House of Representatives

Social Security and Veterans' Entitlements Legislation Amendment (One-Off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Bill 2006

Explanatory Memorandum

(Circulated by the authority of the Minister for Families, Community Services and Indigenous Affairs, the Hon Mal Brough MP)

Social Security and Veterans' Entitlements Legislation Amendment (One-Off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Bill 2006

OUTLINE

This Bill gives effect to two measures announced in the 2006 Budget to provide extra assistance for older Australians and carers. The first measure involves one-off payments to be made to certain older Australians and the second measure involves one-off payments to be made to certain carers.

The one-off payments will generally be paid in June 2006. The payments to older Australians are as follows:

·
A 2006 one-off payment to persons who have reached pension age on or before Budget night 2006 (9 May 2006) and who are receiving income support payments paid under the Social Security Act 1991.
·
A 2006 one-off payment to members of the veteran community who have reached qualifying age on or before 9 May 2006 and who are receiving service pension or income support supplement under the Veterans' Entitlements Act 1986.
·
A 2006 one-off payment to persons who are currently qualified for seniors concession allowance on 9 May 2006 under the Social Security Act 1991 or would so qualify because the person has lodged a claim for the seniors health card on or before 9 May 2006 and the person is eligible for the card on 9 May 2006.
·
A 2006 one-off payment to members of the veteran community who are currently eligible for seniors concession allowance on 9 May 2006 under the Veterans' Entitlements Act 1996 or would be so eligible because the person has lodged a claim for the seniors health card on or before 9 May 2006 and the person is eligible for the card on 9 May 2006.
·
A 2006 one-off payment to persons who are receiving a widow allowance, a mature age allowance, or a partner allowance for a period that includes 9 May 2006 because of a claim made, on or before 9 May 2006.

The 2006 one-off payments for carers are:

·
A 2006 one-off payment of $1,000 to recipients of carer payment on Budget night 2006 (9 May 2006).
·
A 2006 one-off payment of $1,000 to people receiving wife pension in addition to carer allowance on 9 May 2006.
·
A 2006 one-off payment of $1,000 to people receiving partner service pension in addition to carer allowance on 9 May 2006.
·
A 2006 one-off payment of $1,000 to recipients of carer service pension on 9 May 2006.
·
A 2006 one-off payment to recipients of carer allowance on 9 May 2006, generally payable as an amount of $600 for each person being cared for who attracts carer allowance.

The Bill also contains provisions to enable administrative schemes to be established in relation to the one-off payments. In broad terms, the purpose of the administrative scheme will be to provide payments in circumstances where the statutory one-off payments regime does not produce an appropriate result. The relevant Ministers will determine the details of the scheme by legislative instrument.

The Bill commences on Royal Assent.

Financial impact statement

Financial impact Income year Total administered resourcing
2005-06 $551.9 m
2006-07 $3.6 m
2007-08 $ nil
2008-09 $ nil

SOCIAL SECURITY AND VETERANS' ENTITLEMENTS LEGISLATION AMENDMENT (ONE-OFF PAYMENTS TO INCREASE ASSISTANCE FOR OLDER AUSTRALIANS AND CARERS) BILL 2006

NOTES ON CLAUSES

Clause 1 sets out how the Act is to be cited, that is, as the Social Security and Veterans' Entitlements Legislation Amendment (One-off Payments to Increase Assistance for Older Australians and Carers and Other Measures) Act 2006.

Clause 2 provides that the Act commences on Royal Assent.

Clause 3 provides that each Act that is specified in a Schedule is amended or repealed as set out in the applicable items of the Schedule concerned (see notes on the following pages).

This Explanatory Memorandum uses the following abbreviations:

·
'Social Security Act' means the Social Security Act 1991;
·
'Social Security Administration Act' means the Social Security (Administration) Act 1999;
·
'Veterans' Entitlements Act' means the Veterans' Entitlements Act 1986.

Schedule 1 - 2006 one-off payments to older Australians

Summary

This Schedule provides for a one-off payment to be made to a person who has reached pension age on or before Budget night 2006 (9 May 2006) and receives or is eligible to receive income support payments for a period that includes 9 May 2006 under the Social Security Act. Provision is also made for one-off payments to be made to members of the veteran community who have reached qualifying age on or before Budget night 2006 (9 May 2006) and who are receiving or who would be eligible to receive service pension or income support supplement under the Veterans' Entitlements Act for a period that includes 9 May 2006.

