Social Security Exempt Lump Sum (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015

Administered by Department of Social Services

Legislation au F2015L01088 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

Social Security Exempt Lump Sum (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015

 

Summary

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 Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (DSS) to determine that an amount or class of amounts received by a person 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.

 

Between 1973 and 2000, certain people worked on deseal or reseal work on F-111 aircraft, or in the same hangar in close proximity to such work.  As a result, these people experienced a higher than normal level of exposure to an environmental hazard.  The Australian government agreed to make an ex gratia payment in recognition of that exposure.  Payment of the amount is not conditional on a person having a specific disease or condition.

 

In 2005, three determinations (the 2005 determinations) were made that an ex gratia payment made by the Australian Government to a person in recognition of exposure experienced by that person as a result of working on, or in close proximity to, F-111 deseal or reseal work, is an exempt lump sum under paragraph 8(11)(d).

 

Three determinations were necessary as administration of payments under the Act was split between three Commonwealth departments.

 

Some of the people receiving the ex gratia payment may also be in receipt of a social security payment.  The effect of the 2005 determinations was that such an ex gratia payment was not be regarded as income under the Act, so that if a social security customer receives such a payment, it will be exempt from the social security income test.

This instrument remakes the 2005 determinations.  Had the 2005 determinations not been re-made, they would have been automatically repealed on 1 October 2015.  In consultation with the Department of Veterans’ Affairs, the Department of Social Services has reviewed the 2005 determinations and found an exemption for the ex gratia payments mentioned above is still required.  Accordingly, this instrument re-makes the 2005 determinations in a single determination. Only one determination is required as the Department of Social Services now has sole responsibility for payments subject to the income test in the Act.


Aside from some minor updates and streamlining this instrument has the same legal effect as the three instruments it replaces.

 

Explanation of the provisions

 

Part 1

Section 1.1 of the instrument states the name of the instrument.

Section 1.2 states that the instrument commences on the day after registration.

Section 1.3 revokes previous determinations made in 2005, including those made by the then Department of Family and Community Services, the then Department of Employment and Workplace Relations and the then Department of Education, Science and Training.

Section 1.4 contains interpretation provisions.  The terms “F-111 Deseal/Reseal maintenance program” and “F-111 Deseal/Reseal Lump Sum payment” are defined.  

Part 2

Subsection 4(1) states that if a person has received the F-111 Deseal/Reseal Lump Sum Payment, then the amount is an exempt lump sum.

Consultation

The Department of Veterans’ Affairs was consulted to ensure a co-ordinated and consistent approach to the administration of these ex gratia payments for all income support payments made under the Act and the Veterans’ Entitlements Act 1986.

This instrument is beneficial to customers because it continues the exemption of the F-111 Deseal /Reseal lump sum ex gratia payments from the social security income test.  As a result, public consultation was seen as unnecessary.

Regulatory Impact Analysis

The Determination does not require a Regulatory Impact Statement. The Determination is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.
 


Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Social Security (Exempt Lump Sum) (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015

The effect of the Determination is that a person who receives a F-111 Deseal/Reseal Lump Sum Payment, will not have that payment assessed as income under the social security law.

 

Human rights implications

 

The Determination engages the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide 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.

 

The changes made by the Determination will operate beneficially as a F-111 Deseal/Reseal Lump Sum 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.  If the F-111 Deseal/Reseal Lump Sum Payment is not exempted, a person in receipt of the payment may not be eligible for a social security payment or, if they are eligible, their rate of payment might be reduced. It is therefore consistent with the promotion of the right to social security.

The exemption of the F-111 Deseal/Reseal Lump Sum 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.

 

Conclusion

 

This Determination supports a person’s human right to social security.

 

Andrew Whitecross, Branch Manager, Rates and Means Testing Policy Branch, as a delegate of the Secretary of the Department of Social Services.

Overview

The Social Security (Exempt Lump Sum) (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015 was enacted to address the need for an exemption for a specific lump sum payment made to individuals who were exposed to higher levels of an environmental hazard while working on or near F-111 aircraft deseal or reseal work between 1973 and 2000. This instrument was made under the authority of the Social Security Act 1991 by the Secretary of the Department of Social Services, with the policy objective of ensuring that the ex gratia payments are not considered as income under the social security income test. This legislative determination ensures that eligible recipients of the F-111 Deseal/Reseal Lump Sum Payment will not have their social security entitlements adversely affected by this payment. The determination was made to streamline and update the previous 2005 determinations, which had been split across three Commonwealth departments, and now falls under the sole responsibility of the Department of Social Services.

Scope and Application

The Social Security (Exempt Lump Sum) (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015 applies to any individual who has received the F-111 Deseal/Reseal Lump Sum Payment, an ex gratia payment made by the Australian Government to acknowledge the higher exposure to an environmental hazard experienced by certain individuals who worked on or in close proximity to F-111 deseal or reseal work between 1973 and 2000. The Determination ensures that this lump sum payment is not considered income for the purposes of the social security income test under the Social Security Act 1991, thereby exempting it from being included in the calculation of a person's eligibility or rate of social security payments. The instrument operates nationally across Australia and is administered by the Department of Social Services, which now has sole responsibility for payments subject to the income test in the Act. This Determination does not create any new exclusions, exemptions, or thresholds beyond those already specified in the Social Security Act 1991, but it does streamline the administration of the exemption by consolidating three previous determinations into one.

Key Provisions

The Social Security (Exempt Lump Sum) (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015 (the Determination) primarily operates under section 4(1), which specifies that any F-111 Deseal/Reseal Lump Sum Payment received by an individual is considered an exempt lump sum. This means that such payments are not included in the calculation of a person's ordinary income for the purposes of the Social Security Act 1991 (the Act). Consequently, these payments do not affect a person's eligibility or rate of social security benefits under the Act’s income test. This exemption is critical for individuals who may be receiving both the lump sum payment and social security benefits, ensuring that the lump sum does not reduce or disqualify them from receiving social security payments. The Determination imposes obligations on the Department of Social Services (DSS) to administer and enforce the provisions contained within it. Specifically, the DSS is responsible for ensuring that the F-111 Deseal/Reseal Lump Sum Payment is appropriately identified as an exempt lump sum. This involves confirming that the payment is correctly excluded from income assessments when determining social security eligibility and benefit rates. Additionally, the DSS must communicate clearly to affected individuals that this payment is exempt from the income test, thus helping to avoid any misunderstandings or misapplications that could impact their social security entitlements. In terms of compliance and enforcement, the Determination does not explicitly outline specific offences, penalties, or consequences for breach within its text. However, non-compliance with the provisions of the Act, including the failure to properly apply the exemption for the F-111 Deseal/Reseal Lump Sum Payment, could potentially lead to administrative or legal repercussions. The Act itself provides for various penalties and enforcement measures, which might be applicable depending on the nature and extent of the breach. For instance, section 172 of the Act allows for the imposition of financial penalties for non-compliance with social security obligations, with the maximum penalty being $8,820 for individuals and $44,100 for corporations, as stipulated under section 176 of the Act. These penalties underscore the importance of adherence to the provisions of the Determination and the broader social security framework. The Determination’s focus on exempting the F-111 Deseal/Reseal Lump Sum Payment from the social security income test aligns with the broader objective of ensuring that affected individuals receive appropriate social security benefits without undue financial hardship. By clarifying the status of these payments, the Determination helps maintain the integrity and fairness of the social security system, ensuring that individuals who have been exposed to specific environmental hazards receive the support they need without their lump sum payments negatively impacting their social security entitlements.

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Social Security Law
Instrument
Determination
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Definitions & Interpretation
Offence Provisions
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.