EXPLANATORY STATEMENT
Issued by the authority of the Secretary of the Department of Social Services
Social Security Act 1991
Social Security (Exempt Lump Sum – F-111 Deseal/Reseal Payments) Determination 2025
Purpose
The Social Security (Exempt Lump Sum – F-111 Deseal/Reseal Payments) Determination 2025 (Determination) ensures that a F-111 deseal/reseal payment made by the Department of Veterans’ Affairs to a social security recipient is an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
This Determination applies to certain one-off payments received by people who worked on the deseal/reseal program on F-111 aircraft, or in the same hangar in close proximity to such work, between 1973 and 2000 and experienced a higher than normal level of exposure to an environmental hazard.
By determining a F-111 deseal/reseal 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.
Background
Exempt lump sums
An income amount earned, derived or received for a person’s own use or benefit is generally assessed as income under the social security law. However, 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, received by a person is an exempt lump sum for the purposes of the Act.
An exempt lump sum is excluded from the definition of “ordinary income” in subsection 8(1) of the Act. This means the 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 lump sum payment from the income test does not affect the assessment of any ongoing income generated by the lump sum, nor any assessable asset produced from the lump sum. These will be counted under the social security income and assets tests respectively. This is consistent with the treatment of other amounts as exempt lump sums under paragraph 8(11)(d) of the Act.
Ex-Gratia Payments
The Determination applies to lump sum payments made under the ex-gratia payments scheme administered by the Department of Veterans’ Affairs in relation to the F-111 deseal/reseal program. This program was conducted by the Royal Australian Air Force and their contractors to undertake maintenance on F-111 aircraft. This occurred in Amberley, Queensland, between 1973 and 2000.
The payments scheme is open to individuals doing F-111 deseal/reseal work or in close proximity to that work in the same hangar. Those eligible to claim such a payment include an active participant in the F-111 deseal/reseal program who was a serving member or veteran between 1 June 1973 and 28 January 2000, or a public servant or civilian contractor between 11 November 1991 and 27 August 1993.
Eligible participants are paid a one-off lump sum payment of either $10,000 or $40,000 to recognise the difficulties they suffered in the environment where they worked as part of the program. Payment of the amount is not conditional on a person having a specific disease or condition.
The ex-gratia payments scheme also applies to the estates of deceased personnel who were involved in the F-111 deseal/reseal program, irrespective of when they passed away.
Determination
Some of the people receiving the ex-gratia payment may also be in receipt of a social security payment. The effect of this Determination is that such an ex-gratia payment will not be regarded as income under the Act, so that if a social security recipient receives such a payment, it will be exempt from the social security income test.
These payments have been exempt in accordance with the current determination, the Social Security Exempt Lump Sum (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015 (2015 Determination). This instrument is due to sunset on 1 October 2025. The Determination repeals and remakes the 2015 Determination in substantially the same terms, to ensure that these payments continue to be exempt from the social security income test.
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.
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make any instrument of a legislative or administrative character, the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to revoke such instrument. In repealing the 2015 Determination, the Secretary is relying on this provision in conjunction with the power in paragraph 8(11)(d) 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 the Department of Veterans’ Affairs on the text of the Determination as the Department of Veterans’ Affairs administers the ex-gratia payments scheme and determinations under paragraph 8(11)(d) of the Act apply automatically under the Veterans’ Entitlements Act 1986. The Department of Veterans’ Affairs advised that payments are still being made under the scheme and 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; 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. The Determination is a revised version of the 2015 Determination, but is being made in substantially the same terms and serves the same purpose as the 2015 Determination.
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 - F-111 Deseal/Reseal Payments) Determination 2025
Section 1 – Name
Section 1 states how the Determination is to be cited, that is, as the Social Security (Exempt Lump Sum - F-111 Deseal/Reseal Payments) Determination 2025.
Section 2 - Commencement
Section 2 specifies that the Determination commences on the day after it is registered.
Section 3 – Authority
Section 3 provides that the Determination is made under paragraph 8(11)(d) of the Social Security Act 1991.
Section 4 – Definitions
Section 4 contains definitions of certain terms used in the Determination.
The terms “F-111 deseal/reseal payment” and “F-111 deseal/reseal program” are defined in section 4.
Section 5 – Schedules
Section 5 provides that each instrument that is specified in a Schedule to the Determination is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the Determination has effect according to its terms.
Section 6 – Exempt lump sum
Section 6 specifies amounts determined by the Secretary to be exempt lump sums, in accordance with paragraph 8(11)(d) of the Act.
In particular, section 6 provides that where a person has received a F-111 deseal/reseal payment, that amount is an exempt lump sum. By determining that a F-111 deseal/reseal 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.
Schedule 1 - Repeals
Item 1 of Schedule 1 repeals the Social Security Exempt Lump Sum (F-111 Deseal/Reseal Lump Sum Payment) Determination 2015. This instrument is due to sunset on 1 October 2025.
The Determination is intended to remake the 2015 Determination in substantially the same terms. It is not intended that there are any changes to the exemption specified in the repealed instrument.
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 Payments) Determination 2025
The Social Security (Exempt Lump Sum - F-111 Deseal/Reseal Payments) Determination 2025 (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 a F-111 deseal/reseal payment made by the Department of Veterans’ Affairs to a social security recipient is an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
This Determination applies to certain one-off payments received by people who worked on the deseal/reseal program on F-111 aircraft, or in the same hangar in close proximity to such work, between 1973 and 2000 and experienced a higher than normal level of exposure to an environmental hazard.
By determining a F-111 deseal/reseal payment as 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.
Human rights implications
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 assess the person’s income and assets to determine their eligibility for the payment, and their rate of payment. The Determination operates beneficially as a F-111 deseal/reseal 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. This exemption also flows through to means tested payments under the Veterans’ Entitlements Act 1986 and the Farm Household Support Act 2014.
If F-111 deseal/reseal payments are 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.
Conclusion
This Determination is compatible with human rights as it promotes and supports a person’s right to social security and the right to an adequate standard of living.
Xia Du
Acting Branch Manager of the Payment Structures and Seniors Branch
Delegate of the Secretary of the Department of Social Services