House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Family and Community Services, Senator the Hon Kay Patterson)

Outline and financial impact statement

Outline

This Bill makes amendments to the A New Tax System (Family Assistance) Act 1999 and the A New Tax System (Family Assistance) (Administration) Act 1999 to give effect to the Government's Welfare to Work package as it relates to child care benefit.

The amendments made by Schedule 1 increase from 20 to 24 hours per week the threshold weekly limit of hours of care provided by an approved child care service to a child, for which child care benefit may be paid without the need for the claimant and the claimant's partner (if any) to satisfy the work/training/study test.

Amendments made by Schedule 2 modify the work/training/study test that a claimant and the claimant's partner have to meet to be paid child care benefit for up to 50 hours of care provided to the claimants' child by an approved child care service in a week.

As a result of the amendments in Schedule 2, an individual undertaking paid work, or a course of study or training for the purpose of improving the individual's work skills and/or employment prospects, or any other activity that the Minister determines, will satisfy the work/training/study test only if the sum of the hours that the individual spends during the week doing those activities is at least 15. In addition, an individual will be able to average the number of hours that the individual spends doing those activities over a two week period and will satisfy the work/training/study test for each week in that period, if the sum of the number of hours for that two week period is at least 30.

The amendments made by this Bill apply to child care benefit claimed as child care benefit by fee reduction, or as a lump sum, for care provided by an approved child care service.

Financial impact statement

Schedule 1 - Amendments relating to threshold for receiving child care benefit

Commencement: 1 July 2006

Financial impact: Total resourcing

Schedule 2 - Amendments relating to work/training/study test

Commencement: 1 July 2006

Financial impact: Total resourcing

Notes on clauses

Clause 1 provides that the Act may be cited as the Family and Community Services Legislation Amendment (Welfare to Work) Act 2005.

Clause 2 provides that the Act commences on the day on which it receives the Royal Assent.

Clause 3 refers the reader to the Schedules, which contain items amending the provisions of the A New Tax System (Family Assistance) Act 1999 and the A New Tax System (Family Assistance) (Administration) Act 1999.

This Explanatory Memorandum uses the following abbreviations:

•

'Family Assistance Act' means the A New Tax System (Family Assistance) Act 1999;

•

'Family Assistance Administration Act' means the A New Tax System (Family Assistance) (Administration) Act 1999; and

•

'CCB' means child care benefit.

Schedule 1 - Amendments relating to threshold for receiving child care benefit

Summary

The amendments contained in this Schedule increase from 20 to 24 hours per week the threshold weekly limit of hours of care provided by an approved child care service to a child, for which CCB may be paid without the need for the claimant and the claimant's partner (if any) to satisfy the work/training/study test.

These amendments apply to CCB claimed as CCB by fee reduction, or as a lump sum, for care provided by an approved child care service.

Background

Currently, if a claimant or the claimant's partner do not satisfy the work/training/study test, CCB may be paid to the claimant for up to 20 hours of child care provided in a week to the claimant's child by an approved child care service.

Explanation of changes

Amendments to the Family Assistance Act

Items 1 - 8 replace various references to '20' hours in the Family Assistance Act with references to '24' hours to give effect to the increase in the weekly hours threshold from 20 to 24 hours.

Item 1 amends paragraph 53(1)(a) by replacing the reference to 20 hours with a reference to 24 hours. Subsection 53(1) sets out the various weekly limits of hours applicable to a fee reduction claimant.

Item 2 amends paragraph 53(2)(a) by replacing the reference to 20 hours with a reference to 24 hours. Subsection 53(2) sets out the various weekly limits of hours applicable to a past period claimant.

Item 3 amends subsection 53(3) by replacing the reference to 20 hours with one referring to 24 hours. Subsection 53(3) currently provides that a limit of 20 hours applies as the default weekly limit of hours to a claimant if:

(a)

in the case of a fee reduction claimant - a limit of 50 hours, a limit of more than 50 hours or a 24 hour care limit does not apply in respect of the week; and

(b)

in the case of a past period claimant - if a limit of 50 hours does not apply in respect of the week.

