Social Security (Exempt Lump Sum – Rectification Action) Determination 2022 (Cth)

Social Security (Exempt Lump Sum – Rectification Action) Determination 2022

I, Caitlin Delaney, Acting Group Manager of the Pensions Housing and Homelessness Group in the Department of Social Services, make the following Determination.

Dated 8 April 2022

Caitlin Delaney

Acting Group Manager of the Pensions, Housing and Homelessness Group

Delegate of the Secretary of the Department of Social Services

Contents

1 Name........................................................................................................................................ 1
2 Commencement........................................................................................................................ 1
3 Authority.................................................................................................................................. 1
4 Definitions................................................................................................................................ 1
5 Exempt lump sum..................................................................................................................... 2

1 Name

This instrument is the Social Security (Exempt Lump Sum – Rectification Action) Determination 2022.

2 Commencement

(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1	Column 2	Column 3
Provisions	Commencement	Date/Details
1. The whole of this instrument	The day after this instrument is registered.

Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.

(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.

3 Authority

This instrument is made under paragraph 8(11)(d) of the Act.

4 Definitions

In this instrument:

Act means the Social Security Act 1991.

Category 2 Group Member has the meaning for this term given in the Settlement Deed approved by the Federal Court of Australia on 11 June 2021 in Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634.

Eligible Category 3 Group Member has the meaning for this term given in the Settlement Deed approved by the Federal Court of Australia on 11 June 2021 in Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634.

Eligible Group Member means a Category 2 Group Member or an Eligible Category 3 Group Member.

Settlement Payment means a payment of a proportion of the settlement sum based upon interest notionally accrued on monies repaid by an Eligible Group Member to the Commonwealth, pursuant to the Settlement Deed approved by the Federal Court of Australia on 11 June 2021 in Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634.

5 Exempt lump sum

For the purposes of paragraph 8(11)(d) of the Act, a Settlement Payment received by an Eligible Group Member is an exempt lump sum.

CaseChat Overview and Summary

The Acting Group Manager of the Pensions, Housing and Homelessness Group in the Department of Social Services issued the Social Security (Exempt Lump Sum – Rectification Action) Determination 2022. The determination aims to provide clarity on the treatment of settlement payments under the Social Security Act 1991. This case arose from a settlement deed approved by the Federal Court of Australia in Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634, which dealt with the overpayment of social security benefits by the Commonwealth. The primary issue before the court was whether a settlement payment, based on interest notionally accrued on monies repaid by an Eligible Group Member, qualified as an exempt lump sum under the Social Security Act 1991.

The determination addresses the classification of settlement payments made to Eligible Group Members as exempt lump sums. This classification is significant because exempt lump sums are not subject to the same financial assessments and implications as other lump sums under the Social Security Act. The court needed to interpret the terms of the Settlement Deed and the relevant provisions of the Act to determine whether these payments fell under the definition of an exempt lump sum. The determination clarified that Settlement Payments, defined as a payment of a proportion of the settlement sum based on interest notionally accrued on monies repaid by Eligible Group Members, are indeed exempt lump sums.

The Acting Group Manager concluded that the Settlement Payment is an exempt lump sum for the purposes of the Social Security Act 1991. This conclusion was based on the specific terms of the Settlement Deed and the interpretation of the relevant provisions of the Act. The determination provides a clear legal framework for the treatment of these payments, ensuring that Eligible Group Members receive the appropriate benefits without undue financial assessments. This decision ensures that the Settlement Deed's intent is upheld, providing clarity and certainty for those involved in the settlement process.

Social Security (Exempt Lump Sum – Rectification Action) Determination 2022 (Cth)

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established