House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Families, Community Services and Indigenous Affairs, Minister for Disability Reform, the Hon Jenny Macklin MP)

Outline

The Bill contains the measures set out below.

Immunisation requirements

This measure amends the family assistance law to make payment of the family tax benefit Part A supplement conditional on a child meeting the immunisation requirements. This will apply to the income years in which the child turns one, two and five. As a consequence, maternity immunisation allowance will cease from 1 July 2012. This measure will strengthen incentives for parents to have their children immunised and help improve immunisation rates over time.

Baby bonus

This measure pauses the indexation of baby bonus for three years from 1 July 2012, and resets the amount of baby bonus to $5,000 per child from 1 September 2012.

Non-entitlement to family tax benefit on estimated income basis

From 1 July 2012, this measure will prevent an individual (and partner, if any) from being entitled to family tax benefit Part A and/or Part B as fortnightly instalments on the basis of estimated income where the individual had no actual entitlement after underestimating their income for two consecutive years, starting from 2009-10.

Carer allowance

As announced on 3 August 2011 in the Government's National Carer Strategy, the Bill gives certain carer allowance recipients, who care for a disabled adult, access to bereavement payments on the death of the care receiver.

Carer supplement

A second measure from the National Carer Strategy will allow access to carer supplement for those carers whose rate of payment is reduced to nil because of income where they or their partner worked in the fortnight covering 1 July in any given year. This will help ensure the income support system does not act as a disincentive to carers working in paid employment.

Other amendments

Amendments are also made to the family assistance law and social security law to clarify various provisions. The amendments are of a minor or technical nature.

Financial impact statement

Immunisation requirements

This measure will provide savings of $209.1 million over the four years from 1 July 2011.

Baby bonus

This measure will provide savings of $357.7 million over the four years from 1 July 2011.

Non-entitlement to family tax benefit on estimated income basis

This measure has a financial impact of $1.2 million over the four years from 1 July 2011.

Carer allowance

This measure has a financial impact of $2.1 million over the four years from 1 July 2011.

Carer supplement

This measure has a financial impact of $2.9 million over the four years from 1 July 2011.

Other amendments

These amendments have no financial impact.

Statements of compatibility with human rights

The statements of compatibility with human rights appear at the end of this explanatory memorandum.

Notes on clauses

Abbreviations used in this explanatory memorandum

•

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

•

FTB means family tax benefit

•

Income Tax Assessment Act means the Income Tax Assessment Act 1997

•

Social Security Act means the Social Security Act 1991

•

Veterans' Entitlements Act means the Veterans' Entitlements Act 1986

Clause 1 sets out how the new Act is to be cited, that is, as the Family Assistance and Other Legislation Amendment Act 2012.

Clause 2 provides a table that sets out the commencement dates of the various sections in, and Schedules to, the new Act.

Clause 3 provides that each Act that is specified in a Schedule is amended or repealed as set out in that Schedule.

Schedule 1 - Immunisation requirements

Summary

This Schedule amends the family assistance law to make payment of the FTB Part A supplement conditional on a child meeting the immunisation requirements. This will apply to the income years that the child turns one, two and five. As a consequence, maternity immunisation allowance will cease from 1 July 2012. This measure will strengthen incentives for parents to have their children immunised and help improve immunisation rates over time.

Background

Currently, maternity immunisation allowance is generally paid in two separate amounts. In normal circumstances, an individual is eligible for maternity immunisation allowance if the child has met the immunisation requirements before the child turns two and further immunisation requirements before the child turns five.

Where an individual is eligible for FTB, the FTB Part A supplement for each FTB child may be paid at reconciliation, which generally occurs after the end of the relevant income (financial) year.

This Schedule will cease maternity immunisation allowance, currently a payment under the family assistance law. Instead, an individual will only be eligible for the FTB Part A supplement for a child in an income year, where the child turned one, two or five, if they have met the immunisation requirements for the relevant age group.

This Schedule will commence on 1 July 2012.

Explanation of the changes

Part 1 - New rules

Amendments to the Family Assistance Act

Item 1 amends subsection 6(1) of the Family Assistance Act to remove the reference to maternity immunisation allowance and replace it with a reference to the FTB Part A supplement.

Item 2 inserts new section 61B into the Family Assistance Act. New section 61B sets out the situations when the immunisation requirements must be satisfied so that the individual can be eligible for the FTB Part A supplement in respect of a particular FTB child for an income year.

There are two situations in which the immunisation requirements will apply. The first relates to parents and is described in new subsections 61B(1) and (3). The second relates to non-parent carers and is described in new subsections 61B(2) and (3).

New subsections 61B(1) and (3) set out how the immunisation requirements affect eligibility for the FTB Part A supplement for a particular income year if an individual has an FTB child who turns one, two or five in the income year and the individual or their partner is a parent of the child on the last day of the income year. In those circumstances, the FTB Part A supplement is not to be included in calculating the individual's Part A rate for the FTB child for that income year unless certain conditions relating to the immunisation requirements are met. To this end, clause 38A of Schedule 1 to the Family Assistance Act, which provides for the amount of the FTB Part A supplement to be added in working out an individual's maximum or base rate of Part A, is disregarded for the income year unless the conditions in new subsection 61B(3) (explained below) are met.

New subsections 61B(2) and (3) deal with non-parent carers such as foster or kinship carers. New subsection 61B(2) relates to the situation where an individual has an FTB child who turned one, two or five in a particular income year, and neither the individual nor their partner is a parent of the child on the last day of the income year.

If the number of days in the income year that the child is an FTB child of the individual totals at least 182 days (26 weeks), and if the child is an FTB child of the individual on the last day of that year, then the immunisation requirements apply in relation to the child. In those circumstances, the FTB Part A supplement is disregarded in calculating the individual's Part A rate for the child for the income year unless the conditions relating to the immunisation requirements in new subsection 61B(3) (explained below) are met.

As with the health check requirement in section 61A, the conditions in new paragraph 61B(2)(c) ensures that temporary non-parent carers do not need to meet the new requirements by establishing a sufficient period of ongoing care by the carer for it to be reasonable to expect the carer to have organised the child's immunisation. In addition, if the child is no longer an FTB child of the non-parent carer at the end of the income year in which the child turned one, two or five, they would have no continuing legal responsibility in respect of the child and would therefore be unable to play a role in ensuring that the child meets the immunisation requirements within the subsequent two years (the maximum period for meeting the relevant conditions if they apply). In these circumstances, it is unreasonable to withhold the FTB Part A supplement.

In comparison, a parent who has lost care is more likely to have an ongoing connection with the child and could be expected to play a role in ensuring that the immunisation requirements are met. Therefore, it is appropriate for the immunisation requirements to apply to a parent who ceases to have care of the child before the end of the income year.

