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

Administered by Department of Social Services

Legislation au F2008L02094 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

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

 

Summary

Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and the Department of Education, Employment and Workplace Relations 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 Families, Housing, Community Services and Indigenous Affairs is responsible, a Climate Change Adjustment Program Re-establishment Grant (‘Re-establishment Grant’) 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 where the person was an Australian farm owner who has sold their farm enterprise and meets the Commonwealth Government 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 recipient of a FaHCSIA administered social security payment 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 customers 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 Government 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 Education, Employment and Workplace Relations and the Department of Veterans’ Affairs were 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 (against the nine categories listed) as a result of this exemption.

 

Overview

The Social Security Exempt Lump Sum (Climate Change Adjustment Program Re-establishment Grant) (FaHCSIA) Determination 2008, enacted by the Australian Government, seeks to address the economic hardships faced by farmers due to the long-term challenges of climate change. The determination was enacted to exempt a specific grant from being considered as income under the Social Security Act 1991. The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and the Department of Education, Employment and Workplace Relations are the responsible authorities for implementing this determination. The primary objective of this determination is to ensure that the Climate Change Adjustment Program Re-establishment Grant, which is a one-off payment of up to $150,000 to farmers who have sold their farm enterprises, does not impact the social security income test for recipients. This instrument provides relief to farmers who are transitioning out of farming by ensuring that the Re-establishment Grant does not affect their eligibility for social security payments. Under this determination, the Re-establishment Grant is classified as an exempt lump sum, thereby not being considered as income for the purposes of the social security income test. This approach ensures that eligible farmers can receive necessary support without compromising their social security benefits, thereby addressing the specific economic pressures caused by climate change on the agricultural sector.

Scope and Application

The Social Security Exempt Lump Sum (Climate Change Adjustment Program Re-establishment Grant) (FaHCSIA) Determination 2008 applies to Australian farmers who have sold their farm enterprise and meet the eligibility guidelines under the Commonwealth Government Department of Agriculture, Fisheries and Forestry's Australia’s Farming Future Initiative 2008. Specifically, the Act designates the Climate Change Adjustment Program Re-establishment Grant, a one-off payment of up to $150,000, as an exempt lump sum for the purposes of the Social Security Act 1991. This determination ensures that such grants are not considered income for the purposes of social security payments administered by the Minister for Families, Housing, Community Services and Indigenous Affairs. By exempting these payments from the income test, the determination aims to support farmers transitioning out of the industry due to the challenges posed by climate change. The instrument is applicable on a national level, with the determination commencing on 1 July 2008, and no exclusions, exemptions, or thresholds are specified beyond the eligibility criteria set out under the Initiative.

Key Provisions

The main operative sections of this determination (Sections 4(1) and 4(2)) provide that an amount, or class of amounts, received by a person, specifically the Re-establishment Grant, is an exempt lump sum under the Social Security Act 1991. This means that if a person receives a Re-establishment Grant as defined in Section 3, it will be considered an exempt lump sum for the purpose of the Act. The determination also specifies that this classification applies from the date the grant amount was received by the person, provided that date is on or after the commencement of this determination on 1 July 2008 (Section 5). The obligations and requirements imposed by this Act on the parties or entities it governs are primarily administrative and compliance-based. The Act requires the relevant Secretaries to ensure that the Re-establishment Grant is classified as an exempt lump sum and that this classification is applied consistently across all social security payments. The Act also requires the Department of Agriculture, Fisheries and Forestry to ensure that the Re-establishment Grants are paid according to the eligibility guidelines established under the Australia's Farming Future Initiative 2008. There are no offences, penalties, or civil/criminal consequences outlined in the determination for breach of its provisions. The determination focuses on clarifying the treatment of the Re-establishment Grant under the Social Security Act 1991 and does not include any enforcement mechanisms or punitive measures. Instead, it serves to protect eligible farmers from having their social security payments affected by the receipt of the grant. The absence of penalties reflects the determination's intent to provide relief and support to farmers without imposing additional burdens or risks on those involved in the grant distribution process.

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Social Security Law
Instrument
Determination
Concepts
Definitions & Interpretation
Repeal & Amendment
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.