Families Package (Income Tax and Benefits) Bill

  • enacted

Families Package (Income Tax and Benefits) Bill

Government Bill

4—1

Explanatory note

General policy statement

This Bill gives effect to policy changes announced in the Speech from the Throne. These form a Families Package of changes to income tax and benefits. The Families Package replaces part of the earlier Budget 2017 Family Incomes Package, which was mostly enacted in the Taxation (Budget Measures: Family Incomes Package) Act 2017.

Objectives

The Families Package is designed to provide targeted social assistance to improve incomes for low- and middle-income families with children, and to reduce child poverty. It is part of the Government’s focus on ensuring children get the best start in life, and complements other legislation to increase the number of weeks of paid parental leave from 1 July 2018 and 1 July 2020.

The Package also provides income support for some families without children through the reinstatement of the independent earner tax credit, the introduction of the Winter Energy Payment, and some changes to Accommodation Supplement.

The Families Package will:

  • repeal the tax threshold changes, reinstate the independent earner tax credit, and repeal Working for Families tax credit changes legislated as part of the Budget 2017 Family Incomes Package:

  • boost incomes for low- and middle-income families by increasing payments of family tax credit, and raising the Working for Families tax credit abatement threshold:

  • increase financial assistance provided to caregivers receiving Orphan’s Benefit and Unsupported Child’s Benefit:

  • introduce a Best Start tax credit to help families with costs in a child’s early years:

  • introduce a Winter Energy Payment to help older New Zealanders and those in receipt of a main benefit to heat their homes over winter:

  • implement changes to Accommodation Supplement.

The other measures announced as part of the Families Package, including changes to the Accommodation Supplement and Accommodation Benefit maximum rates of payment, are dealt with separately to this Bill through regulations (2 of which were enacted as part of the Budget 2017 Family Incomes Package and reconfirmed in the Families Package).

Specific changes

The following is a brief summary of the policy measures contained in this Bill.

Personal tax changes

This Bill repeals the personal tax changes enacted by the Taxation (Budget Measures: Family Incomes Package) Act 2017. This will allow for revenue to instead be targeted to various social assistance programmes through the income tax and benefit systems. The personal income tax thresholds from 1 April 2018 for the 2018–19 income year and later will be those currently applying for the 2017–18 income year. Repealing the current legislated change in tax thresholds, which would have applied from 1 April 2018, will change the tax thresholds as set out in Table 1.

Table 1: Personal income tax thresholds

Current legislated bracket from 1 April 2018 ($)New bracket from 1 April 2018 ($) Rate
1 – 22,0001 – 14,000 10.5%
22,001 – 52,000 14,001 – 48,000 17.5%
52,001 – 70,000 48,001 – 70,000 30%
70,001+ 70,001+ 33%

The consequential amendments that are in the Taxation (Budget Measures: Family Incomes Package) Act 2017 will be similarly repealed, including changes to fringe benefit tax attribution thresholds, employer superannuation contribution tax thresholds, portfolio investment entity thresholds, PAYE codes, non-filing thresholds, extra pays, and secondary tax. The uplift factor for individual provisional taxpayers who use the uplift method is also reinstated.

Independent earner tax credit

This Bill reinstates the independent earner tax credit from 1 April 2018 (which is the date it was going to be repealed). The independent earner tax credit will be reinstated as it is currently: an annual tax credit of $520 a year applying to individual incomes of $24,000 to $44,000 a year, and abated from $44,000 at a rate of 13% (fully abated by $48,000).

A person cannot claim the independent earner tax credit if they, or their partner, are eligible for a Best Start tax credit. This is achieved from defining a Best Start tax credit as a Working for Families tax credit in section MA 8 of the Income Tax Act 2007. The eligibility criteria for the independent earner tax credit already excludes people eligible for Working for Families tax credits.

Working for families tax credits

This Bill repeals the Working for Families tax credit changes enacted by the Taxation (Budget Measures: Family Incomes Package) Act 2017. As a result, the family tax credit amounts, Working for Families tax credit abatement rate, and threshold from 1 April 2018 will be the same as they were on 1 April 2017.

The abatement rate for the Working for Families tax credits will increase from 22.5% to 25% from 1 July 2018. For the 2018–19 tax year only, the abatement rate for the year will be 24.38%.

The abatement threshold for the Working for Families tax credits will increase from $36,350 a year to $42,700 a year from 1 July 2018. For the 2018–19 tax year only, the abatement threshold for the year will be $41,116.