In addition, provision is made for a one-off payment to persons who are currently qualified for seniors concession allowance on 9 May 2006 under the Social Security Act or would so qualify because the person has lodged a claim for the seniors health card on or before 9 May 2006 and the person is eligible for the card on 9 May 2006. Similarly, provision is made for a one-off payment to members of the veteran community who are currently eligible for seniors concession allowance on 9 May 2006 under the Veterans' Entitlements Act or would be so eligible because the person has lodged a claim for the seniors health card on or before 9 May 2006 and is eligible for the card on 9 May 2006.

Finally, provision is made for a one-off payment to persons who are receiving a widow allowance, a mature age allowance, or a partner allowance for a period that includes 9 May 2006 because of a claim made on or before 9 May 2006.

Background

In broad terms, this Schedule introduces new 2006 one-off payments for older Australians, which would be paid as a lump sum payment, generally before 30 June 2006. There would not be a claim process attached to the 2006 one-off payment.

The amount of the one-off bonus where a person is qualified because of receiving income support payments under the Social Security Act (or eligible because service pension or income supplement is paid under the Veterans' Entitlements Act) will depend on the circumstances of the person. If the person is single, a member of an illness separated couple, a member of a respite care couple, a member of a temporarily separated couple or a member of a couple whose partner does not qualify for the payment, the amount will be $102.80. This amount ($102.80) will also be paid to persons receiving a widow allowance, a mature age allowance, a mature age partner allowance or a partner allowance in similar circumstances. Where each member of a couple is qualified or eligible for the one-off payments, an amount of $51.40 will be paid to each person.

The amount of the one-off payment that is paid in circumstances where a person is qualified or becomes eligible for seniors concession allowance is $102.80.

Explanation of changes

Part 1 - Main amendments

Amendments of the Social Security Act

Item 1 inserts new Part 2.2C into Chapter 2 of the Social Security Act.

New Part 2.2C contains the provisions relevant to the 2006 one-off payment to older Australians.

New section 93Y contains the qualification criteria for the 2006 one-off payment to older Australians.

New subsection 93Y(1) provides that a person is qualified for a 2006 one-off payment to older Australians if subsection 93Y(2), (3) or (4) applies to the person.

New subsection 93Y(2) applies where a person is qualified because of income support payments. Subsection 93Y(2) provides that a person is qualified for a 2006 one-off payment if the person meets the following criteria:

·
the person has reached pension age on or before 9 May 2006 (The pension age is 65 for males and currently age 63 for females according to age equalisation); and
·
the person was receiving an income support payment (other than a service pension or income support supplement) paid under the Veterans Entitlements Act) in respect of a period that includes 9 May 2006; and
·
the person was paid that instalment because of a claim the person made on or before 9 May 2006; and
·
on 9 May 2006:

-
the person was in Australia; or
-
temporarily absent from Australia and had been so for a continuous period not exceeding 13 weeks.

Subsection 93Y(2) reflects the intention to pay the one-off bonus only in circumstances where the income support payment (other than service pension or income support supplement) was payable to the person in respect of a period that includes 9 May 2006. Subsection 23(2) of the Social Security Act provides that a person is taken to be receiving a payment under this Act from the earliest day on which the payment is payable to the person even if the first instalment of the payment is not paid until a later day. Subsection 93Y(2) therefore applies to people who are granted the relevant payments after 9 May 2006 provided that the payments in question are payable to the person for a period that includes 9 May 2006.

New subsection 93Y(3) applies where the person is qualified because of seniors concession allowance. Subsection 93Y(3) provides that a person is eligible for a 2006 one-off payment to older Australians if the person meets the following criteria:

·
the person was qualified for seniors concession allowance under section 1061U of the Social Security Act on 9 May 2006 (seniors concession allowance is provided under Part 2.25B of the Social Security Act); or
·
the person meets both of the following criteria:

-
the person made a claim for the seniors health card and had not withdrawn that claim on or before 9 May 2006; and
-
on 9 May 2006, the person was either qualified for the card or would have been so qualified but for being temporarily absent from Australia for a continuous period not exceeding 13 weeks.

Subsection 93Y(4) applies to persons who are receiving a widow allowance, a mature age allowance or a partner allowance in respect of a period that includes 9 May 2006 because of a claim made on or before 9 May 2006. In addition, on 9 May 2006, to qualify, the person has to be in Australia or temporarily absent from Australia for a period that does not exceed 13 weeks.

