Overview

The Social Security Exempt Lump Sum Determination No. 4 of 1999 was made under the Social Security Act 1991 to clarify the treatment of certain lump sums received under home equity conversion agreements. Enacted by Evan Mann, an Assistant Secretary and delegate of the Secretary to the Department of Family and Community Services, the determination establishes specific amounts that are exempt from the definition of an exempt lump sum, addressing a gap in the legislation related to the financial implications for individuals and couples receiving these payments. The policy objective is to provide clarity and ensure that the social security benefits of individuals and couples are accurately assessed when receiving lump sums under home equity conversion agreements. This determination aims to maintain the integrity of the social security system by precisely defining the scope of exempt lump sums.

Scope and Application

The Social Security Exempt Lump Sum Determination No. 4 of 1999 applies to individuals who receive payments under a home equity conversion agreement, as defined under subsection 8(1) of the Social Security Act 1991. The determination distinguishes between individuals who are members of a couple and those who are not, setting different thresholds for what constitutes an exempt lump sum. For individuals who are not members of a couple, any amount over $40,000 received under a home equity conversion agreement is considered an excluded amount. Similarly, for members of a couple, any amount exceeding $40,000 paid under such agreements to either the individual or their partner is also considered an excluded amount. This determination is made under the authority of the Social Security Act 1991 and came into effect on the date of signing, 23 September 1999. The determination's scope is limited to the specific circumstances outlined, and any broader application or exceptions would need to be addressed through subordinate instruments or further legislative action.

Key Provisions

The Social Security Exempt Lump Sum Determination No. 4 of 1999 provides several key provisions under the Social Security Act 1991. Specifically, section 2.1 outlines the amounts or classes of amounts that are considered exempt lump sums. According to this section, if a person is not part of a couple, any amount over $40,000 received under a home equity conversion agreement (HEC agreement) is an excluded amount. Conversely, if the person is part of a couple, any amount over $40,000 received by either partner under an HEC agreement is also an excluded amount. This determination was made under paragraph 8(11)(d) of the Act, clarifying that these excluded amounts are considered exempt lump sums for the purposes of the Act. In addition to defining the exempt lump sums, the determination imposes specific obligations on the parties involved. The key obligation under this determination is that excluded amounts, as defined, are to be treated as exempt lump sums. This is intended to ensure that these amounts are appropriately accounted for under the Social Security Act 1991. The determination applies from the date the amount is paid, thus setting a clear timeline for when the exemption takes effect. The Social Security Exempt Lump Sum Determination No. 4 of 1999 also includes provisions for penalties and consequences for non-compliance. Although the specific details of these penalties are not outlined within the determination, it is understood that breaches of the Social Security Act 1991 could lead to both civil and criminal penalties. The maximum penalties for such breaches can vary significantly, depending on the nature and severity of the offence. Typically, civil penalties might include fines or other financial penalties, while criminal penalties could involve imprisonment or other legal sanctions. It is important for entities and individuals governed by this legislation to adhere to its provisions to avoid these potential consequences.