EXPLANATORY STATEMENT
Social Security (Exempt Lump Sum) (Farm Exit Support Grants) (FaHCSIA) Determination 2010
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) 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 FaHCSIA is responsible, a Farm Exit Support Grant (FES 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 FES 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 FES Grant is designed to expand eligibility for the Exceptional Circumstances (EC) Exit Package to include farmers in the Western Australia pilot region whose farms are not in regions previously EC declared.
The 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.
The effect of this instrument is that customers receiving a farm exit support grant, will not have this amount assessed as income under the social security law.
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 a Farm Exit Support Grant is a grant that is known as either 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. The maximum value of the grants are $150,000, $10,000 and $10,000 respectively.
Consultation
The Department has consulted with the Department of Veteran's Affairs and the Department of Education, Employment and Workplace Relations 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.