Social Security Exempt Lump Sum (Climate Change Adjustment Program Re-establishment Grant) (DEEWR) Determination 2008

Administered by Department of Social Services

Legislation au F2008L02158 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Social Security Exempt Lump Sum (Climate Change Adjustment Program Re-establishment Grant) (DEEWR) Determination 2008

 

Summary

 

Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Education, Employment and Workplace Relations (DEEWR) and the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to determine that an amount, or class of amounts, is an exempt lump sum for the purpose of the Act.  This instrument determines that, for the purpose of social security payments for which the Minister for Education and the Minister for Employment and Workplace Relations is responsible, a Climate Change Adjustment Program Re-establishment Grant (‘Re-establishment Payment’) paid to Australian farmers under the Australia’s Farming Future Initiative 2008 (the Initiative) is an exempt lump sum under paragraph 8(11) (d) of the Social Security Act 1991 (the Act). 

 

The Re-establishment Grant is part of the response to assist primary industries prepare for a different future due to the long term challenges facing Australian agriculture through the impact of climate change. The Re-establishment Grant is designed to assist farmers leaving the land to have capacity to continue their lives outside of farming the land. 

 

In general terms, the Re-establishment Grant is a one-off payment of up to $150,000, made to a person or a person’s partner where the person was an Australian farm owner who has sold their farm enterprise and who meet the Commonwealth Department of Agriculture, Fisheries and Forestry eligibility guidelines under the Initiative.

 

The effect of this instrument is that a Re-establishment Grant paid under the Initiative will not be regarded as income under the Act. Consequently, if a person receives a Re-establishment Grant under the Initiative, 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 responsible 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 instrument determines that a Re-establishment Grant under the Initiative is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.

 

The effect of this instrument is that for a person receiving a Re-establishment Grant under the Initiative, the amount 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 1 July 2008.

 

Section 3 contains interpretation provisions. The term Re-establishment Grant is defined as a one-off Climate Change Adjustment Program Re-establishment Grant to a person of up to $150,000 made by the Commonwealth Department of Agriculture Fisheries and Forestry under the Australia’s Farming Future Initiative 2008.

 

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 Re-establishment Grant as defined in section 3, then the Re-establishment Grant received by the person is an exempt lump sum.

 

Section 5 specifies that a Re-establishment Grant received by a person referred to in subsection 4(2) will be regarded as an exempt lump sum from the date that the amount was received by the person, provided that date is on or after the commencement of this determination.

 

Consultation 

 

The Department of Families, Housing, Community Services and Indigenous Affairs was consulted during the preparation of this determination.  This was done to ensure a co-ordinated and consistent approach to the income test treatment of this one-off payment for all social security payments under the Act.

 

This instrument is beneficial to customers because it exempts from the income test a Re-establishment Grant under the Australia’s Farming Future Initiative 2008.  Public consultation was therefore seen as unnecessary.

 

Regulatory Impact Analysis

 

This exemption does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator Figure.  This exemption is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.  It is not expected that any compliance costs will be incurred by business as a result of this exemption.

 

Overview

The Social Security Exempt Lump Sum (Climate Change Adjustment Program Re-establishment Grant) (DEEWR) Determination 2008 was enacted to address the financial needs of Australian farmers facing challenges due to climate change. The determination was introduced by the Secretaries of the Department of Education, Employment and Workplace Relations (DEEWR) and the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) under the authority of paragraph 8(11)(d) of the Social Security Act 1991. The policy objective is to provide financial support to farmers exiting the industry by exempting the Climate Change Adjustment Program Re-establishment Grant from being counted as income for social security purposes. This one-off payment, which can be up to $150,000, is designed to help farmers transition to life outside of farming, and by exempting it from the income test, it ensures that recipients of this grant are not adversely affected in their eligibility for social security payments.

Scope and Application

The Social Security Exempt Lump Sum (Climate Change Adjustment Program Re-establishment Grant) (DEEWR) Determination 2008 applies to Australian farmers who have sold their farm enterprises and meet the eligibility guidelines set by the Commonwealth Department of Agriculture, Fisheries and Forestry under the Australia’s Farming Future Initiative 2008. The Determination specifies that a Climate Change Adjustment Program Re-establishment Grant, referred to as a Re-establishment Payment, is an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 for the purposes of social security payments managed by the Minister for Education and the Minister for Employment and Workplace Relations. This means that the Re-establishment Payment, which can be up to $150,000, will not be considered as income and thus will not affect the income test under the social security law. The exemption is effective from 1 July 2008, and it ensures that any Re-establishment Grant received on or after this date will be exempt from being assessed as income under the Act. The instrument is limited in its scope to the specific grants provided under the mentioned initiative and does not extend to other forms of payments or lump sums.

Key Provisions

The main operative sections of this determination (sections 4(1) and 4(2)) establish that a Climate Change Adjustment Program Re-establishment Grant, as defined, is an exempt lump sum under the Social Security Act 1991 (the Act). Specifically, subsection 4(1) clarifies that the Secretary can determine an amount or class of amounts to be an exempt lump sum, while subsection 4(2) directly states that a Re-establishment Grant received by a person, as defined in section 3, is an exempt lump sum. This means that any Re-establishment Grant received on or after the commencement date of this determination will not be considered income under the Act. The obligations and requirements imposed by this Act on the parties it governs include the clear definition and application of the term 'Re-establishment Grant'. This term is specifically defined in section 3, which refers to a one-off Climate Change Adjustment Program Re-establishment Grant of up to $150,000 made by the Commonwealth Department of Agriculture, Fisheries and Forestry under the Australia’s Farming Future Initiative 2008 to a person meeting certain eligibility criteria. The requirement is that the grant must be paid to a person or their partner who was an Australian farm owner, sold their farm enterprise, and meets the eligibility guidelines set by the Commonwealth Department of Agriculture, Fisheries and Forestry. The determination does not specify any offences, penalties, or civil/criminal consequences for breach. Since the instrument is not regulatory in nature and is not expected to incur compliance costs or impact business activities, there are no stated penalties for non-compliance with this determination. The focus of this instrument is to provide clarity and exemption for the Re-establishment Grant under the social security income test, ensuring that recipients of such grants are not disadvantaged in their social security assessments.

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Area of Law
Social Security Law
Instrument
Determination
Concepts
Definitions & Interpretation
Exemptions & Exclusions
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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.