Item 4 amends subsection 54(8) which currently provides that a limit of 50 hours applies to a fee reduction claimant who is an individual if the Secretary considers that the child needs more than 20, up to a maximum of 50 hours care in a week because of exceptional circumstances. This item replaces the reference to "20" hours with "24" hours.

Item 5 amends paragraph 54(9)(b) by replacing the reference to 20 hours with one referring to 24 hours. Subsection 54(9) is similar to subsection 54(8) except that it applies where the fee reduction claimant is an approved child care service.

Item 6 amends subsection 54(10) that currently applies in circumstances where an approved child care service certifies that, for a specified period, the child needs or needed more than 20, but not more than hours of care in a week because the child is or has been at risk of serious abuse or neglect. This item replaces the reference to 20 hours with one referring to 24 hours.

Item 7 replaces the reference in paragraph 54(12)(b) to "20" hours with a reference to "24" hours. Subsection 54(12) sets out circumstances where a limit of 50 hours applies in the week to a fee reduction claimant if the Secretary considers that the child is at risk.

Item 8 amends the reference to "20" hours in paragraph 57A(1)(a) by replacing it with a reference to "24" hours. Subsection 57A(1) provides that the Minister must determine rules relating to how to work out the hours in sessions of care provided by an approved child care service to a child in a week that are to count towards the various weekly limits of hours.

Amendments of the Family Assistance Administration Act

Items 9 - 15 replace various references to "20" hours in the Family Assistance Administration Act with references to "24" hours to give effect to the increase in the weekly hours threshold from 20 to 24 hours.

Item 9 amends paragraph 50H(3)(b) by replacing the reference to "20" hours with a reference to "24" hours. Section 50H requires the Secretary to determine the weekly limit of hours where a fee reduction claimant has a determination under section 50F that the claimant is conditionally eligible for CCB by fee reduction.

Item 10 amends subsection 54C(1) by replacing the reference to "20" hours with a reference to "24" hours. Subsection 54C(1) currently provides that, if the claimant is eligible under section 47 of the Family Assistance Act (an approved child care service is eligible for CCB by fee reduction for care provided to a child at risk), the Secretary is taken to have made a determination of a weekly limit of 20 hours applicable to the service in respect of the child.

Item 11 amends paragraph 56C(3)(b) by replacing the reference to 20 hours with a reference to 24 hours. Subsection 56C(3) currently applies in circumstances where a weekly limit of more than 20 hours is in force in respect of a fee reduction claimant who is an individual. This subsection imposes an obligation on the claimant to notify the Secretary in a manner approved by the Secretary if 'anything happens that causes a reduction in the weekly limit of hours' or the 'claimant becomes aware that anything is likely to happen that will have that effect'.

Item 12 amends paragraph 56D(1)(c) by replacing the reference to "20" hours with a reference to "24" hours. Subsection 56D(1) is similar to subsection 56C(3) except that it applies in circumstances where a determination of a weekly limit of more than 20 hours is in force in respect of a fee reduction claimant who is an approved child care service.

Item 13 amends subsection 59F(1) by replacing the reference to "20" hours with a reference to "24" hours. Subsection 59F(1) applies in circumstances where the Secretary has sent out a data verification form under section 57F to an individual who is conditionally eligible for CCB by fee reduction, whose limit of hours determined under section 50H is 50 hours and who did not provide information requested in the data verification form. Currently, subsection 59F(1) gives the Secretary discretion to vary the determination of a weekly limit of hours to one with a limit of 20 hours.

Item 14 amends subsection 64D(2) by replacing the reference to "20" hours with a reference to "24" hours. Consequential amendments are also made to the heading to section 64D and the heading to subsection 64D(2). Section 64D applies to a fee reduction claimant. Currently, the Secretary has discretion to vary the weekly limit of hours determination so that a limit of 20 hours applies in a week if a limit of 50 hours, more than 50 hours or a 24 hour care limit does not apply in the week.

Item 15 amends paragraph 219B(3)(a) by replacing the reference to "20" hours with a reference to "24" hours. Section 219B imposes an obligation on an approved child care service to reduce the fees of individuals when the approved child care service is eligible for CCB (when a child is at risk).

