Explanatory Statement
Issued by the authority of the Minister for Social Services
Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025
Income Apportionment Resolution Scheme Amendment (ABSTUDY Debts) Determination 2026
Purpose
The Income Apportionment Resolution Scheme Amendment (ABSTUDY Debts) Determination 2026 (the Amendment Determination) is made by the Minister for Social Services (the Minister) under item 3 of Schedule 3 to the Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025 (the Act).
The Amendment Determination amends the Income Apportionment Resolution Scheme Determination 2025 (the Determination) to extend entitlement to a resolution payment under the Income Apportionment Resolution Scheme (the Resolution Scheme) to a person who owes or owed an ABSTUDY debt under the Student Assistance Act 1973 (Student Assistance Act) and clarifies the debt value for the purposes of a resolution payment.
Background
The Determination commenced on 30 January 2026 and sets out provisions for, and in relation to, the Resolution Scheme. Applications for the Resolution Scheme opened on 30 January 2026.
The Resolution Scheme has been established to provide resolution payments to persons whose debts have been affected by income apportionment which relate at least partially to periods between 20 September 2003 to 6 December 2020 inclusive, subject to the requirements in the Act and the Determination.
Under subitem 2(2) of Schedule 3 to the Act, a person is entitled to a resolution payment under the Resolution Scheme if the person owes or owed a debt to the Commonwealth under a prescribed Act, the debt was raised before 5 December 2025 as a result of an overpayment of a payment or benefit under a prescribed Act, and the debt arose because the Division 2 work income of the person, or of a partner of the person, was worked out using the method set out in section 1114 or 1116 of the Social Security Act 1991 (Social Security Act).
Paragraph 3(1)(f) of Schedule 3 to the Act provides that the Minister may, by legislative instrument, determine provisions relating to criteria for a person to be entitled, or not entitled, to be paid a resolution payment despite the requirements of item 2 of Schedule 3 to the Act. As set out in the Explanatory Memorandum to the Act, paragraph 3(1)(f) provides the ability for the Minister to determine other matters relating to the criteria for entitlement in the Determination. This flexibility is required because of the complexity and variety of debts (directly and indirectly) potentially affected by income apportionment over the relevant period.
The Amendment Determination introduces new entitlement criteria to include ABSTUDY debts within the Resolution Scheme and related consequential amendments. New entitlement criteria are required because the income apportionment method set out in section 1114 of the Social Security Act is not applicable to ABSTUDY debts.
The ABSTUDY Scheme is a scheme of educational assistance under special administrative arrangements. Whilst ABSTUDY debts arise under the Student Assistance Act, the ABSTUDY Policy Manual (publicly available at https://guides.dss.gov.au/abstudy-policy-manual) contains qualifying criteria, an income test, and calculation method to assist decision makers administer the ABSTUDY Scheme.
ABSTUDY debts were reasonably likely to be impacted by income apportionment between 2005 and 2020 as the ABSTUDY Policy Manual mirrored the social security law during this period.
The inclusion of ABSTUDY debts aligns with the broad purpose of the Resolution Scheme to provide resolution payments to persons whose debts have been affected by income apportionment from 20 September 2003 to 6 December 2020 inclusive.
Commencement
The Amendment Determination commences the day after the instrument is registered.
Authority
The Amendment Determination is made under item 3 of Schedule 3 to the Act.
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument. In making the Amendment Determination, the Minister is relying on this subsection in conjunction with the instrument-making powers in item 3 of Schedule 3 to the Act
The Amendment Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Consultation
The Department of Social Services (the Department) consulted with Services Australia on the text of the Amendment Determination as they are responsible for service delivery of resolution payments under the Resolution Scheme. Services Australia were supportive of the amendments to the Determination.
The Department also consulted the Department of Education, the Department of Veterans Affairs and the Department of Agriculture, Fisheries and Forestry regarding the clarification of the debt value as it relates to the overall amount a person may receive under the Resolution Scheme, related to their portfolio legislation. The Department of Education, the Department of Veterans Affairs and the Department of Agriculture, Fisheries and Forestry were supportive of the clarificatory amendments to the Determination.