New subsection 61B(3) provides that, in the two situations described above, where the immunisation requirements apply, the FTB Part A supplement is disregarded in the FTB rate calculation process for the income year in which the FTB child turned one, two or five unless two things happen.

The first is that, at any time before the end of the second income year after the one in which the child turned one, two or five, the Secretary becomes aware of information that the child meets the immunisation requirements set out in section 6 of the Family Assistance Act.

The second is that the Secretary is satisfied at any time (including after the two-year timeframe) that the child met the immunisation requirements within the required two-year timeframe.

These rules enable the immunisation requirements to be met within two income years after the income year in which the relevant FTB child turned one, two or five. However, they also cover situations where information suggesting that the immunisation requirements have been met is provided within the two-year timeframe but is not considered until after that time.

New subsection 61B(4) provides that the immunisation requirements do not apply in relation to an FTB child if the child, or the individual who was eligible for FTB for the child, dies before the end of the second income year after the income year in which the child turned one, two or five. If the individual who was eligible for FTB for the child dies (and the child does not die), the immunisation requirements for the child may still affect eligibility for the FTB Part A supplement for a new carer of the child for a relevant income year.

New subsection 61B(5) makes it clear that new section 61B does not limit the application of current section 32A of the Family Assistance Administration Act (which requires the FTB Part A supplement to be disregarded from the FTB rate calculation process unless and until the relevant FTB reconciliation conditions are satisfied). This means that, if the immunisation requirements are satisfied in relation to an individual and FTB child but the individual does not satisfy the relevant FTB reconciliation conditions, the FTB Part A supplement cannot be included in the individual's rate of FTB.

Conversely, if an individual satisfies the FTB reconciliation conditions but has not met the immunisation requirements in relation to a relevant child, then the individual's FTB entitlement for the relevant income year would still be reviewed under section 105 of the Family Assistance Administration Act, but the FTB Part A supplement would be disregarded in relation to the relevant child. If the immunisation requirements are met at a later time and within two years after the end of the income year in which the relevant child turned one, two or five, then the individual's FTB entitlement can again be reviewed and the FTB Part A supplement for the relevant child included in the individual's rate of FTB as appropriate for the relevant income year.

New subsection 61B(6) defines parent as including an adoptive parent and a relationship parent. A relationship parent is currently defined in subsection 3(1) of the Family Assistance Act by reference to the Social Security Act.

Amendments to the Family Assistance Administration Act

Item 3 makes a technical amendment to subsection 107(1) as a consequence of the amendment made by item 4 , explained below.

Item 4 provides for further exceptions to the limitations in the current date of effect rules for arrears of FTB for a Secretary initiated review. New subsection 107(3C) ensures that the FTB Part A supplement may be paid if a child meets the immunisation requirements within the required timeframe set out in new subsection 61B(3) of the Family Assistance Act. New subsection 107(3D) ensures that the FTB Part A supplement may be paid if the immunisation requirements do not apply because of the death of the FTB child or the eligible individual due to new subsection 61B(4) of that Act.

Item 5 provides for further exceptions to the current time limit rules if a person applies for internal review of a decision about FTB for a past period (such as an end of year lump sum claim for FTB) or FTB because of the death of another individual (such as a lump sum bereavement payment). New paragraph 109D(4)(f) ensures that the FTB Part A supplement may be paid if a child meets the immunisation requirements within the required timeframe set out in new subsection 61B(3) of the Family Assistance Act. New paragraph 109D(4)(g) ensures that the FTB Part A supplement may be paid if the immunisation requirements do not apply because of the death of the FTB child or the eligible individual due to new subsection 61B(4) of that Act.

Item 6 provides for further exceptions to the limitations in the current date of effect rules for arrears of FTB if a person applies for internal review of a decision about payment of FTB by instalment. New paragraph 109E(3)(f) ensures that the FTB Part A supplement may be paid if a child meets the immunisation requirements within the required timeframe set out in new subsection 61B(3) of the Family Assistance Act. New paragraph 109E(3)(g) ensures that the FTB Part A supplement may be paid if the immunisation requirements do not apply because of the death of the FTB child or the eligible individual due to new subsection 61B(4) of that Act.

Part 2 - Removal of old rules

Amendments to the Family Assistance Act

Items 7 to 14 repeal all of the relevant rules for the eligibility and amount of maternity immunisation allowance as well as the references to maternity immunisation allowance in the Family Assistance Act.

Amendments to the Family Assistance Administration Act

Items 15 to 45 repeal all of the relevant rules for claims and determinations for maternity immunisation allowance as well as the references to maternity immunisation allowance in the Family Assistance Administration Act.

Part 3 - Consequential amendments

Amendments to the Income Tax Assessment Act

Items 46 and 47 make consequential amendments to the Income Tax Assessment Act to remove references to maternity immunisation allowance.

Amendments to the Social Security (Administration) Act 1999

Items 48 to 51 make consequential amendments to the Social Security (Administration) Act 1999 to remove references to maternity immunisation allowance.

Part 4 - Application and transitional provisions

Item 52 sets out the application and transitional provisions for Schedule 1.

Subitems 52(1), (2) and (3) provide that, if an individual was eligible for maternity immunisation allowance before 1 July 2012, the existing provisions for maternity immunisation allowance will be preserved on and after 1 July 2012 for that eligibility. In these situations, the existing rules in the family assistance law will continue to apply as if the amendments in Part 1 (New rules) and Part 2 (Removal of old rules) of this Schedule had not been made.

However, a claim for maternity immunisation allowance in normal circumstances for preserved eligibility must be made before the end of the earlier of the last day for making the claim under subsection 39(4) of the Family Assistance Administration Act (that is, the existing time limit) or 30 June 2013. Furthermore, if an individual was eligible for maternity immunisation allowance before 1 July 2012 and subsequently dies, paragraph 40(b) of the Family Assistance Act will apply on and after 1 July 2012 so as to enable another individual to claim and be paid the deceased's unpaid maternity immunisation allowance only if the death occurs before 1 July 2013.

In summary, these provisions mean that, despite the repeal of the relevant provisions in the family assistance law for maternity immunisation allowance from 1 July 2012, the relevant law in force immediately before 1 July 2012 is preserved on and after 1 July 2012 (so as to enable payment of maternity immunisation allowance) if: the individual was eligible before 1 July 2012; and a claim is made by the earlier of the existing time limit and 30 June 2013; and for a claim by another individual if the eligible individual dies, the death occurs before 1 July 2013.

Subitem 52(4) provides that section 52-150 of the Income Tax Assessment Act, as in force immediately before 1 July 2012, continues to apply on and after 1 July 2012 in relation to payments of maternity immunisation allowance made before, on or after 1 July 2012. This ensures that these payments of maternity immunisation allowance will be exempt from income tax, despite the amendment to section 52-150 by item 47 (which will remove the reference to maternity immunisation allowance on 1 July 2012).

