EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health
Health Insurance Act 1973
Health Insurance (FTB(A) Family) Determination 2017
Subsection 8A(1) of the Health Insurance Act 1973 (the Act) provides that the Minister for Health may determine that a registered family is an FTB(A) family for the purposes of paragraph (c) of the definition of FTB(A) family in subsection 8(1A) of the Act.
The definition of FTB(A) family is used to determine eligibility for access to the lower threshold of the Extended Medicare Safety Net (EMSN). The Health Insurance (FTB(A) Family) Determination 2017 (the Determination) revokes and remakes the Health Insurance (FTB(A) Family) Determination 2004 (the 2004 Determination). The 2004 Determination is due to sunset on 1 October 2017. Revoking and remaking the 2004 Determination will ensure families that are determined to be FTB(A) families under the 2004 Determination will continue to be eligible for the lower EMSN threshold under the Act.
The EMSN provides an additional rebate for Australian families and singles who have out-of-pocket costs for Medicare eligible out-of-hospital services once an annual threshold of out-of-pocket costs has been met. In 2017, the annual threshold for people with concessional beneficiary status and people who are eligible for FTB(A) is $656.30. For all other singles and families the annual threshold is $2,056.30.
Out-of-hospital services include general practitioner and specialist attendances. Once the relevant annual threshold has been met, Medicare will pay for 80%, or up to the EMSN benefit cap amount if applicable, of any future out-of-pocket costs for Medicare eligible out-of-hospital services for the remainder of the calendar year.
Purpose
For the purpose of the EMSN, an FTB(A) family is a registered family which has received a family tax benefit Part A (FTB(A)) payment at a rate greater than nil under section 23 or section 24 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Family Assistance Administration Act), or a registered family which is determined to be an FTB(A) family under subsection 8A(1) of the Act. Certain families who would not otherwise be FTB(A) families have been determined to be FTB(A) families under the 2004 Determination, enabling them to access the lower threshold of the EMSN. Detailed information about the categories of families that have been determined to be FTB(A) families is set out in the Attachment.
This Determination will revoke and remake the 2004 Determination to ensure FTB(A) families covered by the 2004 Determination will continue to be FTB(A) families for the purposes of accessing the EMSN under the Act.
The Determination has one minor change from the 2004 Determination, which is that the titles of the heads of Centrelink and Medicare have been changed from CEO to Chief Executive, consistent with the terminology in the Act and related legislation.
Details of the Determination are set out in the Attachment. A determination under subsection
8A(1) of the Act is a legislative instrument for the purposes of the Legislation Act 2003.
Consultation
The Department of Health has consulted with the Department of Human Services and the Department of Social Services on the making of this instrument.
Commencement
This Determination will commence on the day after it is registered on the Federal Register of Legislation.
ATTACHMENT
DETAILS OF THE Health Insurance (FTB(A) Family) Determination 2017
1. Name of Determination
Section 1 provides that the title of the Determination is the Health Insurance (FTB(A) Family) Determination 2017.
2. Commencement
Section 2 provides for the Determination to commence the day after the instrument is registered on the Federal Register of Legislation.
3. Definitions
Section 3 defines certain terms used in the Determination.
4. Purpose
Section 4 provides the purpose of the Determination. The Determination specifies a range of conditions under which a registered family will be an FTB(A) family for the purpose of paragraph 8(1A)(c) of the Act.
5. Instalments of family tax benefit deferred
Section 5 provides that a registered family is an FTB(A) family if certain conditions relating to the deferral of instalments of family tax benefit are satisfied. Subsection 5(1) provides that in relation to a safety-net year, a registered family with a member that is entitled to payments of FTB(A) by instalment, but has notified the Secretary of the Department of Social Services they wish to defer receiving their instalments of FTB(A) until after the end of that income year, is an FTB(A) family for the purposes of eligibility for the lower EMSN threshold under the Act. Subsection 5(2) provides that the registered family will be eligible for the lower EMSN threshold from the date the first FTB(A) instalment payment would have been made in that year if they had not deferred.
