EXPLANATORY STATEMENT
Issued by the authority of the Secretary of the Department of Social Services
Social Security Act 1991
Social Security (Exempt Lump Sum - Employment Services Consultation, Research and Trial Participant Incentive Payments) Determination 2026
Purpose
The Social Security (Exempt Lump Sum - Employment Services Consultation, Research and Trial Participant Incentive Payments) Determination 2026 (the Determination) ensures that payments made by, or on behalf of, the Commonwealth to people as an incentive for their participation in employment services consultation, research and trial activities undertaken by or for the Department of Employment and Workplace Relations (DEWR) (referred to as participant incentive payments) are an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
The effect of the Determination is that participant incentive payments are not assessed as income under the social security law.
Background
Income test
When determining a person’s eligibility for a social security payment, income and assets tests are both applied, with the test that results in the lower amount of the social security payment being applied to the person. Income is defined in subsection 8(1) of the Act for the purposes of the income test, and includes any income amount earned, derived or received for a person’s own use or benefit, a periodical payment by way of gift or allowance or a periodical benefit by way of gift or allowance. However, the Act specifically exempts some amounts that would otherwise be income for the purposes of the income test.
Paragraph 8(11)(d) of the Act allows the Secretary of the Department of Social Services, or their delegate, 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. This means the lump sum amount is not taken into account under the social security income test and will not have any effect on the person’s social security payment.
The exemption of a participant incentive payment from the assessment of a person’s income could beneficially impact that person’s eligibility for a social security payment and, if they are eligible, the rate of payment they are entitled to receive.
The exemption of a participant incentive payment from the income test does not mean that any ongoing income generated by the lump sum is exempt from the income test, nor does it mean that any asset produced from the lump sum is exempt from the social security assets test. This is consistent with the treatment of other lump sum payments exempted under paragraph 8(11)(d) of the Act.
Employment services consultation, research and trial activities
The Employment and Workforce Group within DEWR undertakes and commissions consultation, research and trial activities with jobseekers and others for the purposes of evaluating and making improvements to the employment services administered by DEWR on behalf of the Commonwealth.
Participant incentive payments
Participant incentive payments are made by or on behalf of the Commonwealth (represented by DEWR) from time to time, at DEWR’s discretion, to persons who participate in the consultation, research and trial activities, relating to employment services, that are undertaken by or for DEWR. These activities include, but are not limited to, meetings, workshops, discussions and focus groups.
Authority
The Determination is made under paragraph 8(11)(d) of the Act, which provides that the Secretary may determine an amount, or class of amounts, to be an exempt lump sum for the purposes of the Act.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Commencement
The Determination commences on the day after it is registered on the Federal Register of Legislation.
Consultation
The Department of Social Services consulted with DEWR on the text of the Determination, given that agency’s responsibility for the participant incentive payments.
DEWR supported the Determination.
The Department of Social Services also consulted the following agencies on the intention to make the Determination:
- Services Australia, given the impact on income support recipients;
- the Department of Veterans’ Affairs because determinations under paragraph 8(11)(d) of the Act apply automatically under the Veterans’ Entitlements Act 1986; and
- the Department of Agriculture, Fisheries and Forestry because paragraph 8(11)(d) determinations apply automatically under the Farm Household Support Act 2014.
The above agencies supported the Determination.
The Department of Social Services did not consult with income support recipients likely to be affected by the Determination, given it is beneficial in nature.
Availability of independent review
A decision made under the social security law, as informed by the Determination, is subject to internal and external review under Parts 4 and 4A of the Social Security (Administration) Act 1999.
Explanation of the provisions
Details of the Social Security (Exempt Lump Sum - Employment Services Consultation, Research and Trial Participant Incentive Payments) Determination 2026
Section 1 – Name
Section 1 provides that the name of the instrument is the Social Security (Exempt Lump Sum - Employment Services Consultation, Research and Trial Participant Incentive Payments) Determination 2026 (the Determination).
Section 2 – Commencement
Section 2 specifies that the Determination commences on the day after it is registered on the Federal Register of Legislation.