The Department did not consult with student payment recipients on the intention to include ABSTUDY debts as part of the Resolution Scheme. This is because applying to the Resolution Scheme is optional and beneficial to people who owe or owed an ABSTUDY debt.
Availability of independent review
The Amendment Determination and Determination form part of the social security law. Internal and external merits review under Parts 4 and 4A of the Social Security (Administration) Act 1999 (Administration Act) do not apply to decisions made under the Resolution Scheme because of subitem 6(2) of Schedule 3 to the Act. Subitem 3(2) of Schedule 3 to the Act expressly requires the Minister to determine a bespoke process for the review of decisions in the Determination.
Decisions under the Resolution Scheme are subject to internal review processes as set out in Part 5 of the Determination. External merits review is not available for decisions made under the Resolution Scheme. This is consistent with Parliament’s intention for the Resolution Scheme to have its own bespoke review process and disapply Parts 4 and 4A of the Administration Act.
However, as provided for under section 31 of the Determination, any debts due to the Commonwealth as a result of an overpayment under the Resolution Scheme will be treated as if it were a debt arising under the Social Security Act and recoverable under Chapter 5 of that Act. Parts 4 and 4A of the Administration Act apply to these decisions.
Explanation of the provisions
Details of the Income Apportionment Resolution Scheme Amendment (ABSTUDY Debts) Determination 2026
Section 1 states the name of the instrument, being the Income Apportionment Resolution Scheme Amendment (ABSTUDY Debts) Determination 2026.
Section 2 provides that the instrument will commence on the day after registration on the Federal Register of Legislation.
Section 3 provides that the instrument is made by the Minister under item 3 of Schedule 3 to the Act.
Section 4 specifies that each instrument that is specified in a Schedule to the instrument is amended or repealed as set out in the Schedule and has effect according to its terms.
Schedule 1–Amendments
Income Apportionment Resolution Scheme Determination 2025
Item 1 amends the simplified outline in section 4 of the Determination to include a reference to the Student Assistance Act.
Item 2 inserts the definition of an ABSTUDY debt to have the same meaning as in paragraph (a) of the definition of relevant debt in section 38 of the Student Assistance Act, where the amount is a debt under subsection 39(1) of that Act.
Subsection 39(1) of the Student Assistance Act provides that if a person has been paid an amount of a kind referred to in the definition of debt in section 38 of that Act, the amount is a debt owed by the person to the Commonwealth.
Paragraph (a) of the definition of relevant debt in section 38 of the Student Assistance Act includes an amount paid under the ABSTUDY Scheme (also known as the Aboriginal Study Assistance Scheme) that should not have been paid. The note to this definition makes clear that the amount paid under the ABSTUDY Scheme that should not have been paid is a debt under paragraph (a) of the definition of debt and therefore is a debt owed by the person to the Commonwealth for the purposes of subsection 39(1) of that Act.
ABSTUDY debts are owed and recoverable by the Commonwealth under the Student Assistance Act.
Item 3 amends the definition of a prescribed Act in the Determination to include the Student Assistance Act. This means that the Student Assistance Act will be a prescribed Act for the purposes of paragraphs 13(2)(c), 14(2)(e) and 18(2)(b) of the Determination.
Item 4 repeals and substitutes the definition of a prescribed income apportionment method to take into account ABSTUDY debts.
Item 4 substitutes the definition of a prescribed income apportionment method to mean the method described in paragraph 2(2)(d) of Schedule 3 to the Act or for an ABSTUDY debt, the method described in paragraph 59.9.1 of the ABSTUDY Policy Manual as in force on 6 December 2020.
This amendment allows individuals who have ABSTUDY debts under the Student Assistance Act that are reasonably likely to have arisen (whether wholly or partly, or directly or indirectly) because of income apportionment to apply for a resolution payment under the Resolution Scheme.
This new definition incorporates by reference the income apportionment method described in the ABSTUDY Policy Manual last updated 22 September 2020. The same method was reflected in the published ABSTUDY Policy Manuals between 2005 and 2020.
The ABSTUDY Policy Manual is incorporated under paragraph 14(1)(b) of the Legislation Act 2003, which allows a legislative instrument to incorporate any other document in writing which exists at the time the legislative instrument commences, or at a time before its commencement.
