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This Digest was prepared for debate. It reflects the legislation as
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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Family and Community Services Legislation Amendment Bill
2000
Date Introduced: 9 March 2000
House: House of
Representatives
Portfolio: Family and Community Services
Commencement: On Royal Assent except:
-
- Part 2 of Schedule 1 (rate of double orphan pension) which is
taken to have commenced on 1 July 1998
-
- Part 3 of Schedule 1 (rate of family tax benefit in relation to
double orphans) which is to commence on 1 July 2000
-
- Item 18 of Schedule 3 which is taken to have commenced on 1
March 2000, immediately after the commencement of Schedule 10 of
the Further 1998 Budget Measures Legislation Amendment (Social
Security) Act 1999
-
- Item 1 of Schedule 4 which is taken to have commenced on 20
March 2000, immediately after the commencement of Part 3 of the
Social Security (Administration) Act 1999
-
- Items 2 and 3 of Schedule 4 which commence on 20 March 2000,
immediately after the commencement of Schedule 2 of the Social
Security (Administration) Act 1999 or on the day on which this
Act receives Royal Assent, whichever is the later
-
- Items 4, 5, 6 and 7 of Schedule 4 commence on 20 March 2000,
immediately after the commencement of Schedule 1 of the Social
Security (Administration and International Agreements)
(Consequential Amendments) Act 1999
This is an omnibus piece of legislation which
contains amendments to 4 different Acts, all of which fall within
the responsibility of the Department of Family and Community
Services. A number of provisions in the Bill are technical
amendments, consisting of the repeal of redundant provisions and
correcting minor drafting errors. The more substantive amendments
are directed to achieve the following purposes:
-
- extending the definition of a double orphan to include a
situation where one parent is dead and the other is in custody on
remand for a serious offence, the punishment for which is
imprisonment for more than 10 years
-
- amending the rate of the double orphan pension to ensure that
where a child becomes a double orphan, the rate of family allowance
that was applicable before the child was orphaned will continue to
be paid to the person who assumes care of the child
-
- amending the A New Tax System (Bonuses for Older
Australians) Act 1999 to ensure that certain older Australians
will not be disqualified from receiving the self-funded retirees
bonus.
As there is no central theme to the Bill, the
background to each major amendment will be explained where relevant
in the Main Provisions section of this Digest.
Double Orphan Pension
Part 2.20 of the Social Security Act
1991 provides that a double orphan pension is payable in
certain circumstances. The basic conditions for eligibility for a
double orphan pension are as follows:
-
- both the child's parents are dead, or
-
- one parent is dead and the whereabouts of the other is unknown
to the claimant, or
-
- one parent is dead and the other is a long-term prisoner or
patient of a mental hospital or nursing home, or
-
- refugee children under certain circumstances.
The pension is paid to a guardian or to an
approved care organisation in addition to the Family Allowance.
Currently the amount of the double orphan pension is $38.30 a
fortnight.(1)
Schedule 1 of this Bill amends
the Social Security Act 1991. The amendment proposed by
item 2 of Schedule 1 adds to the definition of
'long-term prisoner' to include the situation where the parent of a
child is on remand for a serious offence which is likely to be
punished by a term of imprisonment exceeding 10 years. The
Explanatory Memorandum refers to a recent case where the mother of
a child had died. The child's father was being held in custody,
charged with murder. However the child could not attract payment of
the double orphan pension as the child's father had not been tried,
and therefore, was not a long-term prisoner.(2) The
effect of the proposed amendment is to enable a double orphan
pension to be paid in respect of a child, one of whose parents is
dead and the other in custody on remand for a serious offence.
Commencement date: On Royal
Assent.
This Bill also amends the rate of the double
orphan pension to ensure that when a child becomes a double orphan,
the rate of family allowance that was applicable before the child
was orphaned will continue to be paid to the person who assumes
care of the child. At present the amount of family allowance for
that child is income tested against the guardian's income. The
amendments in Part 2 of Schedule 1 have the effect
of ensuring that where a child becomes a double orphan, the rate of
family allowance that was applicable in respect of the child
immediately before that event will be guaranteed as the minimum to
a person who assumes care of the child and is entitled to family
allowance in that regard.
The double orphan pension is indexed on 1
January each year in line with CPI increases. The rate from 1
January 2000 is $38.30 a fortnight. The amount of $37.90 referred
to in proposed new subsection 1010(1) was the rate
for 1999.
Commencement date: The
amendments in Part 2 of Schedule 1 are backdated
to 1 July 1998. The new provisions will apply only in cases where
the child became a double orphan on or after 1 July 1998. They will
not apply to the periods since 1 July 1998 when the child was in
the care of an approved care organisation. The reason suggested by
the Explanatory Memorandum for the choice of 1 July 1998 is that
this is the date when the problem was first
identified.(3) The anticipated cost of topping up the
double orphan pension to compensate those people who received less
family allowance for an orphaned child is estimated to be
$300 000 in the financial year 2000-2001.(4)
Part 3 of Schedule 1 contains
amendments to guarantee the rate of family tax benefit in relation
to double orphans. These amendments are complementary to those made
by items 3, 4 and 5 of Part 2 and ensure that the changes are
integrated into the new family tax benefit which is to commence on
1 July 2000. The amount of $37.90 referred to in proposed
new subsection 1010(1) is the rate of double orphan
pension for 1999, not for 2000.
Commencement date: 1 July
2000.
