Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Act 2015
No. 159, 2015
An Act to amend the law relating to social security, and for related purposes
[Assented to 26 November 2015]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Social Services Legislation Amendment (More Generous Means Testing for Youth Payments) Act 2015.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
| Commencement information |
| Column 1 | Column 2 | Column 3 |
| Provisions | Commencement | Date/Details |
| 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day this Act receives the Royal Assent. | 26 November 2015 |
| 2. Schedule 1, items 1 to 18 | 1 January 2016. | 1 January 2016 |
| 3. Schedule 1, item 19 | The later of: (a) the start of 1 January 2016; and (b) immediately after the commencement of item 2 of Schedule 5 to the Social Services Legislation Amendment (Youth Employment and Other Measures) Act 2015. However, the provisions do not commence at all if the event mentioned in paragraph (b) does not occur. | Never commenced |
| 4. Schedule 1, item 20 | 1 January 2016. | 1 January 2016 |
| 5. Schedule 1, Part 2 | 1 July 2016. | 1 July 2016 |
| 6. Schedule 1, Part 3 | 1 January 2017. | 1 January 2017 |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Schedules
Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Amendments
Part 1—Parental means testing for youth allowance
Social Security Act 1991
1 Section 10B
Repeal the section.
2 Subsection 547B(2)
Repeal the subsection, substitute:
(2) A person is excluded from the application of the youth allowance assets test if the person is not independent.
3 Paragraph 547C(a)
Repeal the paragraph.
4 Subparagraphs 547C(b)(i), (c)(i), (d)(i) and (e)(i)
Repeal the subparagraphs.
5 Section 547C (note 2)
Omit “amount in paragraph (a) is indexed annually on 1 January and the”.
6 Section 547D
Repeal the section, substitute:
547D Value of person’s assets to include value of assets of partner in certain circumstances
The value of a person’s assets is the sum of the following values:
(a) the value of the person’s assets (disregarding paragraph (b) and Part 3.18);
(b) if the person is a member of a couple (see section 4)—the value of the assets of the person’s partner (disregarding Part 3.18).
Section 547E applies for the purpose of working out the value of the assets of the person and of any other person who is the partner of the person.
7 Section 547G
Repeal the section.
8 Point 1067G‑A1 (method statement, step 10)
Repeal the step.
9 Point 1067G‑A1 (method statement, step 13, paragraph (b))
Repeal the paragraph.
10 Point 1067G‑A1 (method statement, step 13)
Omit “or (b)” (wherever occurring).
11 Paragraph 1067G‑F3(d)
Omit “1061ZK(5); or”, substitute “1061ZK(5).”
12 Paragraph 1067G‑F3(e)
Repeal the paragraph.
13 Point 1067G‑F10 (note 1)
Omit “or received (see points 1067G‑F20 and 1067G‑F21)”, substitute “(see point 1067G‑F20)”.
14 Point 1067G‑F21
Repeal the point.
15 Section 1067G (Module G of the Youth Allowance Rate Calculator)
Repeal the Module.
16 Section 1067G (table item 11 in Module L of the Youth Allowance Rate Calculator)
Repeal the item.
17 Section 1190 (table item 33A)
Repeal the item.
18 Subsection 1191(1) (table item 24)
Repeal the item.
19 Subsection 1192(5AAB)
Omit “, 15 and 24”, substitute “and 15”.
20 Application provision
The amendments made by this Part apply in relation to working out whether youth allowance is payable, or the rate of youth allowance, for days on or after the commencement of this item.
Part 2—Adding FTB children to the parental pool for youth allowance
Social Security Act 1991
21 Point 1067G‑F26 (note)
Repeal the note, substitute:
Note: See also points 1067G‑F30 and 1067G‑F31, which extend the situations in which a person will have parental income in common with other persons.
