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House of Representatives

Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Bill 2007

Explanatory Memorandum

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

OUTLINE

This bill contains several measures affecting Families, Community Services and Indigenous Affairs and related legislation.

Child support consolidation amendments

The bill makes minor consolidating refinements to the child support scheme, and some minor consequential amendments to the family assistance law, to clarify and refine the operation of the government's major 2006 legislation that restructured the scheme in line with the recommendations of the Ministerial Taskforce on Child Support, chaired by Professor Patrick Parkinson. It also clarifies a small number of pre-existing issues or anomalies with the operation of the scheme.

Relocation of measures from the Child Support Legislation Amendment Bill 2004

This bill contains amendments, relocated from the Child Support Legislation Amendment Bill 2004, that are still required in light of the Child Support Taskforce reforms. The 2004 bill, which will now no longer be needed, was introduced in late 2004 but its passage was delayed, largely because the imminent Taskforce reforms overshadowed it. The measures from the 2004 bill now incorporated in this bill are:

·
move into the primary child support legislation provisions currently contained in regulations relating to overseas maintenance arrangements (thus, honouring a commitment made by the government during passage of the enabling provisions for the regulations); minor or consequential amendments to the family law legislation are also being made;
·
make amendments to improve equity between parents in access to court in relation to decisions about parentage of a child and to streamline certain review processes; and
·
make various child support minor policy refinements and technical corrections.

Maintenance income test

The bill amends the maintenance income test provisions in the A New Tax System (Family Assistance) Act 1999 . These amendments:

·
clarify the meaning of 'amount received' and 'amount payable' in the formula used to work out the notional amount of maintenance income an individual is taken to have received under a child support agreement or court order where there is an underpayment of child support that is registered for collection by the Child Support Agency;
·
clarify that maintenance income received by a payee for one or more children will reduce the payee's amount of family tax benefit (FTB) Part A above the base rate for those children only;
·
ensure that the benefits of the maintenance income credit (MIC) are available only where FTB is claimed through Centrelink or Medicare Australia and not through the tax system from the Australian Taxation Office;
·
refine the MIC provisions so that they operate as intended; and
·
reflect the new FTB treatment under the Child Support Taskforce reforms of child support agreements and lump sum child support in the MIC provisions.

Baby bonus amendments

The bill amends the family assistance law to:

·
ensure that under 18 year old claimants are paid the baby bonus in 13 fortnightly instalments;
·
require registration of the birth with the relevant state/territory authority as a condition of eligibility for the baby bonus; and
·
rename maternity payment to 'baby bonus'.

Portability of family tax benefit

Changes are being made to allow the FTB portability period of 13 weeks for full payment to be extended for members of the Australian Defence Force and certain Australian Federal Police personnel of the International Deployment Group who are deployed overseas as part of their duties and, as a result, remain overseas for longer than 13 weeks.

Remote area allowance

The remote area allowance provisions in the Social Security Act 1991 and the Veterans' Entitlements Act 1986 are being amended from 1 July 2008 to ensure that an additional allowance is payable for each FTB child and regular care child of a person.

Dependant and housekeeper rebates, and Medicare levy

Amendments are being made to the Income Tax Assessment Act 1936 as a consequence of the Child Support Taskforce reforms, which included changes to 'FTB child' and the introduction of a concept of 'regular care child'.

Extension of the assets test exemption period

The bill amends the social security and veterans' entitlements legislation to provide a discretion to extend the assets test exemption for proceeds from the sale of a person's principal home from 12 months to up to 24 months in certain circumstances. It also provides a discretion to extend the current 12 month temporary absence from the principal home rule for absences of up to 24 months, in relation to people who have suffered loss of or damage to their homes, including through a natural disaster.

Amendments relating to income streams

This bill amends the Social Security Act 1991 to make a number of minor amendments aimed at enhancing and improving the efficiency and effectiveness of various income streams rules.

Other minor and technical amendments

The bill also makes various amendments of a minor or technical nature to the social security law and child support Acts.

Financial impact statement

  Total resourcing
2006-07 $ 2.1 m
2007-08 $ 0.8 m
2008-09 $ 0.5 m
2009-10 $ 0.4 m


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