Subsection 93Y(5) clarifies that a person is entitled to only one one-off payment under section 93Y, regardless of how many times the person qualifies under this section.

Subsection 93Y(6) clarifies that a person is not qualified for a one-off payment under section 93Y if the person is eligible for a payment under section 118ZZB of the Veterans' Entitlements Act.

Section 93Z sets out the amount of the one-off payments.

Subsection 93Z(1) applies to one-off payments that are made because the person qualifies because of subsection 93Y(2), or (4). The amount of the one-off bonus depends on the circumstances of the person as follows:

·
the amount of the 2006 one-off payment for a person who is not a member of a couple is $102.80;
·
the amount of the 2006 one-off payment for a person who is a member of an illness separated couple is $102.80;
·
the amount of the 2006 one-off payment for a person who is a member of a respite care couple is $102.80;
·
the amount of the 2006 one-off payment for a person who is a member of a temporarily separated couple is $102.80;
·
the amount of the 2006 one-off payment for a person who is a member of a couple (other than an illness separated couple, respite care couple or temporarily separated couple) whose partner does not qualify for the payment will be $102.80;
·
an amount of $102.80 will also be paid to persons receiving a widow allowance, a mature age allowance or a partner allowance in similar circumstances to the above; and
·
where each member of a couple (other than the couples previously mentioned above) is qualified for the one off payments, an amount of $51.40 will be paid to each person.

Subsection 93Z(2) applies to a person who qualifies for the payment because of subsection 93Y(3). The amount of the one-off payment that is paid in circumstances where a person is qualified or becomes eligible for seniors concession allowance is $102.80.

Item 2 clarifies that the effect of a decision of the Secretary made after 9 May 2006 for the purposes of section 15 of the Social Security Administration Act (dealing with certain incorrect or inappropriate claims) is to be disregarded. This is intended to restrict access to the one-off payments to cases where the relevant decision for the purposes of section 15 is made before or on 9 May 2006.

Item 3 adds a new section 1223ABAA, which deals with debts arising in respect of one-off payments to older Australians. In very broad terms, a one-off payment will be a debt where it is established that the recipient knowingly made a false or misleading statement (or provided false information) and, if the true circumstances had been known, the determination in relation to the relevant payment or card (which gave rise to the qualification for the one-off payment) would not have been made.

Subsection 1223ABAA(7) clarifies that the other provisions of Chapter 5 of the Social Security Act do not apply to the one-off payments to older Australians. The only exception is section 1224AA, which applies to cheques in circumstances where a person other than the payee obtains possession of the cheque from the payee.

Amendments of the Social Security Administration Act

Item 4 adds a new section 12AAA that clarifies that a claim is not required for a 2006 one-off payment to older Australians.

Items 5 and 6 clarify that the 2006 one-off payments to older Australians are to be regarded as a lump sum benefit and paid to the individual in a single lump sum. It is anticipated that the majority of the 2006 one-off payments will be paid before the end of the financial year ending 30 June 2006.

Amendments of the Veterans' Entitlements Act

Item 7 adds a new Part VIID to the Veterans' Entitlements Act after Part VIIC.

New Part VIID gives effect to the 2006 Budget measure to provide a one-off payment to certain older Australians.

New subsection 118ZZB(1) provides that a person is eligible for a 2006 one-off payment if subsection 118ZZB(2) or 118ZZB(3) applies to the person.

New subsection 118ZZB(2) applies if the person is eligible because of income support payments. Subsection 118ZZB(2) provides that a person is eligible for a 2006 one-off payment to older Australians if the person meets the following criteria:

·
the person has reached qualifying age or before 9 May 2006 (qualifying age is defined in subsection 118OA(2) of the Veterans' Entitlements Act); and
·
a service pension or an income support supplement was payable to the person in respect of a period that includes 9 May 2006; and
·
the pension or supplement was payable to the person because of a claim that the person made on or before 9 May 2006; and
·
the person is either in Australia or was temporarily absent from Australia for a continuous period not exceeding 13 weeks.

