Social Security Exempt Lump Sum (Australian Capital Territory Government's Community Inclusion and Household Debt Pilot Project) (DEWR) Determination 2005

Administered by Department of Social Services

Legislation au F2005L02662 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Department of Employment and Workplace Relations

 

Social Security Exempt Lump Sum (Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project) (DEWR) Determination 2005

 

Summary

 

Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Employment and Workplace Relations (DEWR), the Department of Family and Community Services and the Department of Education, Science and Training to determine that an amount, or class of amounts, is an exempt lump sum for the purposes of the Act. The effect of this determination is that for the purpose of social security payments for which the Minister for Employment and Workplace Relations is responsible, a one-off payment made under the Community Inclusion and Household Debt Pilot Project is an exempt lump sum under paragraph 8(11)(d).

 

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 DEWR administered social security payment receives a payment from the 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 Secretaries 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 Community Inclusion and Household Debt Pilot Project is an exempt lump sum for the purposes of paragraph 8(11)(d).

 

The Community Inclusion Board, which is 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 Community Inclusion Household Debt Pilot Project. The Project aims to encourage greater community participation for households experiencing financial stress through a combination of supported debt interest repayments, intensive case management, personal coaching and financial education services.  Some Pilot Project recipients may also be in receipt of a DEWR administered social security payment. The effect of this determination is that a payment received by a customer under the Community Inclusion and Household Debt Pilot Project will not be assessed as income under the social security law.


Explanation of Provisions

 

Part 1

 

Section 1 of the determination states the name of the determination.

 

Section 2 states that the determination commences on 23 March 2005.

 

Section 3 contains interpretation provisions. In particular, the term Community Inclusion and Household Debt Pilot Project is defined as a project by that same name, administered by the Australian Capital Territory Government, that promotes community inclusion, by providing intensive case management to a number of participants who are at risk of social exclusion due to unmanageable debt levels.

 

Part 2

 

Subsection 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.

 

Subsection 4(2) provides that if a person receives a payment under the 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.

 

Section 5 specifies that an amount received by a person referred to in subsection 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 Education, Science and Training 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, so that any funds paid under the Community Inclusion and Household Debt Pilot Project to people since this date will be exempt. The retrospective commencement of this determination is beneficial, and does not disadvantage social security recipients.

 

Overview

The Social Security Exempt Lump Sum (Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project) (DEWR) Determination 2005 was enacted to address a specific gap identified under the Social Security Act 1991. This determination was made by the Department of Employment and Workplace Relations, at the request of the Australian Capital Territory Government, to ensure a coordinated approach in handling payments under the Community Inclusion and Household Debt Pilot Project. The objective of this determination is to exempt one-off payments made under this pilot project from being regarded as income under the social security law, thereby not affecting the income test for social security recipients who are also participants in the pilot project. This measure aims to support households experiencing financial stress by providing debt relief and other support services without impacting their social security benefits. The determination aligns with the policy objective of the Australian Capital Territory Government to tackle household debt and encourage greater community participation for those at risk of social exclusion due to unmanageable debt levels. By classifying these payments as exempt lump sums, the determination ensures that the financial assistance provided through the pilot project does not interfere with the eligibility criteria for other social security payments, thus supporting the broader social welfare objectives. This approach was considered beneficial and did not disadvantage social security recipients, leading to the decision that public consultation was unnecessary.

Scope and Application

The Social Security Exempt Lump Sum (Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project) (DEWR) Determination 2005 applies to individuals who are recipients of a one-off payment made under the Community Inclusion and Household Debt Pilot Project and who are also receiving a social security payment administered by the Department of Employment and Workplace Relations. This determination ensures that such payments are treated as exempt lump sums under the Social Security Act 1991, exempting them from the income test that applies to social security recipients. This applies to the Commonwealth jurisdiction and was made to align with the Australian Capital Territory Government's initiative to support households experiencing financial stress through the Pilot Project. The determination does not specify any exclusions or thresholds, but it does clarify that the exempt lump sum applies to payments received from the commencement date of the determination, which is 23 March 2005. Subordinate instruments may further define the administration and application of this determination.

Key Provisions

The main operative sections of this determination (F2005L02662) clarify the circumstances under which payments made under the Community Inclusion and Household Debt Pilot Project are exempt from being considered income for the purposes of social security payments administered by the Department of Employment and Workplace Relations (DEWR) (subsection 4(2)). Section 5 specifies that any payment received by an individual who is also in receipt of a DEWR social security payment will be considered an exempt lump sum under the Social Security Act 1991, provided it is received after the determination's commencement date of 23 March 2005. This exemption means that such payments will not affect the recipient's eligibility for or the amount of social security payments they receive. The obligations and requirements imposed by the Act on the parties governed by this determination include ensuring that payments made under the Community Inclusion and Household Debt Pilot Project are not treated as income when assessing social security eligibility and amounts. DEWR and other relevant departments must apply this determination consistently to all social security payments they administer, ensuring that the specified payments are excluded from the income test. The Australian Capital Territory Government, as the administrator of the Pilot Project, must also comply with the determination by correctly identifying and notifying DEWR of payments made to individuals who are receiving social security benefits. There are no specific offences, penalties, or civil or criminal consequences outlined in the determination for breaches of its provisions. However, non-compliance with the determination by any of the involved parties could potentially lead to improper social security payments, which might incur financial repercussions for the government and could also be subject to administrative review or correction by the relevant authorities. The determination ensures that all parties are aware of their obligations to correctly apply the provisions and to manage the payments in accordance with the Social Security Act 1991.

Legal classification tags

Area of Law
Social Security Law
Instrument
Determination
Concepts
Definitions & Interpretation
Exempt Lump Sum
Social Security Payments

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.