Bills Digest No. 112 2002-03
Family and Community Services Legislation Amendment Bill
2002
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 2002
Date Introduced:
4 December 2002
House: House of Representatives
Portfolio: Family and Community
Services
Commencement:
Many of the remedial
amendments commence retrospectively. The amendments discussed in
this Digest commence on Royal Assent.
Purpose
To amend the
social security law, family assistance law and veterans entitlement
law largely to remedy numbering errors, technical errors,
misdescribed amendments and unintended consequences resulting from
changes to these areas of law in 1999 and 2000.
This bill contains no significant policy
changes. Background to those changes is included in the Main
Provisions section of this Digest.
Schedule 1 amends:
-
- the Social Security Act 1991
-
- the Social Security (Administration) Act 1999,
and
-
- the Social Security (International Agreements) Act
1999.
Items 1 112 commence on Royal
Assent. Items 113 123 commence retrospectively in
2000, coinciding largely with the commencement of other relevant
legislation (the Youth Allowance Consolidation Act 2000
and the Social Security (Administration) Act 2000).
Items 8 9, and 37
39 deal with tools for assessing disability in adults and
children. Sections 38C and 38D provide for Adult Disability
Assessment Tool (ADAT) and Child Disability Assessment Tool (CDAT)
respectively. They permit the Secretary to issue determinations
containing tests for assessing 'the disability, emotional state,
behaviour and special care needs of a person' and a means of
recording the result of that test in a score.
Under existing determinations, ADAT or CDAT
scores reflect the following:
'professional questionnaire score' +
'claimant questionnaire score'
The amendments set requirements for total scores
on ADAT or CDAT, based on minimum scores on the professional
questionnaire. For example, to be eligible for carer's allowance
for a disabled adult, a person must have a total score at least 30
on the ADAT with a minimum score of 12 on the professional
questionnaire (item 39).
The Social Security Act 1991 sets
various penalties for repeated breaches of the activity test. For
example, there are rate reduction and payability penalties for
breaches of activity agreements under Youth Allowance and Newstart
Allowance. There are similar penalties in relation to breaches of
participation agreements under Parenting Payment. These are waived,
and the payments backdated, where the person takes reasonable steps
to comply.
Items 10, 11, 13, 14, 16, 17 and
28 amend the Social Security Act 1991 to provide
that a breach penalty will cease to apply to a person who starts to
participate in the Community Development Employment Projects Scheme
(CDEP). CDEP is a program funded by the Aboriginal and Torres
Strait Islander Commission. It enables Community Councils,
Aboriginal Corporations, etc. to offer paid work to indigenous
community members.(1)
These items amend sections 550B (activity test
non-payment periods), 557A and 558A (rate reduction periods)
relating to Youth Allowance and insert new sections
631D and 631E (non-payment and rate
reduction periods) relating to Newstart Allowance.
Item 24 prevents 'double
dipping' in relation to Austudy and CDEP.
Items 18 and
67 reproduce provisions of the Youth Allowance
Consolidation Act 2000 that were not passed into legislation
due to an inadvertent numbering error in that Act.
These provisions aim to provide for
reconciliations of income at the end of the year and for the
recovery of excess payments and the refund of overpayments or
back-payment of underpayments. This process is not unprecedented,
being the same process current used for the provision of the Family
Tax Benefit (FTB) and Child Care Benefit (CCB) income supplement
payments. But, readers will be aware that end of year income
reconciliations for FTB and CCB have given rise to controversy with
the creation and recovery of debts.
While this end of year income reconciliation
process exists in family assistance law, it is unprecedented in
social security law. Currently, income is assessed at the time of
claim or review. For pay as you earn (PAYE) taxpayers this commonly
involves an examination of pay slips. For those with business
income it would commonly involve an examination of tax assessments,
balance sheets, profit and loss statements and cash receipt books
etc. Once a rate has been set and payments commenced, the recipient
is then obliged to report any income changes. The rate would be
reset upon any change, and reassessed upon review (eg. when more
up-to-date information is available following a tax
assessment).
