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2004-2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SOCIAL SECURITY LEGISLATION AMENDMENT (ONE-OFF PAYMENTS
FOR CARERS) BILL 2005
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Family
and Community Services,
Senator the Hon Kay Patterson)
SOCIAL SECURITY LEGISLATION AMENDMENT (ONE-OFF PAYMENTS
FOR CARERS) BILL 2005
OUTLINE AND FINANCIAL IMPACT STATEMENT
Outline
This Bill gives effect to a measure announced in the 2005 Budget to provide
extra assistance to carers.
The Bill will provide three one-off payments that will generally be paid in
June 2005:
A one-off payment of $1000 to recipients of carer payment on Budget
night 2005 (10 May 2005).
A one-off payment of $1000 to recipients of carer service pension on
Budget night 2005, 10 May 2005 (these are people whose entitlement
to carer service pension was preserved under savings and transitional
provisions under subclause 8(2) or (4) of Schedule 5 of the Veterans'
Entitlements Act 1986).
A one-off payment to recipients of carer allowance on Budget night
2005, generally payable as an amount of $600 for each person being
cared for who attracts carer allowance.
The Bill also contains provisions to enable an administrative scheme to be
established. In broad terms, the purpose of the administrative scheme will be
to provide payments in circumstances where the statutory one-off payments
regime does not produce an appropriate result. The Minister for Family and
Community Services will determine the details of the scheme by legislative
instrument.
The Bill commences on Royal Assent.
Financial impact statement
The financial cost of the one-off payments to carers is $313.7m in 2004-05
and $3.2m in 2005-06.
SOCIAL SECURITY LEGISLATION AMENDMENT (ONE-OFF PAYMENTS
FOR CARERS) BILL 2005
NOTES ON CLAUSES
Clause 1 sets out how the Act is to be cited, that is, as the Social Security
Legislation Amendment (One-off Payments for Carers) Act 2005.
Clause 2 provides that the Act commences on Royal Assent.
Clause 3 provides that each Act that is specified in a Schedule is amended or
repealed as set out in that Schedule (see notes on following pages).
This Explanatory Memorandum uses the following abbreviations:
`Social Security Act' means the Social Security Act 1991;
`Social Security Administration Act' means the Social Security
(Administration) Act 1999;
`Veterans' Entitlements Act' means the Veterans' Entitlements Act
1986.
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Schedule 1 2005 one-off payments to carers
Summary
This Schedule provides for a one-off payment of $1000 to recipients of carer
payment on Budget night 2005. It also provides for a one-off payment to
recipients of carer service pension on Budget night 2005 whose entitlement to
carer service pension was preserved under savings and transitional
provisions under subclause 8(2) or (4) of Schedule 5 to the Veterans'
Entitlements Act. Finally, it provides for a one-off payment to recipients of
carer allowance on Budget night 2005. Where the carer is the only person
who is being paid carer allowance in respect of the care receiver (or care
receivers), the one-off payment will be $600 in respect of each care receiver
(or in respect of the care receivers in relevant cases). Where carer allowance
is shared in relation to a care receiver (or care receivers), the $600 will be
shared on the same basis as the payment(s) of carer allowance is shared.
Background
In broad terms, this Schedule introduces a new one-off payment to carers,
which would be paid as a lump sum payment, generally before 30 June 2005.
There would not be a claim process attached to the one-off payment.
A person who receives an instalment of carer payment for a period that
includes 10 May 2005 will be entitled to a one-off payment of $1000.
Similarly, a person who receives an instalment of carer service pension for a
period that includes 10 May 2005 will be entitled to a one-off payment of
$1000.
Subject to certain qualifications, a person will be entitled to $600 in respect of
each care receiver in relation to whom the person receives an instalment of
carer allowance for a period that includes 10 May 2005. Where the care of
the care receiver is shared, the $600 will also be shared. Where qualification
for carer allowance depends on the person providing care for two disabled
children, the payment will also be $600.
