EXPLANATORY STATEMENT

Family Assistance (One‑off Payments to Families and Carers) Scheme 2004

Summary

This instrument is made under item 1 of Schedule 3 to the Family Assistance Legislation Amendment (More Help for Families – One‑off Payments) Act 2004.

The purpose of this instrument is to provide for a scheme for one‑off payments to families and carers in specified circumstances.

This instrument commences on the date of its notification in the Gazette.

Background

Schedule 3 of the Family Assistance Legislation Amendment (More Help for Families – One‑off Payments) Act 2004 provides for the establishment of an administrative scheme by the Minister for Family and Community Services under which one-off payments can be made to families and carers who are entitled to payment under the administrative scheme.  The administrative scheme can provide for one-off payments to be made in circumstances in which the Minister considers the statutory one-off payment regimes do not produce appropriate results and in relation to circumstances occurring in the 2003-04 financial year.

The statutory one-off payment regimes are set out in Part 5 of the A New Tax System (Family Assistance) Act 1999 (as inserted by Schedule 1 of the Family Assistance Legislation Amendment (More Help for Families – One‑off Payments) Act 2004) and Parts 2.5A and 2.19A of the Social Security Act 1991 (as inserted by Schedule 2 of the Family Assistance Legislation Amendment (More Help for Families – One‑off Payments) Act 2004).

Explanation of the Provisions

Part 1 Preliminary

Section 1 Name of Scheme

Section 1 states the name of this Scheme as the Family Assistance (One-off Payments to Families and Carers) Scheme 2004.

Section 2 Commencement

Section 2 states that the Scheme commences on the date of its notification in the Gazette.

Section 3 Purpose

Section 3 states that the purpose of the Scheme is to provide, in the circumstances specified, for one‑off payments to be made to families and carers.

Section 4 Interpretation

Subsection 4(1) defines certain terms used in this Scheme. 

The broad effect of subsection 4(2) is to provide for certain terms that are used in the Scheme to have the same meaning as when they are used in other specified enactments, Schemes or Manuals. 

Part 2 One-off payments to families

Section 5 When is an individual entitled to a one-off payment to families under this Scheme?

Section 5 sets out the circumstances in which an individual is entitled to a one-off payment to families.

The first situation is where an individual has a confirmed entitlement to FTB Part A for a period or periods in the 2003-04 income year. 

An individual will only have a “confirmed entitlement” in respect of the 2003-04 income year after the individual has satisfied all the relevant FTB reconciliation conditions for that year.  The FTB reconciliation conditions are set out in Subdivision D of Division 1 of Part 3 of the A New Tax System (Family Assistance) (Administration) Act 1999.

The second situation is where an instalment of ABSTUDY, that includes a component of ABSTUDY living allowance, has been paid to, or in respect of, a dependent student for a period that included 11 May 2004 and the dependent student was aged 16 or 17 on that day. In this situation, a parent or guardian of the dependent student would be entitled to a one-off payment for families under the Scheme in respect of the dependent student.

The third situation is where an education allowance under sections 3.3, 3.4, 3.5 or 3.6A of the Veterans’ Children Education Scheme has been paid to, or in respect of, a student for a period that included 11 May 2004 and the student was aged 16 or 17 on that day. In this situation, a parent or guardian of the student would be entitled to a one-off payment for families under the Scheme in respect of the student.

Section 6 In respect of what children is the payment payable?  

Section 6 provides a definition of “eligible child” in respect of whom an amount of one-off payment to families may be paid to an entitled individual.

Where entitlement to a one-off payment under the Scheme is based on confirmed entitlement to FTB Part A for a period or periods in the 2003-04 income year, then each FTB child taken into account in determining the individual’s confirmed entitlement to FTB Part A is an “eligible child”.  The proviso is that $600 in total has not already been paid in respect of the child under Part 5 of the A New Tax System (Family Assistance) Act 1999 and/or under Part 2 of the Scheme.

Where entitlement to a one-off payment under the Scheme is based on payment of ABSTUDY, then each dependent student attracting payment of an instalment of ABSTUDY in respect of a period including 11 May 2004, is an “eligible child”. 

Where entitlement to a one-off payment under the Scheme is based on payment of a VCES education allowance, then each student attracting payment of the allowance in respect of a period including 11 May 2004, is an “eligible child”. 

Section 7  Maximum amount of payment

Under section 7, the maximum amount of one-off payment that can be paid in respect of a single eligible child is $600.  However, if an amount has already been paid in respect of the child under Part 5 of the A New Tax System (Family Assistance) Act 1999 and/or under Part 2 of the Scheme, the $600 starting point is reduced by the amount paid. 

