Commonwealth of Australia
Social Security Act 1991
Social Security Exempt Lump Sum
Determination No. 3 of 2003
I, Leonie Corver, Acting Assistant Secretary, Seniors and Means Test Branch and a delegate of the Secretary of the Department of Family and Community Services, make this determination under paragraph 8(11)(d) of the Social Security Act 1991.
Dated 21 August 2003.
L Corver
Acting Assistant Secretary, Seniors and Means Test Branch
Part 1 Preliminary
1.1 Name of determination
This determination is the Social Security Exempt Lump Sum Determination No. 3 of 2003.
1.2 Commencement
This determination commences on the date it is signed.
1.3 Interpretation
In this determination:
Act means the Social Security Act 1991;
Centrelink means the Commonwealth Services Delivery Agency established under the Commonwealth Services Delivery Agency Act 1997;
social security payment has the same meaning as in subsection 23(1) of the Social Security Act 1991.
Part 2 Exempt Lump Sums
2.1 Amount or class of amounts
(1) Paragraph 8(11)(d) of the Act provides that an amount, or class of amounts, received by a person is an exempt lump sum if the amount, or class of amounts, is determined to be an exempt lump sum.
King Island resident
(2) If:
(a) a person was resident on King Island at anytime during the period 1 July 1990 to 30 June 2001; and
(b) that person was in receipt of:
(i) a social security payment that was payable on or after 1 July 1991; or
(ii) a pension, benefit or allowance under Part IV, V, VI, XIII or XIV or Schedule 1B or a rehabilitation allowance under Part XVI of the Social Security Act 1947 that was payable before 1 July 2001; and
(c) that person receives an ex gratia payment, as a result of the Prime Minister’s decision of 17 July 2003, from Centrelink that is made, or has been made, to the person for the period of residence of that person on King Island;
then, subject to clause 2.2:
(d) the payment mentioned in paragraph 2.1(2)(c) is an exempt lump sum.
Furneaux Group of Islands resident
(3) If:
(a) a person was resident on the Furneaux Group of Islands at anytime during the period 1 July 1990 to 30 June 2001; and
(b) that person was in receipt of:
(i) a social security payment that was payable on or after 1 July 1991; or
(ii) a pension, benefit or allowance under Part IV, V, VI, XIII or XIV or Schedule 1B or a rehabilitation allowance under Part XVI of the Social Security Act 1947 that was payable before 1 July 2001; and
(c) that person receives an ex gratia payment, as a result of the Prime Minister’s decision of 17 July 2003, from Centrelink that is made, or has been made, to the person for the period of residence of that person on the Furneaux Group of Islands;
then, subject to clause 2.2:
(d) the payment mentioned in paragraph 2.1(3)(c) is an exempt lump sum.
2.2 Application—Exempt Lump Sums
Subject to clause 2.3, it is appropriate to determine that an amount, or class of amounts paid, to a person as mentioned in paragraph 2.1(2)(c) or 2.1(3)(c) is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act from the date that the payment is made.
2.3 Claim for ex gratia payment—time limit
This determination does not apply to a person if the person has not made a claim for the ex gratia payment to Centrelink because of that person’s residence on either King Island or the Furneaux Group of Islands during the period specified in paragraph 2.1(2)(a) or 2.1(3)(a) by the end of 31 December 2003.
Overview
The Social Security Exempt Lump Sum Determination No. 3 of 2003 was enacted under the Social Security Act 1991 to address the need for a specific exemption for lump sum payments made to certain residents of King Island and the Furneaux Group of Islands. This determination was introduced to ensure that ex gratia payments made to individuals who resided on these islands during a specified period were not treated as assessable income for the purposes of social security benefits. The determination was made by Leonie Corver, Acting Assistant Secretary of the Seniors and Means Test Branch, and a delegate of the Secretary of the Department of Family and Community Services. The objective of this determination is to provide a clear exemption for certain lump sum payments, ensuring that eligible residents are not unfairly penalised in their eligibility for social security benefits.
Scope and Application
The Social Security Exempt Lump Sum Determination No. 3 of 2003 applies to persons who were residents of King Island or the Furneaux Group of Islands during a specified period, from 1 July 1990 to 30 June 2001, and were recipients of certain social security payments or pensions, benefits, allowances, or rehabilitation payments. Specifically, the determination applies to those who were receiving a social security payment payable on or after 1 July 1991 or a pension, benefit, allowance, or rehabilitation allowance payable before 1 July 2001, and subsequently receive an ex gratia payment from Centrelink related to their residence on these islands. The determination outlines that such payments are considered exempt lump sums under the Social Security Act 1991, provided the individual made a claim for the ex gratia payment by the end of 31 December 2003. The determination is a Commonwealth instrument and applies nationally, with no stated exclusions or exemptions beyond the specified eligibility criteria.
Key Provisions
The Social Security Exempt Lump Sum Determination No. 3 of 2003, made under paragraph 8(11)(d) of the Social Security Act 1991, establishes specific conditions under which certain lump sum payments are exempt from social security assessments. The determination, which applies to payments made to residents of King Island or the Furneaux Group of Islands between 1 July 1990 and 30 June 2001, aims to provide relief to individuals who received social security payments during this period and subsequently received an ex gratia payment from Centrelink (sections 2.1(2) and 2.1(3)). To qualify, the individual must have been in receipt of either a social security payment or a pension, benefit, allowance, or rehabilitation allowance under specified parts of the Social Security Act 1947 before receiving the ex gratia payment (section 2.1(2)(b) and 2.1(3)(b)). The determination outlines that such lump sums are exempt provided the individual claims the payment by the end of 31 December 2003 (section 2.3).
Under this determination, individuals who meet the outlined criteria are required to claim their ex gratia payments from Centrelink by the specified deadline. This involves ensuring that any payments received as a result of their residence on King Island or the Furneaux Group of Islands during the stipulated period are reported to Centrelink, as these payments are to be treated as exempt lump sums for social security purposes (section 2.3). Failure to claim the payment by the end of 31 December 2003 disqualifies the individual from the benefits of this determination, meaning the lump sum would not be exempt from social security assessments.
Breaching the requirements of this determination, such as failing to claim the ex gratia payment by the specified deadline, results in the payment not being exempt from social security assessments. This means that the lump sum would be subject to the usual social security means tests, potentially affecting the individual's eligibility for other social security benefits. There are no explicit penalties mentioned in the determination for failing to comply with the claim deadline, but non-compliance could lead to financial assessments that might reduce or eliminate other social security payments.