Ordinarily, income assessments in social
security law are not retrospective and debts are not provided for
unless the evidence suggests that the recipient has failed to
report an increase in income. In that case a debt would be created
and recovered. The process provided for in items
18 and 67 involves a reconciliation of
all payments and the creation of debts or entitlements arising out
of the reconciliation. Perhaps this signals the intention to expand
this end of year income reconciliation process to all income-tested
payments?
Mobility Allowance (MA) was introduced in April
1983 for severely handicapped people in employment or vocational
training who were unable to use public transport without
substantial assistance. It is tax-free and income test free and
paid at $66.20 per fortnight.
It is a condition of MA that the recipient
perform an 'approved activity' under the Act.
From November 1986 MA was payable where the
claimant performed a combination of employment and vocational
training for at least 20 hours per week. From March 1993 MA was
extended to people who were unable to use public transport unaided
and were undertaking job search or doing voluntary work for at
least eight hours per week. From September 1995 MA was extended to
handicapped recipients of unemployment payments.
Currently, various criteria for MA require
'gainful employment' and/or 'vocational training' for 'at least 8
hours per week on a continuing basis'. These criteria are to be
amended.
Item 43 amends section 1035 of
the Social Security Act 1991 so that a more flexible
definition of 'approved activity' is applied when assessing
eligibility for MA. The time involved in these activities will be
measured on a four weekly rather than a weekly basis. Also, any
combination of gainful employment, voluntary work and vocational
training will allow a person to qualify rather than the more
limited combinations presently prescribed.
Schedule 2 amends
-
- A New Tax System (Family Assistance) Act 1999
-
- A New Tax System (Family Assistance) (Administration) Act
1999
-
- A New Tax System (Family Assistance and Related Measures)
Act 2000
-
- A New Tax System (Family Assistance) (Consequential and
Related Measures) Act (No 1) 1999
-
- A New Tax System (Family Assistance) (Consequential and
Related Measures) Act (No 2) 1999, and
-
- A New Tax System (Tax Administration) Act 1999.
Most of these amendments relate to technical
errors, misdescribed amendments and unintended consequences of
amendments to family assistance law in 1999 and 2000.
Items 1 51 commence on Royal
Assent.
Items 10 and
11 amend A New Tax System (Family Assistance)
Act 1999 to provide a savings arrangement for certain veterans
pensions. They protect recipients of Department of Veterans Affairs
(DVA) disability and war widow/widower pension from reductions in
their entitlement to Family Tax Benefit (FTB) and Child Care
Benefit (CCB) due to changes made to the definition of 'adjusted
taxable income' on 1 July 2000.
FTB and CCB were introduced in July 2000, as
part of a general move to replace Family Allowance, Family Tax
Payment, Family Tax Assistance and Childcare Assistance. The new
legislation included certain tax-free pensions and benefits in the
definition of the 'adjusted taxable income' to be considered when
applying the income test to FTB and CCB. DVA disability pension,
invalidity service pension, partner service pension, widow or
widower pension and income support supplement were among those
tax-free pensions. These payments had not previously been assessed
under the income test that applied to Family Allowance before July
2000, so the changes disadvantaged some DVA recipients.
Items 10 and
11 restore the position of these recipients as at
30 June 2000.
Schedule 3 amends:
-
- the Veterans' Entitlement Act 1986
-
- the Commonwealth Services Delivery Agency Act
1997
-
- the Family and Community Services Legislation Amendment
(1999 Budget and Other Measures) Act 1999
-
- the Social Security (Administration and International
Agreements) (Consequential Amendments) Act 1999
-
- the Social Security Legislation Amendment (Concession
Cards) Act 2001, and
-
- the Youth Allowance Consolidation Act 2000.
These amendments are largely technical and
remedial. They do not reflect policy changes.
Schedule 4 amends
-
- the Social Security Act 1991, and
-
- the Social Security (Administration) Act 1999.
These amendments are largely technical and
remedial. They do not reflect policy changes.
Schedule 5 repeals the
First Home Owners Act 1983.
No new claims have been permitted under the Act
since 30 June 1991 (section 17A).
-
- For a brief description of how the CDEP scheme works see:
http://www.facs.gov.au/guide/ssguide/11c212.htm.
Nathan Hancock and Dale Daniels
13 February 2003
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2003
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2003.
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