As a consequence of the changes to abatement rate and abatement threshold, this Bill repeals sections in a number of Acts that were to phase the abatement rate up to 25% and the abatement threshold down to $35,000 over time. These sections are no longer required given the change in policy settings.

The consequential changes in the Taxation (Budget Measures: Family Incomes Package) Act 2017 for Working for Families tax credits around the indexation of family tax credits are re-enacted in this Bill. The date from which the Consumers Price Index: All Groups excluding cigarettes and tobacco is measured from is amended from 1 April 2018 to 1 July 2018 to reflect the new date on which the amounts of family tax credit are increased.

Family tax credit

This Bill will increase the family tax credit amounts from 1 July 2018. This will increase the interim weekly or fortnightly payments of family tax credit from 1 July 2018. It will also increase the annual entitlement amount for family tax credit, but not by the full amount in the 2018–19 tax year. The annual amount in the 2018–19 tax year will be an average of the 2 amounts reflecting the amounts are increasing part-way through the tax year. From the 2019–20 tax year onwards the annual amounts will be the same as the amounts listed for 1 July 2018 in the table below.

Table 2: Family tax credit amounts

1 April 2018 1 July 2018Annual amount for 2018–19 tax yearWeekly increase from 1 July 2018
Eldest child, 16-18$5,303$5,878 $5,734$11.06
Eldest child, 0-15$4,822$5,614$20.31
Subsequent child, 16-18$4,745 $4,745 $4,745
Subsequent child, 13-15$3,822$4,514$17.75
Subsequent child, 0-12$3,351$4,397$26.80

The combination of the increase in family tax credit amounts and increase in abatement threshold will mean a significant increase in payments to lower-income families with younger children.

Orphan’s benefit and unsupported child’s benefit

This Bill increases the rates of payment for the Orphan’s Benefit and Unsupported Child’s Benefit by $20.31 per week, from 1 July 2018. This increase reflects the increase in the eldest child amount of family tax credit for children aged 0-15 years old from the same date. There will be similar increases in the Foster Care Allowance paid to foster caregivers. No legislative changes are required to increase the rates of Foster Care Allowance as section 363 of the Oranga Tamariki Act 1989 gives the Chief Executive of the Ministry for Vulnerable Children, Oranga Tamariki, the authority to determine and therefore increase the rates of Foster Care Allowance.

Caregivers in receipt of the Orphan’s Benefit and Unsupported Child’s Benefit, and the Foster Care Allowance, will also be able to apply for the Best Start tax credit.

Minimum family tax credit

This Bill increases the threshold of the minimum family tax credit from $23,816 to $26,156 for the 2018–19 tax year and later years to ensure the policy objective is maintained, that beneficiaries with children will be better off in full-time work, following the introduction of the Winter Energy Payment and the annual indexation of main benefit rates.

Parental tax credit

The Best Start tax credit will replace the parental tax credit from 1 July 2018. This Bill will change the eligibility criteria for the parental tax credit so it no longer applies to children born on or after 1 July 2018. A principal caregiver will not be eligible to receive the parental tax credit and the Best Start tax credit for the same child.

Best Start tax credit

This Bill introduces a new tax credit in the Income Tax Act 2007 for families of children under the age of three, referred to as the Best Start tax credit (Best Start). Best Start will be defined as a Working for Families tax credit in section MA 8 of the Income Tax Act 2007.

Best Start is a payment of up to $3,120 a year per child to help families with the costs in a child’s early years, up until the child turns 3. It is intended to give all families extra support in the first year of a child’s life and targeted support for low- and middle-income families with children aged 1 or 2.

In the first year of a child’s life, there is no income abatement applied to the Best Start payment. If the principal caregiver is also receiving a paid parental leave payment, they cannot also receive Best Start payments for the same period of time as paid parental leave payments for the same child. Once paid parental leave ceases to be payable, Best Start payments can be made for the rest of the eligible period. A principal caregiver cannot receive a parental tax credit and Best Start payment for the same child.

In the second and third years of a child’s life, Best Start payments will be abated at 21% for family income over $79,000 a year. Where payments are made for more than 1 child, they will be abated sequentially. Payments will cease when the child turns 3 years old, or the child or the principal caregiver no longer meets the eligibility criteria. If a child dies before they turn 3, payments can continue for 4 weeks before they cease.