Subitem 52(5) provides that, despite the amendments made by items 48, 50 and 51 to the income management provisions in the Social Security (Administration) Act 1999, those provisions continue to apply on and after 1 July 2012 in relation to payments of maternity immunisation allowance made before, on or after 1 July 2012.

Subitem 52(6) defines terms used in item 52.

Schedule 2 - Baby bonus

Summary

This Schedule pauses the indexation of baby bonus for three years from 1 July 2012, and resets the amount of baby bonus to $5,000 per child for an individual who becomes eligible (for example, their child is born) on or after 1 September 2012.

Background

The family assistance law currently provides that the amount of baby bonus for a child is $5,437, and the amount is to be indexed annually each 1 July based on the Consumer Price Index. Baby bonus is paid in 13 fortnightly instalments.

Explanation of the changes

Part 1 - Amendments

Amendments to the Family Assistance Act

Item 1 repeals and substitutes subsection 66(1), commencing on 1 September 2012. The new provision resets the amount of baby bonus to $5,000 on 1 September 2012.

Item 2 adds a new subclause 3(9) to Schedule 4 to the Family Assistance Act, commencing on the day this Act receives the Royal Assent. This new provision provides that baby bonus will not be indexed on 1 July 2012, 1 July 2013 and 1 July 2014.

The note at the end of new subclause 3(9) notes that indexation of baby bonus will resume on 1 July 2015 based on a current figure of $5,000, and refers to the transitional provision in item 6 of this Schedule.

Amendments to the Family Assistance Administration Act

Item 3 amends paragraph 47(2A)(a) to extend to 31 August 2012 the period that the upfront part of the amount of baby bonus is $879.77. This extension is a consequence of indexation not occurring on 1 July 2012 because of the item 2 amendment and baby bonus being reset to $5,000 on 1 September 2012 by item 1 .

Item 4 repeals paragraph 47(2A)(b) and substitutes new paragraphs 47(2A)(b) and (c). New paragraph 47(2A)(b) provides that the upfront part will be $846.15 for eligibility between 1 September 2012 and 30 June 2015. This reflects the resetting of baby bonus to $5,000 by item 1 , and ensures that the upfront part exceeds subsequent instalments of baby bonus by $500. New paragraph 47(2A)(c) provides that the upfront part for eligibility from 1 July 2015 (when indexation resumes) will be 16.92 per cent of the amount of baby bonus. The new figure of 16.92 per cent for the upfront part from 1 July 2015 reflects the upfront part of $846.15 from 1 September 2012 as a percentage of $5,000.

Part 2 - Application and transitional provisions

Item 5 sets out that item 1 (resetting baby bonus to $5,000) applies to individuals who become eligible for baby bonus on or after 1 September 2012.

Item 6 is a transitional provision due to the amendments made by this Schedule. This item sets out that, when indexation of baby bonus resumes on 1 July 2015, the current figure immediately before 1 July 2015 (that is, the amount to be indexed) is taken to be $5,000. This reflects the resetting of baby bonus to $5,000 on 1 September 2012.

Schedule 3 - Non-entitlement to family tax benefit on estimated income basis

Summary

From 1 July 2012, this Schedule will prevent an individual (and partner, if any) from being entitled to FTB Part A and/or Part B as fortnightly instalments on the basis of estimated income where the individual had no actual entitlement after underestimating their income for two consecutive years, starting from 2009-10.

Background

FTB can be paid as fortnightly instalments or a past period lump sum payment. Where FTB is paid fortnightly (or for a past period in the current income year), the individual must provide an estimate of their income (and the income of their partner if relevant) in order to be able to determine their rate of FTB. The estimate is provided because the individual's finally determined adjusted taxable income (actual ATI) cannot be known until after the end of the relevant income year to which the instalment payments apply.

The estimate can be provided by the individual, or the Secretary can calculate an indexed amount based on the individual's previous estimate or previous actual income. The Secretary must be satisfied that the individual's estimate is reasonable.

At the end of the relevant income year when actual ATI is known (that is, the individual or their partner has lodged their income tax return, or they have notified the Secretary that they are not required to lodge), FTB reconciliation occurs and the individual's entitlement based on actual income is determined. If the reconciled FTB entitlement is more than what was paid based on estimated income, a top-up amount may be paid. If the individual has been paid more than the reconciled FTB entitlement, a debt may be raised against the individual for the amount of the overpayment.

Families who have income over the cut-off for a given year (that is, an amount of ATI that results in a nil rate of FTB Part A or primary earner ATI that results in a nil rate of FTB Part B) are currently able to remain as fortnightly instalment recipients if they provide a new estimate (lower than the cut-off) for subsequent years.

From 1 July 2012, this Schedule will prevent an individual (and partner, if any) from being entitled to family tax benefit (FTB) Part A and/or Part B as fortnightly instalments on the basis of estimated income where the individual had no actual entitlement after underestimating their income for two consecutive years, starting from 2009-10. This measure will apply for FTB Part A if, for two consecutive years, the Part A rate is nil because of the individual's actual ATI. Similarly, this measure will apply for FTB Part B if, for two consecutive years, the Part B rate is nil because of the actual ATI of the primary earner (the higher earner in a couple or a sole parent).

Exceptions will apply to ensure that families are not put at risk of hardship. The exceptions will take account of changes that occur after the two consecutive years of nil entitlement to FTB Part A and/or Part B. The exceptions include: a reduction in actual ATI for a more recent income year; receiving an income support payment; gaining a new FTB child; and a couple separating. Exceptions may also apply in special circumstances.

Families not entitled to FTB Part A or Part B as fortnightly instalments will still be able to make a lump sum claim at the end of the income year.

This Schedule will commence on 1 July 2012 and the earliest year that can be counted for this measure is the 2009-10 income year.

Explanation of the changes

Amendments to the Family Assistance Act

Item 1 amends paragraph (b) of the definition of receiving in subsection 3(1) to reflect the reference to receiving a social security pension or a social security benefit in new section 32AI, which is inserted as part of the changes made by item 8 of this Schedule.

Item 2 amends paragraph 103(1)(e) to reflect the new definition of estimated income basis introduced by item 3 . This paragraph is to be introduced into the Family Assistance Act by item 3 of Schedule 2 to the Clean Energy (Household Assistance Amendments) Act 2011 and it is intended that this provision will commence from 14 May 2012.

Amendments to the Family Assistance Administration Act

Item 3 inserts a new definition into subsection 3(1) of the Family Assistance Administration Act for estimated income basis . This definition provides that FTB is worked out on an estimated income basis if it is worked out on the basis referred to in subsection 20(1), (2A) or (3).

Item 4 adds a note to the end of section 20 to assist in explaining that, if the FTB entitlement is worked out on the basis referred to in subsection 20(1), (2A) or (3) it is referred to as being worked out on an estimated income basis as defined in subsection 3(1).

