EXPLANATORY STATEMENT
Department of Families, Housing, Community Services and Indigenous Affairs
Social Security Exempt Lump Sum (Disability Sporting Grants) (FaHCSIA) Determination 2009
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to determine that an amount received by a person is an exempt lump sum for the purposes of the social security income test. The effect of this Determination is that, for disability support pension recipients, the receipt of a one-off payment, for the purpose of athlete support, where made by the Australian Sports Commission (ASC), Australian Paralympic Committee (APC), Australian Commonwealth Games Association (ACGA) or a national sporting organisation (NSO) using funds provided by the ASC, is an exempt lump sum.
Background
Under the social security law, all income earned, derived or received for a person’s own use or benefit, is generally assessable as income. However, some amounts, that would otherwise be income, are specifically exempted from the social security income test. Paragraph 8(11)(d) of the Act allows the 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 excluded from the definition of “ordinary income” under subsection 8(1) of the Act. As a result, any such amount is not to be taken into account under the social security income test.
There is a variety of payments available to eligible athletes for the purpose of athlete support, using funds provided by the ASC. The Direct Athlete Support (DAS) and Australian Government Sport Training Grant (AGSTG) payments are examples of such payments. The DAS payment is administered by the APC. Payments made under these schemes are one-off payments, targeted at athletes based on their medal potential at a major sporting event, such as the Olympics or Paralympics, and their individual need. These payments are intended to support the athletes to prepare for a major sporting event or events. The AGSTG scheme is a similar and more general scheme administered by the ASC.
Explanation of Provisions
Part 1
Section 1 of the Determination states the name of the Determination and shows how it is to be cited.
Section 2 states that the Determination commences on the day after registration with the Federal Register of Legislative Instruments.
Section 3 contains definition provisions.
Part 2
Section 4 provides that if a person who is receiving a disability support pension in respect of a day also receives a disability sporting grant on the same day, the disability sporting grant will be an exempt lump sum in respect of that person for the purpose of the Act.
Example 1: If a person is receiving a disability support pension in respect of 10 January 2010, and also receives a disability sporting grant on 10 January 2010, the disability sporting grant is an exempt lump sum with respect to that person.
Example 2: If a person receives a disability sporting grant on 10 January 2010, and starts to receive a disability support pension on 11 January 2010, the disability sporting grant is not an exempt lump sum with respect to that person.
Consultation
As this Determination is beneficial to customer and only intended to affect persons who receive the disability support pension, which falls wholly within the portfolio responsibility of FaHCSIA, it was decided that consultation was not necessary for this matter.
Regulatory Impact Analysis
This Determination does not require a Regulatory Impact Statement or Business Cost Calculator Figure. The Determination 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, as a result of this Determination, against the nine categories listed in the Business Compliance Cost Checklist contained in the Best Practice Regulation handbook prepared by the Office of Best Practice Regulation.