Best Start will come into effect from 1 July 2018 and will apply to:

  • children born on or after 1 July 2018; and

  • children born before 1 July 2018 where there was an expected due date on or after 1 July 2018.

Payments will be made to principal caregivers of dependent children, who meet the specified eligibility criteria. These criteria are similar to those that apply for the family tax credit, with some exceptions. Best Start will be available to caregivers who receive Orphan’s Benefit, Unsupported Child’s Benefit, or Foster Care Allowances for that child.

The Best Start payment amount of $3,120 will be able to be increased by Order in Council when the Consumers Price Index: All Groups excluding cigarettes and tobacco exceeds a cumulative 5%. The first Order in Council increase would be measured from 1 July 2018. The Order in Council provision would also allow for an increase in the Best Start abatement threshold (currently $79,000).

Best Start will primarily be paid by Inland Revenue. There is provision in the Tax Administration Act 1994 for payments to be made by the Ministry of Social Development to principal caregivers who are in receipt of a main benefit under the Social Security Act 1964.

Winter Energy Payment

This Bill introduces a new Winter Energy Payment (WEP) in the Social Security Act 1964 for recipients of main benefits, New Zealand Superannuation, and Veteran’s Pension. The WEP will support those recipients to meet their household heating costs during the winter period.

As such, the WEP will not be available to people who are receiving long-term residential care in a hospital or rest home or who are receiving residential care services (where that care is or those services are funded under the New Zealand Public Health and Disability Act 2000). It will be reviewed and may be terminated for people who have their rate of main benefit reduced because they are a long-term hospital patient. A person must be in New Zealand over the winter period in order to receive the WEP. As such, the WEP is only payable to a beneficiary (who continues to receive their main benefit, veteran’s pension, or New Zealand superannuation) for 1 or more days during any absence of the beneficiary from New Zealand if that absence is equal to or shorter than 4 weeks during the winter period.

People may also elect not to receive the WEP and inform the Ministry of Social Development accordingly. However, they may revoke this election and receive the WEP again.

The amount of payment for the full winter period will be:

  • $450 for single people without dependent children:

  • $700 for couples and for single people with dependent children.

Children for whom an Orphan’s Benefit, Unsupported Child’s Benefit, and Foster Care allowance are paid will be counted as dependent children for the purposes of the rate of WEP.

The WEP will be payable from 1 May each year for the following 22 weeks. Instalments will be paid fortnightly for New Zealand Superannuation and Veteran’s Pension recipients, and weekly for main benefit recipients.

In the first year, the WEP will be paid from 1 July 2018 for the following 13 weeks (or 6 fortnights). The amount of the payment for the 2018 winter period will accordingly be $265.91 for single people and $413.64 for couples and single people with dependent children.

Accommodation supplement

This Bill removes the requirement that the area boundaries be updated from time to time as defined by the Government Statistician and confirms the area boundaries as defined by the Government Statistician as at 26 June 2017, while still allowing the changes to area boundaries that will be made on 1 April 2018 by the Social Security (Budget 2017—Rates of, and Area for, Accommodation Supplement) Order 2017 to proceed. The Bill provides the ability to make regulations to define the Accommodation Supplement area boundaries. Once the first regulations are made, the area boundary definitions in the Act will be repealed.

Departmental disclosure statement

The Inland Revenue Department and the Ministry of Social Development are required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact statement

The Treasury produced a regulatory impact statement on 24 November 2017 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.

A copy of this regulatory impact statement can be found at—

Clause by clause analysis

Clause 1 gives the title of the Act.

Clause 2 gives the dates on which clauses come into effect.

Part 1Income tax

Subpart 1—Best Start tax credit

Clause 3 provides that clauses 4 to 23 amend the Income Tax Act 2007.

Clauses 4 to 9, and 11 change cross-references in the Income Tax Act 2007, as a consequence of the Best Start tax credit.

Clauses 10, 12, and 13 insert references to the Best Start tax credit in appropriate core provisions within the Working for Families regime, to ensure that the base rules of the Working for Families regime apply for the Best Start tax credit.

Clause 14 amends section MC 6, to ensure that a person does not get the Best Start tax credit at the same time that they receive a parental tax credit, paid parental leave, or certain other forms of social assistance (ie a parent’s allowance or a children’s pension).

Clauses 15 and 16 change cross-references, as a consequence of the Best Start tax credit.

