Family Tax Benefit

Background

12.13 FTB is an income-tested payment for eligible parents and carers. FTB includes two parts: FTB Part A and FTB Part B.

12.14 Family Tax Benefit Part A (FTB Part A) is the ‘primary payment designed to help with the cost of raising children’.^[23] It is paid to eligible parents and carers for each dependent child or, in some circumstances, each dependent full-time student. The amount of FTB Part A payable to a family is assessed according to the number of children, the age of children, and the family’s income.

12.15 FTB Part B is a benefit for eligible single parent families and families with one primary income earner. The rate of FTB Part B depends on the age of the youngest child and, in families with two working parents, the income of the parent who is the secondary income earner.^[24]

12.16 FTB is paid for dependent children under the age of 16 and, in certain circumstances, for dependent children over the age of 16.^[25] Parents and carers must provide at least 35% of a child’s care to receive FTB.^[26] When more than one person provides care for a child, and they are not members of the same couple, FTB payments can be shared.^[27]

12.17 The ALRC has identified several ways that FTB-related legislation and policy may affect victims of family violence, namely:

• policies regarding the payment of FTB in cases of informal care, when a child has experienced family violence;
• exemptions from tax file number requirements;
• determinations of percentage of care, discussed in Chapter 11; and
• the requirement for recipients of more than base rate FTB to obtain child support where eligible (take reasonable maintenance action), discussed in Chapters 9 and 11.

Children in formal and informal care

Formal and informal care

12.18 The Family Assistance Guide distinguishes between formal and informal care. Formal care occurs where there is a change in legal responsibility for the child, usually under state and territory care and protection legislation. People who provide formal care are generally foster carers. Other formal carers may have parenting orders under the Family Law Act 1975 (Cth).^[28]

12.19 Informal care is ‘a private agreement between the parent and another party, where there is no change to any form of legal responsibility’.^[29] The Family Assistance Guide also provides that where a child protection agency ‘facilitates the placement of a child but does not gain legal responsibility it is considered informal care’.^[30] Grandparents, relatives and family friends are identified in the Family Assistance Guide as persons who usually provide informal care.^[31]

Informal carers

12.20 Chapter 10 discusses evidence in relation to informal carers. In brief, informal carers are most commonly grandparents. There are many reasons for informal care arrangements, including, for example, family violence, child abuse, neglect, drug or alcohol misuse, parental death or incarceration, and problems arising from mental or physical illness or intellectual disability. In some cases, children in informal care may be traumatised or otherwise vulnerable. Children may benefit from being cared for by relatives when parental care has broken down. However, caring for children may impose a considerable financial burden on informal carers, and having access to FTB or child support may go some way to meeting it.

12.21 Informal carers face a number of barriers in relation to entitlements such as FTB and child support. In a 2010 report prepared for FaHCSIA, the Social Policy Research Centre reported that grandparents often do not receive the payments they are eligible for, such as FTB,

either because they cannot prove their eligibility, or because they are reluctant to claim these benefits for fear that the biological parents will reclaim the children if family payments are at stake. In some cases grandparents may also fear ‘retribution, i.e. increased family violence or conflict’.^[32]

12.22 As discussed in Chapter 10, a further barrier to entitlements such as FTB is that grandparents may be wary of drawing attention to or attract oversight of their care arrangements, and may be concerned that children will be removed from their care as a result of the involvement of state and territory child protection agencies.^[33]

12.23 Lack of information for informal carers may also constitute a barrier. The Social Policy Research Unit identified a possible ‘information gap about income support entitlements’, stating that some grandparents find it difficult to obtain information about entitlements and support services.^[34]

Changes to care

12.24 Family assistance legislation and the Family Assistance Guide set out the effect on FTB payments when there is a change in care, and a child is no longer cared for by their original carer.^[35] The original carer is likely to be the child’s parent or parents.

