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October 20, 2003
NO.088
VICTORIA NOT ENTITLED TO PAY FIRST HOME OWNERS SCHEME GRANTS TO TODDLERS
Clear guidelines exist for the administration of the First Home Owners Scheme
(FHOS) which was agreed to by all States and Territories when they signed the
Intergovernmental Agreement on the Reform of Commonwealth State Financial Relations
in 1999.
Recipients must be Australian citizens or permanent residents, they must be
buying or building their first home, and the home must be intended to be a principal
place of residence. Under this agreement, State and Territory governments were
also required to enact legislation to prevent abuse of the FHOS.
Todayâs Herald Sun reports that the Victorian Government has paid out FHOS
grants to 38 toddlers.
Toddlers do not buy or build houses. Toddlers do not move into a principal
place of residence.
Victorian Treasurer, Mr John Brumby, has conceded that parents who are ineligible
for the grant because they already own a home, have made an application in the
name of their infant children.
This is an abuse of the FHOS. The Victorian Government must now amend its
legislation which has apparently allowed this. Victoria is in breach of its
obligation to prevent abuse of the scheme.
State Governments are entitled to claim the value of all FHOS grants from
the Australian Government. If the Victorian Government has claimed reimbursement
for these grants to toddlers, than it will be required to repay that sum to
the Australian Government.
In addition, I will be writing to every State Premier and Territory Chief
Minister, seeking an assurance that they have put in place arrangements as per
the principles they agreed to in the Intergovernmental Agreement, to prevent
abuse of the FHOS.
14 October 2003
CANBERRA
Contact: David Alexander
02 6277 7340
Extract from the Intergovernmental Agreement on the Reform of
Commonwealth State Financial Relations
D1. The States and Territories will make legislative provision for the First
Home Owners Scheme (FHOS) from 1 July 2000 which will incorporate programme
criteria consistent with the following principles:
[â¦]
- Eligible applicants must be natural persons who are Australian citizens
or permanent residents who are buying or building their first home in Australia.
[â¦]
- An eligible home must be intended to be a principal place of residence
and occupied within a reasonable period.
[â¦]
- The relevant State and Territory legislation will contain adequate administrative
review and appeal mechanisms, along with provision to prevent abuse of the
FHOS. The States and Territories will cooperate in the exchange of information
to identify eligible first home owners.