EXPLANATORY STATEMENT
Child Care Benefit (Rates and Hardship) Amendment Determination 2007 (No.1)
Summary
This Determination is made under subsection 82(3) of the A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act).
This Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The purpose of this Determination is to amend the Child Care Benefit (Rates and Hardship) Determination 2000 (the Rates and Hardship Determination) that specifies kinds of hardship and the rules relating to the making of decisions on questions of hardship and certain other matters, for the purposes of child care benefit (CCB).
This Determination makes an amendment to remove certain references which became obsolete as a result of the amendments to the Family Assistance Act made by the Family Assistance Legislation Amendment (Child Care Management System and Other Measures) Act 2007 (the CCMS Act). The amendment results in some relaxation of the current limits on the making of hardship decisions in income support cases.
Background
The changes introduced by this Determination are consequential on the amendments made to the Family Assistance Act by the CCMS Act for the purposes of introduction of the Child Care Management System (CCMS).
Under subsection 50J(1) of the A New Tax System (Family Assistance) (Administration) Act 1999 (the Family Assistance Administration Act), if the Secretary makes a determination of conditional eligibility under section 50F in respect of a claimant for CCB by fee reduction, the Secretary must (among other things) determine the CCB% applicable to the claimant and a child (CCB% is a component, derived from the claimant’s income, needed to calculate the hourly rate of CCB fee reductions). Under section 50M of the Family Assistance, the Secretary must give a notice of the CCB% to the claimant and the service(s) that provide care to the child.
Under section 73 of the Family Assistance Act, the CCB% applicable to an individual is the rate calculated under Part 1 to Schedule 2 of the Family Assistance Act.
A special (increased) hourly rate may apply if an individual is experiencing hardship of a kind specified in the Rates and Hardship Determination. In such a case, an approved child care service providing care to the individual’s child may certify, under subsection 76(1) of the Family Assistance Act, an hourly rate of CCB fee reductions applicable to sessions of care provided to the child and the period for which that rate applies, or the Secretary may, under section 81 of the Family Assistance Act, determine the applicable special rate and the period (these certifications or determinations are referred to as ‘hardship determinations’).
An individual who has ceased to receive an income support may be in hardship (in the circumstances specified in subsection 4(3) of the Rates and Hardship Determination). Under section 7 of the Rates and Hardship Determination, the initial period for which a hardship determination applies in an income support case is limited to a period of 3 weeks. When the 3 week period has expired, further hardship determinations may be made in respect of the same individual, for the same reason, for one week at a time, up to the maximum 6 weeks in total. Under subsection 7(2), an approved child care service cannot make a further weekly hardship determination after the service received a notice under section 50M of the Family Assistance Administration Act setting out the updated CCB% applicable to the claimant, and the Secretary cannot make a further hardship determination after a notice under section 50M has been sent to the service.
Amendments made to section 50M by the CCMS Act removed the requirement for the Secretary to give a CCB% notice to a child care service. Consequently, the limitations in subsection 7(2) preventing the making of hardship decisions after a CCB% notice has been received by (or sent to) the service has become inoperative.
The Department has consulted closely with the child care sector in relation to the policy changes resulting from the introduction of the CCMS.
A preliminary assessment of the impact of this amendment has been undertaken in accordance with the procedure established by the Office of Best Practice regulation; this amendment will have minimal impact on child care services.
Explanation of the sections
Name of Determination
Section 1 states the name of this Determination.
Commencement
Section 2 states that this Determination commences on the day after it is registered.
Amendment of the Rates and Hardship Determination
Section 3 states that Schedule 1 amends the Rates and Hardship Determination.
Application
Section 4 provides that the amendment made by this Determination applies to a hardship determination made for a session of care provided by an approved child care service to a child during a week falling wholly after the application day for the service. The ‘application day’ for this purpose is the day as defined and determined under item 91 of the CCMS Act.
Explanation of the item in Schedule 1
Item 1 – amendment to subsection 7(2)
This item substitutes new subsection 7(2) to remove the references to CCB% notices and, consequently, the limitation associated with the CCB% notices. As a result of the amendment, one or more hardship determinations will be able to be made, of one week application, after the initial or a further weekly hardship determination has ended.
The current limit under section 7(3) on the hardship determination in income support cases, maximum 6 weeks in total, remains.