22 Points 1067G‑F31 and 1067G‑F32
Repeal the points, substitute:
Extension to FTB children and regular care children
1067G‑F31 In working out a person’s (the recipient’s) reduction for parental income for the purposes of this Module:
(a) an FTB child, or a regular care child, of someone who is a parent of the recipient is taken to be a person (a relevant sibling) who has parental income in common with the recipient; and
(b) in using the formula in point 1067G‑F28 for the recipient, the maximum payment rate for relevant siblings is 14/365 of the amount worked out under point 1067G‑F32.
Note: For FTB child and regular care child, see section 23.
1067G‑F32 For the purposes of paragraph 1067G‑F31(b), the amount worked out under this point is the amount that would, at the time the recipient’s rate of youth allowance is worked out, be the parent’s maximum rate:
(a) under step 1 of the method statement in clause 3 of Schedule 1 to the Family Assistance Act (having regard only to clauses 7 and 11 for the purposes of paragraph (a) of that step); or
(b) if the only relevant sibling is a regular care child—under step 1 of the method statement in clause 28A of Schedule 1 to the Family Assistance Act.
1067G‑F33 In working out the parent’s maximum rate for the purposes of point 1067G‑F32:
(a) assume that the parent has made a claim for payment of family tax benefit by instalment in accordance with the Family Assistance Administration Act; and
(b) assume that the parent has not made an election under subsection 58A(1) of the Family Assistance Act; and
(c) make any other assumption that the Minister, by legislative instrument, specifies.
1067G‑F34 Work out the amount under point 1067G‑F32 for one parent only.
1067G‑F35 Count the amount worked out under point 1067G‑F32 once only in using the formula in point 1067G‑F28 for a recipient, regardless of how many relevant siblings the recipient has.
23 Application provision
The amendments made by this Part apply in relation to working out rates of youth allowance for days on or after the commencement of this item.
Part 3—Maintenance income test for youth allowance recipients
Social Security Act 1991
24 Point 1067G‑A1 (method statement, step 8)
Repeal the step, substitute:
Step 8. If the person is not independent, work out the person’s reduction for parental income using Module E.
25 After Module D of the Youth Allowance Rate Calculator
Insert:
Module E—Person’s reduction for parental income
Person’s reduction for parental income
1067G‑E1 This is how to work out the person’s reduction for parental income for the purposes of the method statement in point 1067G‑A1.
Method statement
Step 1. Work out the MIT reducible amount by subtracting the base FTB child rate in point 1067G‑E2 from the maximum FTB child rate in point 1067G‑E3.
Step 2. Apply the parental income test in Module F to work out the parental income test result for the person.
Step 3. If the parental income test result is equal to or more than the MIT reducible amount, the person’s reduction for parental income is the parental income test result.
Step 4. If the parental income test result is less than the person’s MIT reducible amount, apply the maintenance income test in Module GA to work out the maintenance income test result for the person.
Step 5. Add the parental income test result to the maintenance income test result to get the person’s notional reduction.
Step 6. If the notional reduction is less than or equal to the MIT reducible amount, the person’s reduction for parental income is the notional reduction.
Step 7. If the notional reduction is more than the MIT reducible amount, the person’s reduction for parental income is the MIT reducible amount.
Base FTB child rate
1067G‑E2 The base FTB child rate is the amount that would be the base FTB child rate within the meaning of the Family Assistance Act, if the person were an FTB child of a parent of the person.
Maximum FTB child rate
1067G‑E3 The maximum FTB child rate is the amount specified for item 2 in column 2 of the table in clause 7 of Schedule 1 to the Family Assistance Act.
Note: The amount is indexed under Schedule 4 of the Family Assistance Act.
26 Heading to Submodule 1 of Module F of the Youth Allowance Rate Calculator
Repeal the heading, substitute:
Submodule 1—Parental income test result
27 Point 1067G‑F1
Repeal the point, substitute:
Parental income test result
1067G‑F1 This is how to work out the parental income test result for a person for the purposes of the method statement in point 1067G‑E1.