New subsection 118ZZB(3) applies if the person is eligible because eligible for seniors concession allowance. Subsection 118ZZB(3) provides that a person is eligible for a 2006 one-off payment to older Australians if the person meets either of the following criteria:

·
the person was eligible for seniors concession allowance on 9 May 2006 (seniors concession allowance is provided under section 118PA of the Veterans' Entitlements Act); or
·
the person meets both the following criteria:

-
the person made a claim for a seniors health card on or before 9 May 2006 and that claim had not been withdrawn on or before 9 May 2006; and
-
the person was eligible for a seniors health card on 9 May 2006 or the person would have been eligible for the seniors health card except for being temporarily absent from Australia for a continuous period not exceeding 13 weeks.

New subsection 118ZZB(4) clarifies that a person is only entitled to one payment under section 118ZZB, regardless of how many times the person becomes eligible under this section.

New subsection 118ZZC(1) provides that the amount of the one-off payment under section 118ZZB is dependent on the person's circumstances on 9 May 2006.

New subsection 118ZZC(1) provides that:

·
the amount of the 2006 one-off payment to older Australians for a person who is not a member of a couple is $102.80;
·
the amount of the 2006 one-off payment to older Australians for a person who is a member of an illness separated couple is $102.80;
·
the amount of the 2006 one-off payment to older Australians for a person who is a member of a respite care couple is $102.80;
·
the amount of the 2006 one-off payment to older Australians is $102.80 for a person who is a member of a couple, but not an illness separated or a respite care couple, if the person's partner is not eligible for the payment;
·
the amount of the 2006 one-off payment to older Australians is $51.40 for a person who is a member of a couple, but not an illness separated or a respite care couple, if the person's partner is also eligible for the payment.

New subsection 118ZZC(2) provides that the amount of the 2006 one-off payment under section 118ZZB to a person who is eligible for the payment because of subsection 118ZZB(3) is $102.80.

New section 118ZZD provides that the person does not have to claim for the one-off payment to older Australians.

New subsection 118ZZE provides that the Commission must pay the 2006 one-off payment for older Australians to an eligible individual:

·
in a single lump sum; and
·
on the earliest date that is reasonably practicable; and
·
in such a manner as the Commission considers appropriate.

New section 118ZZF provides for the circumstances under which a debt may arise in respect of a 2006 one-off payment to older Australians. In very broad terms, a one-off payment will be a debt where it is established that the recipient knowingly made a false or misleading statement (or provided false information) and, if the true circumstances had been known, the determination in relation to the relevant payment or card (which gave rise to the qualification for the one-off payment) would not have been made.

New subsection 118ZZF(7) clarifies that the other provisions of the Veterans' Entitlements Act under which debts arise do not apply in relation to payments to which section 118ZZF applies.

New subsection 118ZZF(8) provides that a debt that arises under this section is a recoverable amount within the meaning of subsection 205(8).

Part 2 - Related amendments

Amendments of the Income Tax Assessment Act 1936

A taxpayer's dependants' Separate Net Income (SNI) is used to determine the taxpayer's eligibility to certain dependant offsets. SNI is income and other specified amounts earned, derived or received, less certain expenses incurred in earning that income. Payments such as carer allowance, child care benefit and family tax benefit (FTB) are not included as part of SNI. As it is not intended that the one-off payments to older Australians form part of SNI, item 8 makes the necessary amendments to subsection 159J(6) of the Income Tax Assessment Act 1936 to clarify this.

Amendments of the Income Tax Assessment Act 1997

The effect of items 9 to 14 is to make one-off payments to older Australians (as well as payments to older Australians under the administrative scheme determined under Schedule 2 to the Bill) exempt from income tax.

Amendments of the Social Security Act

Item 15 clarifies that the one off payments are not to be treated as income for the purposes of the Social Security Act.

Amendments of the Veterans' Entitlements Act

Item 16 clarifies that the one off payments are not to be treated as income for the purposes of the Veterans' Entitlements Act.

Schedule 2 - Administrative schemes for 2006 one-off payments to older Australians

Summary

This Schedule contains provisions to enable an administrative scheme to be established. In broad terms, the purpose of the administrative scheme will be to provide payments in circumstances where the statutory one-off payments regime provided for in Schedule 1 does not produce an appropriate result in relation to circumstances that occur in the 2005-06 income year. The relevant Minister will determine the details of the scheme by legislative instrument.

Background

This Schedule enables an administrative scheme to be established alongside the statutory one-off payment scheme.

