On 3 December 2015, the Senate referred the provisions of the Social
Services Legislation Amendment (Family Payments Structural Reform and
Participation Measures) Bill (No. 2) 2015 (Bill) to the Senate Community
Affairs Legislation Committee (committee) for inquiry and report by 1 March
The Selection of Bills Committee noted that the reason for
referral was to 'determine the impact of the measures in the Bill on various
types of families.'
Conduct of the inquiry
Details of the inquiry, including a link to the Bill and
associated documents, were placed on the committee's website. The committee also wrote to 170 organisations
and individuals, inviting submissions by 12 February 2016. Submissions
continued to be received after that date.
The committee received 19 submissions to the inquiry. All
submissions are listed at Appendix 1 and published on the committee's website.
The committee held a public hearing in Melbourne on 18 February 2016.
A list of witnesses who appeared at the hearing is at Appendix 2, and the
Hansard transcript is available through the committee's website.
In May 2015, the then Minister for Social Services, the Hon Scott
Morrison MP, announced a $3.5 billion Jobs for Families childcare
package to 'provide greater choice for more than 1.2 million families by
providing a simpler, more affordable, more flexible, and more accessible child
This package comprises a range of initiatives to provide additional
support for low and middle income families:
Abolition of the current Child Care Benefit, Child Care Rebate
and Jobs, Education and Training Child Care Fee Assistance programmes.
Introduction of a single means tested Child Care Subsidy
for all families, subject to a new activity test for up to 100 hours of
subsidised care per child per fortnight, paid directly to approved care service
providers to make it easier for families.
For family incomes of up to approximately $65,000 the Child
Care Subsidy will be 85% per child of the actual fee or a benchmark price,
whichever is lower. This will reduce to 50% for family incomes of approximately
$170,000 and above at the time of implementation.
Families on incomes under $185,000 will no longer have a cap on
the amount of subsidy they receive.
A cap of $10,000 per child at the time of introduction will be
established for the total value of subsidies for family incomes of $185,000 and
In the second reading speech on the Bill, the Minister for Social
Services, the Hon. Christian Porter MP (Minister), noted that the expected
savings from the measures in the Bill would offset the childcare package:
The new package has been introduced in order to pay for the
Jobs for Families package. The package contains the required savings from
family payments to offset the additional investment in childcare reforms which
will help families and encourage workforce participation.
The Minister also noted the amendments would:
[S]implify the family tax benefit system and provide more
money on a fortnightly basis to those families who need it the most.
The Bill seeks to reintroduce modified versions of certain measures
previously outlined in the Social Services Legislation Amendment (Family
Payments Structural Reform and Participation Measures) Bill 2015 (Bill No. 1), which
were removed by amendments agreed to by the House of Representatives on 26
Chapter 2 provides greater detail on the modified measures
proposed in the Bill, which were made in response to concerns raised during a
committee inquiry into Bill No. 1.
Key provisions and purpose of the Bill
The Bill is comprised of three schedules and seeks to amend the A
New Tax System (Family Assistance) Act 1999, A New Tax System (Family
Assistance) (Administration) Act 1999, Social Security Act 1991 and
the Social Security (Administration) Act 1991 in order to:
Part A and at-home, under-18 fortnightly rates for youth allowance
and disability support pension
increasing FTB Part A fortnightly rates by $10.08 for each FTB
child in the family aged up to 19; and
increasing youth allowance and disability support pension by
around $10.44 per fortnight for recipients aged under 18 and living at home.
Reform FTB Part B by changing rates calculated by the youngest
child in the family:
for children under one, increasing the standard rate by $1000.10
for children between one and five, maintaining the current
for children between five and 13, maintaining the current
for children aged 13 to 16, introducing a reduced standard rate
of $1000.10 per year for individuals who are not single parents aged 60 or more
or grandparents or great-grandparents; and
for children aged 13 to 18, maintain the current standard rate for
single parents who are at least 60 years of age, grandparents or
Phase out FTB Part A and Part B supplements by:
reducing FTB Part A supplement to $602.25 a year from 1 July
2016, and to $302.95 a year from 1 July 2017 and ceasing on 1 July 2018; and
reducing FTB Part B supplement to $302.95 a year from 1 July
2016, and to $153.30 a year from 1 July 2017, and ceasing on 1 July 2018.
