Bills Digest No. 142  1999-2000Family and Community Services Legislation Amendment Bill 2000


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details

Passage History

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


Purpose

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.

Background

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.

Main Provisions

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.

Endnotes

  1. 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.
  2. Explanatory memorandum, Family and Community Services Legislation Amendment Bill 2000, p. 4.
  3. ibid, p. 3.
  4. ibid, p. 3.
  5. 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.
  6. 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.
  7. Aboriginal Employment Development Policy, Policy Paper No. 3, Community based employment, enterprise and development strategies, Canberra, AGPS, 1987, p. 6.
  8. Aboriginal Employment Development Policy Task Force, Review of the AEDP, Canberra, Aboriginal and Torres Strait Islander Commission, 1994, p. 148.

Contact Officer and Copyright Details

Rosemary Bell
3 April 2000
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 2000

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Published by the Department of the Parliamentary Library, 2000.

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