In the ABSTUDY Policy Manual in force as on 6 December 2020 (publicly and freely available at https://guides.dss.gov.au/sites/default/files/documents/2021-11/36-september-2020-abstudy.pdf), the calculation of ABSTUDY debts mirrored the Social Security Act at the time which applied the income apportionment method. The income apportionment method is now reflected in section 1114 of the Social Security Act.
Paragraph 59.9.1 of the ABSTUDY Policy Manual, in force as on 6 December 2020, provided that “Ordinary income, including employment income, is assessed in the fortnight that it is first earned, derived or received. Employment income that has been earned in an entitlement period is spread evenly across all days in that entitlement period, regardless of which days or the number of days worked.”
This same method of calculation was used in the ABSTUDY Policy Manual that was in force from 1 January 2005 (publicly available at https://webarchive.nla.gov.au/awa/20050724161609/http://www.dest.gov.au/sectors/indigenous_education/publications_resources/abstudy/contents.htm?wbc_purpose=basic&WBCMODE=presentationunpublished).
As a result, ABSTUDY debts were also affected by the pauses of debt activities, which occurred from mid-2021, for debts potentially affected by income apportionment.
Item 5 substitutes the definition of a relevant debt to mean a debt that is referred to in subitem 2(2) of Schedule 3 in relation to an entitlement under Schedule 3, or an ABSTUDY debt referred to in section 7A in relation to an entitlement under section 7A of the Amendment Determination.
Item 6 amends the heading of section 7 of the Determination to exclude ABSTUDY debts. This is to make clear that the new section 7A entitlement criteria in relation to an ABSTUDY debt operates instead of the entitlement criteria under subitem 2(2) of Schedule 3 to the Act and section 7 of the Determination.
Item 7 amends subsection 7(1) of the Determination to exclude ABSTUDY debts. This is again to make clear that section 7 does not apply in relation to ABSTUDY debts.
Item 8 inserts new section 7A after section 7 in the Determination. Section 7A introduces new entitlement criteria related to ABSTUDY debts.
Section 7A provides that for paragraph 3(1)(f) of Schedule 3 to the Act, a person is entitled to a resolution payment under the Resolution Scheme if:
- the person owes or owed an ABSTUDY debt as defined by the Determination; and
- the ABSTUDY debt was raised before 5 December 2025 (to align with the commencement of Schedule 3 to the Act); and
- the ABSTUDY debt relates to a period beginning on 20 September 2003 and ending on 6 December 2020; and
- it is reasonably likely that the ABSTUDY debt arose (whether wholly or partly, or directly or indirectly) because the ordinary income (including employment income) of the person, or of a partner of the person, was worked out using the prescribed income apportionment method for an ABSTUDY debt.
The prescribed income apportionment method for an ABSTUDY debt is defined in paragraph (b) of the updated definition (refer to item 4 above). It incorporates by reference the method described in paragraph 59.9.1 of the ABSTUDY Policy Manual as in force on 6 December 2020.
This same method of calculation was used in the ABSTUDY Policy Manuals that were in force between 1 January 2005 and 6 December 2020.
The debt period set out in section 7A (period beginning on 20 September 2003 and ending on 6 December 2020) is consistent with the debt period provided for in paragraph 2(2)(c) of Schedule 3 to the Act. The date of 1 January 2005 marks the period in which the method outlined in paragraph 59.9.1 of the ABSTUDY Policy Manual began applying income apportionment in a manner consistent with the Social Security Act (now set out in section 1114 of the Social Security Act). The ending date of 6 December 2020 aligns with the broader eligible debt period dates for the Resolution Scheme.
Aligning the debt period for ABSTUDY debts to the Resolution Scheme eligibility dates acknowledges the broad ranging interactions between income support payments and the use of income apportionment. It also helps applicants navigate the Resolution Scheme by reducing complexity where applications consist of multiple debts and differing debt periods.
ABSTUDY debts will still need to meet the entitlement criteria to receive a resolution payment.
The effect of section 7A is to specify new entitlement criteria that operate in relation to an ABSTUDY debt instead of the entitlement criteria under subitem 2(2) of Schedule 3 to the Act and section 7 of the Determination.