Method statement
Step 1. Work out whether the person is exempt from the parental income test using Submodule 2. If the person is exempt, go to step 5.
Step 2. If the person is not exempt, identify the appropriate tax year using Submodule 3.
Step 3. Work out the person’s combined parental income for the appropriate tax year using Submodule 4.
Step 4. Work out the person’s parental income free area using Submodule 5.
Step 5. If:
(a) the person’s combined parental income does not exceed the person’s parental income free area; or
(b) the person is exempt from the parental income test;
then the parental income test result for the person is nil.
Step 6. If the person’s combined parental income exceeds the person’s parental income free area, then the parental income test result for the person is the amount worked out using Submodule 6.
28 Heading to Submodule 2 of Module F of the Youth Allowance Rate Calculator
Repeal the heading, substitute:
Submodule 2—Exemption from parental income test
29 Point 1067G‑F2
Repeal the point.
30 Point 1067G‑F3
Omit “The parental income test does not apply to the person”, substitute “A person is exempt from the parental income test”.
31 Point 1067G‑F10 (note 1)
Repeal the note.
32 Heading to Submodule 6 of Module F of the Youth Allowance Rate Calculator
Repeal the heading, substitute:
Submodule 6—If person’s combined parental income exceeds parental income free area
33 Point 1067G‑F27
Omit “reduction for parental income” (wherever occurring), substitute “parental income test result”.
34 Point 1067G‑F28
Omit “reduction for parental income”, substitute “parental income test result”.
35 Heading to point 1067G‑F29
Repeal the heading, substitute:
Rounding the parental income test result
36 Point 1067G‑F31
Omit “reduction for parental income”, substitute “parental income test result”.
37 After Module F of the Youth Allowance Rate Calculator
Insert:
Module GA—Maintenance income test
Submodule 1—Maintenance income test result
Maintenance income test result
1067G‑GA1 This is how to work out the maintenance income test result for a person for the purposes of the method statement in point 1067G‑E1.
Method statement
Step 1. Work out whether the person is exempt from the maintenance income test using Submodule 2. If the person is exempt, go to step 5.
Step 2. If the person is not exempt, work out the annualised amount of maintenance income for a parent of the person (the parent’s maintenance income) using Submodule 3.
Step 3. Work out the parent’s maintenance income free area using Submodule 4.
Step 4. Work out whether the parent’s maintenance income exceeds the parent’s maintenance income free area.
Step 5. If:
(a) the parent’s maintenance income does not exceed the parent’s maintenance income free area; or
(b) the person is exempt from the maintenance income test;
then the maintenance income test result for the person is nil.
Step 6. If the parent’s maintenance income exceeds the parent’s maintenance income free area, multiply the excess by 0.5. The result, divided by 26, is the maintenance income test result for the person.
Submodule 2—Exemption from maintenance income test
Parent exempt from FTB maintenance income test
1067G‑GA2 A person is exempt from the maintenance income test if paragraphs 19B(a) and (b) of Schedule 1 to the Family Assistance Act apply to the person’s parent or to the parent’s partner.
Submodule 3—Annualised amount of maintenance income for parent of a person
Annualised amount of maintenance income
1067G‑GA3 Work out the annualised amount of maintenance income for a parent of the person as if step 1 of the method statement in clause 20 of Schedule 1 to the Family Assistance Act applied. In doing so:
(a) assume that the person is an FTB child of the parent; and
(b) assume that paragraphs (a), (b), (c) and (d) are not in the step; and
(c) only take into account maintenance income received in relation to the person; and
(d) in working out whether maintenance income is received in relation to the person, have regard to the considerations that would apply under the Family Assistance Act; and
(e) have regard to maintenance income for the income year in respect of which the person’s rate of youth allowance is being worked out.
Submodule 4—Maintenance income free area
Main rule
1067G‑GA4 The maintenance income free area for a parent of a person is:
(a) the column 2 amount (see point 1067G‑GA7); or
(b) if another point in this Submodule applies—the amount worked out in the point.