6. Notional overpayment due to revised income estimate
Section 6 provides that a registered family is an FTB(A) family if certain conditions relating to a revised income estimate under the Family Assistance Administration Act are satisfied. Subsection 6(1) provides that in relation to a safety-net year, a registered family with a member who has their fortnightly instalment payments of FTB(A) reduced to nil because they have a notional overpayment due to a revised estimate of income or maintenance income is an FTB(A) family for the purposes of eligibility for the lower EMSN threshold under the Act. Subsection 6(2) provides that the registered family will be eligible for the lower EMSN threshold from the date the first FTB(A) instalment payment would have been made in that year, if the reduction to nil due to notional overpayment had not occurred.
7. Non-payment of family tax benefit payments due to non-lodgement of tax return
Section 7 provides that a registered family is an FTB(A) family if certain conditions relating to non-payment of family tax benefit due to non-lodgement of a tax return estimate under the Family Assistance Administration Act are satisfied. Subsection 7(1) provides that in relation to a safety-net year, a registered family with a member who is prohibited from receiving a payment of FTB(A) by instalment because they or their partner have not submitted a tax return is an FTB(A) family for the purposes of eligibility for the lower EMSN threshold under the Act. Subsection 7(2) provides that the registered family will be eligible for the lower EMSN threshold from the date the first FTB(A) instalment payment would have been made in that year, if the non-payment due to failure to submit a tax return had not occurred.
8. Single payment of family tax benefit following review
Section 8 provides that a registered family is an FTB(A) family if certain conditions relating to a single payment of family tax benefit following a review are satisfied. Subsection 8(1) provides that in relation to a safety-net year, a registered family with a member who does not receive a payment of FTB(A) by instalment in respect of the last income year ending before the start of the safety-net year, but is subsequently determined to be entitled to a single payment of FTB(A) in respect of the last income year following a review decision by the Secretary of the Department of Social Services under the Family Assistance Administration Act, is an FTB(A) family for the purposes of eligibility for the lower EMSN threshold under the Act.
Subsection 8(2) provides that this does not apply if the family member did not receive a payment of FTB(A) by instalment because of section 31E, 32AA or 32AD of the Family Assistance Administration Act. This prevents families which have been determined to be FTB(A) families in respect of a safety-net year under section 6 or 7 from being FTB(A) families in a later year under section 8, following receipt of a single payment of FTB(A) in respect of that safety-net year.
Subsection 8(3) provides that the registered family will be eligible for the lower EMSN threshold from the date the relevant single payment of FTB(A) is paid. For example, a registered family with a member who receives a single payment in March 2018 following a review of entitlement for the 2016-17 income year will be a FTB(A) family from March 2018 for the remainder of the year.
9. Family tax benefit not payable because of debt or liability
Section 9 provides that a registered family is an FTB(A) family if certain conditions relating to family tax benefit that is not payable due to debt or liability are satisfied. Subsection 9(1) provides that in relation to a safety-net year, a registered family with a member who is entitled to FTB(A) and whose instalment payment or lump sum payment is deducted or set off under the Family Assistance Administration Act in order to recover a debt or reduce a liability is an FTB(A) family for the purposes of eligibility for the lower EMSN threshold under the Act.
Subsection 9(2) provides that the registered family will be eligible for the lower EMSN threshold:
- if the family member is entitled to payment of FTB(A) by instalment – from the date that the first FTB(A) instalment payment would have been received for the safety-net year if not for the deduction or set-off; or
- if the family member is entitled to a lump sum payment of FTB(A) under section 24 of the Family Assistance Administration Act – from the date the lump sum payment would have been received, if not for the deduction or set-off.
10. Family tax benefit paid to payment nominee
Section 10 provides that a registered family is an FTB(A) family if certain conditions relating to family tax benefit being paid to a payment nominee are satisfied. Subsection 10(1) provides that a registered family with a member who is entitled to FTB(A) and whose instalment payment or lump sum payment is directed to a payment nominee under the Family Assistance Administration Act is an FTB(A) family for the purposes of eligibility for the lower EMSN threshold under the Act. Subsection 10(2) provides that the registered family will be eligible for the lower EMSN threshold:
- if the family member is entitled to payment of FTB(A) by instalment – from the date that the first FTB(A) instalment payment would have been received in that safety-net year, if not for payment instead being made to the payment nominee; or
- if the family member is entitled to a lump sum payment of FTB(A) under section 24 of the Family Assistance Adminsitration Act – from the date the lump sum payment would have been received, if not for the payment instead being made to the payment nominee.