Item 9 numbers the note in subsection 9(2) of the Determination as ‘Note 1’. This amendment is consequential on the insertion of Note 2 in Item 10.
Item 10 inserts a second note under subsection 9(2) of the Determination. This note provides, for the avoidance of doubt, that any amount added by way of a penalty under section 1228B of the Social Security Act is part of the debt value, with reference to subsection 1228B(2A) of the Social Security Act. Subsection 1228B(2A) of the Social Security Act expressly states that an amount added by way of penalty is part of the debt.
Item 11 repeals and substitutes subsection 9(3) of the Determination. It provides that the debt value of a particular relevant debt does not include any amount that has been waived in relation to the debt or any interest charge payable to the Commonwealth in connection with the relevant debt as at 30 January 2026 (refer to subsection 9(2)).
This is to clarify, for the avoidance of doubt, that interest charges are not included in the debt value under section 9 of the Determination for the purposes of calculating the resolution payment. This reflects the fact that interest charges are considered separate debts to the Commonwealth, and do not form part of the debt (unlike penalties under subsection 1228B(2A) of the Social Security Act).
The amendments to section 9 of the Determination provide greater transparency and clarification for individuals around the determination of a debt value for the purposes of calculating the resolution payment, and the overall amount they may receive.
Item 12 is a technical amendment to paragraph 11(2)(c) of the Determination to include the word “must” at the start of the paragraph.
Item 13 inserts new section 17A after section 17 in the Determination. Section 17A sets out requirements for effective acceptance in relation to ABSTUDY debts.
Subsection 17A(1) provides that for paragraph 3(1)(j) of Schedule 3 to the Act, if a person covered by new section 7A lodges an effective acceptance of an offer to be paid a resolution payment, the acceptance must include, or be accompanied by an acknowledgment that the person:
- releases and forever discharges the Commonwealth from all liability against any future claims that arise as a result (whether directly or indirectly) of the ordinary income (including employment income) of the person, or of the partner of the person, being worked out using the prescribed income apportionment method for an ABSTUDY debt; and
- cannot bring or continue any such claim against the Commonwealth, including in their capacity as an individual, as a representative party or a member of a group.
A notice of offer will inform an applicant about the effect of accepting an offer of a resolution payment and the applicant will have the opportunity to seek their own independent advice before deciding whether to accept the offer.
Subsection 17A(2) additionally provides that where a person is acting on behalf of a person who is entitled to the Resolution Scheme, that agent may lodge an effective acceptance of an offer to be paid a resolution payment on behalf of the entitled person and also agree to release the Commonwealth from all liability to any claim against the Commonwealth arising as a result of income apportionment in respect to the entitled person.
Note 1 refers to the fact that section 17A does not apply if the effective acceptance ceases to be in force. Section 26 of the Determination provides for when an acceptance of offer may cease to have effect.
Section 17A broadly mirrors the effect of effective acceptance of offer of resolution payment provisions in subitems 2(5) to (7) of Schedule 3 which apply to individuals covered by subitems 2(2) or (3) of Schedule 3 to the Act in relation to other relevant debts.
The requirement under section 17A is part of an individual’s choice to accept an offer of a resolution payment under the Resolution Scheme. By acknowledging the requirements set out in section 17A, an individual is agreeing to confer immunity to the Commonwealth from civil liability (e.g. by providing that civil proceedings cannot be brought against a person).
This “immunity” will be conferred only where an individual elects to accept a resolution payment. This reflects a voluntary decision by the person to forego any existing right to bring proceedings against the Commonwealth by instead accepting a resolution payment. It is open to an applicant to decide to refuse an offer of a resolution payment and retain their existing rights to pursue claims against the Commonwealth regarding the use of income apportionment. An individual will have the opportunity and time to consider the offer and make an election of accepting a resolution payment.
The Resolution Scheme is an optional scheme which individuals impacted by income apportionment (within the entitlement criteria) can choose to apply for. The Resolution Scheme offers an avenue for individuals to receive a form of reparation from the Commonwealth in recognition of the past practice of income apportionment. It is wholly up to the individuals to elect whether they want to apply for the Resolution Scheme and accept an offer of a resolution payment under the Resolution Scheme.
Item 14 inserts new section 32 after section 31 in the Determination.
