Family Assistance and Other
Legislation Amendment Bill 2011
On 2 June 2011 the Family Assistance and Other Legislation Amendment
Bill 2011 (the Bill) was referred to the Community Affairs Legislation
Committee for inquiry and report by 14 June 2011.
On 3 June 2011, the committee tabled an interim report stating:
In order to give proper consideration to this bill, the
committee has agreed to present this interim report and intends to present the
final report on Monday, 20 June 2011.
The Bill was also referred to the House of Representatives Standing
Committee on Social Policy and Legal Affairs on 2 June 2011 for inquiry and
report. The House of Representatives committee report was tabled on 14 June
In accordance with usual practice, the committee advertised the inquiry
on its website and in The Australian. The committee also wrote to
relevant organisations and associations inviting submissions. The committee received
seven submissions (listed at Appendix 1) and held one public hearing in
Canberra on 15 June 2011 (see Appendix 2).
The committee notes the short period of time between referral of the
Bill to the committee and lodgement of submissions. The committee appreciates
the effort required to meet this timeframe, and thanks those organisations and
individuals that made contributions to the committee's inquiry. The committee
also thanks representatives of departments and agencies who made themselves
available to the committee at short notice and out of hours to answer
Overview of the Bill
On 2 June 2011, the Family Assistance and Other Legislation Amendment
Bill 2011 (the Bill) was introduced into Parliament.
Main provisions of the Bill
The Bill would make various amendments to the A New Tax System
(Family Assistance) Act 1999, the Paid Parental Leave Act 2010, the Social
Security Act 1991, the Social Security (Administration) Act 1999 and
the Aboriginal Land Rights (Northern Territory) Act 1976.
Age of child for family tax benefit
The amendments to the A New Tax System (Family Assistance) Act 1999
in schedule 1 of the Bill would lower the maximum child age of eligibility for
family tax benefit (FTB) Part A from 24 years old to 21 years old. This change
would come into effect on 1 January 2012 and would 'align with the age at which
a person becomes independent for the purposes of youth allowance'.
These amendments are estimated to result in a total saving of $29.2
million over four years to 2014-15.
Other amendments to the A New Tax System (Family Assistance) Act 1999
would make changes to some indexation arrangements for family assistance income
thresholds, FTB Part A and Part B supplements, and the paid parental leave
(PPL) income limit.
Indexation would be paused until 1 July 2014 for the higher income free
area for FTB Part A, the FTB Part B income limit and the baby bonus income
The indexation of FTB Part A and Part B supplements would be paused for three
years from 1 July 2011.
The Paid Parental Leave Act 2010 provides that the income limit
for PPL before 1 July 2012 is $150 000 and subject to indexation. The Bill seeks
to postpone indexation of the PPL income limit until 1 July 2014.
The indexation pause for the FTB Part A and Part B supplements is
estimated to generate a saving to government of $803.1 million to 2014-2015.
The indexation pauses for FTB income limits, the baby bonus income limit
and the PPL income limit are expected to deliver total savings of approximately
$1.19 billion to 2014-15.
Assessing qualification for the
disability support pension
The Bill would introduce changes to the existing future work capacity
assessment, to commence on 3 September 2011, whereby people must 'provide
evidence that they have tested their future capacity by participating in
training or work-related activities' in order to qualify for the disability
support pension (DSP).
The new requirement to have actively participated in a program of
support to find employment would not apply to people with a "severe
impairment". A severe impairment is defined as an impairment 'of 20 points
or more under the Impairment Tables, of which 20 points or more are under a
single Impairment Table'.
The work capacity assessment measure is estimated to generate savings of
$622.7 million to 2014-2015.
Extending the Cape York welfare
The Bill would extend the Cape York welfare reform trial by a further 12
months to 1 January 2013 by amending the Social Security (Administration)
The welfare reform trial is a partnership between the communities of
Aurukun, Coen, Hope Vale and Mossman Gorge, the Commonwealth Government, the
Queensland Government and the Cape York Institute for Policy and Leadership.
A key feature of the trial is the management of an indigenous person's income
(income management), as a result of a decision by the Family Responsibilities
made before 1 January 2012.
The Bill would extend this date to enable income management to continue in Cape
York for an additional year until 1 January 2013.
Extension of the Cape York welfare reform trial is expected to have a
total cost of $16.2 million to 2013-2014.
Aboriginal Land Trusts
Schedule 5 of the Bill would amend the Aboriginal Land Rights
(Northern Territory) Act 1976 to clarify that the Public Works Committee
Act 1966 (the PWC Act) does not apply to Aboriginal Land Trusts.
To date, Aboriginal Land Trusts have not in practice been considered to
be Commonwealth authorities.
The Bill seeks to provide a legislative basis for this by clarifying that
Aboriginal Land Trusts are not authorities of the Commonwealth Government for
the purposes of the PWC Act.
Issues regarding the Bill
The committee received submissions both in support of and in opposition
to the amendments proposed in the Bill.
Some submitters were supportive of the amendments to pause indexation of
the high income thresholds for the FTB, the baby bonus and PPL.
However, these and other submitters and witnesses raised a number of issues
regarding the Bill. These concerns included:
- The effects of differing residency requirements on age-based
eligibility for benefits;
- The effects on the poorest families of the FTB supplement pauses;
- the appropriateness of the future capacity for work test for
people with a disability, including putting people with a disability on the
Newstart allowance rather than the DSP;
the definition of a severe impairment and the requirement for a
severe impairment to be scored as an impairment of 20 points from a single
the implementation date of 3 September 2011; and
the lack of detail about what constitutes a program of support.
The committee did not receive any submissions discussing the proposed
amendments in schedule 4 that would extend the Cape York welfare reform trial.
For this reason, the committee chose not to examine this section of the Bill
and does not discuss schedule 4 in this report.
Navigation: Previous Page | Contents | Next Page
Back to top