Bonuses for Older Australians
Schedule 2 of the Bill amends
the A New Tax System (Bonuses for Older Australians) Act
1999. The purpose of the A New Tax System (Bonuses for
Older Australians) Act 1999 is to provide, subject to
certain age and income qualifications, a one-off tax free bonus
payment to individuals. The bonus payment generally consists of two
components:
-
- an aged persons savings bonus of up to $1 000, and
-
- a self-funded retirees supplementary bonus of up to
$2 000.
Both components are targeted at lower income
groups. The amount of the bonus reduces on a tapering scale as the
person's income exceeds $20 000, reducing to nothing at
$30 000.(5) The stated aim of the Act is to
'provide further compensation to help maintain the value of the
savings and retirement income of senior Australians'.(6)
The measure is part of a compensation package introduced by the
Government to avoid situations where people would be worse-off
under the new tax system.
The amendments in Schedule 2 of
this Bill relate to the self-funded retirees bonus. Under the
provisions of the A New Tax System (Bonuses for Older
Australians) Act 1999, older Australians may be disqualified
from receiving the self-funded retirees bonus if they received an
income support payment during the period 1 April 2000 to 1 July
2000. However, there will be changes to income support payments
resulting from the new tax system which commences on 1 July 2000.
These changes may allow people who do not currently qualify for
income support to receive an income support payment. This means
that if an older Australian qualifies for an income support payment
for the first time on 1 July 2000, then the fact that there is
a one day overlap with the last day of the disqualifying period,
could mean that the person will miss out on receiving the
self-funded retirees bonus. To avoid this, Schedule
2 amends the A New Tax System (Bonuses for Older
Australians) Act 1999 to ensure that the disqualifying period
for the self-funded retirees bonus ends on 30 June 2000.
The effect of items 1, 2 and 3 of
Schedule 2 is to substitute 30 June 2000 as the day on
which the disqualifying period ends in relation to customers of the
Department of Family and Community Services. Items 4, 5 and
6 of Schedule 2 substitute 30 June 2000 as the day on
which the disqualifying period ends in relation to customers of the
Australian Taxation Office.
Commencement date: On Royal
Assent.
Aboriginal Enterprise Incentive
Scheme
The Aboriginal Enterprise Incentive Scheme
(AEIS) commenced in the 1989-1990 financial year. It was a part of
the Aboriginal Employment Development Policy (AEDP) and was funded
to assist Aborigines and Torres Strait Islanders to establish their
own small businesses. The AEIS was established as an Aboriginal and
Torres Strait Islander-specific counterpart of the New Enterprise
Incentive Scheme by the Hawke Government, and reflected a
recognition of the need to promote alternative approaches to job
creation for Aboriginal and Torres Strait Islander peoples, with
particular emphasis on Aboriginal and Torres Strait Islander people
requiring only small amounts of capital to establish sole trading
businesses for their self-employment.(7)
The AEIS was administered by the Department of
Employment, Education and Training until July 1992 when
responsibility for the program was transferred to ATSIC. It was
subsequently merged with the another program called Enterprise
Support Services and, in response to recommendations of the Royal
Commission into Aboriginal Deaths in Custody, a separate Community
Economic Initiatives Scheme (CEIS) was established to allow for the
funding of non-commercial enterprises that met social, economic and
cultural needs.(8)
Schedule 3 of the Bill amends
the Social Security Act 1991 to remove redundant
references to the Aboriginal Enterprise Incentive Scheme
(items 1, 3, 6, 42-50).
Commencement date: On Royal
Assent
Social Security Administration
Legislation
Schedule 4 contains amendments
to the Social Security (Administration) Act 1999 and the
Social Security (Administration and International Agreements)
(Consequential Amendments) Act 1999. Items 4 and
7 restore the effect of certain provisions relating to the
education entry payment. The education entry payment is paid to a
number of people who are receiving certain payments from Centrelink
or the Department of Veterans' Affairs. One of the eligible groups
of people are those receiving a Widow B pension. The education
entry payment is an amount of $100 paid to assist with meeting the
expenses incurred in undertaking training. The Government intended
to repeal this payment by the Further 1998 Budget Measures
Legislation Amendment (Social Security) Bill 1998. This measure was
defeated in the Senate on 22 September 1999.
Commencement date: 20 March
2000, immediately after the commencement of Schedule 1 of the
Social Security (Administration and International Agreements)
(Consequential Amendments) Act 1999.
- A guide to Commonwealth Government payments on behalf of
the Commonwealth Department of Family and Community Services and
the Department of Education, Training and Youth Affairs, 1 January
to 19 March 2000, Centrelink, 2000, p. 8-9.
- Explanatory memorandum, Family and Community Services
Legislation Amendment Bill 2000, p. 4.
- ibid, p. 3.
- ibid, p. 3.
- Section 16 of the A New Tax System (Bonuses for Older
Australians) Act 1999 deals with the amount of bonus payments
to Family and Community Services customers. Section 45 of the Act
deals with the amount of bonus payments to clients of the
Australian Taxation Office.
- Hon Peter Costello, Second Reading Speech, A New Tax System
(Bonuses for Older Australians) Bill 1998, House of
Representatives, Debates, 2 December 1998, p. 866.
- Aboriginal Employment Development Policy, Policy Paper No.
3, Community based employment, enterprise and development
strategies, Canberra, AGPS, 1987, p. 6.
- Aboriginal Employment Development Policy Task Force, Review
of the AEDP, Canberra, Aboriginal and Torres Strait Islander
Commission, 1994, p. 148.
Rosemary Bell
3 April 2000
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2000
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