EXPLANATORY STATEMENT
Social Security Act 1991
Social Security (Exempt Lump Sum – Australian Thalidomide Survivors Support Program) Determination 2020
Purpose
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (Department) to determine, by legislative instrument, that an amount or class of amounts received by a person is an exempt lump sum for the purposes of the Act.
The Secretary of the Department has delegated the power to determine an exempt lump sum or class of exempt lump sums to senior officers of the Department, including the Branch Manager of the Older Australians Branch.
The effect of the Social Security (Exempt Lump Sum – Australian Thalidomide Survivors Support Program) Determination 2020 (this instrument) is that certain payments made to persons under the Australian Thalidomide Survivors Support Program (the Program) are exempt lump sums. This will apply for social security purposes and for the purposes of the Veterans’ Entitlements Act 1986 (subsection 5H(12A) of the Veterans’ Entitlements Act 1986).
The exempt lump sums under the instrument include a one-off lump sum payment; lump sum payments made through the Extraordinary Assistance Fund; and lump sum payments made through the Health Care Assistance Fund of the Program.
Background
Exempt Lump Sum
Under the social security law, an income test is used to determine a person’s eligibility for some social security payment and, if they are eligible, the rate of a social security payment that is payable. Income received for a person’s own use or benefit is generally assessable. However, some amounts that would otherwise be income are specifically exempted.
Paragraph 8(11)(d) of the Act allows the Secretary of the Department 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 excluded from the definition of ‘ordinary income’ under subsection 8(1) of the Act, meaning the lump sum amount is not to be taken into account under the social security income test.
Australian Thalidomide Survivors Support Program (the Program)
The Australian Government announced funding of $44.9 million over four years from 2020-21, with ongoing funding in the following years, to provide a lifetime support package for thalidomide survivors as part of the 2020-21 Budget. The support package is in response to the 11 recommendations of the Final Report from the Senate Inquiry into support for Australia’s thalidomide survivors.
The Program includes a one-off lump sum payment, of up to a maximum of $500,000 scaled according to level of disability as well as payments made from both the Extraordinary Assistance Fund and Health Care Assistance Fund. These funds provide discrete one-off payments to assist survivors with daily living activities and health care expenses associated with the impacts of thalidomide related injuries.
These payments will be made available to eligible recognised Australian thalidomide survivors. A recognised thalidomide survivor is an Australian who was part of either the 2010 Diageo ex gratia scheme or the thalidomide class action that was approved by the Victorian Supreme Court in 2014. There are currently approximately 135 recognised survivors. Australians who believe they have been impacted by the maternal use of thalidomide, but have not previously been recognised through either the 2010 Diageo ex gratia scheme or the 2014 class action, may apply to the Department of Health to participate in an eligibility assessment for access to the Program.
This instrument ensures that lump sum payments made by the Department of Health (or Services Australia on behalf of the Department of Health) under the Program will be exempt lump sums for the purposes of the Act. The exemption of payments in relation to the Program from the income test on receipt does not alter the fact that any ongoing income generated by the lump sum is not exempt from the income test. This is consistent with the treatment of other exempt lump sum payments under paragraph 8(11)(d) of the Act.
Authority
This instrument is made under paragraph 8(11)(d) of the Act.
This instrument is a legislative instrument for the purposes of the Legislation Act 2003. This instrument is disallowable.
Commencement
This instrument commences on the day after it is registered.
Consultation
Due to the wholly beneficial nature of the changes made by the instrument, public consultation was considered unnecessary for this matter.
Department of Health has policy responsibility for the Program, and was consulted during the preparation and drafting of this instrument.
The Department of Veterans’ Affairs and the Department of Agriculture, Water and the Environment were consulted on the intention to make this instrument.
Regulation Impact Statement (RIS)
This instrument does not require a Regulatory Impact Statement. This instrument is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact (OBPR ID: 42668).
Explanation of the provisions
Section 1 provides that the name of this instrument is the Social Security (Exempt Lump Sum – Australian Thalidomide Survivors Support Program) Determination 2020.
Section 2 provides that this instrument commences on the day after this instrument is registered on the Federal Register of Legislation.
Section 3 provides that the authority for making this instrument is paragraph 8(11)(d) of the Act.
Section 4 contains definitions and terms used in this instrument.
Act is defined to mean the Social Security Act 1991.
Australian Thalidomide Survivors Support Program is defined to mean the program established in the 2020-21 Budget under which a payment is made by the DOH or Services Australia to eligible recognised Australian thalidomide survivors.
DOH is defined to mean the Department of Health.
relevant amount is defined to mean, in relation to a person, any lump sum amount received by the person under the Australian Thalidomide Survivors Support Program.
Section 5 specifies that, if a person receives a relevant amount, that amount is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act. Such an amount will be regarded as an exempt lump sum from the date the payment is received by the person.
Caitlin Delaney, Branch Manager, Older Australians Branch, Pensions, Housing and Homelessness Group, as a delegate of the Secretary of the Department of Social Services
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security (Exempt Lump Sum - Australian Thalidomide Survivors Support Program) Determination 2020
This instrument 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
Under the Thalidomide Survivors Support Program, recognised Australian thalidomide survivors may be eligible to receive lump-sum payments from the Australian Government in recognition of injuries as a result of thalidomide. This program is in response to the 11 recommendations of the Final Report from the Senate Inquiry into support for Australia’s thalidomide survivors.
To be eligible for the Program the applicant needs to be a recognised thalidomide survivor who received support from the 2010 Diageo ex gratia scheme or the thalidomide class action approved by the Victorian Supreme Court in 2014. If someone believes they have been impacted by the maternal use of thalidomide, and are not currently recognised they can apply for recognition under the Program, through the Department of Health.
This instrument ensures that recipients of lump sum payments under this program will not have the payments they receive under the program assessed as income on receipt under the social security law.
Human rights implications
The Social Security (Exempt Lump Sum – Australian Thalidomide Survivors Support Program) Determination 2020 (this instrument) engages the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.
This instrument will operate beneficially as payments in relation to the Program will not be taken into account when assessing a person’s payability or rate of social security entitlements under the social security income test. If these payments were not exempted, a person in receipt of these payments may not be payable for social security payment or, if they are payable, their rate of payment might be reduced. This instrument is therefore consistent with the promotion of the right to social security.
The exemption of payments in relation to the Program from the income test on receipt does not alter the fact that any ongoing income generated by the lump sum is not exempt from the income test. This is consistent with the treatment of other lump sum payments under paragraph 8(11)(d) of the Act.
Conclusion
This instrument is compatible with human rights as it supports a person’s right to social security.
Caitlin Delaney, Branch Manager, Older Australians Branch, Pensions, Housing and Homelessness Group, as a delegate of the Secretary of the Department of Social Services