EXPLANATORY STATEMENT
Social Security (Exempt Lump Sum) (Farm Exit Support Grants) (DEEWR) Determination 2010
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Education, Employment and Workplace Relations (DEEWR) to determine that an amount received by a person is an exempt lump sum for the purposes of the Act. The effect of this Determination is that for the purpose of social security payments for which the Minister for Education, Employment and Workplace Relations is responsible, a Farm Exit Support Grant is an exempt lump sum under paragraph 8(11)(d).
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.
The Farm Exit Support Grant provides a one-off payment to eligible farmers who exit their farming enterprise and undertake not to return to farming as an owner or operator for at least five years. The Farm Exit Support Grant is designed to expand eligibility for the Exceptional Circumstances Exit Package to include farmers in the Western Australia pilot region whose farms are not in regions previously Exceptional Circumstances declared.
The Farm Exit Support Grant is a one-off payment made to a person or a person’s partner who has sold their farm enterprise and who meets the Commonwealth Government Department of Agriculture, Fisheries and Forestry eligibility guidelines under the Package.
Information on the Farm Exit Support package can be found on the web site of the Department of Agriculture, Fisheries and Forestry:
http://www.daff.gov.au/agriculture-food/drought-pilot/farm-exit-support
The effect of this instrument is that a recipient of a social security payment who receives a Farm Exit Support Grant will not have that grant assessed as income under the social security law.
This Determination is a legislative instrument. The Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) will make a complementary Determination in relation to those matters that the Minister for Families, Housing, Community Services and Indigenous Affairs has responsibility for under the Administrative Arrangements Order. This will ensure that an Farm Exit Support Grant received by a recipient of a FaHCSIA-administered social security payment will also be an exempt lump sum for the purposes of the Act.
Explanation of Provisions
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 it is registered.
Subsection 3(1) states that for the purposes of paragraph 8(11)(d) of the Act a Farm Exit Grant is an exempt lump sum.
Subsection 3(2) provides that the Farm Exit Support Grant is a grant that is known as the ‘Farm Exit Support Grant’, the ‘Farm Exit Support Advice and Re-training Grant’, or the ‘Farm Exit Support Relocation Grant’, that is provided under the Farm Exit Support program administered by the Department of Agriculture, Fisheries and Forestry.
Consultation
The Department has consulted with the Department of Agriculture, Fisheries and Forestry, the Department of Veterans’ Affairs and FaHCSIA regarding this exemption.
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.
Overview
The Social Security (Exempt Lump Sum) (Farm Exit Support Grants) (DEEWR) Determination 2010 was enacted to address the need to exempt Farm Exit Support Grants from being considered as income under the Social Security Act 1991 for the purposes of social security payments administered by the Department of Education, Employment and Workplace Relations. This legislative instrument was developed in response to the requirement under paragraph 8(11)(d) of the Act, which allows the Secretary to determine certain amounts as exempt lump sums, thereby excluding them from the social security income test. The policy objective of this Determination is to ensure that eligible farmers who receive a Farm Exit Support Grant do not have this one-off payment assessed as income, thus protecting their social security entitlements. The Determination was made by the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs to complement the Determination made by the Department of Education, Employment and Workplace Relations, ensuring that recipients of social security payments administered by both departments are treated consistently.
Scope and Application
The Social Security (Exempt Lump Sum) (Farm Exit Support Grants) (DEEWR) Determination 2010 applies to recipients of social security payments who receive a Farm Exit Support Grant under the Farm Exit Support program administered by the Department of Agriculture, Fisheries and Forestry. This instrument ensures that the Farm Exit Support Grant is considered an exempt lump sum for the purposes of the Social Security Act 1991, meaning it is excluded from the social security income test. This applies to individuals or their partners who have sold their farming enterprise and meet the eligibility criteria set by the Department of Agriculture, Fisheries and Forestry. The exemption is applicable across the Commonwealth of Australia and ensures that the grant is not assessed as income for social security purposes. The Determination is a legislative instrument that will be complemented by a similar Determination by the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs to cover matters within their responsibility, thereby ensuring comprehensive coverage for all recipients of social security payments.
Key Provisions
The Social Security (Exempt Lump Sum) (Farm Exit Support Grants) (DEEWR) Determination 2010 is a legislative instrument that exempts Farm Exit Support Grants from being considered as income under the Social Security Act 1991 (the Act) (section 3(1)). This Determination allows the Secretary of the Department of Education, Employment and Workplace Relations (DEEWR) to classify Farm Exit Support Grants as exempt lump sums for the purposes of social security payments administered by the Minister for Education, Employment and Workplace Relations (subsection 3(2)). Essentially, this means that recipients of social security payments who receive a Farm Exit Support Grant will not have that grant assessed as income under the social security law.
The Act imposes several obligations on the parties it governs. Firstly, the Secretary of DEEWR has the authority to determine that certain payments, such as Farm Exit Support Grants, are exempt lump sums, which are excluded from the definition of "ordinary income" under the Act (subsection 8(1)). Secondly, eligible farmers who receive a Farm Exit Support Grant must meet the eligibility guidelines set by the Commonwealth Government Department of Agriculture, Fisheries and Forestry (section 3(2)). This includes undertaking not to return to farming as an owner or operator for at least five years. Thirdly, the Department of Agriculture, Fisheries and Forestry is responsible for administering the Farm Exit Support program, which includes providing the grant to eligible recipients.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Determination for breach of its provisions. However, any misuse or fraudulent claims related to the Farm Exit Support Grant could potentially lead to civil or criminal penalties under other relevant legislation. For instance, if a recipient of a social security payment knowingly provides false information to receive a Farm Exit Support Grant, they could be subject to penalties under the Social Security Act 1991, which may include fines and imprisonment. The exact penalties would depend on the nature and severity of the offence, as well as any applicable provisions in other legislation.