11. Regular care children
Section 11 provides that a registered family is an FTB(A) family if certain conditions relating to ineligibility for family tax benefit due to the operation of section 25 of the Family Assistance Act are met, in cases where a claim is made for payment of family tax benefit by instalment. The section provides for those families who are no longer eligible for FTB(A) payments, but who provide between 14 and less than 35 per cent of the care for their child, and meet the other eligibility criteria for FTB(A) payments, to be a FTB(A) family for the purposes of the Act, and so have access to the lower threshold of the EMSN.
Subsection 11(1) defines the family that makes a claim for FTB(A) instalments. Paragraph 11(1)(a) provides that a member of the family must either make a claim for payment of family tax benefit by instalment under paragraph 7(1)(a) of the Family Assistance Administration Act, or, request that a notional rate of family tax benefit be worked out for a day in the safety-net year. Paragraph 11(1)(b) provides that the family must meet the conditions outlined in subsection 11(2).
Subsection 11(2) sets out the conditions that must be met by a family that applied under subsection 11(1). That is, that another member of the family must be a regular care child, and that the family would have been entitled to a FTB(A) payment greater than nil, had section 25 of the Family Assistance Act not been in operation. Effectively, an assessment is made in order to work out a ‘notional rate of family tax benefit’.
Subsection 11(3) provides further guidance to assist with working out the notional rate of FTB(A) for the purpose of subsection 11(1).
Paragraph (a) of subsection 11(3) provides that for working out the notional rate of FTB(A) and access to the lower threshold of the EMSN, all parents that provide between 14 per cent and less than 35 per cent of care for a child will be deemed to have a ‘shared care percentage’ of 24 per cent. One of the requirements for FTB(A) eligibility under section 21 of the Family Assistance Act is that the individual’s rate of family tax benefit is greater than nil. This is calculated using an income test. The income cut-out for both actual and notional FTB(A) payments is affected by the percentage of care a parent provides for their child, which is converted into a ‘shared care percentage’. The Family Assistance Act does not include a shared care percentage for parents providing between 14 per cent and less than 35 per cent of care. Applying a fixed shared care rate of 24 per cent will align this assessment with child support care percentages and therefore ensure consistency across assessments for Government benefits. It may also reduce conflict between parents about actual levels of care within this care bracket as eligibility for the lower threshold of the EMSN will not be impacted.
Paragraph (b) of subsection 11(3) assists with the assessment of notional rate of FTB(A) by deeming the ‘regular care child’ to be a ‘FTB child’.
Paragraph (c) of subsection 11(3) provides that the FTB Part A supplement (a lump sum payment paid to FTB(A) recipients subsequent to reconciliation at the end of the income year) is not included in working out the notional rate of FTB(A), consistent with the operation for actual FTB(A) recipients.
Paragraph (d) of subsection 11(3) provides that if the information regarding the individual’s adjusted taxable income is not available then subsection 11(4) applies. Subsection 11(4) provides that the individual may provide an estimate of adjusted taxable income for the purposes of working out the rate of notional FTB(A), if the Chief Executive Centrelink considers that estimate to be reasonable.
Paragraph (e) of subsection 11(3) provides that if the amount of maintenance income is not available for working out the amount of notional FTB(A) that the Chief Executive Centrelink may estimate the amount of maintenance income.
Subsection 11(5) specifies that the family is eligible for the lower threshold of the EMSN at the time set out in subsection 11(6) if the family’s notional rate of FTB(A) is greater than nil.
Subsection 11(6) specifies, as required by subsection 8A(2) of the Act, that the time after which a family that satisfies subsection 11(1), is a FTB(A) family is the first time in the safety net year the Chief Executive Centrelink notifies the Chief Executive Medicare that the family has a notional rate of FTB(A) greater than nil.
12. Regular care children – past periods
Section 12 provides that a registered family is an FTB(A) family if certain conditions relating to ineligibility for family tax benefit due to the operation of section 25 of the Family Assistance Act are met, in cases where a claim is made for payment family tax benefit for a past period.
Subsection 12(1) defines the family that makes a claim for FTB(A) for a past period. Paragraph 12(1)(a) provides that a member of the family must either make a claim for payment of family tax benefit for a past period under paragraph 7(1)(b) of the Family Assistance Administration Act (being a claim for the past period falling within the last income year before the start of the safety net year), or, request that a notional rate of family tax benefit be worked out for a day in the last income year ending before the start of the safety-net year.