Item 16 is a transitional provision that addresses the situation where a 20 hour limit applies to a claimant who is an individual or an approved child care service immediately before the new rules start to apply on and from 3 July 2006.

The effect of new subitem 16(1) is to convert the existing 20 hours determination, whether the claimant is an individual or a child care service, into a 24 hours determination, on and from 3 July 2006.

If a determination of the limit of hours under subsection 50H(1) of the Family Assistance Administration Act is in force, to which new subitem (1) applies, new subitem 16(2) requires the Secretary to give notice to the individual and to the approved child care service or services providing care to the child.

New subitem 16(3) provides that the notice must state that, on and from the start of the first week commencing after 1 July 2006 (3 July 2006), the weekly limit of hours applicable to the claimant and the child is 24 hours.

New subitem 16(4) clarifies that the failure to send the notice referred to in subitem 16(2) or include the information specified by subitem 16(3) or both does not invalidate the operation of subitem 16(1).

New subitem 16(5) ensures that the necessary obligation is imposed upon the approved child care service to act on the notice in the same way as if it were a notice of a kind referred to in column 1 of table item 6 of the table in subsection 219A(2) of the Family Assistance Administration Act (the obligation being to apply the new limit of hours to the calculation of CCB).

Item 17 provides that the amendments made by the Schedule apply to sessions of care provided during the first week commencing after 1 July 2006 (these sessions would start in the week commencing Monday 3 July 2006) or during subsequent weeks.

Schedule 2 - Amendments relating to work/training/study test

Summary

Amendments made by this Schedule modify the work/training/study test that a claimant and the claimant's partner have to meet to be paid CCB for up to 50 hours of care provided to the claimant's child by an approved child care service in a week.

As a result of the amendments in Schedule 2, an individual undertaking paid work, or a course of study or training for the purpose of improving the individual's work skills and/or employment prospects, or any other activity that the Minister determines, will satisfy the work/training/study test if the sum of the hours that the individual spends during the week doing those activities is at least 15. Alternatively, an individual will satisfy the work/training/study test for each week in a fortnight if the number of hours the individual has engaged in such activities is at least 30 over the fortnight.

These amendments apply to CCB claimed as CCB by fee reduction, or as a lump sum, for care provided by an approved child care service.

Background

Under the current rules, the work/training/study test is only relevant if a claimant wishes to receive CCB for up to 50 hours of care provided in a week to the claimant's child. For a 50 hour limit to apply to a claimant, the claimant and the claimant's partner (if any) are required to satisfy the work/training/study test 'at some time in the week' (subsection 54(2) of the Family Assistance Act refers).

The amendments to the Family Assistance Act and the Family Assistance Administration Act made by this Schedule amend the work/training/study test as it applies to paid work, a training course with the purpose of improving the individual's work skills and/or employment prospects and to a course of education undertaken for the purpose of improving the individual's work skills and/or employment prospects. The claimant and the claimant's partner (if any) will satisfy the work/training/study test for a week only if the sum of the number of hours that each individual spends during the week doing those activities is at least 15. Alternatively, if an individual is unable to meet the 15 hour test for a week, an individual will be able to meet the work/training/study test for that week provided that the sum of the hours the individual worked in the immediately preceding week or in the immediately following week when added to the number of hours for the week in question is at least 30. This allows the individual to satisfy the work/training/study test by engaging in such activities for an average of at least 15 hours per week for the two weeks in question.

The amendments also give the Minister the power to determine by legislative instrument other activities that can be counted towards meeting the activity requirements.

Explanation of the changes

Amendments to the Family Assistance Act

Items 1 - 14 make amendments to the Family Assistance Act.

Items 1 and 2 amend the definition of 'paid work' in subsection 3(1) and subsection 3B(1) to clarify that these definitions do not apply to new section 17A.

The definitions of 'paid work' in subsection 3(1) and subsection 3B(1) were recently added to the Family Assistance Act by the Family and Community Services Legislation Amendment (Family Assistance and Related Measures) Act 2005 and are relevant to the method of calculating the rate of family tax benefit Part B and not CCB.

