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House of Representatives

Child Support and Family Assistance Legislation Amendment (Budget and Other Measures) Bill 2010

Explanatory Memorandum

Circulated By the Authority of the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP

OUTLINE

The bill contains several measures amending the child support legislation and the family assistance law.

Child support income estimates

This bill introduces amendments to the income estimate provisions in the child support legislation to align estimate periods with financial years rather than with child support periods. These amendments will make it easier for parents to estimate their income and for reconciliation to be done through an automated process. These amendments do not affect the length of the child support period, which remains at 15 months. These amendments only change the period over which income estimates are reconciled from 15 months, to a financial year. The reconciliation process checks a parent's estimate of their income against their actual income, so that the correct income is used in child support calculations. This will help improve the accuracy of child support calculations to make sure that the correct information is used.

Percentage of care

The family assistance law and the child support legislation differ in how they deal with care percentages and changes in care for a child. This bill aligns care determinations made under the family assistance law and the child support legislation. This will allow parents or carers who are entitled to family tax benefit and are also child support payers or payees to have the same care determinations made for a child where the care of the child involves more than one carer.

Non-payment of family tax benefit for non-lodgment of tax returns

The bill also makes minor amendments to the family assistance law to exclude two circumstances from the provisions that prevent payment of family tax benefit on the basis of an income estimate if relevant tax returns have not been lodged.

Other amendments

This bill makes minor amendments to the A New Tax System (Family Assistance) Act 1999 and the Child Support (Registration and Collection) Act 1988.

Financial impact statement

Child support income estimates

The financial impact of the income estimates component of the bill is negligible. However, failure to implement the changes will have a financial impact through less efficient processes.

Percentage of care

This component of the bill relates to the 2009-10 Budget Measure ' Care determinations - alignment across Family Assistance Office and Child Support Program'. The measure will provide savings of $0.5 million over four years. The fiscal cost of this measure is as follows:

2009-10 2010-11 2011-12 2012-13
$9.3 m $5.8 m -$5.6 m -$10.0 m

This financial impact includes impacts for the Department of Human Services, Centrelink and the Department of Families, Housing, Community Services and Indigenous Affairs.

Non-payment of family tax benefit for non-lodgment of tax returns

These costs are further to the financial impact of the original measure contained in the 2008-09 Budget - Responsible Economic Management - Family Tax Benefit - cease fortnightly payments for recipients who do not lodge tax returns. The additional cost is as follows:

Total resourcing

2009-10 2010-11 2011-12 2012-13 2013-14
$0.3 m $1.6 m $0.2 m $0.2 m $0.2 m


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