Clause 17 amends section MD 11, to stop a person receiving parental tax credit for children born on and after 1 July 2018 (ie the start date for the Best Start tax credit). For a child born before then, but with an expected due date of after then, the person may be entitled to the Best Start tax credit. However, they may elect to receive parental tax credit instead of the Best Start tax credit.

Clause 18 amends section MF 1, to provide an application for payment, by the Commissioner, by way of instalment for the Best Start tax credit, as per the usual Working for Families regime.

Clause 19 amends section MF 2, to provide that the Commissioner does not have to pay by way of instalment for the Best Start tax credit for certain beneficiaries, as per the usual Working for Families regime.

Clause 20 amends section MF 4, to provide for the calculation of a payment by the Commissioner, by way of instalment for the Best Start tax credit, as per the usual Working for Families regime.

Clause 21 amends section MF 7, to provide an inflation-linked Order in Council mechanism to enable changes to the amount of the Best Start tax credit, and an Order in Council mechanism to enable changes to the abatement threshold and abatement rate for the Best Start tax credit.

Clause 22 inserts a new subpart MG, to provide the Best Start tax credit. New section MG 1 provides the base credit entitlement. A principal carer is entitled for a dependent child under 3 years old, if the relevant base criteria are met (eg residency). New section MG 2 provides the Best Start credit amount of $3,120 a year. It also provides for shared care of a child, and for continuation following the death of a child. An Order in Council mechanism to enable changes to the amount of the Best Start tax credit is included. New section MG 3 provides for the abatement of a person’s Best Start tax credit entitlement at the rate of 21 cents for every dollar over the threshold of $79,000 of family scheme income. Also, an Order in Council mechanism is provided, to enable changes to the abatement threshold and abatement rate for the Best Start tax credit. New section MG 4 provides for some persons, who have received an income-tested benefit, to have their entitlement to the Best Start tax credit protected, for the purposes of the abatement calculation in new section MG 3.

Clause 23 amends section YA 1, which contains definitions. New subclauses (2) and (5) to (8) make cross-reference changes for the Best Start tax credit. New subclause (3) provides a definition of Best Start credit abatement, as part of calculating a person’s Best Start tax credit entitlement. New subclause (4) provides a definition of Best Start tax credit, as part of calculating a person’s Best Start tax credit entitlement. New subclause (9) amends the definition of dependent child, to ensure that people in receipt of certain benefits for children are entitled to the Best Start tax credit. New subclauses (10) to (20) and (22) to (25) make cross-reference or consequential changes for the Best Start tax credit. New subclause (21) provides a definition of protected Best Start tax credit, to prevent abatement of the Best Start tax credit.

Clause 24 provides that clauses 25 to 40 amend the Tax Administration Act 1994.

Clauses 25 to 40 amend the Tax Administration Act 1994, to ensure that the standard administration and instalment payment provisions for Working for Families tax credits apply for the Best Start tax credit, as appropriate. The 1 departure from the standard administration is made for Best Start recipients who have no other Working for Families tax credits and 1 child under 1 year old: To lower these recipients’ compliance burden, no income information is requested. See clauses 28 and 36.

Clause 41 amends the Housing Restructuring and Tenancy Matters Act 1992, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in that Act.

Clause 42 amends the Social Security Act 1964, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in that Act.

Clause 43 amends the Social Security Act 1964, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in the calculation of temporary additional support.

Clause 44 amends the Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Order 2017, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in that Order.

Clause 45 amends the Taxation (Abated Interim Payments of subparts MA to MF and MZ Credit) Regulations 2002, as a consequential matter, to ensure that the Best Start tax credit is taken account of appropriately in the interim payment of WFF tax credits.

Subpart 2—Working for Families

Clause 46 repeals the Taxation (Budget Measures: Family Incomes Package) Act 2017, to remove the personal tax cuts in that Act, and to re-instate the independent earner tax credit (IETC).

Clause 47 provides that clauses 48 to 57 amend the Income Tax Act 2007.

Clause 48 amends section MD 3, to provide, for the 2018–19 tax year, average annual amounts of the family tax credit that take into account the increases to the tax credit on 1 July 2018.

Clause 49 amends section MD 3, to provide, for the 2019–20 and later tax years, the increased annual amounts of the family tax credit that take into account the increases to the tax credit on 1 July 2018.