Section 3 – Authority
Section 3 provides that the authority for making the Determination is paragraph 8(11)(d) of the Act.
Section 4 – Definitions
Section 4 provides the definitions of key terms used in the Determination. The terms “employment services consultation, research and trial activities” and “participant incentive payment” are defined for the purposes of the Determination.
Section 5 – Exempt lump sum
Section 5 specifies amounts determined by the Secretary to be exempt lump sums, in accordance with paragraph 8(11)(d) of the Act.
In particular, section 5 provides that where a person has received a participant incentive payment, that amount is an exempt lump sum.
By determining that a participant incentive payment is an exempt lump sum under the Act, the amount of such a payment will not be assessed as ordinary income for the purposes of the recipient’s social security payment.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security Act 1991
Social Security (Exempt Lump Sum - Employment Services Consultation, Research and Trial Participant Incentive Payments) Determination 2026
The Social Security (Exempt Lump Sum - Employment Services Consultation, Research and Trial Participant Incentive Payments) Determination 2026 (the Determination) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrument
The Determination ensures that payments made by, or on behalf of, the Commonwealth to people as an incentive for their participation in employment services consultation, research and trial activities undertaken by or for the Department of Employment and Workplace Relations (DEWR) (referred to as a participant incentive payment) are an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
The effect of the Determination is that participant incentive payments are not assessed as income under the social security law.
Human rights implications
Right to social security and right to an adequate standard of living
The Determination engages the right to social security and the right to an adequate standard of living.
Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right to social security and requires a social security scheme be established under domestic law that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.
Article 11 of the ICESCR recognises the right to an adequate standard of living, which provides that everyone is entitled to adequate food, clothing and housing and to the continuous improvement of living conditions.
Under the Act, social security payments are subject to a means test which assesses the person’s income and assets to determine their eligibility for the payment, and their rate of payment. The Determination operates beneficially as a participant incentive payment will not be taken into account when assessing a person’s eligibility or rate of social security entitlements under the social security income test. The Determination encourages people to participate in the consultation, research and trial activities undertaken by or for DEWR by ensuring participant incentive payments do not affect their social security payments. This exemption also flows through to means tested payments under the Veterans’ Entitlements Act 1986 and the Farm Household Support Act 2014.
If a participant incentive payment is not exempted, a person in receipt of such a payment may not be eligible for an income support payment or, if they are eligible, their rate of payment might be reduced. As a result, their standard of living may be adversely affected.
Right to freedom of opinion and expression
The Determination also engages the right to freedom of expression, the right to freedom of opinion and expression and ensuring that persons with disabilities can exercise the right to freedom of expression and opinion.
Article 19 of the International Covenant on Civil and Political Rights recognises that everyone shall have the right to hold opinions without interference (subject to certain restrictions, but these are only such as provided by law and are necessary).
Article 5(d)(viii) of the International Convention on the Elimination of All Forms of Racial Discrimination recognises the right to freedom of opinion and expression.
Article 21 of the Convention on the Rights of Persons with Disabilities recognises that parties shall take all appropriate measures to ensure that persons with disabilities can exercise the right to freedom of expression and opinion, including the freedom to seek, receive and impart information and ideas on an equal basis with others and through all forms of communication of their choice.
The participant incentive payments exempted under the Determination encourage attendance at relevant consultation, research and trial activities, which affords participants with the opportunity to freely express their insights regarding their experiences of employment services. This includes advising participants that everyone involved in the activities has the right to freely express their views and opinions. While the activities are in progress, there are mechanisms in place to ensure this occurs, such as advising participants that it is important to respect everyone’s unique views and experiences.
DEWR facilitates diversity in the activities and ensures that participants from all backgrounds are welcome to attend the activities. Reasonable adjustments are available for participants, including those with disabilities or cultural or linguistic needs, which facilitates participation in the activities and supports freedom of expression and opinion.
Conclusion
This Determination is compatible with human rights as it promotes and supports a person’s right to social security, the right to an adequate standard of living and the right to freedom of opinion and expression.
Kirsty Johnson
Branch Manager of the Payment Structures and Seniors Branch
Delegate of the Secretary of the Department of Social Services