12.25 Where possible, FTB is paid to the person providing actual care for the child.^[36] When a person no longer has care of a child, he or she is required to notify the FAO.^[37]

12.26 In some cases, the original carer may continue to receive FTB where the child is not in his or her care. Generally the original carer should not receive FTB for more than a four-week period in these circumstances.^[38] However, if the original carer has legal responsibility for the child, but the child is removed without his or her consent or legal authority, and he or she is taking reasonable steps to regain care of the child, the original carer may receive FTB for up to 14 weeks.^[39]

12.27 Informal carers can obtain FTB when their care of a child is ongoing:

When it is clear from the outset that a child will be in ongoing care, then the carer will be eligible for FTB from the date the child enters their care. When care has been on a temporary and short-term basis and it subsequently becomes ongoing, a change of care applies at the point it becomes ongoing and FTB may be payable.^[40]

Informal care not in child’s best interests

12.28 The Family Assistance Guide provides principles for dealing with cases when informal care arrangements may not be in the best interests of a child.^[41] It states that a case should be referred to a social worker where:

• the child is not a family member of the person claiming FTB or a social security payment that is dependent on the provision of care for a child, and
• the person has not supplied documentation to support that the child is legally in his or her care, or
• the person has previously lost care of children.^[42]

12.29 Examples are provided of care arrangements that may not be in the child’s best interests—such as those in which the child’s well-being or daily needs are disregarded, the child is exposed to drugs or alcohol, or there is a ‘lack of guidance and oversight’.^[43] Family violence is not specifically mentioned in the Family Assistance Guide.

12.30 The Family Assistance Guide prescribes a broad role for Centrelink social workers in cases where a child is at risk. It includes obtaining information about the reason for the change in care and how long the arrangement is likely to last, contacting the original carer, and making a recommendation to the FAO about FTB and other payments. Social workers may also seek approval to disclose information to a state welfare authority.^[44] The ALRC understands that Centrelink social workers may also provide support services to carers and children in these circumstances. Where the child is Indigenous or a refugee child, social workers are required to consult with Indigenous Service Officers (ISOs) and Multicultural Service Officers (MSOs).^[45]

12.31 The Family Assistance Guide provides that where FTB to the original carer is cancelled due to a change to informal care, it should be cancelled only after the social worker has made a recommendation. The social worker’s recommendations must be given ‘due weight’.^[46]

Submissions and consultations

12.32 In the Family Assistance Issues Paper, the ALRC asked whether reforms are needed to:

• ensure that the Family Assistance Office identifies, and refers to social workers, cases in which children living in informal care may be at risk of harm because of family violence;^[47] and
• improve the safety of children considered at risk of family violence, when the Family Assistance Office, due to a change in care, cancels a former carer’s Family Tax Benefit, or starts paying Family Tax Benefit to a new carer.^[48]

12.33 Stakeholder comment regarding these questions was limited. For example, the Australian Domestic and Family Violence Clearinghouse (ADFVC) considered that family violence should be included as an example of where care arrangements are not in a child’s best interest.^[49] Another stakeholder stated that, where family violence is identified, cases should be referred to a social worker.^[50] National Legal Aid suggested specific referencing of family violence in the Family Assistance Guide, and appropriate education and training about family violence including screening and risk assessment processes.^[51]

ALRC’s views

12.34 The ALRC considers it unnecessary for the Family Assistance Guide to include family violence as a specific example of where informal care arrangements are not likely to be in a child’s best interests. In such circumstances, children may be more likely to be at risk of family violence in the home of their parents—indeed, this may be the underlying reason for a change to informal care arrangements. Consequently, the ALRC does not propose change to the Family Assistance Guide, particularly given that the list of examples it provides is not exhaustive, and family violence may be considered where necessary.

12.35 Informal carers of children who have experienced family violence may choose not to obtain entitlements for reasons discussed above and in Chapter 10. However, when they choose to obtain entitlements, they should be supported in accessing FTB. The ALRC considers that the accessibility of FTB should be improved for informal carers of children who have experienced family violence, including measures to address the ‘information gap’ about the availability of FTB.

12.36 The proposals for reform in Chapter 4 may improve FTB accessibility for informal carers of children who have experienced family violence, and also assist them to access support services. The proposed reforms would operate so that, where informal carers apply for FTB, Centrelink will screen for family violence.^[52] When carers disclose family violence—through the screening process or otherwise—they will be referred to a Centrelink social worker.^[53]

12.37 The screening and referral proposals apply not only to informal carers who apply for FTB, but to all Centrelink, CSA and FAO customers. This means that even when an informal carer is not an FTB applicant or recipient, she or he may be referred to a Centrelink social worker. The Centrelink social worker should provide referrals, and inform him or her of support services and FTB entitlements—as well as any other relevant entitlement, such as Grandparent Child Care Benefit.

