EXPLANATORY STATEMENT
Department of Education, Science and Training
Social Security Exempt Lump Sum (Fisheries Adjustment Package (Securing Our Fishing Future) 2005) (DEST) Determination 2006
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Families, Community Services and Indigenous Affairs, the Department of Employment and Workplace Relations and the Department of Education, Science and Training (DEST) 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, Science and Training is responsible, a one-off payment made by the Department of Agriculture, Fisheries and Forestry to persons under the Fisheries Adjustment Package (Securing Our Fishing Future) 2005 is an exempt lump sum under paragraph 8(11)(d) of the Act.
The effect of this instrument is that such a one-off payment will not be regarded as income under the Act, so that if a recipient of a DEST administered social security payment receives a payment under the Fisheries Adjustment Package (Securing Our Fishing Future) 2005, 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 Secretaries 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 a one-off payment made by the Fisheries Adjustment Package (Securing Our Fishing Future) 2005 is an exempt lump sum for the purposes of paragraph 8(11)(d).
The effect of this instrument is that customers receiving a payment under the Fisheries Adjustment Package (Securing Our Fishing Future) 2005 will not be subject to a reduction in the amount of their DEST administered social security payment, as a result of receiving the payment under the Fisheries Adjustment Package (Securing Our Fishing Future) 2005, and the payment will not be assessed as income under the social security law.
Explanation of Provisions
Part 1
Clause 1 of the instrument states the name of the instrument.
Clause 2 states that the instrument commences on 17 March 2006.
Clause 3 contains interpretation provisions. In particular, the term Workers Assistance Grant is defined as a payment made to a person by the Australian Government Department of Agriculture, Fisheries and Forestry under the Fisheries Adjustment Package (Securing Our Fishing Future) 2005 on an ex gratia basis in recognition of that person losing their job as a result of reduced fishing activity.
Part 2
Subclause 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.
Subclause 4(2) provides that if a person receives a Workers Assistance Grant from the Australian Government Department of Agriculture, Fisheries and Forestry under the Fisheries Adjustment Package (Securing Our Fishing Future) 2005 and they are also in receipt of a social security payment, then the Workers Assistance Grants received by the person are an exempt lump sum.
Clause 5 specifies that Workers Assistance Grants received by a person referred to in subclause 4(2) are an exempt lump sum for the purpose of paragraph 8(11)(d) of the Act. Such an amount will be regarded as an exempt lump sum from the date that the amount was received by the person, provided that this date is on or after the commencement of this instrument.
Consultation
The Department of Employment and Workplace Relations and the Department of Families, Community Services and Indigenous 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 Workers Assistance Grants made by the Department of Agriculture, Fisheries and Forestry. Public consultation was therefore seen as unnecessary.