Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) (Social Security) Determination 2015

Overview

The Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) (Social Security) Determination 2015, enacted under subsection 9A(6) of the Social Security Act 1991, addresses the need to clarify and update guidelines for identifying income streams exempt from the assets test. This Determination replaces the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998, ensuring consistency with the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015 made by the Repatriation Commission under the Veterans’ Entitlements Act 1986. The primary objective of this Determination is to streamline and simplify the guidelines, maintaining the same substantive operation while updating definitions and criteria to align with current legislation, such as the definition of a ‘defined benefit income stream’ now referenced from subsection 9(1F) of the Act. The Determination was made by the Secretary of the Department of Social Services and engages with the Right to Social Security under the International Covenant on Economic, Social and Cultural Rights, ensuring compatibility with human rights.

Scope and Application

The Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) (Social Security) Determination 2015 applies to individuals who are recipients of social security benefits under the Social Security Act 1991. It sets out guidelines for the exercise of the Secretary's discretion to determine whether a defined benefit income stream is exempt from the assets test, which is used to assess an individual's eligibility for certain social security benefits. The determination applies nationally across Australia and has been designed to be consistent with the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 2015 made by the Repatriation Commission under the Veterans’ Entitlements Act 1986. There are no exclusions, exemptions or thresholds outlined in the Determination. The Determination extends or restricts application through subordinate instruments such as regulations or rules made under the Act. The purpose of this Determination is to revoke and remake the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) Determination 1998 and ensure consistency with the Repatriation Commission's equivalent determination. The Determination sets out the guidelines for the exercise of the Secretary's discretion to determine that a defined benefit income stream is exempt from the assets test under the Social Security Act 1991. The changes made to this instrument are to simplify and streamline the guidelines, but there has been no change to the operation of the instrument. The definition of a ‘defined benefit income stream’ has been updated to refer to the current definition in subsection 9(1F) of the Act. The Department of Veterans' Affairs was consulted to ensure a consistent approach to the instruments and their remaking. The Determination is compatible with human rights as it engages and promotes the Right to Social Security contained in article 9 of the International Covenant on Economic Social and Cultural Rights.

Key Provisions

The main operative sections of the Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) (Social Security) Determination 2015 (the Determination) pertain to the identification and guidelines for income streams that are exempt from the assets test under the Social Security Act 1991 (the Act). Section 3 outlines the guidelines for the exercise of the Secretary's discretion, under subsection 9A(5) of the Act, to determine that a defined benefit income stream, which does not meet the requirements of subsection 9A(2) of the Act, is an asset-test exempt income stream. Section 4 provides the definition of a ‘defined benefit income stream’ as referred to in subsection 9(1F) of the Act, which has been updated to reflect the current definition within the Act itself. The Determination also includes streamlined criteria and combines certain criteria from the previous 1998 Determination to simplify the guidelines, as mentioned in Section 5. The Determination imposes several obligations and requirements on the parties and entities it governs. Firstly, it mandates that the Secretary of the Department of Social Services must apply the guidelines set out in Section 3 when determining whether a defined benefit income stream is exempt from the assets test. This includes assessing whether the income stream meets the specified criteria, as outlined in the streamlined Part 2 of the Determination. Furthermore, the Determination requires that the criteria for a ‘defined benefit income stream’ be adhered to as per the updated definition in Section 4. Entities and individuals must also ensure that their income streams comply with these guidelines to benefit from the asset-test exemption. Breaching the provisions of the Determination can result in various consequences, although the Determination does not explicitly outline specific offences or penalties. However, under the Social Security Act 1991, any failure to comply with the asset-test requirements may lead to the loss of entitlement to social security benefits. The Act provides for civil and criminal penalties for non-compliance, including fines and imprisonment. The exact penalties are determined by the courts and can vary depending on the nature and severity of the breach. It is essential for all parties to adhere to the guidelines to avoid any potential penalties or loss of benefits.