Schedule 1—Increase payment rates
This schedule proposes to increase the fortnightly rates for FTB
Part A by $10.08 for each FTB child in the family aged up to 19 years of age.
An equivalent rate of increase (of around $10.44 per fortnight) would apply to
certain youth allowance and disability support pension recipients aged under 18
years of age. These increases would commence from 1 July 2018.
Schedule 2—Family tax benefit Part
This schedule proposes to:
introduce a new rate structure for FTB Part B, and make other
amendments to the rules for Part B, to:
increase the standard rate by
$1,000.10 per year for families with a youngest child aged under one;
maintain the current standard rate
for families with a youngest child aged between one and five;
maintain the current standard rate
for families with a youngest child aged between five and 13;
maintain the current standard rate
for single parents who are at least 60 years of age, grandparents and
great-grandparents with a youngest child aged between 13 and 18; and
introduce a reduced standard rate
of $1,000.10 per year for individuals with a youngest child aged 13 to 16
(currently $2,737.50) who are not single parents aged 60 or more or grandparents
Item 11 of Schedule 2 specifies that the new criteria for working
out the rate of FTB would commence on 1 July 2016. The first indexation of the
new amounts outlined in the table in subclause 30(1) of schedule 1 would occur
on 1 July 2017.
The committee notes that the Bill amends previously proposed
changes to the standard rates of FTB Part B,
to maintain the current standard rates for families with a youngest child aged
between one and five or between five and 13, as well as for single parents aged
60 years and over, grandparents and great-grandparents with a youngest child
aged between 13 and 18.
Schedule 3—Family tax benefit
This schedule proposes to:
[P]hase out the family tax benefit Part A supplement by
reducing it to $602.25 a year from 1 July 2016, and to $302.95 a year from 1
July 2017. It will then be withdrawn from 1 July 2018.
The family tax benefit Part B supplement will also be phased
out. It will be reduced to $302.95 a year from 1 July 2016, and to $153.30 a
year from 1 July 2017. It will then be withdrawn from 1 July 2018.
Part 1 and Part 2 of this schedule provide for the reduction of
end-of-year FTB Part A and FTB Part B supplements, to commence on 1 July 2016,
with further reductions to commence on 1 July 2017. Part 3 of this schedule
provides for FTB Part A and FTB Part B supplements to be phased out completely
by 1 July 2018.
Statements of compatibility with
The statements of compatibility with human rights (statements)
included in the Explanatory Memorandum to the Bill, provide analysis on each of
the three schedules of the Bill. The statements affirm that Schedule 1 of the
Bill supports the right to social security as it will increase certain social
security payments and to the extent that Schedule 2 and Schedule 3 limit the
right to social security, those limits are reasonable and proportionate.
The Parliamentary Joint Committee on Human Rights (PJCHR)
examined the bill in its report of 2 February 2016 and referred to comments
made in its report of 10 November 2015 in relation to the measures as
introduced in a previous bill.
In its November 2015 report, the PJCHR considered that the
reduction in the rate of FTB Part B and the removal of the supplements to FTB
Parts A and B may engage and limit the right to social security and the right
to an adequate standard of living. The PJCHR sought advice from the Minister on
the justification for these limits.
The PJCHR had not published the Minister's response by the time this inquiry
Consideration of the Bill by other committees
The Senate Standing Committee for the Scrutiny of Bills made no
comments on the Bill.
The measures are expected to generate savings of $5429.1 million
over the forward estimates. This is comprised of $584.2 million in savings from
reform of FTB Part A and at-home under-18 youth fortnightly rates, $781.1
million in savings (indicative) from reforms to FTB Part B and $4063.9 million
in savings from the phase out of FTB Part A and B supplements. The explanatory
memorandum does not indicate how many people are expected to be affected by the
The committee thanks those organisations who made submissions to
the inquiry and gave evidence at the hearing.
Note on references
Pages numbers vary between proof and official Hansard. Any
reference to proof Hansard is marked as such.
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