EXPLANATORY STATEMENT
FAMILY ASSISTANCE (HIGHER AMOUNTS)
DETERMINATION 2000 (No. 2)
Summary
The Family Assistance (Higher Amounts) Determination 2000 (No. 2) (the determination) amends the A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) by increasing certain amounts that are currently in the Family Assistance Act. The new higher amounts will be effective on 1 July 2000.
Background
The Family Assistance Act received the Royal Assent on 8 July 1999. The Family Assistance Act was amended by the A New Tax System (Family Assistance and Related Measures) Act 2000 (the Family Assistance and Related measures Act) which received the Royal Assent on 3 May 2000.
As part of the Government’s plan for a new tax system, the structure and administration of family assistance is being simplified with effect from 1 July 2000. The 12 existing forms of family assistance available through the social security and taxation systems are being replaced by three new payments, family tax benefit Part A, family tax benefit Part B and child care benefit. The Family Assistance Act outlines the eligibility conditions for, and rates of payment of, these three new payments.
Given the lead-in time necessary to develop and implement the new family assistance regime, it was necessary to include a number of amounts in the Family Assistance Act that will not be current as at 1 July 2000 when the new family assistance regime commences. The amounts included in the Family Assistance Act reflected the rates available to assist families at the time the legislation was enacted. These amounts did not take into account any indexation increases that occurred between the time of enactment and 1 July 2000 or the increases to social security rates and free areas on 1 July 2000 to compensate for the effects of the new goods and services tax. In the case of child care benefit, the new rates include an adjustment for a childcare assistance increase due to an indexation that would have occurred in April 2000 but was deferred until 1 July 2000 (under a Childcare Assistance (Fee Relief) Amendment Guidelines (No. 1) 2000).
Accordingly, clause 8 of Part 4 of Schedule 4 to the Family Assistance Act, as amended by the Family Assistance and Related Measures Act, provides a mechanism for increasing specified amounts to take account of these factors (where applicable). The mechanism is by disallowable instrument signed by the Secretary.
The Family Assistance (Higher Amounts) Determination 2000 (the original determination) was made on 8 May 2000 to increase specified amounts in the Family Assistance Act. Among other things, the original determination provided new maximum rent assistance rates for family tax benefit that incorporated a 7% increase to compensate for the effects of the goods and services tax.
The Government has decided to increase the maximum rates of rent assistance by 10% (instead of 7%), with effect from 1 July 2000. This means that some of the amounts in the original determination are now incorrect. Accordingly the original determination is repealed.
The determination gives effect to the Government’s decision by further increasing the maximum rent assistance amounts that will apply in relation to family tax benefit from 1 July 2000. The determination also increases other relevant amounts in the Family Assistance Act in the same way as the original determination.
Explanation of the provisions
Section 1 states the name of the determination.
According to section 2, section 5 of the determination commences immediately after the commencement of items of Schedule 1 (other than item 83) to the Family Assistance and Related Measures Act. This effectively means that the increases provided for in section 5 commence on 1 July 2000. Otherwise the determination commences upon gazettal.
Section 3 contains interpretation provisions.
Section 4 repeals the Family Assistance (Higher Amounts) Determination 2000.
Section 5 amends the Family Assistance Act by substituting the new higher amounts specified in the table for the amounts that are currently in the Family Assistance Act.