Section 32 provides that the amendments made by Schedule 1 to the Amendment Determination apply in relation to an application for a resolution payment for an ABSTUDY debt, made on or after 30 January 2026. The Amendment Determination is beneficial in nature and ensures individuals with ABSTUDY debts impacted by income apportionment are included in the Resolution Scheme.
The effect of this application provision is to ensure that applications relating to ABSTUDY debts, made on or after the commencement of the Resolution Scheme on 30 January 2026, can be assessed against the new entitlement criteria for ABSTUDY debts as provided for by the Amendment Determination.
Since 30 January 2026, when the Resolution Scheme commenced, Services Australia have received a number of applications from individuals with ABSTUDY debts impacted by income apportionment. The Amendment Determination will enable these applications to be processed alongside with the broader cohort of eligible debts considered by the Resolution Scheme.
Whilst individuals with ABSTUDY debts who are yet to apply to the Resolution Scheme may have less than the full 12-month period afforded under section 10 of the Determination to apply for the Resolution Scheme, it is open to these individuals to seek an extension of time to apply beyond 29 January 2027 under subsection 10(7) of the Determination based on special circumstances.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025
Income Apportionment Resolution Scheme Amendment (ABSTUDY Debts) Determination 2026
The Income Apportionment Resolution Scheme Amendment (ABSTUDY Debts) Determination 2026 (the Amendment Determination) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrument
The Amendment Determination is made by the Minister for Social Services (the Minister) under item 3 of Schedule 3 to the Social Security and Other Legislation Amendment (Technical Changes No. 2) Act 2025 (the Act).
The Amendment Determination amends the Income Apportionment Resolution Scheme Determination 2025 (the Determination) to extend entitlement to a resolution payment under the Income Apportionment Resolution Scheme (Resolution Scheme) to a person who owes or owed an ABSTUDY debt to the Commonwealth under the Student Assistance Act 1973 (Student Assistance Act).
Human rights implications
The Amendment Determination engages the right to social security contained in:
- Articles 4 and 9 of the International Covenant on Economic, Social and Cultural Rights (ICESR);
- Article 28(2)(b) of the Convention of the Rights of Persons with Disabilities (CRPD); and
- Article 26 of the Convention on the Rights of the Child (CRC).
Right to social security
Article 9 of the ICESR requires that a social security system be established under domestic law that provides a minimum essential level of benefits to all people and families that will enable them to cover essential living costs. In order to effectively provide those benefits, public authorities must take responsibility for the effective administration of the system.
The Amendment Determination supports effective administration of the social security system by providing a mechanism for people with ABSTUDY debts that are reasonably likely to be impacted by income apportionment to obtain a resolution payment as a form of compensation for the use of income apportionment, without the need to recalculate affected debts. The significant cost and effort that would be involved in recalculating all affected debts would detract from the resources required to ensure that Australia’s social security system continues to provide essential benefits to people and families. This is consistent with the requirement under the ICESR to provide an effective social security system that provides appropriate social security benefits to those who need it.
Article 4 of the ICESR provides that countries may limit the right to social security in a way determined by law only in so far as this may be compatible with the nature of the rights contained within the ICESR and solely for the purpose of promoting general welfare in a democratic society. Such a limitation must be proportionate to the objective to be achieved.
The CRC and the CRPD do not expressly allow any limitation to be placed on the right to social security, as set out in those conventions. However, under those conventions, countries’ obligations with respect to the right to social security is qualified to the extent that countries are only required to take measures to progressively achieve the realisation of that right “to the maximum of [their] available resources, with a view to achieving progressively the full realisation” of economic, social and cultural rights, including the right to social security (Article 2(1) of the ICESCR, Article 4(2) of the CRPD and Article 4 of the CRC).
The Amendment Determination extends the entitlement criteria under the Resolution Scheme to people with ABSTUDY debts, to obtain a resolution payment as a form of reparation for the use of income apportionment if eligible under the Resolution Scheme.
Conclusion
The Amendment Determination is compatible with human rights as it promotes and supports the right to social security. To the extent a human rights obligation is engaged or limited, the impact is for a legitimate objective and is necessary and proportionate.
The Hon Tanya Plibersek MP, Minister for Social Services