If there are other siblings including an FTB child
1067G‑GA5 This point applies if the parent of the person is also the parent of:
(a) an FTB child in relation to whom the parent receives maintenance income; or
(b) both:
(i) an FTB child in relation to whom the parent receives maintenance income; and
(ii) another person who is receiving youth allowance and in relation to whom the parent receives maintenance income.
The maintenance income free area for the parent is the column 3 amount (see point 1067G‑GA7).
If there are other siblings but no FTB child
1067G‑GA6 This point applies if the parent of the person:
(a) is also the parent of another person (an other recipient) who is receiving youth allowance and in relation to whom the parent receives maintenance income; and
(b) is not the parent of an FTB child in relation to whom the parent receives maintenance income.
The maintenance income free area for the parent is worked out using this formula:
Definitions of column 2 amount and column 3 amount
1067G‑GA7 In this Submodule:
column 2 amount means the amount specified for item 1 in column 2 of the table in clause 22 of Schedule 1 to the Family Assistance Act.
column 3 amount means the amount specified for item 1 in column 3 of the table in clause 22 of Schedule 1 to the Family Assistance Act.
Note: The amounts are indexed under Schedule 4 of the Family Assistance Act.
Receiving maintenance income in relation to a person
1067G‑GA8 In working out whether a parent of a person receives maintenance income in relation to an FTB child or other person, have regard to the considerations that would apply under the Family Assistance Act.
Social Security (Administration) Act 1999
38 Subsection 109(6)
Omit “section 110A applies”, substitute “section 109A or 110A apply”.
39 After section 109
Insert:
109A Date of effect of determination under section 78 resulting from review required by section 126A
If the Secretary makes a determination under section 78 (rate increase determination) as a result of a review required by section 126A (review of determination of youth allowance rate in relation to maintenance income), the determination takes effect:
(a) unless paragraph (b) applies—on the date that would give full effect to the decision on review; or
(b) if the date referred to in paragraph (a) is earlier than the first day of the income year before the income year in which the review decision was made—that first day.
40 Subsection 110(1)
Omit “(11)”, substitute “(11A)”.
41 After subsection 110(11)
Insert:
(11A) If the Secretary makes a determination under section 78 (rate increase determination) as a result of a revised estimate of maintenance income for a parent of a person as referred to in section 123AA, the determination takes effect on the day the revised estimate was made by, or given to, the Secretary.
42 Subsection 114(1)
After “109,”, insert “109A,”.
43 Subsection 118(2)
Omit “and (2C)”, substitute “, (2C), (2D) and (2E)”.
44 After subsection 118(2C)
Insert:
(2D) If the Secretary makes a determination under section 79 (rate reduction determination) as a result of a revised estimate of the amount of maintenance income for a parent of a person as referred to in section 123AA, the determination takes effect on the day the revised estimate was made by, or given to, the Secretary.
(2E) If the Secretary makes a determination under section 79 (rate reduction determination) as a result of a review required by section 126A (review of determination of youth allowance rate in relation to maintenance income), the determination takes effect on the date that would give full effect to the decision on review.
45 At the end of Part 3
Add:
Division 11—Estimates and verification of maintenance income for Youth Allowance Rate Calculator
123AA Estimate of maintenance income for Youth Allowance Rate Calculator
(1) In working out the annualised amount of maintenance income for the parent of a person for the purposes of the maintenance income test in Module GA of the Youth Allowance Rate Calculator in section 1067G of the 1991 Act, the Secretary may have regard to an estimate of the amount of maintenance income for a period made by, or given to, the Secretary, if the Secretary is satisfied that the estimate is reasonable.
(2) If the Secretary has no reason to believe that there is any amount of maintenance income for the parent of the person for the period, the Secretary is taken to have had regard to an estimate of nil.
123AB Verification of maintenance income for Youth Allowance Rate Calculator
(1) The method statement in this section applies if the Secretary is required by section 126A to review one or more decisions determining a rate of youth allowance for a person for a period or periods in an income year.