Clause 50 amends section MD 13, to provide, for the 2018–19 tax year, average annual abatement thresholds and rates for the family tax credit that take into account the increases for the tax credit on 1 July 2018.

Clause 51 amends section MD 13, to provide, for the 2019–20 and later tax years, the increased annual abatement thresholds and rates for the family tax credit that take into account the increases for the tax credit on 1 July 2018.

Clause 52 amends section ME 1, to increase the minimum family tax credit, to align with the targeted social assistance increases in this Bill.

Clauses 53 and 54 repeal sections MF 4D and MF 4E. They are redundant.

Clause 55 inserts new sections MF 4F and MF 4G, to provide instalment amounts for the 2 parts of the 2018–19 tax year, to reflect increases in family tax credit from 1 July 2018.

Clause 56 amends section MF 7, to reset the inflation indexation to account for the 1 July 2018 increases to the family tax credit.

Clause 57 amends section MF 7, to change cross-references and repeal redundant provisions, consequential to the increases to the family tax credit.

Clause 58 amends the Taxation (Annual Rates and Budget Measures) Act 2011, by removing redundant provisions as a consequence of the increases to the family tax credit amounts, abatement thresholds, and rates on 1 July 2018.

Part 2Benefits

Subpart 1—Winter energy payment

Clause 59 provides that clauses 60 to 67 amend the Social Security Act 1964 (the principal Act).

Clause 60 amends section 3(1), which contains definitions, to define a winter energy payment, ensure that a winter energy payment is a benefit, and cross-refer to the special definition of dependent child in new Schedule 18A (inserted by clause 66).

Clause 61 inserts new Part 1KA (winter energy payment), which contains new sections 61FE to 61FJ.

New section 61FE states the payment’s purpose, which is to provide targeted financial assistance to help certain people meet their household heating costs during the winter period (as defined in new section 61FF).

New section 61FF defines the following 3 key terms:

  • qualifying benefit, which means—

    • a main benefit under the principal Act (as defined in section 3(1) of that Act); or

    • New Zealand superannuation; or

    • veteran’s pension:

  • relevant payment date, which, for a person who is receiving a qualifying benefit (or a portion of it), either as the person granted that benefit or as the spouse or partner of that person, for 1 or more days during the winter period, means the date on which the person is paid a weekly or fortnightly instalment of the person’s qualifying benefit (or a portion of it) for those days:

  • winter period, which, for a calendar year, means the 22-week period starting on 1 May.

New section 61FG(1) (eligibility requirements) provides that a person is entitled to a winter energy payment for 1 or more days during the winter period if, for those days,—

  • the person is receiving a qualifying benefit (or a portion of it), either as the person granted that benefit or as the spouse or partner of that person; and

  • the qualifying benefit (or a portion of it) is payable to the person; and

  • the person is not disqualified under new section 61FG(2).

New section 61FG(2) ensures that the person is, however, not entitled to a winter energy payment for 1 or more days during the winter period if, for those days,—

  • the qualifying benefit is payable at a rate prescribed in respect of a person who is married or in a civil union or in a de facto relationship, and the chief executive has determined under new section 61FG(3) that the person’s spouse or partner is entitled to a winter energy payment; or

  • the rate of the person’s qualifying benefit is required by section 75(3) to be reduced to the rate payable to long-term hospital patients, and the payment has been reviewed under section 81(1) and terminated under new section 81(5); or

  • the person is receiving long-term residential care in a hospital or rest home, and that care is funded, in whole or in part, under the New Zealand Public Health and Disability Act 2000; or

  • the person is receiving residential care services (as defined in section 3(1) of the principal Act), and those services are funded, in whole or in part, under the New Zealand Public Health and Disability Act 2000; or

  • the person has made, and not revoked, an election not to receive the payment (see new section 61FH).

New section 61FG(3) requires the chief executive, if the qualifying benefit is payable at a rate prescribed in respect of a person who is married or in a civil union or in a de facto relationship, to determine which 1 of the spouses or partners is (as only 1 of them can be) entitled to a winter energy payment.

New section 61FH relates to an election not to receive the payment.

New section 61FI is about instalments, rates, and payment.

New section 61FJ indicates how the payment is affected by the beneficiary’s absence from New Zealand.

Clause 62 amends section 61H, which enables an Order in Council to amend specified provisions by increasing the amount of a benefit set out in them. The amendment ensures that the specified provisions include new Schedule 18A (inserted by clause 66), and that an Order in Council can increase the amount of any winter energy payment set out in that schedule. No similar amendment is to be made to section 61HA (annual CPI adjustment of rates of certain benefits).