Items 5, 6 and 7 amend subsection 32AA(1), section 32AD and subsections 32AE(2) and (5) to reflect the new definition of estimated income basis introduced by item 3 .

Item 8 inserts a new Subdivision CB into the Family Assistance Administration Act. New Subdivision CB sets out when an individual will not be entitled to FTB on an estimated income basis.

New subsection 32AF(1) sets out the scope of Subdivision CB. For new Subdivision CB to apply to an individual, there must be two consecutive years (each of which is a consecutive year ) in which the individual was entitled to be paid FTB on an estimated income basis; for each of the consecutive years the Secretary has conducted a Secretary-initiated review on the basis of the individual's finally determined ATI (that is, FTB reconciliation), and, as a result of the Secretary-initiated review for each consecutive year, the Secretary determines either or both of the following apply:

•

the individual's FTB Part A rate is nil because of the individual's finally determined ATI and there are no other days in either of the consecutive years that the individual is entitled to be paid FTB Part A;

•

the individual's FTB Part B rate is nil because of the application of subclause 28B(1) of Schedule 1 to the Family Assistance Act. This means the finally determined ATI of the primary earner (the higher earner in a couple or a sole parent) is greater than the primary earner income limit for FTB Part B, which is currently $150,000.

The note at the end of new subsection 32AF(1) provides a reference to the new definition of estimated income basis in subsection 3(1).

Basic non-entitlement rule

New paragraph 32AF(2)(a) provides that, if new subparagraph 32AF(1)(c)(i) applies, such that an individual's rate of FTB Part A was nil for two consecutive years because of the individual's finally determined ATI, then the individual is not entitled, on and after the exclusion day, to be paid FTB Part A on an estimated income basis. New subsection 32AF(3) defines the exclusion day .

Similarly, new paragraph 32AF(2)(b) provides that, if new subparagraph 32AF(1)(c)(ii) applies, such that an individual's rate of FTB Part B was nil for two consecutive years because of the primary earner's finally determined ATI, the individual is not entitled, on and after the exclusion day, to be paid FTB Part B on an estimated income basis.

For the purpose of new Subdivision CB, the exclusion day for an individual is defined in new subsection 32AF(3) to be 1 July 2012 if the later of the consecutive years is the 2010-11 income year, or, in any other case, 1 July of the first income year after the later of the consecutive years. However, the Secretary may determine a later day to be the exclusion day. The discretion under new paragraph 32AF(3)(b) to determine a later day exists so as to avoid an exclusion day under paragraph 32AF(3)(a) that may result in a debt for the amount of FTB Part A or Part B already paid on an estimated income basis for a previous period. For example, if the individual is currently being paid fortnightly instalments of FTB Part A or Part B, the intention is to determine an exclusion day that would result in the fortnightly instalments ceasing prospectively.

New subsection 32AF(4) provides that a determination made under new paragraph 32AF(3)(b) is not a legislative instrument. This provision is included to assist readers and is merely declaratory of the law, as the determination is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003.

Position of individual's partner

New subsections 32AF(5) and (6) set out that, if an individual is not entitled to be paid FTB Part A and/or FTB Part B on an estimated income basis, the individual's partner (including a new partner) is also not entitled to be paid FTB Part A and/or Part B on an estimated income basis.

Multiple applications of section

New subsection 32AF(7) provides that, even if an exception in new sections 32AG to 32AM applies, this does not prevent new section 32AF from applying again in relation to the individual in respect of two consecutive income years, if either or both of those years are different to the previous consecutive income years. For example, if the original consecutive income years were 2009-10 and 2010-11 and a change that occurs after the end of 2010-11 results in an exception that prevents section 32AF applying, that particular exception would not prevent section 32AF again applying because of the different consecutive income years of 2010-11 and 2011-12. However, if a fresh exception arises due to a change that occurs after the end of 2011-12, that would prevent section 32AF applying.

Exceptions

New sections 32AG to 32AM set out when there may be an exception for an individual such that new section 32AF is taken not to have applied or ceases to apply. As a consequence, if an exception applies, an individual may be entitled to be paid FTB on an estimated income basis despite having two consecutive years of nil entitlement.

Exception - greater than nil rate of FTB for later income year

New section 32AG provides that there will be an exception for an individual if their rate of FTB Part A or Part B is greater than nil for a more recent income year. New subsection 32AG(1) sets out the scope of this section. New section 32AG applies if, in respect of an income year (the payment year ) after the later of the consecutive years, the Secretary determines on a day (the payment day ) following reconciliation for the payment year, that the individual's rate of FTB Part A or FTB Part B is greater than nil for one or more days in the payment year.

If new section 32AG applies, then the non-entitlement on an estimated income basis to FTB Part A under new paragraph 32AF(2)(a) and/or to FTB Part B under new paragraph 32AF(2)(b) is taken not to have applied or ceases to apply, depending on when the payment day occurs. The relevant provision depends on which component or components of FTB the individual is entitled to in the payment year.

Payment day is in same income year as exclusion day

New subsection 32AG(2) sets out when the non-entitlement is taken not to have applied because the payment day is in the same income year in which the exclusion day in new subsection 32AF(3) occurred. If section 32AG applies in relation to FTB Part A, then paragraph 32AF(2)(a) is taken not to have applied and the individual can be paid FTB Part A on an estimated income basis from the exclusion day. If section 32AG applies in relation to FTB Part B, then paragraph 32AF(2)(b) is taken not to have applied and the individual can be paid FTB Part B on an estimated income basis from the exclusion day.

The example at the end of new subsection 32AG(2) assists in explaining the date of effect rule in this provision.

Payment day is in income year later than that of exclusion day

New subsection 32AG(3) sets out when the non-entitlement ceases to apply because the payment day is in an income year which is later than the income year in which the exclusion day occurred. If section 32AG applies in relation to FTB Part A, then paragraph 32AF(2)(a) ceases to apply and the individual can be paid FTB Part A on an estimated income basis from 1 July of the income year in which the payment day occurs. If section 32AG applies in relation to FTB Part B, then paragraph 32AF(2)(b) ceases to apply and the individual can be paid FTB Part B on an estimated income basis from 1 July of the income year in which the payment day occurs.

The example at the end of new subsection 32AG(3) assists in explaining the date of effect rule in this provision.

The note after new section 32AG provides a reference to the subsections that provide the meaning for consecutive year and exclusion day .

Exception - resumption of eligibility for FTB

New section 32AH provides that an exception will apply for an individual if, for the whole of an income year (the applicable year ) after the consecutive years, the individual was not eligible for FTB for a non-income reason (for example, did not have an FTB child), and, after the applicable year, the individual claims FTB for the income year (the current year ) in which the claim is made, and the actual ATI for the applicable year of the individual (and their current partner, if any) is below the individual's income cut-out for FTB Part A, or does not exceed the FTB Part B primary earner income limit, in the current year.

