Social Security Exempt Lump Sum (Exceptional Circumstances Exit Grant) (DEEWR) Determination 2008

Administered by Department of Social Services

Legislation au F2008L00707 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Social Security Exempt Lump Sum (Exceptional Circumstances Exit Grant) (DEEWR) Determination 2008

 

Summary

 

Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Education, Employment and Workplace Relations (DEEWR) and the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to determine that an amount, or class of amounts, is an exempt lump sum for the purpose of the Act.  This instrument determines that, for the purpose of social security payments for which the Minister for Education and the Minister for Employment and Workplace Relations is responsible, an Exceptional Circumstances Exit Grant (‘Exit Payment’) paid to Australian farmers under the Exceptional Circumstances Exit Package 2007 (DAFF scheme) is an exempt lump sum under paragraph 8(11) (d) of the Social Security Act 1991 (the Act). 

 

The Exit payment relates only to payments made under the Exceptional Circumstances Exit Grant of the DAFF Scheme.  For the avoidance of doubt, this instrument does not exempt any payments made under the Exceptional Circumstances Advice and Retraining Grant, which also forms part of the DAFF Scheme.

 

The Exit Payment is a response to the extent and the severity of the drought and is designed to assist farmers leaving the land and to have capacity to continue their lives outside of farming the land. 

 

In general terms, the Exit Payment is a one-off payment of up to $150,000, made to a person or a person’s partner where the person was an Australian farm owner who has sold their farm enterprise and who meet the Department of Agriculture, Fisheries and Forestry eligibility guidelines under the DAFF Scheme.

 

The effect of this instrument is that an Exit payment paid under the DAFF Scheme will not be regarded as income under the Act.  Consequently, if a recipient of a DEEWR administered social security payment receives an Exit payment under the DAFF Scheme, it will be exempt from the income test under the social security law.

 

Background

 

Under the social security law all income earned, derived or received for a person’s own use or benefit, is counted as income.  The only exceptions are items specifically exempted under the social security law.  Paragraph 8(11)(d) of the Act allows the responsible 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 not included in the definition of ‘ordinary income’ under subsection 8(1) of the Act, so any such amount would not be taken into account under the social security income test.

 

This instrument determines that an Exit Payment under the DAFF Scheme is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.

 

The effect of this instrument is that for customers receiving an Exit Payment under the DAFF Scheme, the amount will not be assessed as income under the social security law.  


Explanation of Provisions

 

Part 1

 

Section 1 of the determination states the name of the determination.

 

Section 2 states that the determination commences on the day after registration.

 

Section 3 contains interpretation provisions. The term Exit Payment is defined as a payment to a person of up to $150,000 made by the Commonwealth Department of Agriculture Fisheries and Forestry under the Exceptional Circumstances Exit Package 2007.

 

Part 2

 

Subsection 4(1) states that paragraph 8(11)(d) of the Act allows the Secretary to determine that an amount, or class of amounts, received by a person is an exempt lump sum.

 

Subsection 4(2) provides that if a person receives an Exit Payment as defined in section 3, then the Exit Payment received by the person is an exempt lump sum.

 

Section 5 specifies that an Exit Payment received by a person referred to in subsection 4(2) will be regarded as an exempt lump sum from the date that the amount was received by the person, provided that date is on or after the commencement of this determination.

 

Consultation 

 

The Department of Families, Housing, Community Services and Indigenous Affairs and the Department of Veteran’s Affairs were consulted during the preparation of this determination.  This was done to ensure a co-ordinated and consistent approach to the income test treatment of this one-off payment for all social security payments under the Act.

 

This instrument is beneficial to customers because it exempts from the income test an Exit Payment under the Exceptional Circumstances Exit Package 2007.  Public consultation was therefore seen as unnecessary.

 

Regulatory Impact Analysis

 

This exemption does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator Figure.  This exemption 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 exemption.

 

Overview

The Social Security Exempt Lump Sum (Exceptional Circumstances Exit Grant) (DEEWR) Determination 2008 was enacted to address the need for financial assistance for Australian farmers exiting the land due to severe drought conditions. The determination was made by the Secretaries of the Department of Education, Employment and Workplace Relations and the Department of Families, Housing, Community Services and Indigenous Affairs under paragraph 8(11)(d) of the Social Security Act 1991. This instrument classifies an Exceptional Circumstances Exit Grant, known as an "Exit Payment", as an exempt lump sum for social security purposes. This means that such payments, up to a limit of $150,000, are not considered income under social security law and therefore do not affect eligibility for social security benefits. This exemption is designed to provide financial relief to farmers who meet the eligibility criteria under the Exceptional Circumstances Exit Package 2007, thereby assisting them in transitioning out of farming.

Scope and Application

The Social Security Exempt Lump Sum (Exceptional Circumstances Exit Grant) (DEEWR) Determination 2008 applies to the Exceptional Circumstances Exit Grant, commonly referred to as the Exit Payment, which is a one-off payment of up to $150,000 made to Australian farmers under the Exceptional Circumstances Exit Package 2007 of the Department of Agriculture, Fisheries and Forestry (DAFF) Scheme. This determination specifies that such Exit Payments are exempt lump sums for the purposes of the Social Security Act 1991, meaning they will not be considered income for the purposes of social security payments administered by the Department of Education, Employment and Workplace Relations (DEEWR) and the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). This exemption is limited to Exit Payments under the DAFF Scheme and does not extend to payments made under other grants, such as the Exceptional Circumstances Advice and Retraining Grant. The exemption applies to individuals who have sold their farm enterprise and meet the eligibility guidelines set by the DAFF Scheme. The determination came into effect on the day after its registration, as specified in Section 2.

Key Provisions

The main operative sections of the Social Security Exempt Lump Sum (Exceptional Circumstances Exit Grant) (DEEWR) Determination 2008 are found in sections 4 and 5. Section 4(1) establishes the authority for the Secretary to determine that an amount, or class of amounts, received by a person is an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991. Section 4(2) applies this authority specifically to Exit Payments as defined in section 3 of the determination. Section 5 then clarifies that such Exit Payments will be regarded as exempt lump sums from the date they are received, provided this date is on or after the commencement of the determination. The Act imposes several obligations on the parties involved. The Secretary, under subsection 4(2), is obligated to recognise Exit Payments as exempt lump sums for the purposes of social security payments. This means that any Exit Payment received by a person will not be included in their income assessment under the Social Security Act 1991. This exemption is specifically tied to Exit Payments under the Exceptional Circumstances Exit Package 2007, as defined in section 3 of the determination. Recipients of such payments must also ensure that they meet the eligibility guidelines set by the Department of Agriculture, Fisheries and Forestry (DAFF) to qualify for the Exit Payment. The determination does not explicitly outline specific offences, penalties, or consequences for breaches, as the nature of the exemption is administrative rather than regulatory. However, any misuse or misreporting of the Exit Payment, such as claiming it while not meeting the eligibility criteria, could potentially lead to penalties under the Social Security Act 1991. These penalties could include financial penalties, disqualification from social security benefits, or other legal consequences for fraud or misrepresentation. The maximum penalties for such breaches would be as prescribed under the Social Security Act 1991, which could include fines or imprisonment, depending on the severity of the offence.

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Area of Law
Social Security Law
Instrument
Determination
Concepts
Definitions & Interpretation
Regulatory Standards
Exemptions & Exclusions

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.