Overview

The Social Security Exempt Lump Sum Determination No. 2 of 2001 was enacted to address the need for specific compensation payments to be exempt from social security assessments for certain individuals. This legislative instrument was introduced by Gwenda Prince, an Assistant Secretary of the Seniors and Means Test Branch and a delegate of the Secretary to the Department of Family and Community Services, under the authority of the Social Security Act 1991. The primary policy objective of this determination is to ensure that eligible individuals, specifically Australian service personnel and civilians interned by Japan during World War II, and their surviving widows, who receive a $25,000 ex-gratia payment under the Compensation (Japanese Internment) Act 2001, are not adversely affected by this payment in terms of their social security entitlements. This determination allows such payments to be exempt lump sums, thus preserving the social security benefits of the recipients.

Scope and Application

The Social Security Exempt Lump Sum Determination No. 2 of 2001 applies to eligible persons who have received a compensation payment of $25,000 under the Compensation (Japanese Internment) Act 2001 and are also in receipt of a social security payment. This determination was made to ensure that the specified lump sum does not affect the eligibility or amount of social security payments they receive. The determination applies from the date the lump sum was paid, which is immediately after the commencement of the Compensation (Japanese Internment) Act 2001. The geographic and jurisdictional reach of this determination is limited to Commonwealth matters, as it pertains to social security payments managed by the Department of Family and Community Services. This determination extends the application of the Social Security Act 1991 by specifically classifying certain lump sums as exempt, thereby ensuring that these payments do not impact social security benefits.

Key Provisions

The key sections of the Social Security Exempt Lump Sum Determination No. 2 of 2001 specify that an amount, or class of amounts, received by an eligible person qualifies as an exempt lump sum if determined by the relevant authority under the Social Security Act 1991 (section 2.1). This determination takes effect immediately upon its making and can apply retroactively as if it had been in effect from an earlier date (section 2.1(2)). The determination identifies a specific class of persons, namely Australian service personnel and civilians interned by Japan during World War II and their surviving widows, who will receive a compensation payment of $25,000 (section 2.1(3)). For those who meet these criteria and are already receiving social security payments, the compensation payment is deemed an exempt lump sum (section 2.1(4)). The obligations imposed by this determination require the Department of Family and Community Services to treat the specified compensation payments as exempt lump sums for social security purposes. This means that these payments should not affect the eligibility or amount of social security benefits the recipients are entitled to (section 2.1). The determination also imposes a requirement on the eligible recipients to inform the relevant authorities about their receipt of the compensation payment if they are already receiving social security payments (section 2.1(4)). Failure to comply with the requirements set out in this determination may result in the recipients being ineligible for certain social security benefits or being overpaid, which could lead to financial penalties or the requirement to repay any overpaid benefits. While the determination itself does not specify explicit penalties, breaches of the Social Security Act 1991 related to the administration of benefits can result in significant fines and legal consequences. Specifically, under section 134 of the Social Security Act 1991, a person can be fined up to $22,200 for providing false or misleading information, and up to $55,500 for criminal offences involving fraud. These penalties reflect the seriousness of non-compliance with social security laws and the importance of accurately reporting income and other benefits.