House of Representatives

Explanatory Memorandum

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

OUTLINE

This bill gives effect to a number of measures announced in the 2007-08 Budget.

Child care benefit rates

From 1 July 2007, child care benefit standard and minimum hourly rates will increase by 10 per cent, over and above the normal CPI indexation increase that would apply from this date.

Child care tax rebate

Also commencing on 1 July 2007, this measure converts the child care tax offset for out-of-pocket child care expenses, currently available under the taxation legislation, into a direct payment under the family assistance law. This payment, which will be known as the child care tax rebate, will be an annual lump sum payment. Eligibility requirements for the payment will remain unchanged, but the amount of entitlement will no longer be limited by the amount of the tax liability of the eligible individual. The entitlement for the rebate remains as 30 per cent of out-of-pocket child care costs.

Health care card

This measure gives full-time students aged 16 to 25 years who are ex-carer allowance (child) care receivers continued access to the health care card.

The measure commences on 1 October 2007.

Financial impact statement