Dan Tehan (Wannon, Liberal Party, Minister Assisting the Prime Minister for Cyber Security) Share this | Hansard source

By way of summation on the second reading debate for the Social Services Legislation Amendment (Family Assistance Alignment and Other Measures) Bill 2016, as was noted by the shadow minister for social services, the bill does introduce amendments in the social services portfolio to reinforce the time period for income reconciliation for certain family tax benefit recipients for the 2012-13, 2013-14 and 2014-15 financial years, and to correct an unintended consequence generated by the youth allowance rate calculator.

Amendments will be made to the date-of-effect provisions to clarify long-standing administrative practice in relation to the payment of arrears of family tax benefit. In effect, the amendments will ensure it is clear that an individual cannot be paid family tax benefit supplements and top-ups where they notify that they were not required to lodge an income tax return more than one year after the end of the relevant income year. This will ensure that the legislation is clear so that review agencies such as the Administrative Appeals Tribunal will apply the law as intended when reviewing these matters. The amendments also ensure consistency with the equivalent time frame currently applying to families who are required to lodge a tax return for the 2012-13, 2013-14 and 2014-15 financial years.

While the amendments are technically retrospective in nature, they merely strengthen existing provisions to put their interpretation beyond doubt. It is worth noting that there will be no material effect on the family tax benefit recipients for these years given the one-year time frame has been in effect since the 2012-13 year and has been communicated consistently to recipients since that time. One year is considered a reasonable amount of time for families to notify Centrelink that they are not required to lodge and/or provide details of types of income not included in a tax return in order for reconciliation of their family tax benefit entitlement to occur.

This bill does not prevent extensions to the period of time available for recipients to notify that they were not required to lodge where there were special circumstances that prevented them from fulfilling their obligations on time. Such extensions continue to be available under the current subsection 32J subsection (2) of the A New Tax System (Family Assistance) (Administration) Act 1999. This bill also does not prevent those recipients granted an extension under the above-mentioned subsection from being paid family tax benefit supplements and top-ups as a result of notifying that they were not required to lodge an income tax return more than a year after the end of the relevant financial year. These amendments will ensure that full effect is given to the original 2013 realignments of the time period for income reconciliation budget measure and that the intent of the family assistance program is met, which is to deliver financial assistance to families to help with the cost of raising children when it is needed.

The bill also includes contingent amendments to remove reference to family tax benefit supplements in the event they are phased out as part of the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2016, which is, of course, designed to improve the sustainability of the family payment system. The bill also introduces amendments to correct unintended consequences of amendments that were made in part 3 of schedule 1 to the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Bill 2015 to the youth allowance rate calculator in section 1067G of the Social Security Act 1991. It is intended that the rate calculator produce a fortnightly rate. Currently, there is an inconsistency in that step 1 of the rate calculator is expressed as an annual amount while subsequent steps are expressed as fortnightly amounts. The result is that comparing the outcome of the subsequent steps from the calculation in step 1 does not generally provide the correct threshold test outcome and, in most cases, will result in a harsh outcome. This error occurred because the introduction of complex maintenance income rules from the A New Tax System (Family Assistance) Act 1999 which are predicated on annual amounts to the Social Security Act 1991, where payments are based on fortnightly amounts. The change that is proposed amends step 1 in the rate calculator to reduce the figure to a fortnightly amount consistent with the original intent of the changes as announced by the government in the 2015-16 budget.

It is also customary at this point to thank members opposite for their contributions. Of course, I do that. I note that the shadow minister, the member for Jagajaga, said that, whilst they are the supporting this bill which is technical in nature, they will not support further cuts to the FTB supplement. I note the use of the word 'further' because, of course, you did not support a range of cuts for those people on incomes above $80,000, which was the complete end of their supplement. The use of 'further' was advisable because the support for that reduction was a reversal of your position, because you opposed that prior to the election. You let millions of Australians believe that your position was to oppose any cuts to the supplements, but in the omnibus savings bill—

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