The principle is that one child cannot attract more than $600 under the statutory and/or administrative one‑off payment schemes, irrespective of the number of entitled individuals.  This is because the payment is principally intended to benefit the child in question.

Section 8  Amount payable to entitled individual

Section 8 provides that the amount of the one-off payment to families under the Scheme is the sum of the amounts applicable for each eligible child (subject, of course, to the $600 per child payment not being exceeded).

Section 9  Amount for FTB children

Section 9 provides the process for calculating the amount payable to an entitled individual in respect of an FTB child who is an eligible child. The calculation process requires consideration of the period or period in the 2003‑04 income year in which the individual had a confirmed entitlement to FTB Part A in respect of the eligible child, the “percentage of FTB Part A” (as defined in subsection 9(8)) which applied in relation to each period and any amounts already paid to the individual in respect of the child under Part 5 of the A New Tax System (Family Assistance) Act 1999 and/or Part 2 of the Scheme. 

Under subsection 9(2), if 1 percentage of FTB Part A applied during the 2003‑04 income year, then the preliminary amount for the child is determined by applying the formula:

(P x Prop x $600) – A

where “P” is the percentage of FTB Part A that applied as a confirmed entitlement during 2003-04, “Prop” is the proportion of the year which that percentage applied and “A” is the total of any amounts already paid to the individual in respect of the child under Part 5 of the A New Tax System (Family Assistance) Act 1999 and/or Part 2 of the Scheme. 

Under subsections 9(3) and (4), if 2 or more percentages of FTB Part A applied at different times during 2003-04, then the formula “P x Prop x $600” would apply in relation to each different percentage that applied as a confirmed entitlement in 2003-04.  The preliminary amount for the eligible child would be the sum of the amounts determined by applying the formula, minus “A”.

Under subsection 9(5), if the preliminary amount is equal to or greater than the remaining amount (as defined in subsection 9(8)), then the amount payable in respect of the child is the remaining amount.  If the preliminary amount is less than the remaining amount, then the amount payable in respect of the child is the preliminary amount.

There will be situations where an FTB child will only attract FTB Part A for part of the 2003-04 income year.  This could happen where, for example, a child reaches an age at which the child ceases to be an FTB child.  However, the intention is that there should still be capacity to pay a maximum of $600 for that child.  Accordingly, the Secretary has a discretion, under subsection 9(6), to determine the period of the year for which FTB Part A was payable for the child where the child does not otherwise attract FTB Part A for one or more individuals for the full 2003-04 income year. 

Some other examples where the discretion in subsection 9(6) might be exercised is where a child is born or dies in 2003-04 or is an Australian resident for only part of 2003-04.

Subsection 9(7) ensures that the period determined under subsection 9(6) is used in the relevant calculations in subsections 9(2) and (4).   

Subsection 9(8) contains the relevant definitions for concepts used in section 9. The concept of “percentage of FTB Part A” links into shared care and blended family percentage determinations made under sections 28, 29 and 59 of the A New Tax System (Family Assistance) Act 1999 as they apply after the individual has satisfied the relevant FTB reconciliation conditions (that is, after reconciliation occurs).  The “remaining amount” is defined to mean the difference between $600 and any amount or amounts paid under Part 5 of the A New Tax System (Family Assistance) Act 1999 and/or under Part 2 of the Scheme in respect of the child.

Section 10 Amount for students in respect of which ABSTUDY living allowance or VCES education allowance is paid

The general rule in subsection 10(1) is that an amount of $600 is payable to an entitled individual in respect of an eligible child of the individual who is a

dependent student attracting payment of an instalment of ABSTUDY in respect of a period including 11 May 2004 or a student attracting payment of VCES education allowance in respect of a period including 11 May 2004.

However, the amount could be less than $600 for the eligible child if a one-off payment has already been paid to any entitled individual in respect of the eligible child under Part 5 of the A New Tax System (Family Assistance) Act 1999 and/or under section 9 of the Scheme.

Part 3 One‑off payments to carers

Section 11 Who is qualified for a one‑off payment under this Scheme?

The Veterans’ Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 made changes that removed all carer provisions from the Veterans’ Entitlements Act, allowing the recipients to transfer to carer payments that were available at that time under the Social Security Act 1991.  However, it was recognised that a number of people would be adversely affected by those changes and so the Veterans’ Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 also contained certain transitional and savings provisions which (among other things) preserved the entitlement to “carer service pension” for some people.  To achieve that outcome, Division 2 of Part 5 of Schedule 1 to the Veterans’ Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 inserted Clause 8 into Schedule 5 of the Veterans’ Entitlements Act.

