EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO. 97
FIRST HOME OWNERS REGULATIONS (AMENDMENT)
Issued by the Authority of the Minister for Community Services and Health.
Change in amounts of assistance
Statutory Rule No. 97 makes regulations under the First Home Owners Act 1983 (“the Act”) relating to the maximum amounts of assistance payable, includes a provision that applicants without dependent children may receive assistance by way of instalments only, includes a change that is required annually to incorporate changes in average weekly earnings caused by inflation, and, corrects a minor technical error.
The First Home Owners Regulations provide in regulation 6, 7 and 8 respectively that the maximum amounts of assistance payable shall be $6000 (for applicants with two or more dependent children), $5500 (one dependent child) and $4000 (no dependent children) respectively. The Schedule to the regulations provides a table setting out the amounts of annual subsidy payable in respect of the maximum amounts specified in the regulations.
The proposed regulations will amend the maximum amounts of assistance payable under regulation 6, 7 and 8 to $5000, $4500 and $3000 respectively, and will amend the amounts payable in respect of each of the annual subsidy amounts as provided in the Schedule to the Regulations. The proposed regulations will provide that applicants without dependent children may receive assistance by way of instalments only.
Updating of income deflationary formula
The Act provides that assistance shall not be paid to an applicant if the amount of his or her taxable income for the relevant year exceeds a prescribed income limit. Ordinarily, the relevant year of income is the financial year preceding the date on which the applicant entered into the contract to purchase or build his or her home, or in the case of owner-builders, commenced the construction of his or her home (“the prescribed date”). However, section 22 of the Act under certain circumstances permits the applicant’s eligibility to be assessed on the income of the year in which the prescribed date falls (“the current year”), or the following year (“the succeeding year”). Where section 22 applies, subsection 19(2) provides for the applicant’s income in the relevant year to be reduced in accordance with the Regulations under the Act to enable that income to be tested against the income limits applicable in the financial year preceding home purchase. This ensures equity with applicants who have purchased their home in the same year but are being assessed on the basis of the income in the year preceding home acquisition.
The existing Regulations provide certain formulae to be used in the calculation of the reduced amount of taxable income (Regulation 4A). The formulae are based on yearly changes to Average Weekly Earnings.
Currently, Regulation 4A provides appropriate formulae in cases where the applicant’s relevant year of income is the 1983/84 year, the 1984/85 year, 1985/86 year or 1986/87 year. Statutory Rules No. will amend Regulation 4A to provide for additional formulae in cases where the applicant’s relevant year of income is the 1987/88 year.
Correction of minor technical error
Sub regulation 4AA(5) inserted by Statutory Rules 1987 (No. 287) refers to the phrase “this section”. The proposed regulation corrects this reference to “this regulation”.