Explanation of changes

Item 1 provides for the establishment of an administrative scheme by the relevant Minister, under which one-off lump sum payments can be made to older Australians in specified circumstances. The purpose of the scheme is to provide payments in circumstances where the statutory one-off payments regime does not produce an appropriate result in relation to circumstances that occur in the 2005-06 income year.

The details of the administrative scheme (including such matters as eligibility, amount of the payment and administrative matters) would be set out in a legislative instrument.

Payments under the administrative scheme would be made out of the Consolidated Revenue Fund (in accordance with subitem 1(4 ).

Item 2 provides for the establishment of an administrative scheme by the Minister for Veterans' Affairs under which one-off lump sum payments can be made to older Australians (veterans) in specified circumstances. The purpose of the scheme is to provide payments in circumstances where the statutory one-off payments regime does not produce an appropriate result in relation to circumstances that occur in the 2005-06 income year.

The details of the administrative scheme (including such matters as eligibility, amount of the payment and administrative matters) would be set out in a legislative instrument.

Payments under the administrative scheme would be made out of the Consolidated Revenue Fund (in accordance with subitem 2(4) ).

Schedule 3 - 2006 one-off payments to carers

Summary

In broad terms, this Schedule introduces new one-off payments for certain carers, which will be paid as a lump sum payment generally before 30 June 2006. The bonuses are to be paid to people who will have received targeted payments in an instalment period that includes 9 May 2006, or who have contacted Centrelink about and indicated an intention to apply for such payments on or shortly before that date.

Background

This Schedule provides for a one-off payment to eligible carers that will be paid automatically and without the need for a claim.

Specifically, and subject to qualification, a payment of $1,000 will be paid to persons who are paid an instalment of:

·
carer payment in respect of a period that includes 9 May 2006;
·
wife pension in respect of a period that includes 9 May 2006 where that person is also paid an instalment of carer allowance in respect of a period that includes that same date;
·
* carer service pension under the Veterans' Entitlements Act in respect of a period that includes 9 May 2006; and
·
partner service pension under the Veterans' Entitlements Act in respect of a period that includes 9 May 2006 where that person is also paid an instalment of carer allowance in respect of a period that includes that same date.

Further, and subject to qualification, carers will be entitled to $600 in respect of each care receiver in relation to whom the person receives an instalment of carer allowance for a period that includes 9 May 2006. Where the care of the care receiver is shared, the $600 will also be shared. Where qualification for carer allowance depends on the person providing care for two disabled children, the payment will also be $600.

Explanation of changes

Part 1 - Main amendments

Amendments of the Social Security Act

Item 1 inserts new Parts 2.5D, 2.5E, 2.5F and 2.5G into Chapter 2 of the Social Security Act. It is noted that people who qualify for one-off payments under this item may also qualify for another one-off payment under item 2 of this Schedule.

New Part 2.5D applies to the 2006 one-off payment to people eligible for carer payment.

New section 253 provides that a person is qualified for a one-off payment if the person has been paid an instalment of carer payment in respect of a period that includes 9 May 2006 and the person was paid that instalment because of a claim the person made on or before 9 May 2006.

New section 254 provides that the amount of the 2006 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.

New Part 2.5E applies to the 2006 one-off payment to certain carers eligible for wife pension.

New section 255 provides that a person is qualified for a one-off payment if the person has been paid an instalment of wife pension and an instalment of carer allowance, both in respect of a period that includes 9 May 2006, where three conditions are satisfied in relation to one or more instalments of carer allowance that have been paid to the person. These conditions are that: the instalment was in respect of a period that includes 9 May 2006; the reason that the instalment covered 9 May 2006 was not only because of clause 16 or 17 of Schedule 2 to the Social Security Administration Act; and the person was paid that instalment because of a claim the person made on or before 9 May 2006. The second requirement is not to be taken to limit the third requirement in any way.

New section 256 provides that the amount of the 2006 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.

New Part 2.5F applies to the 2006 one-off payment to certain carers eligible for partner service pension.

New section 257 provides that a person is qualified for a one-off payment if the person has been paid an instalment of partner service pension under Part 3 of the Veterans' Entitlements Act and an instalment of carer allowance, both in respect of a period that includes 9 May 2006 where three conditions are satisfied in relation to one or more instalments of carer allowance that have been paid to the person. These conditions are that: the instalment was in respect of a period that includes 9 May 2006; the reason that the instalment covered 9 May 2006 was not only because of clause 16 or 17 of Schedule 2 to the Social Security Administration Act; and the person was paid that instalment because of a claim the person made on or before 9 May 2006. The second requirement is not to be taken to limit the third requirement in any way.