Explanation of changes
Part 1 Main Amendments
Amendments of the Social Security Act
Item 1 inserts new Parts 2.5B and 2.5C into Chapter 2 of the Social Security
Act.
New Part 2.5B applies to the 2005 one-off payment to people eligible for carer
payment.
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New section 249 provides that a person is qualified for a one-off payment if
the person has been paid an instalment of carer payment and the instalment
period includes 10 May 2005. The Note to this provision makes it clear that a
person can qualify for this one-off payment as well as the one-off payment
that is available in respect of carer allowance.
New section 250 provides that the amount of the 2005 one-off payment is
$1000. The Note to the provision makes it clear that the maximum available
to a person is $1000 regardless of the number of people in relation to whom
the qualified person provides care.
New Part 2.5C applies to the 2005 one-off payment to people eligible for carer
service pension.
The only people who are now currently receiving carer service pension are
people whose entitlement to carer service pension was preserved under
savings and transitional provisions under subclause 8(2) or (4) of Schedule 5
to the Veterans' Entitlements Act). This is because the Veterans' Affairs
Legislation Amendment (Budget and Compensation Measures) Act 1997
made changes that removed all carer provisions from the Veterans'
Entitlements Act, allowing the recipients to transfer to carer payments that
were available at that time under the Social Security Act. Because, at the
time of these changes, it was recognised that a number of people would be
adversely affected by those changes, they could elect to remain on the carer
service pension rather than transferring to carer payment.
New section 251 provides that a person is qualified for a one-off payment if
the person has been paid an instalment of carer service pension as a result of
the operation of subclause 8(2) or (4) of Schedule 5 to the Veterans'
Entitlements Act in respect of a period that includes 10 May 2005.
New section 252 provides that the amount of the 2005 one-off payment is
$1000. The Note to the provision makes it clear that the maximum available
to a person is $1000 regardless of the number of people in relation to whom
the person provides care.
Item 2 inserts a new Part 2.19B into Chapter 2 of the Social Security Act.
Part 2.19B applies to the 2005 one-off payment to people eligible for carer
allowance.
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New section 992Q sets out the criteria to be satisfied in order for a person to
qualify for a 2005 one-off payment to carers (carer allowance related). In
effect, there are two requirements that need to be met in relation to one or
more instalments of carer allowance that have been paid to the person. The
first requirement is that the instalment of carer allowance was in respect of a
period that includes 10 May 2005. The second requirement is that the
operation of clause 16 or 17 of Schedule 2 to the Social Security
Administration Act (which deal with `backdating') must not be the reason that
the instalment covered 10 May 2005.
The effect of subsection 992Q(2) is that each instalment that meets both the
requirements of subsection (1) is a `qualifying instalment'.
The Note to the provision makes it clear that a person can qualify for this 2005
one-off payment as well as the 2005 one-off payment that is available in
respect of carer payment.
The broad operation of the scheme is that a qualified person will receive
payment in respect of each `eligible care receiver' in relation to the person.
The concept of who is an `eligible care receiver' is dealt with in new
section 992R. Subsection (1) essentially provides for the general rule that,
where providing care to a person gives rise to a qualifying instalment of carer
allowance, that person is an `eligible care receiver' in relation to the qualified
person. However, there are situations where a person's qualification for an
instalment of carer allowance arises on account of the care the person
provides for two disabled children (subsection 953(2) of the Social Security
Act). Accordingly, subsection (2) qualifies the general rule by providing that,
where subsection 953(2) applies in relation to the qualifying instalment, the
two disabled children are treated as a single `eligible care receiver'.
New section 992S is concerned with working out the amount of the one-off
payment. Subsection (1) provides that the amount is worked out by adding
together the amounts applicable for each eligible care receiver.
