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1996
THE PARLIAMENT OF THE
COMMONWEALTH OF
AUSTRALIA
SENATE
FAMILY
(TAX INITIATIVE) BILL 1996
SUPPLEMENTARY EXPLANATORY
MEMORANDUM
Requests to be moved on behalf of the
Government
(Circulated by authority of the Minister for
Social Security,
Senator the Hon Jocelyn
Newman)
79302 Cat. No. 96 5318 X ISBN 0644
48294X
FAMILY (TAX INITIATIVE) BILL
1996
OUTLINE AND FINANCIAL IMPACT STATEMENT
These requests affect the Social Security Act 1991 (the
Act).
The Family (Tax Initiative) Bill 1996 was introduced
into the Senate after passing the House of Representatives on 9 October 1996.
However, after introduction of the Bill, an error was subsequently
found.
The financial impact of the request is as
follows:
1996-97 - $ negligible
1997-98 - $ negligible
1998-99 - $
negligible
NOTES ON REQUESTS
In general, a person must be in receipt of family payment at a rate in excess of the minimum family payment rate in order to qualify for family tax payment. However, new subsection 900AD(2) provides an exception to this rule, by using the concept of the "excluding provisions". The "excluding provisions" are defined in new subsection 6AA(1) of this Bill, and provide exceptions to the following rules relating to:
"prescribed education scheme child(ren)" (section 832);
the family payment assets test (section 838);
the absence of family payment recipient from Australia for more than 13 weeks (point 1069-B5(1));
the receipt of periodic payments which provides for an increase in the rate of payment with reference to a child (point 1069-B8);
the impact of income components other than taxable income (points 1069-H2(b),(c) and (d));
the family payment maintenance income test (Module J of the Family Payment Rate Calculator);
the requirement that a person take reasonable maintenance income (point 1069-K3).
Thus, if a person's rate of family payment is limited to the minimum family payment rate, because of the operation of one of the provisions listed above, new subsection 900AD(2) provides that the person still qualifies for family tax payment.
However, a reference to point 1069-B7 of the Social Security Act 1991 was unwittingly omitted from the definition of "excluding provisions". Point 1069-B7 applies where the child of a family payment recipient is overseas, and operates to limit the rate of family payment to a set amount (which equates with the minimum family payment rate).
However, it is intended that family tax payment be payable to a person in this situation, provided the person remains qualified for family payment.
Accordingly, it is proposed to include a reference to point 1069-B7 in the definition of "excluding provision" in new section 6AA.