If new section 32AH applies, then the non-entitlement on an estimated income basis to FTB Part A under new paragraph 32AF(2)(a) and/or to FTB Part B under new paragraph 32AF(2)(b) is taken not to have applied or ceases to apply, depending on when the exclusion day in new subsection 32AF(3) occurs. The relevant provision depends on which component or components of FTB the individual would be entitled to in the current year.

Exclusion day is in current year

New subsection 32AH(2) sets out when the non-entitlement is taken not to have applied if the exclusion day is in the current year. If section 32AH applies in relation to FTB Part A, then paragraph 32AF(2)(a) is taken not to have applied and the individual can be paid FTB Part A on an estimated income basis from the exclusion day. If section 32AH applies in relation to FTB Part B, then paragraph 32AF(2)(b) is taken not to have applied and the individual can be paid FTB Part B on an estimated income basis from the exclusion day.

The example at the end of new subsection 32AH(2) assists in explaining the date of effect rule in this provision.

Current year is later than that of exclusion day

New subsection 32AH(3) sets out when the non-entitlement ceases to apply if the current year is later than the income year in which the exclusion day occurs. If section 32AH applies in relation to FTB Part A, then paragraph 32AF(2)(a) ceases to apply and the individual can be paid FTB Part A on an estimated income basis from 1 July of the current year. If section 32AH applies in relation to FTB Part B, then paragraph 32AF(2)(b) ceases to apply and the individual can be paid FTB Part B on an estimated income basis from 1 July of the current year.

The example at the end of new subsection 32AH(3) assists in explaining the date of effect rule in this provision.

The note after new section 32AH provides a reference to the subsections that provide the meaning for consecutive year and exclusion day .

Exception - income support payments

New section 32AI provides that an exception will apply if, on a day (the income support day ) after the later of the consecutive years, the individual, or the individual's partner, is receiving a social security pension, a social security benefit, a service pension or income support supplement. In new section 32AI, these payments are referred to as income support .

New subsections 32AI(2) and (3) set out the date of effect rules for this provision. If the trigger day (defined in new subsection 32AI(4)) is on or before the exclusion day, then new subsection 32AF(2) is taken not to have applied. If the trigger day is after the exclusion day, then new subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

New subsection 32AI(4) sets out the meaning of trigger day for the purpose of new section 32AI. In this situation, it means the later of the earliest income support day and 1 July of the income year the Secretary becomes aware that the individual (or partner, if any) is receiving income support.

The note after new section 32AI provides a reference to the subsections that provide the meaning for consecutive year and exclusion day .

Exception - new FTB child

New section 32AJ provides that an exception will apply if, on a day (the FTB child day ) after the later of the consecutive years, the individual now has an FTB child who was not an FTB child of the individual at any time during the consecutive years.

New subsections 32AJ(2) and (3) set out the date of effect rules for this provision. If the trigger day (defined in new subsection 32AJ(4)) is on or before the exclusion day, then new subsection 32AF(2) is taken not to have applied. If the trigger day is after the exclusion day, then new subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

New subsection 32AJ(4) sets out the meaning of trigger day for the purpose of new section 32AJ. In this situation, it means the later of the earliest FTB child day and 1 July of the income year the Secretary becomes aware of the existence of the FTB child.

The note after new section 32AJ provides a reference to the subsections that provide the meaning for consecutive year and exclusion day .

Exception -couple separates

New section 32AK provides that an individual may have an exception if the individual was a member of a couple at the end of the later of the consecutive years, and has ceased to be a member of that couple on a later day (the separation day ).

New subsections 32AK(2) and (3) set out the date of effect rules for this provision. If the trigger day (defined in new subsection 32AK(5)) is on or before the exclusion day, then new subsection 32AF(2) is taken not to have applied. If the trigger day is after the exclusion day, then new subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

The exception in new section 32AK will continue to apply if the individual becomes a member of a couple with a new partner. However, new subsection 32AK(4) provides that the exception will end if the individual reconciles with the individual who was their partner at the end of the later of the consecutive years. In this situation, new subsection 32AF(2) applies in relation to the individual as if the day the individual reconciles with the partner were the exclusion day.

The note after new subsection 32AK(4) notes that subsection 32AK(4) may apply more than once if the couple separates and reconciles more than once.

New subsection 32AK(5) sets out the meaning of trigger day for a particular separation day for the purpose of new section 32AK. In this situation, it means the later of the particular separation day and 1 July of the income year the Secretary becomes aware that the individual has (on that separation day) ceased to be a member of that couple.

The note after new section 32AK provides a reference to the subsections that provide the meaning for consecutive year and exclusion day .

Exception - special circumstances

New section 32AL provides that there may be an exception if the Secretary is satisfied that, on a day (the special circumstances day ) after the later of the consecutive years, special circumstances exist in relation to the individual or the individual's partner (or both) that did not exist at the end of the later of the consecutive years and make it inappropriate to prevent the individual from being entitled to be paid FTB Part A and/or Part B on an estimated income basis.

New subsections 32AL(2) and (3) set out the date of effect rules for this provision. If the trigger day (defined in new subsection 32AL(5)) is on or before the exclusion day, then new subsection 32AF(2) is taken not to have applied. If the trigger day is after the exclusion day, then new subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

New subsection 32AL(5) sets out the meaning of trigger day for the purpose of new section 32AL. In this situation, it means the later of the special circumstances day and 1 July of the income year the Secretary becomes aware of the existence of the special circumstances.

The note after new section 32AL provides a reference to the subsections that provide the meaning for consecutive year and exclusion day .

New subsection 32AL(4) provides that a determination made under new subsection 32AL(2) or (3) has effect in accordance with its terms and is not a legislative instrument. New paragraph 32AL(4)(b) is included to assist readers and is merely declaratory of the law, as the determination is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003.

Exception - determined circumstances

New section 32AM allows the Minister to make an instrument to determine other circumstances that may result in an individual having an exception from the application of new section 32AF and being entitled to be paid FTB Part A and/or Part B on an estimated income basis. This provision is similar to new section 32AL, except that new subsection 32AM(2) provides that the Minister may make a legislative instrument to determine circumstances for the purposes of new paragraph 32AM(1)(a). The Secretary must be satisfied that the circumstances set out in the instrument exist in relation to the individual, their partner or both on a day (the determined circumstances day ) after the later of the consecutive years.

New subsections 32AM(3) and (4) set out the date of effect rules for this provision. If the trigger day (defined in new subsection 32AM(6)) is on or before the exclusion day, then new subsection 32AF(2) is taken not to have applied. If the trigger day is after the exclusion day, then new subsection 32AF(2) ceases to apply to the individual on and from the trigger day.