Item 3 amends the note to subsection 3B(1) and is consequential to the amendment made by item 2.

Item 4 amends section 14 by adding three new subsections (1A), (1B) and (1C).

Section 14 contains rules applicable to the meaning of 'satisfies the work/training/study test'. Subsection 14(1) provides that an individual satisfies the work/training/study test if the individual has 'recognised work or work related commitments' (defined in section 15), 'recognised training commitments' (defined in section 16) or 'recognised study commitments' (defined in section 17).

New subsection 14(1A) is applicable to circumstances where a 50 hours weekly determination is sought in relation to care provided by an approved child care service. Under new subsection 14(1A), an individual satisfies the work training test only if:

(a)

the individual meets the activity requirements under new section 17A for the week; or

(b)

the individual is not included in a class of individuals specified in a determination under new subsection 14(1C) and:

(i)

paragraph 15(1)(b), 15(1)(c), 17(1)(a), 17(1)(b), 17(1)(c) or 17(1)(d) applies to the person; or

(ii)

the individual is included in a class specified in a determination under subsection 15(2); or

(iii)

the individual is covered by the Minister's determination under subsection 14(1B) or 14(2).

The requirement in new paragraph 17A(1)(a) only applies if:

•

the activity engaged in by the individual is specified in new subsection 17A(1); or

•

the activity is one determined by the Minister, by legislative instrument, under new subsection 17A(2) ( item 9 ) as an activity that counts towards meeting the activity requirements under new section 17A; or

•

the individual is included in a class of individuals specified in a determination under new subsection 17A(1C).

In the case of new paragraph 14(1A)(a), the amendments made to subsection 54(2) and paragraph 54(3)(b) ( items 11 and 13 ) clarify that the work/training/study test is satisfied if the activity requirements under new section 17A are met 'for the week'.

If new paragraph 14(1A)(b) applies to the individual, the amendments made to subsection 54(2) and paragraph 54(3)(b) ( items 11 and 13 ) clarify that the work/training/study test is satisfied if the requirements are met 'at some time in the week'. This retains the current work/training/study test for these individuals.

New paragraph 14(1A)(b) refers to new subsection 14(1C) which provides the Minister with power, by legislative instrument, to determine that one or more of the classes of individuals specified in a determination under subsection 15(2) are classes of individuals who must meet the activity requirements under section 17A. Subsection 15(2) gives the Minister power to determine that individuals included in a specified class are individuals who are taken to have recognised work or work related commitments for the purposes of section 15.

New subparagraph 14(1A)(b)(iii) refers to new subsection 14(1B) and subsection 14(2). New subsection 14(1B) gives the Minister power, by legislative instrument to determine circumstances in which individuals are not required to meet the activity requirements under section 17A. Subsection 14(2) provides that the Minister may determine that individuals included in a specified class are exempt from the requirements of paragraphs 14(1)(a), (b) and (c). If an individual is covered by a future determination under new subsection 14(1B) the individual will not be required to meet the activity requirements in section 17A. Individuals who are covered under subsection 14(2) determination are exempted from having to satisfy the work/training/study test and this exemption will continue.

Item 5 is consequential to item 6 and amends the current section 16 so that it becomes subsection 16(1).

Item 6 adds a new subsection 16(2) which clarifies that an individual who undertakes an education course will still be regarded as having 'recognised training commitments' even if the individual is not required to participate in any activity for the course, for example, due to vacation breaks in the course. This subsection is intended only to apply to breaks that occur during the currency of a course and would not apply once the course had formally concluded.

Item 7 is consequential to item 8 and amends current section 17 so that it becomes subsection 17(1).

Item 8 adds a new subsection 17(2) which clarifies that an individual who undertakes an education course will still be regarded as having 'recognised study commitments' even if the individual is not required to participate in any activity for the course, for example, due to vacation breaks in the course. This subsection is intended only to apply to breaks that occur during the currency of a course and would not apply once the course had formally concluded.

