Social Security Exempt Lump Sum (Compensation payments in respect of certain World War 2 internments) (DEST) Determination 2007

Administered by Department of Social Services

Legislation au F2007L01671 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Social Security Exempt Lump Sum (Compensation payments in respect of certain World War 2 internments) (DEST) Determination 2007

 

Summary

 

Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Education, Science and Training, the Department of Families, Community Services and Indigenous Affairs (FaCSIA) and the Department of 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 Education, Science and Training is responsible, a compensation payment in respect of certain World War 2 internments (‘compensation payment’) is an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).  The compensation payment is a one-off payment of $25,000, made to a person or a person’s partner where the person was a former prisoner of war of the Axis forces during World War 2 on behalf of the Commonwealth by the Australian Government Department of Veterans’ Affairs under the Social Security and Veterans’ Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act 2007 (‘2007 Budget Measure’).  The compensation payment is in recognition of the hardship and suffering endured by former prisoners of war, or to their widows or widowers.

 

The effect of this instrument is that a compensation payment under the 2007 Budget Measure will not be regarded as income under the Act.  Consequently, if a recipient of a DEST administered social security payment receives a compensation payment under the 2007 Budget Measure, 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 compensation payment under the 2007 Budget Measure 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 compensation payment under the 2007 Budget Measure, the grant 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 the day after registration.

 

Section 3 contains interpretation provisions. The term compensation payment is defined as a one-off payment of $25,000 made by the Australian Government Department of Veterans’ Affairs under the Social Security and Veterans’ Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act (2007 Budget Measure). 

 

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 compensation payment as defined in section 3, then the compensation payment received by the person is an exempt lump sum.

 

Section 5 specifies that a compensation payment 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, Community Services and Indigenous Affairs and the Department of Employment and Workplace Relations 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 compensation payment under the 2007 Budget Measure made by the Department of Veterans’ Affairs.  Public consultation was therefore seen as unnecessary.

 

Business Cost Calculator Figure 

 

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 (Compensation Payments in Respect of Certain World War 2 Internments) (DEST) Determination 2007 was enacted to address the issue of ensuring that compensation payments made to former prisoners of war of the Axis forces during World War 2 would not be regarded as income under the Social Security Act 1991. This instrument was developed by the Australian government, specifically through the Department of Education, Science and Training, the Department of Families, Community Services and Indigenous Affairs, and the Department of Employment and Workplace Relations, to achieve the policy objective of providing appropriate recognition and relief to those who suffered during the war. By determining that these compensation payments are exempt lump sums, the instrument ensures that these payments will not be assessed as income under the social security law, thereby exempting them from the income test for those receiving social security payments.

Scope and Application

The Social Security Exempt Lump Sum (Compensation payments in respect of certain World War 2 internments) (DEST) Determination 2007 applies to former prisoners of war of the Axis forces during World War 2 and their widows or widowers who are recipients of social security payments administered by the Minister for Education, Science and Training. This instrument designates a compensation payment of $25,000, made by the Australian Government Department of Veterans' Affairs under the Social Security and Veterans' Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act, as an exempt lump sum under the Social Security Act 1991. The exemption means that such compensation payments are not counted as income and, therefore, do not affect the income test for social security eligibility. This determination applies on a national level within Australia, ensuring consistency across the relevant departments and social security schemes. There are no stated exclusions or exemptions within this determination, but its application is limited to the specific compensation payments outlined.

Key Provisions

The main operative sections of the Social Security Exempt Lump Sum (Compensation payments in respect of certain World War 2 internments) (DEST) Determination 2007 (the Determination) include Section 1, which names the determination, and Section 4(2), which specifies that a compensation payment as defined in Section 3 is an exempt lump sum for the purposes of the Social Security Act 1991 (the Act). The Determination exempts a compensation payment of $25,000 from the income test under the Act, meaning that such a payment will not be considered income when assessing eligibility for social security payments. The Determination imposes obligations on the parties or entities it governs by specifying that a compensation payment made by the Australian Government Department of Veterans’ Affairs under the Social Security and Veterans’ Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act (2007 Budget Measure) is an exempt lump sum (Section 4(2)). This means that the payment will not be assessed as income under the social security law for the purposes of determining eligibility for DEST administered social security payments. The Determination also requires that the compensation payment be regarded as an exempt lump sum from the date it was received by the person, provided that date is on or after the commencement of the Determination (Section 5). There are no explicit offences, penalties, or civil/criminal consequences for breach stated in the Determination. However, any breach of the Act or the Determination could potentially lead to legal consequences under the relevant laws. The Determination is not regulatory in nature, and it is not expected to have any significant compliance costs or competition impact. The Determination aims to provide a fair and consistent approach to the income test treatment of the compensation payment for all social security payments under the Act.

Legal classification tags

Area of Law
Social Security Law
Instrument
Statutory Instrument
Concepts
Definitions & Interpretation
Offence Provisions
Exempt Lump Sum

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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.