Subsection 11(1) provides that a person is qualified for a one‑off payment to carers under the Scheme if the person has been paid an instalment of carer service pension under subclause 8(2) or (4) of Schedule 5 to the Veterans’ Entitlements Act 1986 in respect of a period that includes 11 May 2004.  The effect of subsection (2) is that a person is not qualified for a payment under this Scheme if the person receives a one‑off payment to carers under Part 2.5A of the Social Security Act 1991.

Section 12 What is the amount of the payment?

Section 12 provides that the amount of the one‑off payment is $1000. 

Part 4 Miscellaneous

Section 13 Payment of one‑off payment

In accordance with section 13, where a person is entitled to a one‑off payment under the Scheme, the payment is to be made in a lump sum.  It is to be made on the day that the Secretary considers to be the earliest day on which it is reasonably practicable for the payment to be made and it is to be paid in such manner as the Secretary considers appropriate.

The Note that appears at the end of section 13 makes it clear that a claim is not required.

Section 14 Debts arising in relation to one‑off payments under this Scheme

A one‑off payment under the Scheme will be a debt where a relevant individual has knowingly made a false or misleading statement or knowingly provided false information.

One concept that is used in the Scheme for the purposes of establishing whether a debt has arisen is the concept of a “relevant determination”.  In broad terms, a relevant determination is a determination that is made in particular circumstances in relation to an entitlement (for example, in relation to FTB, ABSTUDY living allowance, carer service pension etc) on which entitlement to a one‑off payment is contingent.

Situation in which whole amount is a debt

The whole amount of a one‑off payment will be a debt where, after the payment was made, the following requirements are met:

• a relevant determination is changed, revoked, set aside etc by another determination; and

• depending on which circumstance is relevant in the context of the determination, the relevant determination either related to 11 May 2004 (or a period that includes 11 May 2004) or related to all or part of the 2003‑04 income year; and

• a reason the relevant determination was changed, set aside etc was that a recipient (or, in appropriate cases, the student or one of the students) knowingly made a false or misleading statement or knowingly provided false information; and

• had the change, revocation etc occurred on or before 11 May 2004 (or occurred during or before the period to which the one‑off payment relates), the one‑off payment would not have been made.

Situation in which part of amount is a debt

Similar rules apply where an individual is paid in excess of the amount of his or her entitlement, except that the amount of the debt is the difference between the amount of one-off payment paid and the amount that should have been paid. 

Clause 15 Person other than payee obtaining payment of a cheque

Section 15 deals with situations where an amount of one‑off payment is paid by cheque and a person other than the payee obtains value for the cheque without the endorsement of the payee.  In those circumstances, the amount of the cheque is a debt due by the person to the Commonwealth.

Clause 16 Provisions for debt recovery

The effect of subsection 16(1) is that the provisions of the A New Tax System (Family Assistance) (Administration) Act 1999 relating to debt recovery (and non-recovery) apply to debts of one‑off payments to families under the Scheme as if they were debts under the family assistance law.

The effect of subsection 16(2) is that the provisions of the Social Security Act 1991 relating to debt recovery (and non-recovery) apply to debts of one‑off payments to carers under the Scheme as if they were debts under the social security law.

Clause 17 Review of decisions

The effect of subsection 17(1) is that the provisions of the A New Tax System (Family Assistance) (Administration) Act 1999 relating to review of decisions apply, as far as they are capable of doing so, to decisions under the Scheme in relation to one‑off payments to families as if they were decisions under the family assistance law.

The effect of subsection 17(2) is that the provisions of the Social Security (Administration) Act 1999 relating to review of decisions apply, as far as they are capable of doing so, to decisions under the Scheme in relation to one‑off payments to carers as if they were decisions under the social security law.

Clause 18 Delegations

Subsection 18(1) provides that the Secretary can delegate to an officer all or any of the powers of the Secretary under the Scheme.  The effect of subsection 18(2) is that the Secretary must not delegate any powers to an officer of an agency (other than the Department) unless the head of the agency has agreed to the delegation.

Clause 19 Decisions to be in writing

Subsection 19(1) requires that decisions made by officers under the Scheme must be in writing.  Subsection 19(2) provides that a decision is taken to be in writing if it is made, or recorded, by means of a computer.

Clause 20 Secretary may arrange for use of computer programs to make decisions

Subsection 20(1) provides that the Secretary may arrange for the use of computer programs for any purposes for which the Secretary may make decisions under the Scheme.  The effect of subsection 20(2) is that a decision made by the operation of a computer program as contemplated in subsection 20(1) is taken to be a decision made by the Secretary.