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Chapter 4 - Family and Community Services Legislation Amendment
(Welfare to Work) Bill 2005
Background
4.1
This Bill relates to the
number of hours of assistance that can be claimed under the Child Care Benefit
(CCB) provisions.
4.2
Currently, parents or other defined principal carers
are able to claim CCB, which provides financial assistance to help in meeting
the cost of child care. This assistance is delivered as reduced fees for child
care services or a yearly lump sum payment. To be eligible for CCB, certain residency
and immunisation requirements must be met and the children for whom the benefit
is being sought must attend approved or registered care that charges a fee. CCB
is means tested based on family income.
4.3
The number of hours of Child Care Benefit
a family using approved child care may be eligible for depends, in part, on
whether both parents or a sole parent of a family satisfy a work/training/study
test. Currently CCB is available as follows:
-
families who do not satisfy the work/training/study
test can get up to 20 hours CCB per week for each child attending an
approved child care service;[192]
-
up to 50 hours of CCB per child per week where
families satisfy the work/training/study test or qualify for an exemption (such
as parents of a child with a disability); and
-
more than 50 hours of CCB per child per week.[193]
4.4
Parents using a paid registered carer for child care
may also be eligible for up to 50 hours of minimum rate CCB.[194] The a work/study/training test must
be satisfied 'at some time' each week in order to receive this level of
assistance.
The Bill
4.5
The Bill amends the A New Tax System (Family Assistance) Act
1999 and the A New Tax System (Family
Assistance) (Administration) Act 1999.
4.6
Schedule 1 of the Bill increases
the base limit of the number of hours per week, from 20 to 24, for which CCB
may be paid without claimants needing to meet stipulated work/training/study
requirements.[195]
4.7
Introducing the Bill
into the House of Representatives, Minister for Workforce Participation, Peter
Dutton MP, stated that:
Increasing the threshold limit of hours for which a family can
receive child-care benefit will assist parents in maintaining ongoing lower
levels of work force participation and help their transition to a greater level
of participation once their children are older. It also recognises that
child-care requirements often exceed actual working hours.[196]
4.8
The Department of Family and Community Services (FaCS)
indicated that the increase from 20 to 24 hours took into account the charging
practices of some child care centres:
Some of them have a 12-hour charging day, so increasing to 24
hours allows for two days of child care to be fully covered for parents not
meeting the work/training/study test. It allows for two full days for the child
to attend child care so that the parent can undertake other activities and so
the child's developmental needs can be met as well.
Officers explained:
They charge for the full session for the day, and the parent
might only use four or five hours of that session. It allows for the full payment
for that session for two days in any given week.[197]
4.9
Schedule 2 alters the work/study/training (or activity)
test that claimants must satisfy in order to be paid CCB for up to 50 hours for
approved care. Currently, those claiming CCB for up to 50 hours need only
demonstrate that they have satisfied the activity test 'at some time in the
week'. The Bill proposes to amend the Act to stipulate
that claimants must satisfy the activity test for at least 15 hours each week,
or for an average of 15 hours for two consecutive weeks.[198]
4.10
The Minister for Workforce Participation told the House
that:
This measure ensures that the greatest level of support is
directed to those families with higher levels of work related participation.[199]
4.11
The amendments also allow the Minister, by legislative
instrument, to:
(a)
determine the circumstances under which individuals
will not be required to meet the activity test; and
(b)
determine any other activities that may be counted
towards the activity test.[200]
Issues
4.12
Catholic Welfare Australia (CWA) commented that the
proposed changes 'do little to address the problems of single parents, many of
whom will re-enter the workforce with casual and part-time jobs and study
options'. CWA went on to state that the changes will benefit those who are
working or studying in a permanent and full-time capacity but single parents
who are in casual jobs and have to take unpaid time off (for example, when
their child is sick or during school holidays) will not be able to meet the new
activity test. CWA concluded 'not only will they miss out on their income if
they are forced to take unpaid leave but also their Child Care Benefit would be
jeopardised'.
4.13
CWA also stated that
while the Minister is allowed, by legislative instrument, to determine
activities that count towards meeting the activity requirements, CWA
would 'rather see the safeguards to protect some of those already most
disadvantaged in society protected by law'.[201]
4.14
FaCS commented that 'the increased participation
requirements as part of the proposed amendments will be administered in a way
that meets the need so parents who work a non-standard week or in a rotating
pattern'.[202]
Conclusion
4.15
The Committee notes that individuals who are
working/studying/training for less than 15 hours per week will be unlikely to
require more than 24 hours per week of subsidised approved child care. The
proposed amendments will continue to allow parents under the 15 hour threshold to
claim Child Care Benefit for periods paid of
child care well in excess of the time that they are engaging in work/study/training
activities.
Recommendation 6
4.16
The Committee reports to the Senate that it has
considered the Family and Community Services Legislation Amendment (Welfare to
Work) Bill 2005 and recommends that the Bill be
passed without amendment.
Senator Gary Humphries
Chairman
November 2005
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