Clause 63 amends section 72(a), which ensures that no person is entitled to receive more than 1 benefit in the person’s own right, but also lists sections that are exceptions to that rule. The amendment adds, to the sections listed, new section 61FG (inserted by clause 61), because it contemplates that a person is entitled to receive, in that person’s own right, both a winter energy payment and another benefit.

Clause 64 amends section 81 (review of benefits). New section 81(5) enables the chief executive to terminate a winter energy payment if satisfied, after reviewing the payment under section 81(1), that—

  • the rate of the beneficiary’s qualifying benefit (under new section 61FG(1)(a)) is required by section 75(3) to be reduced to the rate payable to long-term hospital patients (even if a higher rate is paid under section 75(4)); and

  • continuing the payment is not consistent with the purpose stated in new section 61FE.

Clause 65 amends section 82(2A) to make it clear that the winter energy payment is a benefit paid in respect of a 7-day week.

Clause 66 inserts new Schedule 18A. New Schedule 18A sets out the rates of the winter energy payment.

Clause 67 inserts new Part 7 of Schedule 32. The new Part contains transitional provisions related to the winter energy payment. Clause 29 in the new Part clarifies aspects of eligibility based on a qualifying benefit. Clause 30 in the new Part provides for a special winter period, instalments, and rates for 2018.

Clause 68 makes consequential amendments to the Acts listed in Schedule 3.

Subpart 2—Rates of orphan’s benefit and unsupported child’s benefit

Clause 69 provides that clause 70 amends the Social Security Act 1964.

Clause 70 amends Schedule 4 (maximum rates of orphans’ benefits and unsupported child’s benefits). The amendments increase the rates by $20.31 per week, to reflect the increase in the eldest child family tax credit rate for children aged 0–15 years.

Subpart 3—Accommodation supplement areas (fixing as on 26 June 2017)

Clause 71 provides that clauses 72 to 74 amend the Social Security Act 1964.

Clauses 72 and 73 make amendments to ensure accommodation supplement areas are based on urban areas, urban zones, or area units as on 26 June 2017 (not, as under current law, as from time to time) defined by the Government Statistician (and so are unaffected by any later new or altered definitions adopted by the Government Statistician). The provisions amended are section 61I – which authorises orders altering, in stated ways, the definitions in clause 1 of Part 1 of Schedule 18 of accommodation supplement Area 1, Area 2, and Area 3 – and those definitions.

Clause 74 inserts new Part 6 of Schedule 32. The new Part contains transitional provisions related to accommodation supplement areas. Clause 27 in the new Part requires parts of New Zealand, on and after 26 June 2017 and until the commencement of that clause 27, to be taken to be as defined on 26 June 2017 by the Government Statistician. Clause 28 in the new Part is about the continuation of the Social Security (Budget 2017—Rates of, and Areas for, Accommodation Supplement) Order 2017.

Subpart 4—Accommodation supplement areas (regulations)

Clause 75 provides that clauses 76 to 78 amend the Social Security Act 1964.

Clause 76 amends section 3(1), which contains definitions. The amendment inserts a new definition, for accommodation supplement purposes, of the terms Area 1, Area 2, Area 3, and Area 4. The new definition makes clear that those terms—

  • are defined in regulations made under new section 61I (inserted by clause 77) for the purposes of Part 1K and Schedule 18 (accommodation supplement); but

  • until the commencement of the first regulations made under that section, refer to the terms defined in clause 1 of Part 1 of Schedule 18.

Clause 77 replaces section 61I, which authorises orders altering, in stated ways, accommodation supplement Area 1, Area 2, and Area 3 (as defined in clause 1 of Part 1 of Schedule 18). Under section 61I (as earlier amended by this Bill), the alterations must be based on urban areas, urban zones, or area units (as those terms were on 26 June 2017 defined by the Government Statistician). New section 61I instead enables regulations that define fully, for accommodation supplement purposes, the terms Area 1, Area 2, Area 3, and Area 4.

Clause 78 amends Part 1 of Schedule 18, which contains preliminary provisions about the accommodation supplement. The amendment repeals the definitions, in clause 1, of Area 1, Area 2, Area 3, and Area 4, on the commencement of the first regulations made under new section 61I (inserted by clause 77).