EXPLANATORY STATEMENT
Child Care Benefit (Session of Care) Amendment Determination 2007 (No. 1)
Summary
This Determination is made under section 9 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 (Session of Care) Determination 2000 (the Session of Care Determination) that sets out the meaning of ‘session of care’ for the purposes of child care benefit (CCB).
This Determination repeals the rules applicable to the meaning of a ‘session of care’ where an individual’s eligibility for CCB is limited to a specified number of more than 50 hours in a week and care in excess of 50 hours is provided to the child in respect of whom the eligibility arises. Under those rules, for the purposes of an individual’s eligibility for CCB, a session of care in this situation is limited to 1 hour. This limits the individual’s eligibility for CCB for care provided in excess of 50 hours to the hours of care provided as opposed to all the hours in the relevant session of care, for which the individual may be liable to pay fees.
As a result of the amendment, if an individual in this situation is liable to pay child care fees for a session of care that consists of more than one hour, the individual may be eligible for CCB for all the hours in the session of care, up to the individual’s weekly limit of hours, even if the care was not provided to the child in all of those hours. Individuals who use more than one child care service in a week for the provision of care to a child are likely to benefit from this amendment.
Background
CCB is a payment towards an individual’s child care costs. CCB is payable for a ‘session of care’ provided to a child by an approved child care service, (for example, section 43 of the Family Assistance Act refers) up to the specified limit of hours in a week.
Section 9 of the Family Assistance Act requires the Minister to determine what constitutes a ‘session of care’ for this purpose. The Session of Care Determination defines a ‘session of care’ as the number of hours for which a service charges fees, as a unit. The Session of Care Determination limits the maximum number of hours that are taken into account for CCB purposes. For example, a ‘session of care’ must not exceed 12 hours. The effect is that, if an individual is charged fees by an approved child care service for a session of care that does not exceed those limits, the individual is eligible for all the hours in the session of care charged regardless of whether the care was provided in all of those hours or not.
Under the Family Assistance Act, the number of hours per week for which an individual may be eligible for CCB is limited. The limit is either 24, 50 or more than 50 hours.
A limit of more than 50 hours of care in a week may apply where a claimant satisfies the work/disability test, exceptional circumstances exist or the approved child care service or the Secretary considers that the child is at risk (section 55 of the Family Assistance Act refers).
Section 9 of the Session of Care Determination provides that where a limit of more than 50 hours per week applies and care is provided for more than 50 hours, a session of care cannot exceed one hour. This operates to the effect that the eligibility for CCB only arises for actual hours of care used over 50 hours, rather than for a block of time that constitutes a service’s session of care that may not be fully used.
As a result, if an approved child care service provides care to a child in excess of 50 hours in a week, and the number of the excess hours is lower than the number of hours in a service’s session of care, and the service charges the individual for all the hours in the session of care, the individual is liable to pay full fees for the hours in that session of care for which the individual is not eligible for CCB.
While an approved child care service may normally make an adjustment to avoid charging for the hours over 50 hours of care provided to a child for which CCB eligibility does not arise, this is not possible in the situation where the child uses a number of services in a week, because the service cannot know when the total of 50 hours of care provided to a child by all the services has been reached.
The need for the amendments made by this Determination arises in the context of the introduction of the CCMS, which has been extensively consulted with the child care sector.
A preliminary assessment of the impact of this proposal has been undertaken in accordance with the procedure established by the Office of Best Practice Regulation; this proposal will not affect 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 Session of Care Determination
Section 3 states that Schedule 1 amends the Determination.
Application
Section 4 provides that the amendments made by this Determination will apply to a session of care that would otherwise have been provided to the child by an approved child care service 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 – repeal of Part 4
Item 1 repeals Part 4 (including section 9) of the Session of Care Determination which provides a one hour limit, for the purposes of eligibility for CCB, on a session of care provided to a child in excess of 50 hours in a week, where the individual’s weekly limit of hours is a particular number of more than 50 hours. The one hour limit will no longer apply.
As a result, the same rules relating to the duration of sessions of care will apply for the purposes of determining an individual’s eligibility for CCB for a session of care provided to a child, regardless of whether the limit of hours applicable in a week to the individual and the child is 24, 50 or more than 50.