Item 9 adds a new section 17A that contains the activity requirements that will be applicable to individuals who engage in the activities described and who are required to satisfy the activity requirements in the section because of a determination under new subsection 14(1C) or because the activity is one that counts towards meeting the activity requirements under new section 17A by virtue of a determination under new subsection 17A(2).

New subsection 17A(1) is intended to be read in conjunction with new subsection 14(1A) (item 4) and applies if paragraph 14(1A)(a) applies to the individual but not if paragraph 14(1A)(b) applies.

New subsection 17A(1) provides that an individual who has claimed CCB for care provided during a week meets the activity requirements for a week if:

(a)

during the week, the individual has engaged in one or more of the following activities:

(iv)

paid work (this can include work as an employee or other work such as self employment);

(v)

a training course undertaken for the purposes of improving his or her work skills and/or employment prospects;

(vi)

a course of education undertaken for the purposes of improving his or her work skills and/or employment prospects;

(vii)

any other activity that the Minister determines under subsection 17A(2); and

(b)

the sum of the hours that the individual spends during the week doing those activities:

(viii)

is at least 15; or

(ix)

if subparagraph (i) does not apply - is, when added to the sum of the number of hours that the individual spends during the immediately proceeding week doing those activities, at least 30; or

(x)

if subparagraphs (i) and (ii) do not apply - is, when added to the sum of the number of hours that the individual spends during the immediately following week doing those activities, at least 30.

New subparagraphs 17A(1)(b)(ii) and (iii) apply in circumstances where an individual does not have the 15 hours as required by subparagraph (i) for a particular week. In these circumstances, an individual will still be able to satisfy the work/training/study test for the week in question provided that the sum of the hours the individual worked in the immediately preceding week or in the immediately following week when added to the number of hours for the week in question is at least 30.

For example Alexandra engages in paid work as follows:

Alexandra satisfies the work/training/study test for week 1 on the basis of subparagraph 17A(1)(b)(i) because she has worked at least 15 hours for that week.

Alexandra satisfies the work/training/study test for week 3 on the basis of subparagraph 17A(1)(b)(ii) because she has worked 20 hours during the immediately preceding week (week 2) which can be added to the 10 hours worked in week 3 to reach the 30 hours required. Alexandra also satisfies the work/training/study test for week 2 in these circumstances.

Alexandra satisfies the work/training/study test for week 5 on the basis of subparagraph 17A(1)(b)(iii) because she has worked 20 hours during the immediately following week (week 6) which can be added to the 10 hours worked in week 3 to reach the 30 hours required. Alexandra also satisfies the work/training/study test for week 6 in these circumstances.

New subsection 17A(1) is intended to allow an individual to meet the activity requirements in two ways. An individual can meet the activity test by doing one of the activities specified in new subparagraphs (i) - (iv) for at least 15 hours, for example by engaging in paid work for 15 hours. If the individual does not perform any of the activities specified in subparagraphs (i) - (iv) for at least 15 hours, the individual can combine any of the activities specified to reach the 15 hour threshold, for example, an individual may engage in 10 hours paid work during the week and in 5 hours of training for the week. Similarly an individual can meet the activity test by engaging in such activities (or a combination thereof) for an average of at least 15 hours for two consecutive weeks (at least 30 hours for the two weeks concerned).

New subsection 17A(2) provides that the Minister may, by legislative instrument, determine activities that count towards meeting the activity requirements under this section.

Examples of the activities that may be covered by a legislative instrument under new subsection 17A(2) include: actively setting up a business that has not yet started to operate, or personally providing constant care and supervision for a disabled person in circumstances where the individual is unable to undertake a work, training or study commitment.

New subsection 17A(3) provides that the determination may provide that specified kinds of leave are activities that count towards meeting the activity requirements under this section.

Examples of the kinds of leave that could be covered by the determination include: annual leave, long service leave and any other form of paid leave granted under the individual's terms and conditions of paid work.