Subsection (2) provides that the applicable amount for an eligible receiver is
$600 unless subsection (3) applies. Subsection (3) is concerned with
situations where 2 people are qualified for carer allowance because they
share the care of a care receiver (or care receivers). In those circumstances,
subsection 981(1) of the Social Security Act provides for the Secretary to
make a written determination specifying the share of carer allowance that
each of the two people is to receive. The effect of subsection (3) is that,
where the qualifying instalment was paid on the basis of a determination as to
a particular share of carer allowance, the amount applicable for an eligible
care receiver in relation to a qualified person is that same share of $600.
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Items 3 to 6 deal with overpayment arising in respect of the three 2005
one-off payments. These amendments ensure that section 1223ABA of the
Social Security Act (which applies in relation to the payments made under the
Family Assistance Legislation Amendment (More Help for Families One-off
Payments) Act 2004) will also apply to the 2005 one-off payments.
Section 1223ABA, in very broad terms, provides that a one-off payment (or
part of a one-off payment) will be a overpayment where it is established that
the recipient knowingly made a false or misleading statement (or provided
false information) and, if the true circumstances had been known, the
determination in relation to the relevant instalment (which gave rise to the
qualification for the one-off payment) would not have been made.
Amendments of the Social Security Administration Act
Item 7 inserts new section 12AB into the Social Security Administration Act. It
provides that a claim is not required in order to be paid any of the three 2005
one-off payments.
Item 8 inserts a reference to the three new one-off payments into the existing
definition of `lump sum benefit' contained in subsection 47(1) of the Social
Security Administration Act.
Item 9 inserts new section 47C. In broad terms, it provides that the Secretary
must pay the payments provided for by this Schedule on the date that the
Secretary determines is the earliest reasonably practicable date on which to
do so.
Part 2 Related amendments
Amendments of the Income Tax Assessment Act 1936
A taxpayer's dependants' Separate Net Income (SNI) is used to determine the
taxpayer's eligibility to certain dependant offsets. SNI is income and other
specified amounts earned, derived or received, less certain expenses incurred
in earning that income. A payment of carer allowance is not included as part
of SNI. As it is not intended that any of the 2005 one-off payments to carers
form part of SNI, items 10 and 11 make the necessary amendments to the
Income Tax Assessment Act 1936.
Amendments of the Income Tax Assessment Act 1997
The 2005 one-off payments to carers, and a payment made under the
scheme determined under Schedule 2 to this Bill, will be exempt from income
tax. Amendments are made to section 52-10 of the Income Tax Assessment
Act 1997 to achieve this effect (items 13 to 15).
A consequential amendment is also made to the table in section 11-15 to add
in references to the 2005 one-off payments to carers and a payment made
under the scheme determined under Schedule 2 to this Bill (item 12).
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Amendments of the Social Security Act 1991
Item 16 inserts a new paragraph 8(8)(jac) into the Social Security Act. This
ensures that any payment made under the arrangements determined under
Schedule 2 to this Bill, do not count as income for the purposes of the social
security law.
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Schedule 2 Administrative scheme for 2005 one-off payments to carers
Summary
This Schedule contains provisions to enable an administrative scheme to be
established. In broad terms, the purpose of the administrative scheme will be
to provide payments in circumstances where the statutory one-off payments
regime provided for in Schedule 1 does not produce an appropriate result in
relation to circumstances that occur in the 2004-05 income year. The
Minister for Family and Community Services will determine the details of the
scheme by legislative instrument.
Background
This Schedule enables an administrative scheme to be established alongside
the statutory one-off payment scheme.
Explanation of changes
Item 1 provides for the establishment of an administrative scheme by the
Minister for Family and Community Services by legislative instrument, under
which one-off lump sum payments can be made to carers in specified
circumstances. The purpose of the scheme is to provide payments in
circumstances where the statutory one-off payments regime does not produce
an appropriate result in relation to circumstances that occur in the 2004 - 05
income year.
The details of the administrative scheme (including such matters as eligibility,
amount of the payment and administrative matters) would be set out in a
disallowable instrument.
Payments under the administrative scheme would be made out of the
Consolidated Revenue Fund (in accordance with subitem 1(4)).
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