Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill introduces amendments to align 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.

Specifically, amendments will be made to the date-of-effect provisions to clarify longstanding administrative practice in relation to the payment in arrears of family tax benefit. In effect, the amendments will ensure that it is clear an individual cannot be paid family tax benefit supplements and top-ups where they notified that they were not required to lodge an income tax return more than one year after the end of the relevant income year.

These amendments ensure consistency with the equivalent time frame currently applying to families who were required to lodge a tax return for the 2012-13, 2013-14 and 2014-15 financial years.

These amendments strengthen existing provisions to ensure that their interpretation is beyond doubt. There will be no material effect on family tax benefit recipients for these years given the one-year time frame has been in effect since 2012-13 and has been communicated to recipients clearly since that time.

One year is considered to be 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.

These amendments will ensure that full effect is given to the original 2013 realignment of 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 themselves are designed to improve the sustainability of the family payments system.

This bill also introduces amendments to correct an unintended consequence of amendments that were made in part 3 of schedule 1 of the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Act 2015 to the youth allowance rate calculator, which appears 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 harsher outcome.

The error occurred because of introducing complex maintenance income rules from 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.

This amendment ensures that the aim to align the parental means testing arrangements for youth allowance more closely with those for family tax benefit part A will be met.

I commend the bill to the House.

Debate adjourned.