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”.
Overview
The First Home Owners Regulations (Amendment) Statutory Rules 1988 No. 97 were enacted to address the need to adjust the maximum amounts of assistance payable under the First Home Owners Act 1983, in response to changes in average weekly earnings due to inflation. These regulations were issued by the Minister for Community Services and Health, reflecting a policy objective to ensure that the financial assistance provided to first home buyers remains equitable and relevant in the context of economic changes. The amendments to the maximum amounts of assistance, the introduction of a provision that restricts applicants without dependent children to receiving assistance by instalments, and the correction of a minor technical error, collectively aim to maintain the integrity and effectiveness of the First Home Owners Assistance Scheme.
Scope and Application
The First Home Owners Regulations (Amendment) Statutory Rules 1988 No. 97 apply to the First Home Owners Act 1983, impacting first-time home buyers who seek financial assistance to purchase or construct their first home. This amendment affects individuals and families who meet the eligibility criteria for the assistance, including consideration of their dependent children status and income levels. The regulations set out the maximum amounts of financial assistance that may be granted to applicants, differentiating the amounts based on the number of dependent children, and also introduce a requirement for applicants without dependent children to receive their assistance in instalments. Additionally, the rules include an update to the income deflationary formula, ensuring consistency and fairness in income assessments for applicants whose home purchase or construction aligns with specific financial years. The changes are designed to address inflation and correct minor technical errors in the existing regulations.
Geographically, these regulations apply at the Commonwealth level under Australian law. They do not specify any exclusions or exemptions beyond those already outlined in the Act, and they do not introduce any new thresholds beyond those for the maximum assistance amounts and the income limits. The amendments are made to accommodate changes in Average Weekly Earnings due to inflation and to correct a technical error in the existing regulations, thereby extending the application of the regulations to include an additional year for the income deflationary formula.
Key Provisions
The First Home Owners Regulations (Amendment) Statutory Rules 1988 No. 97 revise the maximum amounts of assistance available under the First Home Owners Act 1983. Specifically, regulation 6, 7, and 8 will now limit the maximum assistance to $5000 for applicants with two or more dependent children, $4500 for one dependent child, and $3000 for applicants with no dependent children (regs 6, 7, 8). These changes are designed to align the assistance levels with current economic conditions. Furthermore, applicants without dependent children will only be eligible for instalment-based assistance (reg 8).
These regulations impose clear obligations on applicants for assistance under the Act. Applicants must ensure their income does not exceed the prescribed limits. For those whose relevant year of income is the current or succeeding year, their income will be adjusted according to the formulae set out in Regulation 4A to ensure it is tested against the correct income thresholds (s 22). The updated formulae, which now include cases for the 1987/88 year, will be used to calculate the reduced amount of taxable income (reg 4A).
Failure to comply with the provisions of the Act and its regulations can result in serious consequences. Any breach of the requirements set out in the Act, including providing false information to obtain assistance, may result in criminal charges. The Act does not specify maximum penalties, but penalties for fraud and misrepresentation under related legislation can be severe, including substantial fines and imprisonment. Additionally, civil penalties may apply for non-compliance with the regulations, reinforcing the importance of adhering to the legislative requirements.