House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Schedule 1 - Social Security Act 1991

Background

This Schedule amends the Social Security Act to make various amendments that are consequential on the new family assistance structure and the repeal of the current forms of assistance to families. The Schedule is divided into Parts that group related amendments together.

Explanation of the amendments

Part 1 - Amendments relating to family allowance

Items 1, 27 to 45, 48, 51, 53, 54, 56, 59, 60, 62, 63, 65, 66, 67, 69, 71, 72, 73, 75, 76, 79, 80, 81, 83, 84, 85, 88, 89, 90, 92, 94, 95, 96, 98, 99, 101, 103, 104, 105, 106, 107, 109, 110, 111, 112 and 113 are to omit existing references in the Social Security Act relating to family allowance and substitute equivalent references to the new family assistance structure. Generally, the Part A rate of family tax benefit under the Family Assistance Act will take the place of family allowance. The amendments made by items 62, 83, 84, 98, 103 and 110 to rent assistance provisions also clarify the operation of the provisions in the case of a person who is a member of an illness separated couple, a respite care couple or a temporarily separated couple. Such people should have their rent assistance qualification assessed independently from the rent assistance qualification of their partners.

In a related vein, items 2 to 14, 22, 23, 24, 25, 26, 46, 47, 49, 50, 52, 53 (note only), 55, 57, 58, 64, 70, 77, 78, 86, 87, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 127, 128, 129, 130, 132, 133, 134, 135, 136, 137, 138, 141, 142, 143, 144 and 145 are simply to omit references to family allowance and maternity allowance in provisions in the Social Security Act in which they will no longer be appropriate because of the family assistance changes, or to omit whole provisions that have been relevant only for payments that will now be covered by the family assistance legislation. Some of these omissions are of notes or examples, which are no longer required in the Social Security Act to the extent that they have been previously.

Items 15, 126, 131, 139 and 140 make amendments for the purposes of the method statement in point 1210-A1 of the Social Security Act. This deals with the calculation of a persons international agreement portability rate and relies in part on the persons notional family allowance rate. This is currently specified to be the amount worked out by adding the standard family allowance rate and the guardian allowance and subtracting the minimum standard family allowance rate. Rather than try to preserve this link by translating the concept to the family assistance equivalent (because this would be difficult to achieve accurately), the link is to be severed and replaced with a specific amount that will perform the same function and preserve international undertakings.

Accordingly, new steps 5 and 6 of the method statement will now deal with the persons additional child amount or amounts to the same effect in the method statement as the current notional family allowance rate construction. These additional child amounts will be provided by new point 1210-A1A. Instead of being reached by link to the family assistance structure, the three amounts, ranging from $37.00 to $105.10, are specified in a table and differ depending on the age of the child and on whether the person concerned has a partner. These amounts as specified in the Bill are correct as at the time of introduction. However, a special transitional indexation provision allows the rates to be updated ready for the commencement of the new rule should this need to happen because of movement in the source family assistance figures on which the amounts are based.

In the longer term, provision is made for the routine indexation of the amounts so that they keep pace with the source figures.

Items 16, 17, 18, 19, 20, 21 and 61 add to appropriate provisions in the Social Security Act new references to family assistance payments and concepts, including definitions of those new elements and legislative references. In particular, item 18 adds to subsection 23(1) the definition family assistance law as an abbreviated way of referring to both principal pieces of family assistance legislation - the Family Assistance Act and the Family Assistance Administration Act.

Items 68, 74, 82, 91, 97, 100, 102, 108 and 114 insert a new remote area allowance provision in each rate calculator to allow an additional amount of remote area allowance to be paid in respect of an FTB child who has died, for 14 weeks after the death. This rule replaces an existing family allowance rule, which increases the amount of bereavement payment for a deceased child if the family allowance recipient also received remote area allowance when the child died. This rule has not been incorporated into the bereavement provisions that apply to family tax benefit.

Item 146 repeals clauses 50, 51, 52, 53, 54 and 69 of Schedule 1A to the Social Security Act. These are current savings provisions that are either no longer applicable because of the repeal of family allowance or that are no longer appropriate under the new family assistance regime, the object of which is to rationalise and make more equitable programs for payments to families. Some of those pensioners affected by the repeal of clause 54 may be able to opt for an agreement payment that would include the additional child amount. The savings currently provided by clauses 52 and 53 will be reinstituted through a regulation to be made under section 4 of the First Consequential Act.

Part 2 - Amendments relating to family tax payment

The amendments made by this Part are to omit references to family tax payment in provisions in the Social Security Act in which they will no longer be appropriate because of the family assistance changes, or to omit whole provisions that have been relevant only for family tax payment.

