Bills Digest no. 94 2008–09
Household Stimulus Package Bill 2009
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
Financial implications
Main provisions
Concluding comments
Endnotes
Contact officer & copyright details
Passage history
Date
introduced: 4 February
2009
House: House of Representatives
Portfolio: Families, Housing, Community Services
and Indigenous Affairs
Commencement:
The day on which the Act
receives Royal Assent, except for Schedule 2 Part 1 which commences
on 1 January 2009 and Schedule 2 Part 2 which commences on 1 July
2009.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To provide a series of bonus
payments to certain recipients of income support and family
assistance payments as part of the Governments Nation Building and
Jobs Plan.[1]
The background to the Nation Building and Jobs Plan is examined
in the Bills Digest for the Appropriation (Nation Building and
Jobs) Bill (No. 1) 2008-2009.
This Bill provides for a series of one off cash payments to
people who are receiving a range of payments under the Social
Security Act 1991 (SSA) and the Family Assistance Act
1999 (FAA) on 3 February 2009. All of the payments are of $950
and will be paid, subject to the Bill being passed in the near
future, in most cases in March 2009 at a cost of $4.584 billion.
The payments are:
- Training and Learning Bonus - This bonus is
for senior secondary or tertiary students receiving a range of
education assistance payments or Family Tax Benefit part A (aged 21
to 24 years) plus recipients of Sickness Allowance and Special
Benefit.
- Farmers Hardship Bonus - This bonus is for
people receiving Exceptional Circumstances Relief Payment, Farm
Help Income Support, Transitional Income Support or Interim Income
Support. It will potentially be paid in the fortnight commencing 24
March 2009.
- Education Entry Supplement - This payment will
go to people receiving Education Entry Payment between 1 January
2009 and 30 June 2010. The qualification period for receipt of
Education Entry Payment will be reduced from 12 months to 4 weeks
of continuous receipt of an income support payment during the
period 1 January 2009 until 30 June 2010. Eligibility for the
Education Entry Payment will also be extended during this period to
Youth Allowance (Other) recipients who are not full time
students.
- Back to School Bonus - This Bonus is for each
child aged 4 to 18 years who qualifies for Family Tax Benefit part
A on 3 February 2009. It will also be paid to recipients of
Disability Support Pension and Carer Payment who are aged under 19
years on 3 February 2009. It will potentially be paid in
March.
- Single Income Family Bonus - This Bonus will
potentially be paid in the fortnight commencing 11 March to
families qualifying for Family Tax Benefit part B on 3 February
2009.
|
Payment
|
Numbers assisted
|
|
Training and Learning Bonus and the Education Entry
Supplement
|
440,000 students
|
|
Farmers Hardship Bonus
|
21,500 people
|
|
Back to School Bonus
|
2.76 million children
|
|
Single Income Family Bonus
|
1.5 million families
|
The Bill has been referred
to the Senate Finance and Public Administration Committee for
inquiry and report by 10 February 2009. Details of the inquiry are
at
http://www.aph.gov.au/senate/committee/fapa_ctte/stimulus_package/index.htm.
One-off payments targeted at specific groups are inevitably
criticised on equity grounds. People who do not qualify often feel
that they are just as deserving of assistance as some of those who
did qualify. The payments in this Bill are all provided to people
receiving income tested payments. However these bonuses and the Tax
Bonus for Working Australians are only partially aimed at those
doing it tough at present. The emphasis on supporting education and
stimulating the economy in the package of payments and in the
broader nation Building and Jobs Plan is clear.
In addition the targeting of these new payments is meant to
complement the one off payments provided under the Economic
Security Strategy in December 2008. They were strongly targeted at
pensioners, carers, self-funded retirees and families with
children.[3]
However there are groups of low and middle income people who
will either not receive a bonus or receive several bonuses from the
two packages of bonus payments. The long term unemployed people
without children for example miss out completely while the design
of the package gives two bonus payments to students receiving
income support who are also tax payers. Families with dependent
children who are also single income families will have receive two
or more bonus payments from this Bill alone.
Item 3 inserts new Part 2.18
into the Social Security Act 1991. New Division
1 sets out the qualification requirements and the amount
of the Training and Learning Bonus.
The bonus goes to people receiving one of the following payments
on 3 February 2009:
- Youth Allowance if a full-time student or an apprentice,
- Austudy Payment,
- Special Benefit if under age pension age,
- Sickness Allowance,
- An Abstudy living allowance,
- Veterans Children Education Scheme allowance,
- Military Rehabilitation and Compensation Act Education and
Training Scheme allowance, or
- Family Tax Benefit part A (FTBA) if a full time student aged 21
to 24 years.