Paragraph 12(1)(b) provides that conditions outlined in subsection 12(2) must apply for at least one day in the last income year ending before the start of the safety net year.
Subsection 12(2) sets out the conditions that must be met by a family that applied under subsection 12 (1). That is, that another member of the family must be a regular care child, and that the family would have been entitled to a FTB(A) payment greater than nil, had section 25 of the Family Assistance Act not been in operation. Effectively, an assessment is made in order to work out a ‘notional rate of family tax benefit’.
Subsections 12(3), (4) and (5) provide further guidance to assist with working out the notional rate of FTB(A) for the purpose of subsection 12(1). The 24 per cent shared care rate is also applied for past period FTB(A) claimants. Paragraph (c) of subsection 12(3) provides that the FTB Part A supplement is not to be included in working out the notional rate of FTB(A) if the reconciliation conditions under the Family Assistance Act have not been met at the time of the assessment. This is consistent with the operation for actual FTB(A) recipients. Paragraph (d) of subsection 12(3) provides that if the information regarding the individual’s adjusted taxable income is not available then subsection 12(6) applies. Subsection 12(6) provides that the individual may provide an estimate of adjusted taxable income for the purposes of working out the rate of notional FTB(A), if the Chief Executive Centrelink considers that estimate to be reasonable.
Paragraph (e) of subsection 12(3) provides that if the amount of maintenance income is not available for working out the amount of notional FTB(A) that the Chief Executive Centrelink may estimate the amount of maintenance income.
Subsection 12(4) and 12(5) together provide that the FTB Part A supplement is be included in working out the notional rate of FTB(A) if the family meets the reconciliation conditions under the Family Assistance Administration Act. This is the same arrangement that applies to actual FTB(A) recipients.
Subsections 12(7) and 12(8) specify, as required by subsection 8A(2) of the Act, that the time after which a family that satisfies subsection 12(1) is a FTB(A) family is the later of the start of the safety net year, or, when the Chief Executive Centrelink notifies the Chief Executive Medicare that the family has a notional rate of FTB(A) greater than nil.
13. Repeal
Section 13 of the Determination repeals the Health Insurance (FTB(A) Family) Determination 2004.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Health Insurance (FTB(A) Family) Determination 2017
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Determination revokes and remakes the 2004 Determination to ensure certain FTB(A) families will be able to continue to register for the purpose of the EMSN. The 2004 Determination is due to sunset on 1 October 2017.
Human rights implications
The Determinatation engage Articles 9 and 12 of the International Covenant on Economic Social and Cultural Rights (ICESCR), specifically the rights to health and social security.
The Right to Health
The right to the enjoyment of the highest attainable standard of physical and mental health is contained in Article 12(1) of the ICESCR. The UN Committee on Economic Social and Cultural Rights (the Committee) has stated that the right to health is not a right for each individual to be healthy, but is a right to a system of health protection which provides equality of opportunity for people to enjoy the highest attainable level of health.
The Committee reports that the ‘highest attainable standard of health’ takes into account the country’s available resources. This right may be understood as a right of access to a variety of public health and health care facilities, goods, services, programs, and conditions necessary for the realisation of the highest attainable standard of health.
The Right to Social Security
The right to social security is contained in Article 9 of the ICESCR. It requires that a country must, within its maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care. Countries are obliged to demonstrate that every effort has been made to use all resources that are at their disposal in an effort to satisfy, as a matter of priority, this minimum obligation.
The Committee reports that there is a strong presumption that retrogressive measures taken in relation to the right to social security are prohibited under ICESCR. In this context, a retrogressive measure would be one taken without adequate justification that had the effect of reducing existing levels of social security benefits, or of denying benefits to persons or groups previously entitled to them. However, it is legitimate for a Government to re-direct its limited resources in ways that it considers to be more effective at meeting the general health needs of all society, particularly the needs of the more disadvantaged members of society.
Analysis
This Determination will maintain rights to health and social security by ensuring access to publicly subsidised health services which are clinically effective and cost-effective.
Conclusion
The Legislative Instrument is compatible with human rights because it maintains existing arrangements and the protection of human rights.
Greg Hunt
Minister for Health