Part 3 - Amendments relating to maternity allowances

This Part contains two amendments that are to omit a reference to maternity allowance and a whole paragraph relating to maternity allowance and maternity immunisation allowance from provisions in the Social Security Act that will no longer need to reflect those payments because of their movement to the family assistance structure.

Part 4 - Amendments relating to parenting payment

The three items in this Part omit some existing references to PP (partnered) and replace them with references to benefit PP (partnered). This is done because one of the two elements of the existing PP (partnered), non-benefit PP (partnered), is being removed as part of the family assistance measures, leaving only benefit PP (partnered), which may now be spelled out in full in the relevant provisions. Two of the amendments are of provisions inserted by the Further 1998 Budget Measures Legislation Amendment (Social Security) Act 1999 , currently still a Bill before the Parliament (see item 14 of Schedule 2 and item 53 of Schedule 3).

Part 5 - Amendments relating to the introduction of child care benefit

As the heading to this Part indicates, the amendments contained in this Part generally relate to the introduction of the child care benefit element of family assistance.

Item 157 amends the definition of protected information in subsection 23(1) of the Social Security Act, which is used for the confidentiality provisions. This is to make the definition mirror the equivalent definition that is to apply for the family assistance confidentiality provisions.

Essentially, the pool of information to be accessed, and protected, both by the family assistance and by the social security confidentiality provisions will be the same. It will comprise information about a person that is or was held in the records of the Department or Centrelink, or information about a person obtained by an officer under the family assistance law that is or was held in the records of the Australian Taxation Office or the Health Insurance Commission. It will also cover information that there is no information about a person held in the records of any one or more of these bodies. However, it will be possible to obtain, disclose, record or otherwise use that information only for relevant purposes (ie, generally, for the purposes of either of the two legislative systems).

Item 158 makes a minor technical correction to section 1261.

Items 159, 160, 161, 162, 164, 165 and 166 make minor amendments to several confidentiality provisions in the Social Security Act to remove reference to the Child Care Payments Act 1997 , which will be repealed by the First Consequential Act. In these cases, it is not necessary to replace this reference with a reference to the new family assistance equivalent - the revised definition of protected information (see item 157 above) will have the effect of protecting child care benefit information, along with other family assistance information, so that it may be obtained, recorded, disclosed or otherwise used only for relevant social security purposes.

However, item 163 does replace the Child Care Payments Act 1997 reference in paragraph 1312B(b) with a reference to the family assistance law. This is to make sure that a person performing family assistance duties does not technically commit an offence under section 1312B of the Social Security Act in disclosing protected information (which, under the revised definition discussed under item 157 above may include information obtained under the family assistance law) if that disclosure is authorised or required by the family assistance law. Again, this mirrors the equivalent family assistance confidentiality provision.

Part 6 - Amendments relating to overpayments and debt recovery

This Part contains two amendments that include reference to the new family assistance structure in relevant debt recovery provisions in the Social Security Act.

The first, made by item 167 , is to make sure that a persons family assistance debt may be recovered by deductions from the persons social security entitlement if he or she has one (consistent with the treatment of debts under various other Acts and schemes).

The second, made by item 168 , is complementary to this, recognising that recovery by deductions from a persons social security entitlement does not have to be pursued if the amount is recovered under the family assistance debt recovery provisions.

Part 7 - Amendments relating to commencement of the Youth Allowance Consolidation Act 1999

This Part makes amendments to provisions inserted into the Social Security Act, or substituted, by the Youth Allowance Consolidation Act 1999 , currently still a Bill before the Parliament (the YA Act). (The YA Act is expected to commence before the family assistance package.)

Items 169 to 174 are to adjust concepts used in the youth allowance family actual means test inserted into the Social Security Act by Schedule 3 to the YA Act (the test formerly having been provided by regulation).

The family actual means test relies in part on identifying the value of the increase in the tax free threshold that is available to the family of a young person affected by the test. However, the family assistance changes remove this increase as a method of assisting families and replace it with direct family assistance. Accordingly, these items reflect the family assistance changes as they affect the test.

Items 175 and 176 amend section 1127 (relating to the disposal of assets more than 5 years ago), after it is repealed and substituted by item 25 of Schedule 4 to the YA Bill. The amendments are simply to remove references to family allowance since it will no longer be a payment under the Social Security Act.

Part 8 - Miscellaneous amendment

This Part contains only one amendment. It is to omit a no longer relevant parenting allowance reference in section 1190 relating to indexation.