Opposition amendments passed by the Senate will remove the proposed freeze on the indexation of the Child Care Rebate. The rebate covers 50% of out of pocket child care expenses, up to a maximum amount per child per year.
The bill as originally introduced proposed to set the annual child care rebate limit at $7500 for three income years starting from 1 July 2014, with the first indexation of this amount not to occur until 1 July 2017.
As a result, an individual would have been able to receive up to the maximum amount of $7500 per child per financial year for out-of-pocket child care costs for those three income years.
However, Opposition amendments agreed to by the Senate (and subsequently agreed to by the House) mean that the three year indexation freeze will not apply, and therefore the indexation of the rebate will continue.
The rebate can be paid either:
With effect from 1 July 2014 (instead of the originally announced 1 March 2014), the current Paid Parental Leave legislation was to have been amended to remove the requirement for employers to provide government-funded parental leave pay to their eligible long-term employees. From 1 July 2014, employees were to be paid directly by the Department of Human Services, unless an employer opts in to provide parental leave pay to its employees and an employee agrees for their employer to pay them.
Under the bill, the government was seeking to remove the mandatory employer role from the PPL scheme, and give that function to Centrelink and the Department of Human Services, although employers would still be able to opt in to provide parental leave pay to their employees if both the employer and the employee agree to this arrangement. Opposition amendments were passed by the Senate that sought to limit the applicability of this measure to employers with 20 employees or fewer.
However, when the bill went back to the House of Representatives, the government decided to remove the PPL amendments entirely and it has now reintroduced them in a separate bill – the Paid Parental Leave Amendment Bill 2014 that was introduced on 19 March 2014. That bill proposes to ease administrative burdens on business by amending the PPL legislation to remove the requirement for employers to provide government-funded parental leave pay to their eligible long-term employees. From 1 July 2014, employees will be paid directly by the Department of Human Services, unless an employer opts in to provide parental leave pay to its employees and an employee agrees for their employer to pay them.
The Social Services and Other Legislation Amendment Bill 2013 also contains other important amendments that will align the income test treatment of account-based superannuation income streams, for products assessed from 1 January 2015, with the deemed income rules applying to other financial assets.
Terry Hayes is the editor-in-chief of tax news reporting at Thomson Reuters, a leading Australian provider of tax, accounting and legal information solutions.
Terry Hayes is the editor-in-chief of tax news reporting at Thomson Reuters, a leading Australian provider of tax, accounting and legal information solutions.
