian Porter MP)Schedule 16 - Streamlining tax file number collection
Summary
This Schedule amends the Social Security Administration Act to allow a request to provide a tax file number and/or a relevant third party's tax file number as part of a claim for a social security payment,seniors health card or income-tested health care card, and to prevent payment or provision of the card until the request is satisfied.
Background
Under section 75 of the Social Security Administration Act, the Secretary has the power to request tax file numbers from persons who have made a claim for a social security payment or seniors health card, who are currently receiving a social security payment, or who are the holder of a seniors health card.
Under sections 76 and 77 of the Social Security Administration Act, these persons have 28 days from the date the Secretary makes the request to satisfy the request by:
- a)
- providing their tax file number and/or a relevant third party's tax file number;
- b)
- giving the Secretary a declaration that they do not know what their tax file number is, and authorising the Commissioner of Taxation to inform the Secretary of the person's tax file number; or
- c)
- giving the Secretary a declaration that their application for a tax file number is pending, and authorising the Commissioner of Taxation to inform the Secretary of the person's tax file number; or
If the person does not satisfy the request within 28 days, unless the person is exempted from the requirement, their social security payment is not payable, the person's seniors health card claim is not determined, or their seniors health card is cancelled.
The purpose of amending these provisions is to allow the Secretary to request a claimant's tax file number and/or a relevant third party's tax file number as part of the claim for a social security payment, seniors health card or income-tested health care card, and to prevent payment or provision of the card until the request is satisfied. No 28 day period is allowed for claimants. Instead, a claimant must provide their tax file number or make a TFN declaration as part of the claim. As a result, a person cannot have their claim assessed until they can provide their tax file number or make a TFN declaration. Making a TFN declaration will satisfy these requirements even where the Australian Taxation Office has not yet provided the tax file number to the Department of Human Services.
These amendments would encourage social security claimants to provide the information required for their claim in a timely manner, in line with government and community expectations that individuals take personal responsibility for their affairs.
For the existing categories of persons of whom a request for a tax file number may be made, including persons who are in receipt of payment, or who hold a concession card, the existing timeframe of 28 days to satisfy the request will continue to apply.
If this Act receives the Royal Assent before 1 November 2017, the amendments made by this Schedule commence on 1 January 2018.
If the Act receives the Royal Assent on or after 1 November 2017, the amendments made by this Schedule will commence on the first 1 January, 1 April, 1 July or 1 October that occurs after the end of the period of 2 months beginning on the day this Act receives the Royal Assent.
Explanation of the changes
Part 1 - Main Amendments
Social Security Administration Act
Item 1 repeals existing sections 75 to 77 of the Act and substitutes new sections 75 to 77.
New sections 75 to 77 are a substantial redraft of the previous provisions to improve their readability and simplicity. However, all powers located in previous sections 75 to 77 have been retained in the new provisions.
In addition to retaining all previous powers, new sections 75 to 77 will allow a request to provide a tax file number and/or a relevant third party's tax file number as part of a claim for a social security payment,seniors health card or income-tested health care card, and will prevent payment or provision of the card until the request is satisfied.
Section 75 as redrafted gives the Secretary the power to request a person who is claiming, has claimed, or is receiving, a social security payment, or who is claiming, has claimed, or is the holder of, a seniors health card or income-tested health care card, to provide the Secretary with a written statement of the person's tax file number. If the person does not have a tax file number, the Secretary will have the power to request that the person apply to the Commissioner of Taxation for a tax file number and then give the Secretary a written statement of the person's tax file number once it has been issued. Making a TFN declaration will satisfy these requirements even where the Australian Taxation Office has not yet provided the tax file number to the Department of Human Services.
The section also gives the Secretary the power to request that a person who is claiming, has claimed, or is the holder of a relevant payment or card, provide the Secretary with a written statement of another person's tax file number:
- •
- if the person is a member of a couple and the person's partner is in Australia - the partner's tax file number;
- •
- if the rate of the social security payment that the person is receiving takes account of someone else's income, and that other person is in Australia - the tax file number of that other person. This request may relate to several persons, and need not identify a particular person in the request.
Although the Secretary may make a request under this section, a person to whom the request is made cannot be required to comply with it.
Section 76, as redrafted, sets out a number of ways in which a person may satisfy a request for a tax file number under section 75, duplicating the effect of current section 76.
Section 77 as redrafted outlines the consequences of not satisfying a request for a tax file number under section 75, and the consequences for not having a tax file number after giving a declaration under section 76.
In addition, section 77 gives the Secretary the power to exempt a person from the operation of these consequences. A specific instance where this may occur is if the Secretary requests a person to give a written statement of another person's tax file number, and the Secretary is satisfied that the person does not know the other person's tax file number, and the person cannot otherwise satisfy the request.
Item 1A inserts new paragraph 204A(2)(ba), expanding the scope of section 204A, which provides the uses to which the Secretary may put information provided to the Secretary by the Commissioner of Taxation, including tax file numbers. New paragraph 204A(2)(ba) allows the use of this information to verify, in respect of persons who have made claims under the social security law for seniors health cards, or health care cards that are income-tested for those persons, the qualification of those persons for those cards.
Item 1B makes consequential amendments to insert a definition of income-tested into the Social Security Act, to support the use of this term in the tax file number provisions. The definition inserted into subsection 6A(1) provides that a health care card is income-tested for a person if the person is required by paragraph 1061ZO(2)(d), (3)(e) or (4)(d) to satisfy the health care card income test in order to qualify for the health care card.
New item 1C, consequential to item 1B, inserts a cross-reference to the new definition in section 6A into subsection 23(1), which sets out general definitions.
Part 2 - Consequential Amendments
Items 2, 3, 4, 5 and 6 are consequential to the amendments made by item 1, and adjust references to the amended sections.
Part 3 - Application provision
Item 7 provides that amendments made by this Schedule will only apply in relation to requests made under section 75 on or after the commencement of this Schedule.