It should be noted that students eligible for FTBA aged 19 and
20 years will not be eligible for this bonus or for the Back to
School Bonus provided in Schedule 3. This appears to be an omission
given that all other students receiving income tested payments are
provided with a bonus payment. This apparent gap in coverage is not
commented upon in the Explanatory Memorandum.
Provision is made to ensure that only one bonus is paid for each
eligible person.
New Division 2 sets out the qualification
requirements and amount of the Farmers Hardship Bonus. The Bonus
will be paid people who received one of the following payments
under the Farm Household Support Act 1992 on 3 February
2009:
- Exceptional Circumstances Relief,
- Farm Help Income Support,
- Exceptional Circumstances Interim Income Support, or
- Transitional Income Support.[4]
Items 1 to 7 reduce the period that a person
must be in receipt of income support in order the receive an
Education Entry Payment (EEP) from 12 months to 4 weeks for the
period 1 January 2009 to 30 June 2010.
Item 8 inserts new Division
12A which provides for eligibility for EEP for Youth
Allowance (other) recipients. These Youth Allowees are unemployed
young people or part-time students. This change will apply from 1
January 2009 until 30 June 2010.
Item 9 adds new Division 14
which sets out the qualification requirements and the amount of the
Education Entry Payment Supplement. It will be paid to EEP
recipients between 1 January 2009 and 30 June 2010.
Item 3 inserts new Part 7 into
the A New Tax System (Family Assistance) Act 1999.
Division 1 of this part sets out the qualification
requirement and the amount of the Back to School Bonus.
New section 95 provides for the bonus to be
paid for each child eligible for FTBA aged between 4 and 18 years
inclusive on 3 February 2009. Provision is made to ensure that
people who claim FTBA in arrears in their tax return will receive
the bonus along with their FTBA entitlement. People receiving FTBA
on a fortnightly basis will potentially be paid the bonus during
March 2009.[5]
New section 98 provides for the bonus to be
paid to young people receiving Carer Payment or Disability Support
Pension where they are aged under 19 years on 3 February 2009.
Division 2 of new Part 7 sets
out the qualification requirement and the amount of the Single
Income Family Bonus.
New section 101 provides for the payment of the
bonus to people eligible for Family Tax Benefit part B (FTBB) on 3
February 2009. Provision is made to ensure that people who claim
FTBB in arrears in their tax return will receive the bonus along
with their FTBB entitlement. People receiving FTBA on a fortnightly
basis will potentially be paid the bonus during March 2009.[6]
Item 7 inserts new section 71K
into the A New Tax System (Family Assistance) (Administration)
Act 1999. The section provides that a debt will only arise
with regard to a payment of Back to School Bonus or Single Income
Family Bonus if the claimant knowingly made a false or misleading
statement or knowingly provided false information. This ensures
that people who lose FTB eligibility because they under estimated
their income for the 2008-09 year but did not do so knowingly will
not lose their bonus once their actual income is established by the
ATO in late 2009.
This schedule allows the establishment by legislative instrument
of an administrative scheme to provide payments to people who miss
out under this bill where it is considered that they were
inappropriately excluded. The scheme would be subject to
parliamentary scrutiny and disallowance processes.
This is a common feature of legislation that provides one-off
payments. It ensures that groups who are not included initially in
the eligibility conditions can be added without the need to
introduce a new Bill to Parliament.
This schedule provides that the payments will not be counted for
income testing purposes and that they will not be income for income
tax purposes.
It also provides that where the payments are provided to people
subject to the income management regime the whole amount will be
credited to the persons income management account rather than being
paid as cash.[7]
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
2410.
[7] Income Management is a practical
measure to assist customers to meet essential household needs and
expenses. It does not reduce a customer s entitlements, rather it
sets aside a percentage of certain income support and family
payments to be spent on priority goods and services such as food,
housing, clothing, education and health care. Customers cannot
purchase alcohol, tobacco, prohibited material or gambling products
with income managed money. Customers receive the remaining part of
their payments as usual, and have total discretion to spend that
money as they wish. Income Management is used to support the
following welfare payments reform measures:
- Northern Territory Emergency Response
- Cape York Trial
- Child Protection.
Dale Daniels
10 February 2009
Bills Digest Service
Parliamentary Library
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