12.38 Further, the proposed reforms would also ensure that all informal carers who are customers of Centrelink, the Child Support Agency or the FAO—including those who are not referred to social workers—are provided with the information and referrals described above.^[54]

12.39 These reforms are complemented by proposals about training for agency staff. The ALRC has suggested multifaceted training that should improve staff skills and knowledge base, including:

• family violence screening;
• making appropriate referrals to other services;
• the services that may be provided by the agency; and
• the nature, features and dynamics of family violence, and its impact on victims, in particular those from high risk and vulnerable groups.^[55]

12.40 The ALRC considers that this package of reforms should improve FTB accessibility for informal carers of children who have suffered family violence. It should also improve accessibility to entitlements generally across family assistance, child support and social security frameworks. These reforms should also improve the safety of informal carers and the children they care for, by facilitating referrals to appropriate supports—for example, legal referrals where state and territory family violence protection orders are required.

Exemptions from tax file number requirements

Background

12.41 The Family Assistance (Administration) Act provides that an individual applying for FTB must provide both a tax file number (TFN)^[56] and a TFN for his or her partner during the relevant payment period.^[57] If an applicant either does not know his or her TFN or is currently applying for one, then the person may authorise the Commissioner of Taxation to share his or her TFN with the FAO and file a statement to that effect.^[58] The Act provides for an exemption from the requirement for applicants to provide their partners’ TFN, or partners’ authorisation for the ATO to provide the TFN, where applicants cannot obtain these from their partners.^[59]

12.42 The Family Assistance Guide describes the limited circumstances in which an individual may qualify for an exemption, including where a partner is violent, imprisoned for life, or seriously ill or disabled.^[60] In particular, an indefinite exemption may be granted when the applicant has a

well based reason to believe that as a result of their request to the partner for TFN information:

• the partner could become violent to the applicant or a child, or
• there would be other concerns for the safety or the health of the applicant or a child.^[61]

12.43 The Family Assistance Guide provides that these cases are determined on request. Requests are referred to a social worker or an ISO for advice and assistance.^[62]

Submissions and consultations

12.44 In the Family Assistance Issues Paper, the ALRC asked whether

• improvements are needed to ensure that applicants for family assistance are aware of, and using, the exemption from providing their partners’ tax file numbers in cases of family violence; and

• the Family Assistance (Administration) Act should expressly refer to family violence as an example for an indefinite exemption.^[63]

12.45 Stakeholders who responded to these questions commented that persons who use family violence may withhold necessary information as a means of control,^[64] and that victims may be unaware of the exemption.^[65] The Office of the Commonwealth Ombudsman similarly stated that customers do not realise that family violence may be a relevant factor in determining entitlements and exemptions in relation to family assistance, such as the exemption from providing a partner’s TFN.^[66]

12.46 The ADFVC referred to its suggestions about providing information to victims of family violence—discussed in Chapter 4—in order to increase awareness of the exemption. It considers that this information should be provided to customers when they first disclose family violence to Centrelink, the Child Support Agency (CSA) and the FAO.^[67] The Ombudsman suggested an active screening process, combined with general information to customers in claim forms, payment information booklets and letters may assist to better educate customers.^[68]

12.47 Additionally, three stakeholders stated that an indefinite family violence exemption should be provided for in the legislation.^[69]

ALRC’s views

12.48 The reforms in Chapter 4 should increase awareness about, and therefore the accessibility of, the exemption to tax file number requirements. In particular, Proposal 4–8 provides that allcustomers should be informed of how family violence is relevant to family assistance, and should be given information about exemptions.

12.49 The ALRC considers that details about the indefinite family violence exemption are suitably placed in the Family Assistance Guide, and therefore it is unnecessary to amend the Family Assistance (Administration) Act. However, the exemption in the Family Assistance Guide is somewhat narrow, insofar as it refers to ‘violence’, rather than ‘family violence’.

12.50 The ALRC considers that the Family Assistance Guide should explicitly refer to family violence. This captures a broader range of conduct than ‘violence’, insofar as that conduct is violent, threatening, controlling, coercive or engenders fear. This proposed reform is complemented by Proposals 3–3, 3–4 and 12–1(a), which would set out a definition of family violence in family assistance legislation and the Family Assistance Guide. It is further complemented by Proposals 12–1(b) and 4–6, which state that the Family Assistance Guide should include a description of, and staff should receive training about, the nature, features, and dynamics of family violence.