Family assistance

196. The Commonwealth has provided family allowances since 1941.^[271] The current framework for family assistance comprises a range of payments and is primarily governed by two statutes: A New Tax System (Family Assistance) Act 1999 (Cth) and A New Tax System (Family Assistance) (Administration) Act 1999 (Cth). Family assistance payments play a significant role in supporting low-income families.^[272]

197. Mature age persons may be eligible for family assistance when they care for children—frequently grandchildren. In 2009–2010, there were 16,000 Australian families in which grandparents were raising children 17 years and younger.^[273] Arrangements for care may be formal (when carers have legal responsibility for children), or informal (by private agreement).^[274]

198. Mature age persons may also be eligible for family assistance as parents. The ALRC does not propose to identify and examine workplace barriers that may affect parents as a group. Reforms to address the workplace barriers faced by parents of all ages are beyond the scope of this Inquiry.

199. The two primary family assistance payments that grandparents and other mature age non-parent carers may be eligible for are Family Tax Benefit (FTB) and Child Care Benefit (CCB). FTB is comprised of two parts. FTB Part A is the ‘primary payment designed to help with the cost of raising children’.^[275] It is paid to eligible parents and carers for each dependent child. FTB Part B is a benefit for eligible single parent families and families with one primary income earner.

200. CCB assists with the costs of child care. It is discussed in detail below, as is Child Care Rebate (CCR), as both have specific policy objectives relevant to this Inquiry. Grandparents and other mature age carers may also be eligible for a range of other payments including: baby bonus; maternity immunisation allowance; and double orphan allowance.

201. The ALRC is interested in hearing from stakeholders whether any aspects of family assistance laws and payments operate as a barrier to mature age participation in the workforce or other productive work.

Child Care Benefit

202. CCB is an income-tested payment that assists eligible parents and non-parent carers with the cost of child care.^[276] Other CCB objectives are to provide incentives for parents and carers with low and middle incomes to participate in the workforce and community, and to support parents and carers to ‘balance work and family commitments’.^[277]

203. CCB is available to parents or carers responsible for child care costs where their children attend approved child care services,^[278] including: long day care services; family day care services; in-home care services; occasional care services; and outside school hours care services.^[279]

204. Most parents and carers and their partners must meet a work/training/study test to receive up to 50 hours of CCB a week when children are cared for by approved child care services. To satisfy the test, parents and carers must undertake 30 hours per fortnight of work, training or study. If they do not meet this test, they may receive CCB at a lower weekly limit of 24 hours.^[280]

205. The work/training/study test does not apply to grandparents who are the ‘principal carers’ of a child in approved care.^[281] Grandparent principal carers may therefore receive up to 50 hours weekly CCB without meeting this test.^[282] ‘Principal carers’ are sole or major providers of ongoing daily care who make day-to-day decisions about the child.^[283] ‘Grandparent’ is defined broadly to mean the ‘natural, adoptive or step grandparent or great grandparent of the grandchild’. It also includes a grandparent’s or great-grandparent’s current or former partner.^[284]

206. The ALRC is interested in stakeholder views about the grandparents’ exception to the work/training/study test—in particular whether this amounts to a disincentive to participation in work or work-related activities. However, removing this exception may dismantle a source of financial support for mature age persons who are principal carers of grandchildren. This is of concern given that children may be out of their parents’ care for reasons including: family violence; drug or alcohol misuse; child abuse or neglect; the incarceration or death of a parent; and due to problems arising from mental or physical illness or intellectual disability.^[285]

Child Care Rebate

207. CCR covers 50% of out-of-pocket child care expenses for approved child care up to a maximum legislated amount per year (currently $7,500 per child).^[286] CCR is not income tested. As the Family Assistance Guide explains, the policy aims of CCR are to:

• assist families with the cost of approved child care,
• provide incentives for families with dependent children to participate in the community, and
• support parents in balancing work and family commitments.^[287]

208. Parents and carers who are eligible for CCB are also eligible for CCR, even if their CCB entitlement is nil due to their income.^[288] As for CCB, applicants and their partners must meet a work/training/study test to be eligible for CCR. Applicants and their partners are not required to meet a minimum number of hours to satisfy this test—they need only have a work, or work-related commitment (as provided for in the legislation and the Family Assistance Guide) at some point during the week for which CCR is claimed.^[289] As for CCB, grandparents and great grandparents who are principal carers are not required to meet this test to receive CCR.^[290]

209. The ALRC is interested in hearing from stakeholders about the exception to the work/training/study test for grandparents for CCR—in particular whether this is a disincentive to community participation, insofar as this relates to work or voluntary work.