New section 258 provides that the amount of the 2006 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.

New Part 2.5G applies to the 2006 one-off payment to people eligible for carer service pension.

The only people receiving carer service pension are those whose entitlement to carer service pension was preserved under savings and transitional provisions under subclause 8(2) or (4) of Schedule 5 to the Veterans' Entitlements Act). This is because the Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 made changes that removed all carer provisions from the Veterans' Entitlements Act, allowing the recipients to transfer to carer payments that were available at that time under the Social Security Act. Because, at the time of these changes, it was recognised that a number of people would be adversely affected by those changes, they could elect to remain on the carer service pension rather than transferring to carer payment.

New section 259 provides that a person is qualified for a one-off payment if the person has been paid an instalment of carer service pension as a result of the operation of subclause 8(2) or (4) of Schedule 5 to the Veterans' Entitlements Act and the person was paid the instalment because of a claim the person made on or before 9 May 2006.

New section 260 provides that the amount of the 2006 one-off payment is $1,000. The Note to the provision makes it clear that the maximum available to a person is $1,000, regardless of the number of people in relation to whom the qualified person provides care.

Item 2 inserts a new Part 2.19C into Chapter 2 of the Social Security Act.

Part 2.19C applies to the 2006 one-off payment to people eligible for carer allowance. It is noted that people who qualify for a one-off payment under this item may also qualify for another one-off payment under item 1 of this Schedule.

New section 992T sets out the criteria to be satisfied in order for a person to qualify for a 2006 one-off payment to carers (carer allowance related). In effect, subsection 992T(1) sets out three requirements that must be met in relation to one or more instalments of carer allowance that have been paid to the person. The first requirement is that the instalment of carer allowance was paid to the person in respect of a period that includes 9 May 2006. The second requirement is that the operation of clause 16 or 17 of Schedule 2 to the Social Security Administration Act (which deal with 'backdating') must not be the reason that the instalment covered 9 May 2006. The third requirement is that the person was paid the instalment because of a claim the person made on or before 9 May 2006. The second requirement is not to be taken to limit the third requirement in any way.

The effect of subsection 992T(2) is that each instalment that meets all three requirements of subsection (1) is a 'qualifying instalment'.

The broad operation of the scheme is that a qualified person will receive payment in respect of each 'eligible care receiver' in relation to the person. The concept of who is an 'eligible care receiver' is dealt with in new section 992U. Subsection 992U(1) essentially provides for the general rule that, where providing care to a person gives rise to a qualifying instalment of carer allowance, that person is an 'eligible care receiver' in relation to the qualified person. However, there are situations where a person's qualification for an instalment of carer allowance arises on account of the care the person provides for two disabled children (subsection 953(2) of the Social Security Act). Accordingly, subsection (2) qualifies the general rule by providing that, where subsection 953(2) applies in relation to the qualifying instalment, the two disabled children are treated as a single 'eligible care receiver'.

New section 992V is concerned with working out the amount of the one-off payment. Subsection (1) provides that the amount is worked out by adding together the amounts applicable for each eligible care receiver. Subsection (2) provides that the applicable amount for an eligible receiver is $600 unless subsection (3) applies. Subsection (3) is concerned with situations where 2 people are qualified for carer allowance because they share the care of a care receiver (or care receivers). In those circumstances, subsection 981(1) of the Social Security Act provides for the Secretary to make a written determination specifying the share of carer allowance that each of the two people is to receive. The effect of subsection (3) is that, where the qualifying instalment was paid on the basis of a determination as to a particular share of carer allowance, the amount applicable for an eligible care receiver in relation to a qualified person is that same share of $600.

Item 3 is concerned with determining whether a person has made a claim, or should be taken to have made a claim, on or before 9 May 2006. In determining whether this has occurred, the effect of section 12 and section 15 of the Social Security Administration Act is to be disregarded.

In relation to section 12, subitem 3(a ) provides that a person should not be paid a one-off payment where he or she has claimed a payment (for example, age pension), subsequently become qualified for another payment (for example, carer payment) and after 9 May 2006 is transferred to that latter payment by virtue of section 12 of the Social Security Administration Act.

