EXPLANATORY STATEMENT
Department of Education, Science and Training
Social Security Exempt Lump Sum (Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project) (DEST) Determination 2005
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Family and Community Services, the Department of Employment and Workplace Relations and the Department of Education, Science and Training (DEST) to determine that an amount, or class of amounts, is an exempt lump sum for the purpose of the Act. The effect of this determination is that for the purpose of social security payments for which the Minister for Education, Science and Training is responsible, a one-off payment made by the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project is an exempt lump sum under paragraph 8(11)(d) of the Act.
The effect of this determination is that such a one-off payment will not be regarded as income under the Act, so that if a recipient of a DEST administered social security payment receives a payment from the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project, it will be exempt from the income test under the social security law.
Background
Under the social security law all income earned, derived or received for a person’s own use or benefit, is counted as income. The only exceptions are items specifically exempted under the social security law. Paragraph 8(11)(d) of the Act allows the Secretary to determine that an amount, or class of amounts, is an “exempt lump sum” for the purposes of the Act. An exempt lump sum is not included in the definition of “ordinary income” under subsection 8(1) of the Act, so any such amount would not be taken into account under the social security income test.
This determination provides that a one-off payment made under the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.
The Community Inclusion Board, part of the Australian Capital Territory Government’s Canberra Social Plan has determined that tackling household debt is a key priority. On 21 December 2004 the Chief Executive of the Chief Minister’s Department authorised commencement of the Household Debt Pilot Project. Some Household Debt Pilot Project recipients may also be in receipt of a DEST administered social security payment. The effect of this determination is that a payment received by a customer under the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project will not be assessed as income under the social security law.
Explanation of Provisions
Part 1
Clause 1 of the determination states the name of the determination.
Clause 2 states that the determination commences on 23 March 2005.
Clause 3 contains interpretation provisions. In particular, the term Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project is defined as a project by that same name that promotes community inclusion, by providing intensive case management to a small number of participants who are at risk of social exclusion due to unmanageable debt levels.
Part 2
Subclause 4(1) states that paragraph 8(11)(d) of the Act allows the Secretary to determine that an amount, or class of amounts, received by a person is an exempt lump sum.
Subclause 4(2) provides that if a person receives a payment under the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project and they are also in receipt of a social security payment, then the payment received by the person as a participant in the Community Inclusion and Household Debt Pilot Project is an exempt lump sum.
Clause 5 specifies that an amount received by a person referred to in subclause 4(2) is an exempt lump sum for the purpose of paragraph 8(11)(d) of the Act. Such an amount will be regarded as an exempt lump sum from the date that the amount was received by the person, provided that this date is after the commencement of this determination (ie on or after 23 March 2005).
Consultation
This determination was made at the request of the Australian Capital Territory Government.
The Department of Family and Community Services, the Department of Employment and Workplace Relations and the Department of Veterans Affairs were consulted to ensure a co-ordinated and consistent approach to the income test treatment of this payment for all social security payments under the Act.
This determination is beneficial to customers because it exempts this Australian Capital Territory Government’s payment from the social security income test. Public consultation was therefore seen as unnecessary.
Retrospectivity
This determination has effect from 23 March 2005, as funds paid under the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project are paid to people who are eligible from this date. The retrospective commencement of this determination is beneficial to, and does not disadvantage social security recipients.