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.
Overview
The Family Assistance (Higher Amounts) Determination 2000 (No. 2) was enacted to amend the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act) by increasing certain amounts within the Act. This determination was introduced by the Australian Parliament to address the need for updated rates in the Family Assistance Act to reflect changes such as indexation increases and adjustments for the new goods and services tax (GST) that were scheduled to take effect from 1 July 2000. The policy objective was to ensure that family assistance payments remained adequate and relevant to the economic context of the time. The original Family Assistance (Higher Amounts) Determination 2000 was repealed to correct inaccuracies arising from a subsequent government decision to increase maximum rent assistance rates by 10%, rather than the initially proposed 7%. This updated determination ensures that the new higher amounts specified in the Family Assistance Act are correctly aligned with the government's policy adjustments.
Scope and Application
The Family Assistance (Higher Amounts) Determination 2000 (No. 2) amends the A New Tax System (Family Assistance) Act 1999 by increasing specific amounts within that act, ensuring that these amounts are aligned with the new family assistance regime that commenced on 1 July 2000. This determination applies to the specified monetary thresholds and rates within the Family Assistance Act, which governs the eligibility conditions and payment rates for family tax benefit Part A, family tax benefit Part B, and child care benefit. The changes are applicable nationally, as the Family Assistance Act operates under the Commonwealth of Australia. The determination addresses the discrepancies caused by the passage of time between the original enactment of the Family Assistance Act and the new rates effective from 1 July 2000, including adjustments for indexation and the introduction of the goods and services tax. Notably, this determination repeals the earlier Family Assistance (Higher Amounts) Determination 2000 to correct inaccuracies resulting from the recent policy decision to increase maximum rent assistance rates by 10% instead of the previously announced 7%. The new amounts are to be incorporated in the Family Assistance Act to reflect these updated policy decisions.
Key Provisions
The Family Assistance (Higher Amounts) Determination 2000 (No. 2) primarily focuses on amending the Family Assistance Act by increasing certain financial assistance amounts (s. 5). This is achieved through the substitution of new higher amounts specified in a table within the determination for the existing amounts in the Family Assistance Act. This amendment is set to take effect from 1 July 2000 (s. 2). The determination also includes interpretation provisions to clarify the terms used within the document (s. 3), and it repeals the earlier Family Assistance (Higher Amounts) Determination 2000 to correct the previously established rates (s. 4).
Under this determination, entities governed by the Family Assistance Act must adhere to the new amounts specified for family tax benefit, child care benefit, and other relevant benefits. These new amounts are designed to account for indexation increases and adjustments due to the implementation of the new tax system, including compensation for the effects of the goods and services tax. The entities must ensure that their payments align with the updated rates set forth in the determination, thereby facilitating the smooth transition to the new family assistance regime.
Breach of the provisions outlined in this determination could lead to non-compliance with the Family Assistance Act. While the determination itself does not explicitly outline specific offences or penalties, non-compliance with the Act could result in legal consequences such as fines or other penalties as stipulated in the Family Assistance Act. The maximum penalties for non-compliance would be governed by the general provisions of the Family Assistance Act, which may include financial penalties and other enforcement actions.
The determination is part of a broader legislative framework aimed at simplifying and updating family assistance provisions in Australia. By increasing certain amounts, the Government ensures that the financial support provided to families remains adequate in light of economic changes and policy adjustments. This amendment ensures that the family assistance system remains effective and responsive to the needs of families under the new tax regime.