Method statement
Step 1. Work out the amount of maintenance income for a parent of the person for the income year using the information referred to in paragraph 126A(c). In doing so:
(a) assume that the person is an FTB child of the parent for the year; and
(b) only take into account maintenance income received in relation to the person; and
(c) in working out whether maintenance income is received in relation to the person, have regard to the considerations that would apply under the Family Assistance Act.
This amount is the parent’s actual maintenance income for the income year.
Step 2. Work out the annualised maintenance income free area for the parent for the income year under section 123AC.
Step 3. Go to:
(a) subsection (2) if the actual maintenance income is equal to or more than the annualised maintenance income free area but no more than 125% of the annualised maintenance income free area; or
(b) subsection (3) if the actual maintenance income is less than the annualised maintenance income free area; or
(c) step 4 if the actual maintenance income is more than 125% of the annualised maintenance income free area.
Step 4. If the actual maintenance income is more than 125% of the annualised maintenance income free area, work out the annual amount of estimated maintenance income for the parent under section 123AD.
Step 5. Go to:
(a) subsection (2) if the actual maintenance income is equal to or more than the annual amount of estimated maintenance income but no more than 125% of the annual amount of estimated maintenance income; or
(b) subsection (3) in any other case.
(2) If the method statement says go to this subsection, the Secretary must affirm the decision or decisions under review.
(3) If the method statement says go to this subsection, the Secretary must recalculate the person’s rate of youth allowance having regard to the parent’s actual maintenance income for the income year and vary or substitute the decision or decisions under review accordingly.
123AC Annualised maintenance income free area
For the purposes of the method statement in section 123AB, work out the annualised maintenance income free area for a parent of the person for the income year using this method statement.
Method statement
Step 1. Using Submodule 4 of Module GA of the Youth Allowance Rate Calculator in section 1067G of the 1991 Act, work out whether the maintenance income free area (the MIFA) for the parent was the same on all days in the income year. If it was, then that MIFA is the annualised maintenance income free area for the parent for the income year.
Step 2. If the MIFA for the parent was not the same on all days in the income year, work out for how many days in the income year each MIFA applied.
Step 3. Work out the MIFA share for each such period by using this formula:
Step 4. Add up the MIFA share for each such period in the income year. The result is the annualised maintenance income free area for the parent for the income year.
123AD Annual amount of estimated maintenance income
For the purposes of the method statement in section 123AB, work out the annual amount of estimated maintenance income for a parent of a person using this method statement.
Method statement
Step 1. For each estimate of maintenance income of a parent of a person that applied in relation to a period in the income year, work out the annualised estimate by multiplying the amount of the estimate by:
Step 2. For each annualised estimate worked out in step 1 for the income year, work out the period estimate by multiplying the annualised estimate by:
Step 3. Add up all the period estimates for periods that occurred in the income year. This is the annual amount of estimated maintenance income for the parent for the income year.
46 After section 126
Insert:
126A Review of determination of youth allowance rate in relation to maintenance income
The Secretary must review a decision under section 126 if:
(a) the decision is a determination of the rate of youth allowance payable to a person for a period in an income year; and
(b) in making the determination, the Secretary had regard to an estimate of the amount of maintenance income for a parent of the person; and
(c) at a time after the end of the income year, the Secretary becomes satisfied that the Secretary has sufficient information to work out the annualised amount of maintenance income for the parent for the income year for the purposes of point 1067G‑GA1 of the Youth Allowance Rate Calculator in section 1067G of the 1991 Act, without regard to an estimate.
Note: Section 123AB (verification of maintenance income) applies to the review of the decision.
47 Application provision
The amendments made by this Part apply in relation to working out rates of youth allowance for days on or after the commencement of this item.
[Minister’s second reading speech made in—
House of Representatives on 10 September 2015
Senate on 10 November 2015]