Senate

Social Security and Family Assistance Legislation Amendment (Weekly Payments) Bill 2010

Supplementary Explanatory Memorandum

Circulated By the Authority of the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP)

Government Amendments

The following amendments add a new Schedule 3 to the Bill and make consequential changes to the commencement provision in clause 2 of the Bill. The new Schedule 3, in turn, amends the application and transitional rules in Schedule 1 to the amending Act.

Changes to Youth Allowance included in the Social Security and Other Legislation Amendment (Income Support for Students) Bill 2009 (the Students Bill) were expected to come into effect on 1 January 2010.

The changes to the youth allowance parental income test, included in the Students Bill, would have resulted in around 65,000 FTB Part A children aged 16-20 becoming eligible for youth allowance.

The youth allowance legislation has not yet passed through Parliament and amended legislation with a new start date of 1 July 2010 is expected to be debated in the 2010 Autumn sitting.

Of the 65,000 FTB children who were expected to move to youth allowance from 1 January 2010 as a result of the changes to the youth allowance parental income test, around 10,000 are thought to be undertaking a combination of study and work activities. With a 1 May start date for the FTB Part A participation requirement, these young people will lose eligibility for FTB Part A and need to wait two months until they can access youth allowance under the new parental income test.

To ensure these FTB children continue to be eligible for government assistance, it is proposed to postpone the start date to 1 July 2010 to align with the introduction of the youth allowance amendments.

A postponement will also mean around 8,300 young people who will not meet the participation requirement will remain eligible for FTB Part A until 1 July 2010.

Notes on amendments

Amendment 1 amends the commencement provision in clause 2 of the Bill. Schedules 1 and 2 (weekly payments) will continue to commence on Royal Assent. Schedule 3 will commence immediately after the commencement of Schedule 1 to the amending Act (1 January 2010). However, the changes made by Schedule 3 are to the application and transitional provisions in the amending Act and will not affect the entitlement of FTB instalment customers who claimed their FTB before 1 January 2010 before 1 July 2010.

Amendment 2 adds a new Schedule 3 to the Bill.

New Schedule 3 makes three amendments to the application and transitional rules in Part 2 of Schedule 1 to the amending Act.

The first amendment is to replace the current reference to 1 May 2010 in subitem 13(2) with a reference to 1 July 2010. This amendment ensures that the FTB participation measure will not affect until 1 July 2010 those existing FTB instalment customers who claimed their FTB before 1 January 2010.

The second amendment is a similar consequential change to subitem 14(1).

The third amendment is to subitem 14(3) to extend the transition period so that it applies from 1 January 2010 until 30 June 2010 (instead of the current 30 April 2010). This change will enable the Secretary to require the provision of information or production of a document relevant to the new FTB activity test up to the time that the measure starts applying to FTB instalment customers who claimed their FTB before 1 January 2010.


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