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1998-99
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
_____________________________________________________________________
A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999
_____________________________________________________________________
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Requests for amendments to be moved on behalf of the Government
(Circulated by authority of the Minister for Family and
Community Services,
Senator the Hon Jocelyn Newman)
ISBN: 0642 404631
A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999
Requests for amendments to be moved on behalf of the Government
OUTLINE AND FINANCIAL IMPACT STATEMENT
The requests for amendments deal with:
a) an extension of
eligibility for family tax benefit (Part A) to young persons
aged 21 to under-25 (if that young person is undertaking full-time study);
and
b) an increase in the rate of family tax benefit to $50, payable to
an FTB child who is aged 18 to under-21, or who is undertaking
full-time study and is aged 21 to under-25.
• These requests for
amendments to the A New Tax System (Family Assistance) Bill 1999 will
take effect from the commencement of that Act, that is 1 July 2000. In order
that the corresponding measures relating to family allowance commence with
effect from 1 October 1999, complementary amendments to the Social Security
Act 1991 will made in the Social Security (Family Allowance and Related
Matters) Legislation Amendment Bill 1999.
The legislation is drafted
to ensure that a young person who would attract a higher rate under the family
tax benefit provisions rather than the youth allowance provisions will have the
option to forgo his or her youth allowance entitlement to enable eligibility for
family tax benefit by an adult (in respect of whom the young person would then
be an FTB child).
This measure forms part of the
Government’s plan for a new tax system, in which the structure and
administration of family assistance is being simplified with effect from
1 July 2000.
The financial impact of these measures
are:
Rate of family tax benefit – increase to $50 for over-18
year olds
2000-2001 $ 50m (expenditure)
2001-2002 $
50m (expenditure
A NEW TAX SYSTEM (FAMILY ASSISTANCE) BILL 1999
Requests for amendments to be moved on behalf of the Government
NOTES ON REQUESTS FOR AMENDMENTS
As part of the Government’s plan for a new tax system, the
structure and administration of family assistance is being simplified with
effect from 1 July 2000. Under this initiative, twelve forms of assistance,
currently available under the tax and social security systems, will be reduced
to three: family tax benefit (Part A), family tax benefit
(Part B) and child care benefit.
Requests for
amendments Nos. 1 – 5 (inclusive)
Requests for amendments 1 to
5 (inclusive) give effect to the Government’s decision to extend
eligibility for family tax benefit (Part A) to young people aged
under-25 who are undertaking full-time study, with effect from 1 July
2000.
Requests for amendments No. 6 – 8 (inclusive) – Rate
of family tax benefit - $50
Requests for amendments Nos. 6 – 8
(inclusive) give effect to the Government’s decision to increase the
fortnightly rate of family tax benefit (Part A) to $50, in respect of young
persons over 18 years of age, with effect from 1 July 2000.
• These
requests for amendments to the A New Tax System (Family Assistance) Bill
1999 will take effect from the commencement of that Act, that is 1 July
2000. In order that the corresponding measures relating to family allowance
commence with effect from 1 October 1999, complementary amendments to the
Social Security Act 1991 will made in the Social Security (Family
Allowance and Related Matters) Legislation Amendment Bill
1999.
• Indexation: these amounts are subject to CPI
indexation - see Requests for amendment 9 - 15
(inclusive
Requests for amendments No. 9 – 15 (inclusive) -
Indexation
These requests for amendments provide for the CPI
indexation of the new rates of family tax benefit.
Where is the
ability to choose between youth allowance and family tax benefit
(Part A)?
Section 22 of the Bill contains a Table which sets
out some occasions when an individual cannot be an FTB child of an
adult (and therefore not attract payment of family tax benefit). Item 3 of the
Table provides that an individual is not an FTB child if the
individual is receiving a social security benefit (among other
things).
An individual in receipt of youth allowance is receiving a
social security benefit. An individual who wishes to enable
eligibility for family tax benefit (Part A) by an adult in respect
of the individual, rather than receiving youth allowance, may choose to do so
simply by not applying for youth allowance, or, if the individual is already
receiving youth allowance, by relinquishing that benefit.