New subsection 32AM(6) sets out the meaning of trigger day for the purpose of new section 32AM. In this situation, it means the later of the determined circumstances day and 1 July of the income year the Secretary becomes aware of the existence of the determined circumstances.

The note after new section 32AM provides a reference to the subsections that provide the meaning for consecutive year and exclusion day.

New subsection 32AM(5) provides that a determination made under new subsection 32AM(3) or (4) has effect in accordance with its terms and is not a legislative instrument. New paragraph 32AM(5)(b) is included to assist readers and is merely declaratory of the law, as the determination is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003.

Item 9 amends paragraphs 65J(2)(b) and (3)(b) to reflect the new definition of estimated income basis introduced by item 3 . These paragraphs are to be introduced into the Family Assistance Administration Act by item 4 of Schedule 2 to the Clean Energy (Household Assistance Amendments) Act 2011 and it is intended that this provision will commence from 14 May 2012.

Item 10 is the application provision for this Schedule. Subitem 10(1) provides that new paragraph 32AF(1)(a), which defines a consecutive year, applies in relation to the 2009-10 income year and later income years. Subitem 10(2) provides that new paragraph 32AF(1)(c), which relates to a determination by the Secretary of nil entitlement to FTB Part A and /or Part B for each consecutive year based on finally determined ATI, applies in relation to determinations made before, on or after 1 July 2012.

Schedule 4 - Carer allowance

Summary

As announced on 3 August 2011 in the Government's National Carer Strategy, this Schedule gives certain carer allowance recipients, who care for a disabled adult, access to bereavement payments on the death of the care receiver.

Background

Carer allowance is an income supplement available to people who provide care and attention on a daily basis to an adult or child who has a physical, intellectual or psychiatric disability which is permanent and likely to affect the person for an extended period.

The Social Security Act currently provides for a bereavement payment to be made to a person receiving carer allowance for care of a disabled child on the death of that child, but not to a person receiving carer allowance for care of a disabled adult on the death of that adult. These amendments will extend bereavement payments to cover the latter case.

The amendments made by this Schedule commence on 1 July 2012.

Explanation of the changes

Amendments to the Social Security Act

Item 1 repeals and substitutes the heading of Division 10 of Part 2.19 of the Social Security Act.

Item 2 inserts new Subdivision BA of Division 10 of Part 2.19 of the Social Security Act. This new Subdivision allows a person receiving an income support payment (other than carer payment), as well as carer allowance for care of a disabled adult, to remain qualified for carer allowance during the bereavement rate continuation period. This provides for a bereavement payment for a person receiving carer allowance, for the death of a disabled adult to whom they were providing daily care and attention, when they are not qualified for any other bereavement payment (under another provision of the Social Security Act or the Veterans' Entitlements Act) for the death of the disabled adult.

Example 1

Tara receives carer payment and carer allowance for her care of Mario, a disabled adult. Mario dies, and Tara remains qualified for carer payment for the bereavement period because of the carer payment bereavement payment provisions. In this case, Tara does not remain qualified for carer allowance for the bereavement period because she qualifies for another payment in respect of Mario's death (the carer payment bereavement payment).

Example 2

Sean receives carer allowance for his care of Tim, a disabled adult, as well as disability support pension. Tim dies, and Sean remains qualified for disability support pension, but does not qualify for a disability support pension bereavement payment because Sean and Tim were not a couple. In this case, Sean remains qualified for carer allowance for the bereavement period because he does not qualify for another bereavement payment in respect of Tim's death.

Example 3

Lance receives carer allowance for his care of Sally, a disabled adult. Lance receives no other social security payments. Sally dies. In this case, Lance does not remain qualified for carer allowance for the bereavement period because he did not, prior to Sally's death, receive an income support payment as well as the carer allowance.

The rate at which carer allowance is to be paid during the bereavement rate continuation period is the rate at which the allowance was payable to the carer allowance recipient immediately before the day on which the disabled adult died (new section 992LA refers).

A lump sum is payable in some circumstances (new section 992LB refers).

Items 3, 4, 5, 6, 7 and 8 make consequential amendments to section 992M (Death of recipient) of the Social Security Act, to cover the contingency of the recipient of bereavement payments under new Subdivision BA dying. In that situation, the person's partner (if the deceased carer was a member of a couple) or such person as the Secretary thinks appropriate (if the deceased carer was not a member of a couple) is entitled to the amount of payment that would have been payable to the person (that is, the deceased carer) under new Subdivision BA had the person not died.

Item 9 provides that the amendments made by this Schedule apply in relation to deaths occurring on or after the commencement of this Schedule.

Items 10 and 11 make consequential amendments to the Income Tax Assessment Act. These amendments provide a tax exemption for the new carer allowance bereavement payments. This will ensure consistency in the tax treatment of bereavement payments made to surviving members of a couple.

Schedule 5 - Carer supplement

Summary

This Schedule introduces a measure from the National Carer Strategy, which will allow access to carer supplement for those carers whose rate of payment is reduced to nil because of income where they or their partner worked in the fortnight covering 1 July in any given year. This will help ensure the income support system does not act as a disincentive to carers working in paid employment.

Background

Presently, a carer cannot receive the annual carer supplement payment if their income, or their partner's income, reduces the carer's rate of carer payment, wife pension, carer service pension or partner service pension to nil during the instalment period that includes 1 July in any given year.

This situation may disadvantage carers or their partners who may participate in casual or irregular work in addition to their caring commitments, and who are offered extra employment in the instalment period that includes 1 July. These carers may be faced with the difficult decision of accepting the offer of extra employment, knowing that they may then lose their annual carer supplement because the employment income they receive in that period may, solely or partly, cause their instalment of carer payment, wife pension, carer service pension or partner service pension to be reduced to nil.

This Schedule introduces amendments to remedy this situation. The amendments apply to a carer who is not paid an instalment of carer payment or wife pension under the Social Security Act or partner service pension or carer service pension under the Veterans' Entitlements Act because the income threshold has been exceeded in the carer's instalment period that includes 1 July. If the carer's income threshold has been exceeded because of assessed income that includes an amount of employment income, then the carer can nevertheless, from 2012, receive carer supplement.

The amendments made by this Schedule commence on the day of Royal Assent.

Explanation of the changes

Item 1 repeals the heading to section 992X of the Social Security Act, and substitutes the heading 'Carer supplement'. This essentially updates the drafting to remove the redundant reference to arrangements for 2009.

Item 2 repeals and substitutes subsection 992X(1), updating the drafting to remove the redundant reference to arrangements for 2009.. New subsection 992X(1) provides that a person is qualified for carer supplement for a year if the person was paid an instalment of carer allowance or carer payment under the Social Security Act or carer service pension under the Veterans' Entitlements Act in respect of a period that includes 1 July in that year.

