Julie Collins (Franklin, Australian Labor Party, Parliamentary Secretary for Community Services) Share this | Hansard source

Can I begin by thanking both sides of the House for their contributions on this bill. This bill brings forward three further election commitments to improve support for Australian families. The 2010-11 budget measure and also some minor clarifications to family payments are introduced by the bill.

The first election commitment is an overhaul of the arrangements for advance payments of family tax benefit to better meet families' needs. Families will get a more flexible system, with more scope to choose the size and timing of their advanced payments. The new system, starting on 1 July 2011, will help families meet unexpected household costs such as having to replace a broken-down fridge or a damaged school uniform. Some families may find the new, more flexible system means they can avoid high credit card bills or high-interest small loans. Other families might find they manage their budget better around unexpected expenses like car registration. Families will choose how much they get in an advance payment, subject to set minimum and maximum amounts. The minimum amount will be 3.75 per cent of the maximum standard rate for a child aged under 13. This comes to around $160 as the minimum advance amount for all families. The maximum amount will differ between families depending on their usual rate of payment. Generally, a maximum of 7.5 per cent of that rate will be available for advance payment. For example, if the family is not receiving rent assistance and has one child under 13, the maximum advance amount would be around $320. If the family is not receiving rent assistance and has two children under 13, it would be around $640. A family that is receiving rent assistance would have a higher maximum advance. An overall maximum will apply. This will be $1,000 in 2011-12 and it will be maintained at the same percentage of the maximum standard rate for one child under 13 as in the first year. Families will have their ongoing fortnightly family tax benefit part A entitlement adjusted to repay their advance. Under new arrangements, families will no longer be limited to receiving and repaying advances within two set periods of the year, those being 1 January to 30 June and 1 July to 31 December. Families will be able to request more of their entitlement in advance at any point in the year and the advance will be recovered in the following six months. Importantly, though, Centrelink will not approve advance payment requests if financial hardship would be likely to result. Also, families making repeated requests will be assessed to see whether financial advice or financial counselling will be of any benefit.

The second of the election commitments introduced by this bill is to establish a new requirement for income support recipient parents or carers of four-year-olds. This is aimed at giving their children a healthy start to school. Under this new requirement, family tax benefit part A supplement, which is paid to families at the end of the financial year, will become conditional on the kids in these families going through a health assessment. The Healthy Kids Check is such an assessment. A health assessment at this age will help ensure that children are healthy, fit and ready to learn when they start school. In particular, it will help with the early detection of lifestyle risk factors and delayed development, and illness such as vision and hearing problems.

The health check will also offer families guidance on healthy lifestyles and early intervention strategies. We know from research that opportunities such as these will be especially important for disadvantaged families, for a good education is so important in helping to break down patterns of disadvantage. The Healthy Start for School initiative will apply from 1 July 2011. Parents will need to confirm with Centrelink that the health check has been done. In exceptional circumstances, the new requirement may be waived—for example, when the child has severe disability or terminal illness.

The third and last election commitment in the bill will introduce a new, more accurate process for assessing income for child support purposes in place of the current policy that applies when a parent fails to lodge or is late with his or her tax return. Currently, the child support assessment for a parent in these situations is based on a figure equal to two-thirds of the male total average weekly earnings, a process that often leads to an understatement of the parents' actual income. The new process will achieve a more accurate child support assessment and, therefore, better support for children in separated families by generally using the assessment of the parents' last known taxable income, indexed by the growth in average wages. However, if the current process based on two-thirds of male total average weekly earnings would lead to a higher income, that process will be used instead.

In a measure from the 2010-11 budget, this bill will streamline the notification process when payments are made by compensation payers and insurers. These compensation payers and insurers will now need to tell Centrelink before compensation payments are made to compensation recipients or their partners. The new requirement will apply to lump-sum payments as well as to ongoing periodic payments. It will help to simplify the notification process to Centrelink and will help to make sure that people are paid their correct entitlements and avoid unnecessary overpayments.

Amendments will be moved to this measure as a result of consultation with the insurance sector. These amendments will avoid any risk of conflict with state and territory compensation laws surrounding grants and payment of workers compensation and will make the new arrangements easier for the industry to manage. The bill currently provides for Centrelink to be notified at least 14 days before the payment is made. The amendments will allow the secretary and the compensation payer to agree on an alternative period within which notice must be given. Lastly, some minor clarifications within existing policy will be made to several family assistance and child support provisions.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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