New subsection 17A(4) applies, if in determining whether an individual has met the activity requirements for a week, hours that the individual spends during another week, doing the activities mentioned in paragraph (1)(a) are counted. This occurs when new subparagraph 17A(1)(b)(ii) or (iii) are applied. In these circumstances, none of the hours spent in that other week (whether all hours or some hours of the other week were counted) are to be counted in determining whether the individual has met the activity requirements for a third week.

Example 1: Lisa works 7 hours in week 1, 23 hours in week 2 and 7 hours in week 3.

Lisa is not meeting the work/training/study test for week 1 under subparagraph 7A(1)(b)(i) because she works less than 15 hours in that week. Lisa is meeting the test under subparagraph 17A(1)(b)(iii) because the total number of hours in weeks 1 and 2 is 30. The 23 hours from week 2 were used for the purposes of meeting the test in week 1. Lisa is not meeting the work/training/study test for week 3 under 17A(1)(b)(i) (she works less than 15 hours in that week) and the 23 hours from week 2 cannot be used for the purposes of meeting the test in week 3 because hours from week 2 have already been used for the purposes of meeting the test in week 1.

Example 2: Harry works 10 hours in week 1, 23 hours in week 2 and 12 hours in week 3.

Harry is not meeting the work/training/study test for week 1 under subparagraph 17A(1)(b)(i) (he works less than 15 hours in that week) but he is meeting the test under subparagraph 17A(1)(b)(iii) because the total number of hours in weeks 1 and 2 is "at least 30". The 23 hours from week 2 were used for the purposes of meeting the test in week 1. Harry is not meeting the work/training/study test for week 3 under 17A(1)(b)(i) (he works less than 15 hours in that week) and none of the 23 hours from week 2 can be used for the purposes of meeting the test in week 3 because under subsection 17A(4) none of the hours in week 2 are to be counted in determining whether Harry has met the activity requirements for a third week.

New subsection 17A(5) applies in circumstances where an individual is in paid work and is taking leave of a kind specified in the determination under new subsection 17A(2). The individual is taken to have engaged in paid work for the number of hours that the individual would have spent doing the paid work if the individual did not take the leave.

For example, Nicole is a sole parent with one child in approved child care. Nicole satisfies the work/training/study test because she does paid work for 38 hours per week. When Nicole takes annual leave from her employment for a week, she is taken to have worked 38 hours during the week for the purposes of the work/training/study test under new subsection 17A(5).

Item 10 amends paragraph 52(4)(a) by inserting a reference to new subsection 59(2) of the Family Assistance Administration Act before 'section 59F'. This amendment is consequential to the amendment of section 59 of the Family Assistance Administration Act ( item 18 ). Paragraph 52(4)(a) lists the provisions of the Family Assistance Administration Act under which variation of the determination relating to the weekly limit of hours may be made. Item 10 inserts a reference to a new variation power created by item 18 .

Item 11 amends subsection 54(2) that applies in circumstances where the claimant is an individual.

Currently, subsection 54(2) requires that the individual satisfy the work/training/study test 'at some time in the week'.

This amendment clarifies that in relation to the activity requirements under new section 17A, the work/training/study test is satisfied if the activities are performed 'for the week'. The requirement to meet the test 'at some time in the week' will continue to be relevant to individuals to whom the activity requirements in new section 17A do not apply.

The claimant and the claimant's partner (if any) must both satisfy the work/training/study test.

Item 12 adds a new note at the end of subsection 54(2) that provides that new subsection 14(1A) specifies extra requirements for satisfying the work/training/study test for the purposes of this section.

Item 13 amends paragraph 54(3)(b) that applies in circumstances where the claimant is an approved child care service.

Currently, paragraph 54(3)(b) requires that the individual in whose care the child last was satisfy the work/training/study test 'at some time in the week'.

This amendment clarifies that, in relation to the activity requirements under new section 17A, the work/training/study test is satisfied if the activities are performed 'for the week'. The requirement to meet the test 'at some time in the week' will continue to be relevant to individuals to whom the activity requirements in new section 17A do not apply.

In these circumstances, the individual and the individual's partner (if any) must both satisfy the work/training/study test.

Item 14 adds a new note at the end of subsection 54(3) that provides that new subsection 14(1A) specifies extra requirements for satisfying the work/training/study test for the purposes of this section.