In relation to section 15, subitem 3(b ) clarifies that the effect of a decision of the Secretary made after 9 May 2006 for the purposes of section 15 of the Social Security Administration Act (dealing with certain incorrect or inappropriate claims) is to be disregarded. This is intended to restrict access to the one-off payments to cases where the relevant decision for the purposes of section 15 is made before or on 9 May 2006.

Items 4 to 6 deal with overpayment arising in respect of the five 2005 one-off payments. These amendments ensure that section 1223ABA of the Social Security Act (which applies in relation to the payments made under the Family Assistance Legislation Amendment (More Help for Families - One-off Payments) Act 2004 and under the Social Security Legislation Amendment (One-off Payment for Carers) Act 2005) will also apply to the 2006 one-off payments. Section 1223ABA, in very broad terms, provides that a one-off payment (or part of a one-off payment) will be a overpayment where it is established that the recipient knowingly made a false or misleading statement (or provided false information) and, if the true circumstances had been known, the determination in relation to the relevant instalment (which gave rise to the qualification for the one-off payment) would not have been made.

Item 7 inserts new section 12AC into the Social Security Administration Act. It provides that a claim is not required in order to be paid any of the five 2006 one-off payments.

Item 8 inserts a reference to the five new one-off payments into the existing definition of 'lump sum benefit' contained in subsection 47(1) of the Social Security Administration Act.

Item 9 inserts new section 47D. In broad terms, it provides that the Secretary must pay the payments provided for by this Schedule on the date that the Secretary determines is the earliest reasonably practicable date on which to do so. The manner of payment is that manner which the Secretary considers is appropriate.

Part 2 - Related amendments

Amendments of the Income Tax Assessment Act 1936

A taxpayer's dependants' Separate Net Income (SNI) is used to determine the taxpayer's eligibility to certain dependant offsets. SNI is income and other specified amounts earned, derived or received, less certain expenses incurred in earning that income. A payment of carer allowance is not included as part of SNI. As it is not intended that any of the 2006 one-off payments to carers form part of SNI, items 10 and 11 make the necessary amendments to the Income Tax Assessment Act 1936.

Item 12 amends the Income Tax Assessment Act 1936 to provide that payment to carers made under the administrative scheme determined under Schedule 4 of this Bill is not included as part of SNI.

Amendments of the Income Tax Assessment Act 1997

The 2006 one-off payments to carers, and a payment made under the scheme determined under Schedule 4 to this Bill, will be exempt from income tax. Amendments are made to section 52-10 of the Income Tax Assessment Act 1997 to achieve this effect ( items 14 to 16 ).

A consequential amendment is also made to the table in section 11-15 to add in references to the 2006 one-off payments to carers and a payment made under the scheme determined under Schedule 4 to this Bill ( item 13 ).

Amendments of the Social Security Act

Item 17 inserts a new paragraph 8(8)(jad) into the Social Security Act. This ensures that any payment made under the administrative scheme determined under Schedule 4 to this Bill, do not count as income for the purposes of the social security law.

Amendments to the Veterans' Entitlements Act

Item 18 inserts a new paragraph 5H(8)(zzc) in the Veterans' Entitlements Act. This ensures that any payment made under the administrative scheme determined under Schedule 4 to this Bill, do not count as income for the purposes of the Veterans' Entitlements Act.

Schedule 4 - Administrative scheme for 2006 one-off payments to carers

Summary

This Schedule contains provisions to enable an administrative scheme to be established. In broad terms, the purpose of the administrative scheme will be to provide payments in circumstances where the statutory one-off payments regime provided for in Schedule 3 does not produce an appropriate result in relation to circumstances that occur in the 2005-2006 financial year. The Minister for Families, Community Services and Indigenous Affairs can determine the details of the scheme by legislative instrument.

Background

This Schedule enables an administrative scheme to be established alongside the statutory one-off payment scheme.

Explanation of changes

Item 1 provides for the establishment of an administrative scheme by the Minister for Families, Community Services and Indigenous Affairs by legislative instrument, under which one-off lump sum payments can be made to carers in specified circumstances. The purpose of the scheme is to provide payments in circumstances where the statutory one-off payments regime does not produce an appropriate result in relation to circumstances that occur in the 2005-2006 financial year.

The details of the administrative scheme (including such matters as eligibility, amount of the payment, debt recovery and administrative matters) would be set out in a legislative instrument.

Payments under the administrative scheme would be made out of the Consolidated Revenue Fund (in accordance with subitem 1(4)).