The Note to the new subsection makes it clear that a person may have more than one qualifying instalment for carer supplement for a year where, for example, the person may be in receipt of an instalment of carer allowance as well as an instalment of carer payment in respect of a period that includes 1 July.

Item 3 inserts new subsection 992X(3A). This new subsection sets out the circumstances in which a person who is a carer payment or wife pension recipient under the Social Security Act or a partner service pension or carer service pension recipient under the Veterans' Entitlements Act may receive carer supplement even where the person has exceeded the income threshold in respect of an instalment period that includes 1 July, resulting in their carer payment, wife pension, partner service pension or carer service pension being reduced to nil.

The relevant circumstances are that the person's rate of payment is reduced to nil because of the income test module in the relevant rate calculator in either the Social Security Act or the Veterans' Entitlements Act, and that the income assessed under the relevant rate calculator comprises income that includes a component of employment income. Employment income is defined in section 8 of the Social Security Act.

Schedule 6 - Other amendments

Summary

This Schedule makes amendments to the family assistance law and social security law to clarify various provisions. The amendments are mainly of a minor or technical nature.

Background

The amendments in this Schedule do not involve any changes to policy. The following changes are included:

•

correcting a longstanding error in the legislation (since 1 January 2005) in relation to the FTB Part B supplement for an absent overseas FTB child (that is, absent overseas for more than 13 weeks);

•

consequential amendments to the maintenance income ceiling provisions due to the new clean energy supplement from 1 July 2013;

•

amending the clean energy advance top-up provision to allow for a legislative instrument (rather than subsection 108(1) of the Family Assistance Act) to set out the amount of the top-up if a member of a couple separates after being paid clean energy advance for one or more children, and the care of the child(ren) after separation is shared or split with the former partner;

•

correcting two drafting issues in the health check requirement for the FTB Part A supplement; and

•

other minor or technical amendments.

Explanation of the changes

Amendments to the Family Assistance Act

Item 1 repeals and substitutes subsection 21(1A) to clarify the structure and grammar of this provision, which relates to holders of certain temporary visas who satisfy the residence criteria for FTB. The new provision is consistent with the same provision for single income family supplement in new subsection 57G(2) (to commence on 14 May 2012). There is no change to the FTB residence policy in the new provision.

Item 2 inserts a new heading before subsection 21(2).

Items 3 and 12 amend paragraphs 31(3)(a) and 65(2)(a) to reinsert reference to 'studying overseas full-time' in these provisions from 1 January 2012. This reference was inadvertently removed on 1 January 2012 due to changes to the age requirements in these provisions at that time (by items 2 and 4 of Schedule 1 to the Family Assistance and Other Legislation Amendment Act 2011). Reinserting reference to 'studying overseas full-time' ensures that the eligibility and amount of FTB for a child who dies and who was studying overseas will be based on the same higher age limit of 21 that applies to a child studying in Australia (rather than the age limit of 20 that applies to non-students).

Items 4 and 13 are the application provisions for items 3 and 12 respectively. The application provisions set out that each of the amendments in items 3 and 12 applies to deaths occurring on or after 1 January 2012.

Item 5 amends paragraph 32(2)(b) to clarify this provision. The period for which an individual is eligible for FTB under subsection 31(2) after a child dies may be less than 14 weeks. For example, a student child would have turned 22, or a non-student child would have turned 21, before the end of the 14-week period (as set out in subsection 31(3)). For this reason, the existing reference to the period of 14 weeks in paragraph 32(2)(b) will be replaced with the correct reference to the period under subsection 31(2).

Item 6 is the application provision for item 5. The application provision sets out that the amendment in item 5 applies to deaths occurring on or after the day this Act receives the Royal Assent.

Item 7 repeals subsections 61A(1) and (2), and substitutes subsections 61A(1), (2) and (2A), so as to correct two unintended outcomes of a technical nature. .

There is no change to the policy for the health check requirement in section 61A.

New subsections 61A(1) and (2A) provide that, if an individual, or the individual's partner, is a parent of an FTB child on the last day of the income year the child turned four, then the FTB Part A supplement must be disregarded for all the days spent receiving income support and being a carer of the FTB child unless one of the exceptions in new subsection 61A(2A) applied within the required timeframe.

New subsections 61A(2) and (2A) provide that, if the individual, and the individual's partner, is a non-parent carer of an FTB child on the last day of the income year the child turned four, and the child was the individual's FTB child for at least 182 days in that income year, then the FTB Part A supplement must be disregarded for all the days spent receiving income support and being a carer of the FTB child unless one of the exceptions in new subsection 61A(2A) applied within the required timeframe.

New subsection 61A(2A) brings together the same exceptions currently set out in paragraphs 61A(1)(c) and (d) and paragraphs 61A(2)(e) and (f).

Item 8 repeals and substitutes the heading before subsection 61A(3).

Item 9 amends subsection 61A(3) to reflect the changes made by item 7 .

Item 10 provides that the amendments made to the health check requirement in section 61A by items 7, 8 and 9 apply in relation to an individual's eligibility for FTB Part A supplement in the 2012-13 income year and later income years.

Item 11 amends table item 2 in subsection 63(4) to include clause 31A of Schedule 1, which provides for the amount of an individual's FTB Part B supplement. This will result in an absent overseas FTB child being disregarded in working out whether an individual's rate of FTB includes the FTB Part B supplement. An FTB child generally becomes an absent overseas FTB child after 13 weeks' absence from Australia. The amendment corrects a longstanding error in the Family Assistance Act.

The amendment will commence retrospectively from 1 January 2005 as this is the day that the FTB Part B supplement commenced under the Family Assistance Act. The correction reflects the current administration of the policy and will therefore not have any actual adverse effect on individuals.

Items 14 and 15 make consequential amendments to subsection 108(1) because of the inclusion of new subsections 108(1A) and (1B) by item 16 .

Item 16 inserts new subsections 108(1A) and (1B) into the Family Assistance Act. New subsection 108(1A) provides that the amount of an individual's top-up payment of clean energy advance will be worked out in accordance with an instrument made under new subsection 108(1B), rather than under subsection 108(1), if: the individual is a member of a couple on the decision day for the original advance; on a later day before 1 July 2013, the individual's circumstances change; and the individual is entitled to a top-up payment in accordance with an instrument made under new subsection 108(1B). New subsection 108(1B) is a legislative instrument-making power that allows the Minister to specify the circumstances in which individuals are entitled to a top-up payment, and a method for working out the amount, for the purposes of new subsection 108(1A).

The intention is for the instrument under new subsection 108(1B) to apply if a member of a couple separates after being paid a clean energy advance for one or more children, and the care of the child(ren) after separation is shared or split with the former partner.

Items 17 and 18 make minor amendments to subsection 108(2).

Item 19 makes a minor amendment to subsection 108(2) to refer to the trigger day, to reflect the reference to trigger day in paragraph 65J(2)(a) of the Family Assistance Administration Act.