Amendments of the Family Assistance Administration Act

Items 15 - 34 amend various provisions of the Family Assistance Administration Act.

Items 15 and 16 amend section 57F.

Section 57F gives the Secretary power to give a claimant who is conditionally eligible for CCB by fee reduction a written notice requiring the claimant to give to the Secretary, within the time specified in the notice, the information specified in the data verification form accompanying the notice.

The power contained in section 57F will be used to send notices to fee reduction claimants who have a 50 hours weekly limit determination in order to assess their continued eligibility for that limit of hours under the modified work/training/study test that will apply from 3 July 2006. Item 16 adds a new subsection 57F(2) that clarifies that the powers contained in section 57 (which item 15 amends to become subsection 57F(1)) can be used for this purpose.

Once a response is received to the notice issued in relation to the matters set out in new subsection 57F(2), the Secretary will be able to determine whether or not the claimant will satisfy the work/training/study test on or after the week commencing 3 July 2006.

If the Secretary is satisfied that the claimant will satisfy the work/training/study test, no further action will be necessary as the claimant will continue on with the 50 hours determination.

If the Secretary is satisfied that the claimant would not satisfy the work/training/study test on and from 3 July 2006, then the Secretary will be able to use the variation powers contained in the Family Assistance Administration Act to vary the 50 hours determination to one with a 24 hour limit. The determination would have effect from 3 July 2006.

Items 17 and 18 amend section 59.

Section 59 applies in circumstances where a claimant has been sent a notice under section 57F and the claimant has not returned the form in the time specified in the request. In these circumstances, under section 59 as it currently provides, the Secretary has discretion to vary the claimant's determination of conditional eligibility with the effect that the claimant is not conditionally eligible from 1 July in the income year following the one in which the request was made.

Item 18 adds new subsections 59(2) and 59(3) to section 59.

New subsection 59(2) provides that, where the request is a request for information of the kind referred to in subsection 57F(2) (see item 16 ) and the request form is not returned in the time specified in the request, then the Secretary may vary the claimant's determination as to hours with the effect that the weekly limit is 24 hours, from 3 July 2006. The variation of the claimant's determination of conditional eligibility so that eligibility is lost from 1 July of the next income year following that in which the notice was sent is not considered appropriate in these circumstances.

New subsection 59(3) provides that the Secretary must make a determination to undo the effect of a variation under new subsection 59(2) if, before the end of the income year following the one in which the variation took effect:

(xi)

the claimant returns the data verification form specified in the request under section 57F and provides the information referred to in new paragraph 59(2)(c); or

(xii)

the Secretary finds out the information whether from the claimant or someone else.

Item 17 is an amendment consequential to the amendment made by item 18 and changes the existing section 59 into subsection 59(1) to reflect the addition of new subsections 59(2) and (3).

Item 19 amends paragraph 62D(a). This amendment is a consequential amendment to the amendment described in item 18 .

Section 62D applies where:

(m)

the Secretary makes a variation of a determination under section 58, 59C, 59D, 59F, 59G, 60C, 60E, 62A, 62B, 62C or 62CA (the first variation); and

(n)

the period specified under the particular section passes, during which the Secretary is required to vary again the determination to undo its effect; and

(o)

after the period, the Secretary is provided with the information, or finds out the information, the lack of which caused the Secretary to make the first variation.

In these circumstances, the Secretary must again vary the determination using the information provided or found out, with effect from the Monday after the new variation.

Item 19 adds reference to the new variation power in new subsection 59(2), to paragraph 62D(a), to ensure that section 62D also applies where the Secretary was required to undo the effect of a variation under new subsection 59(2) because of new subsection 59(3) (item 18).

Items 20, 21 and 22 amend various parts of subsection 64A(5). These amendments are consequential to the amendment described in item 18 .

Section 64A gives the Secretary power to vary a determination of a weekly limit of hours under section 50H or section 54C, on application, so that a limit of 50 hours in the week applies provided that the criteria contained in subsection 64A(2) are satisfied.

