Child Care Subsidy Amendment (NSW Third Party Payment) Minister’s Rules 2022

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Employment, Workforce, Skills, Small and Family Business

A New Tax System (Family Assistance) Act 1999

Child Care Subsidy Amendment (NSW Third Party Payment) Minister’s Rules 2022

AUTHORITY

The Child Care Subsidy Amendment (NSW Third Party Payment) Minister’s Rules 2022 (Amendment Rules) are made under subsection 85GB(1) of the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act) as construed in accordance with subsection 33(3) of the Acts Interpretation Act 1901 (Acts Interpretation Act).

Under subsection 33(3) of the Acts Interpretation Act, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke and amend or vary any such instrument.

PURPOSE AND OPERATION

The Amendment Rules amend the Child Care Subsidy Minister’s Rules 2017 (Principal Rules) to prescribe an additional third party payment that does not impact the hourly session fee for a session of care provided to a child. The amount of Child Care Subsidy (CCS) an individual is eligible for in a week is determined using, among other factors, the hourly rate of CCS for the individual for each session of care provided to the child during that week. Subclause 2(1)  of Schedule 2 to the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act) provides that the hourly rate of CCS is the lower of the hourly session fee for the individual and the CCS hourly rate cap for the session. Subclause 2(2) of Schedule 2 to the Family Assistance Act provides that the hourly session fee for a session of care provided to a child is the amount the individual or the individual’s partner is liable to pay for the session of care, reduced by the hourly rate of any payment which the individual benefits from in respect to that session. This means that the amount of CCS received by an individual can be reduced if the individual benefits from another payment (e.g. from a Commonwealth, State or Territory entity) in respect of the relevant session of care.

Paragraph 2(2A)(c) of Schedule 2 to the Family Assistance Act provides that subparagraph 2(2)(b)(i) does not apply to a payment prescribed by the Principal Rules. The Amendment Rules prescribes vouchers given by the New South Wales government between 1 January 2022 and 1 July 2023 to reduce the cost to families for children to participate in outside school hours care in New South Wales for the purpose of paragraph 2(2A)(c).

This prescribed payment will allow the Commonwealth to further support individuals eligible for CCS by allowing them to benefit from the New South Wales voucher with no reduction in the amount of CCS they are entitled to for the relevant sessions of care.  

REGULATORY IMPACT

The Office of Best Practice Regulation (OBPR) has advised that a RIS is not required for the measures included at item 1 of Schedule 1 (OBPR reference OBPR21-01245).

COMMENCEMENT

The Amendment Rules commence on the day after they are registered on the Federal Register of Legislation.

CONSULTATION

The Department of Education, Skills and Employment has consulted with the New South Wales Government and stakeholders in the early childhood education and care sector in developing the Amendment Rules. These stakeholders were supportive of these measures.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Child Care Subsidy Amendment (NSW Third Party Payment) Minister’s Rules 2022

The Child Care Subsidy Amendment (NSW Third Party Payment) Minister’s Rules 2022 (the Amendment Rules) are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Amendment Rules prescribe an additional third party payment that does not impact the hourly session fee for a session of care provided to a child. Subparagraph 2(2)(b)(i) of Schedule 2 to the A New Tax System (Family Assistance) Act 1999 (Assistance Act) provides that the hourly session fee is reduced by the hourly rate of any payment which the individual benefits from in respect to that session before Child Care Subsidy (CCS) entitlement is calculated. However, the amount of CCS an individual is entitled to is not reduced if the individual benefits from a payment prescribed in the Minister’s Rules under paragraph 2(2A)(c) of the Assistance Act.

The Amendment Rules have the effect that vouchers given by the New South Wales government between 1 January 2022 and 1 July 2023 to reduce the cost to families for children to participate in outside school hours care in New South Wales do not reduce an individual’s CCS entitlement.

Human rights implications

The Amendment Rules engage the following human rights:

• Article 18 of the Convention on the Rights of the Child (CRC), which requires States Parties to take all appropriate measures to ensure that children of working parents can benefit from child care services and facilities.

Article 18 of the CRC

Article 18 of the CRC, and particularly paragraph 3 of article 18, requires States Parties to take all appropriate measures to ensure that children of working parents have the right to benefit from child care services and facilities for which they are eligible.

The Amendment Rules make changes to allow individuals to benefit from a third party payment from the NSW Government that will reduce the costs of child care while not reducing the amount of CCS they receive. This will allow parents to receive further benefits from child care services by reducing the cost of accessing child care and enabling greater synergy between different government child care payments. 

Accordingly, these Amendment Rules will support children and families to continue to be able to afford and access child care.

Conclusion

The Instrument is compatible with human rights because it promotes the protection of human rights.

Minister for Employment, Workforce, Skills, Small and Family Business, the Hon Stuart Robert MP

Child Care Subsidy Amendment (NSW Third Party Payment) Minister’s Rules 2022

EXPLANATION OF PROVISIONS

Section 1: Name

1. This is a formal provision specifying the name of the instrument as the Child Care Subsidy Amendment (NSW Third Party Payment) Minister’s Rules 2022 (Amendment Rules).

Section 2: Commencement

Section 3: Authority

Section 4: Schedules

SCHEDULE 1 – Amendments

Child Care Subsidy Minister’s Rules 2017

Item 1

5.             This item inserts subsection 16A(3C) into Part 3 of the Principal Rules to prescribe an additional third party payments that does not reduce the hourly session fee for a session of care provided to a child.

6.             Subparagraph 2(2)(b)(i) of Schedule 2 to the Family Assistance Act provides that the hourly session fee is reduced by the hourly rate of any payment which the individual benefits from in respect to that session. Paragraph 2(2A)(c) of Schedule 2 to the Family Assistance Act provides that subparagraph 2(2)(b)(i) does not apply to payments that are prescribed in the Principal Rules.  Section 16A of the Principal Rules prescribes payments for the purpose of paragraph 2(2A)(c) of the Family Assistance Act.

7.             Subsection 16A(3C) prescribes vouchers to reduce the cost to families for children to participate in outside school hours care in New South Wales. In particular this subsection refers to a $500 payment in the form of a voucher that will be issued by the New South Wales Government between 1 January 2022 and 1 July 2023 to reduce the cost of outside school hours care for families. As a result of this subsection, the amount of CCS an individual will be entitled to for the relevant sessions of care will not be reduced by the amount of the $500 voucher used.