Items 20 to 24 make consequential amendments to the provisions for the maintenance income ceiling to reflect the introduction of the clean energy supplement from 1 July 2013 due to changes made by the Clean Energy (Household Assistance Amendments) Act 2011.

Item 20 inserts a new step 1A into the method statement in clause 24G of Schedule 1.

Item 21 inserts new clause 24HA of Schedule 1 into the Family Assistance Act. This provision is similar to clause 24H with the difference being that the 'above base clean energy supplement amount' would refer to the difference between the clean energy supplement under clause 38AA and the clean energy supplement under clause 38AF. This amount can then be used in the new formula in clause 24L to work out an individual's maintenance income ceiling. Item 22 sets out the revised formula that includes the 'above base clean energy supplement amount for the income'.

Item 23 inserts a new step 4A into the method statement in clause 24N of Schedule 1.

Item 24 inserts new clause 24RA of Schedule 1 into the Family Assistance Act. This provision is similar to clause 24R with the difference being that the 'clean energy supplement amount' refers to the clean energy supplement under clause 38AA.

Item 25 is an application provision for the amendments made by items 20 to 24 and sets out that items 20 to 24 apply in relation to the 2013-14 income year and later income years.

Amendments to the Family Assistance Administration Act

Item 26 inserts new subsection 21(1A) into the Family Assistance Administration Act for consistency between entitlement and non-entitlement determinations for a claim for FTB by instalments. Currently under the family assistance law, if an individual makes a claim for FTB by instalments and it is determined that they are entitled, this can be backdated to the day the claim was made. If it is determined that they are not entitled, this only applies from the day the determination is made. New subsection 21(1A) provides that a determination that an individual is not entitled to FTB by instalments can be backdated to the day of the claim, if applicable.

Item 27 is an application provision for item 26 and sets out that the amendment made by item 26 applies in relation to determinations made on or after the day this Act receives the Royal Assent.

Item 28 makes a minor amendment to paragraph 65J(2)(a) to reflect the change made by item 16 .

Item 29 amends paragraph (a) of the definition of family assistance payment in subsection 93A(6) to clarify that baby bonus is included in the definition.

Items 30, 31 and 32 make technical amendments to subsection 107(3B) and paragraphs 109D(4)(e) and 109E(3)(e) to reflect the changes made by item 7 .

Amendments to the Social Security Act

Item 33 amends paragraph 1061ZK(4)(b) of the Social Security Act to ensure that, if an individual would be entitled to a rate of FTB Part A above nil but for the rate being reduced to nil for the repayment of an FTB advance, they will still qualify for a health care card, provided they meet the other requirements in subsection 1061ZK(4) (that is, that the individual is entitled to FTB by instalments and that the individual's ATI does not exceed the income free area for FTB Part A).

Statements of compatibility with human rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Family assistance amendments and related measures - Schedules 1, 2, 3 and 6

These Schedules are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Schedules

Schedule 1 amends the family assistance law to make payment of the family tax benefit (FTB) Part A supplement conditional on a child meeting the immunisation requirements. This will apply to the income years that the child turns one, two and five. As a consequence, maternity immunisation allowance will cease from 1 July 2012. This measure will strengthen incentives for parents to have their children immunised and improve immunisation rates.

Schedule 2 pauses the indexation of baby bonus for three years from 1 July 2012, and resets the amount of baby bonus to $5,000 per child from 1 September 2012.

Schedule 3 will cease fortnightly payments of family tax benefit on the basis of estimated income if an individual had no actual entitlement after underestimating their income for two consecutive years. Families not entitled to fortnightly instalments will still be able to make a lump sum claim at the end of the income year, and exceptions will apply to ensure that families are not put at risk of hardship.

Schedule 6 makes minor and technical amendments to the family assistance and social security law to clarify a number of provisions. The amendments do not involve any substantive changes to policy.

Human rights implications

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), as well as Article 26 of the Convention on the Rights of the Child (CRC), recognise the right of a child to benefit from social security.

The right to social security in article 9 of the ICESCR requires that a social security system be established and that a country must, within its maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.

Article 26 of the CRC requires countries to recognise the right of the child to benefit from social security. Benefits should take into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child.

The changes in Schedule 1 will strengthen the financial incentives for parents to immunise their young children by linking the payment of the FTB Part A supplement to the child's immunisation.

Schedule 2 pauses indexation of baby bonus for three years and resets the amount of baby bonus to $5,000. In addition to baby bonus, eligible families will remain able to claim family tax benefit to help with the costs of raising their child.

Schedule 3 will cease fortnightly payments of family tax benefit to families who have zero entitlement for two consecutive years. Families not entitled to fortnightly payments will still be able to make a lump sum claim at the end of the income year, and exceptions will apply to ensure that families are not put at risk of hardship.

Conclusion

The Schedules are compatible with human rights. Australia has one of the most generous family payment systems in the world. The most recent analysis shows that spending on cash family benefits by Australia was 1.80 per cent of GDP in 2007, well above the OECD average of 1.22 per cent. These changes will make the family payment system sustainable for the long term.

Carer allowance - Schedule 4

Overview

Schedule 4 to this Bill provides for a bereavement payment for a person receiving carer allowance for the death of a disabled adult to whom they were providing daily care and attention, when they are ineligible for any other bereavement payment (under another provision of the Social Security Act 1991, or of the Veterans' Entitlements Act 1986) for the death of the disabled adult.

Human rights implications

This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

This Schedule is compatible with human rights as it does not raise any human rights issues.

Carer supplement - Schedule 5

Overview

This Schedule introduces a measure from the National Carer Strategy aimed at carers receiving certain income support payments working in paid employment during an instalment period that includes 1 July in a given year. The measure will allow access to carer supplement for those carers whose rate of payment is reduced to nil because of income where they or their partner worked in the fortnight covering 1 July in any given year. This will help ensure the income support system does not act as a disincentive to carers working in paid employment.

This Schedule introduces amendments to remedy this situation. The amendments apply to a carer who is not paid an instalment of carer payment or wife pension under the Social Security Act 1991 or partner service pension or carer service pension under the Veterans' Entitlements Act 1986 because the income threshold has been exceeded in the carer's instalment period that includes 1 July. If the carer's income threshold has been exceeded because of assessed income that includes an amount of employment income, the carer can nevertheless, from 2012, receive carer supplement.

Schedule 5 also repeals a number of redundant references, contained in section 992X of the Social Security Act 1991, as a direct result of these changes.

The change will allow greater access to the carer supplement.

None of these amendments makes any substantive change to the law.

Human rights implications

Schedule 5 engages and supports the right to social security contained in article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

This Bill supports the Carer Recognition Act 2010 which intends to increase recognition and awareness of carers and to acknowledge the valuable contribution they make to society.