Subsection 64A(5) provides that, if:

(a)

when a variation under subsection 64A(2) takes place, a variation is in force under section 59F or 62C; and

(b)

the variation under section 59F or 62C has effect for any period when the variation under this section would have effect;

the variation under section 59F or 62C prevails over the variation under section 64A unless the variation under section 64A take place because of circumstances listed in subsection 54(12) of the Family Assistance Act (child needs up to 50 hours of care because he or she is at risk of serious neglect or abuse) applies in a week.

Items 20, 21 and 22 are consequential on the amendment made to section 59 by item 18 . Items 20, 21 and 22 amend the heading to subsection 64A(5), paragraph 64A(5)(a), 64A(5)(b) and subsection 64A(5) to include references to new subsection 59(2). This clarifies when and in what circumstances a variation under new subsection 59(2) should prevail over a variation made under section 64A.

Items 23, 24 and 25 amend various parts of subsection 64B(6). These amendments are consequential to the amendment described in item 18 .

Section 64B enables a determination of a weekly limit of hours in force under section 50H or section 54C to be varied, on application, so that a limit of more than 50 hours in a week applies.

Subsection 64B(6) is similar to subsection 64A(5) and clarifies when and in what circumstances a variation under section 59F or 62C should prevail over a variation made under section 64B.

The amendments made by items 23, 24 and 25 amend the heading to subsection 64B(6) and amend paragraph 64B(6)(a), 64B(6)(b) and subsection 64B(6) by adding references to new subsection 59(2) for a similar reason to the amendments described for items 20, 21 and 22 .

Items 26, 27 and 28 amend various parts of subsection 64C(5). These amendments are consequential to the amendment described in item 18 .

Section 64C enables a determination of a weekly limit of hours in force under section 50H or section 54C to be varied, on application, so that a 24 hour care limit in a week applies.

Subsection 64C(5) is similar to subsection 64A(5) and subsection 64B(6) and clarifies when and in what circumstances a variation under section 59F or 62C should prevail over a variation made under section 64C.

The amendments made by items 26, 27 and 28 add references to new subsection 59(2) in the headings to subsection 64C(5), paragraphs 64C(5)(a) and 64C(5)(b) and subsection 64C(5) for a similar reason to the amendments to subsections 64A(5) and 64B(6) described above.

Items 29, 30 and 31 amend various parts of subsection 65D(5). These amendments are consequential to the amendment described in item 18 .

Section 65D enables a determination of a weekly limit of hours in force under section 50H to be varied if an event occurs to reflect changes in weekly limit of hours.

Subsection 65D(4) is similar to subsections 64A(5), 64B(6) and 64C(5) and clarifies when and in what circumstances a variation under section 59F or 62C should prevail over a variation made under section 64C.

The amendments made by items 29, 30 and 31 add references to new subsection 59(2) in the heading to subsection 65D(4) and to paragraphs 65D(4)(a), 65D(4)(b) and subsection 65D(5) for a similar reason to the amendments to subsections 64A(5), 64B(6) and 64C(5) described above.

Items 32 and 33 amend subsection 157(2), which provides the Secretary with the power to obtain information to verify claims.

Item 32 adds a further paragraph at the end of paragraph 157(2)(j) that clarifies that, in relation to any employment of the person, information can be sought about the number of hours each week for which the person is employed.

Item 33 adds further paragraphs at the end of subsection 157(2) to clarify that information relevant to the work/training/study test can be gathered in relation to 'any other work (other than as an employee) that the person does' and 'in relation to any training of the person'.

Item 34 amends subsection 219A(2) (table item 6, column 1) (section 219A deals with child care services' obligations following receipt of notices of determinations relating to child care benefit of an individual) to clarify that the existing obligation of an approved child care service to act on a notice of variation of the determination of the weekly limit of hours includes acting on a variation made under new subsection 59(2). This amendment is consequential to the amendment made by item 18 .

Item 35 provides that the application of the amendments made by Schedule 2 apply to sessions of care provided during the first week commencing after 1 July 2006 (the week commences Monday 3 July 2006) and during subsequent weeks.