EXPLANATORY STATEMENT
Issued by the authority of the Acting Branch Manager of the Payment Structures and Seniors Branch, Department of Social Services
Social Security Act 1991
Social Security (Exempt Lump Sum – Memorial Service for Bali Bombings Travel Assistance Payment) Determination 2022
Purpose
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services, or their delegate, to determine by legislative instrument that an amount, or class of amounts, received by a person is an exempt lump sum under social security law, and do not count under the income test.
The Social Security (Exempt Lump Sum – Memorial Service for Bali Bombings Travel Assistance Payment) Determination 2022 (the Determination) provides that payments under the Memorial Services for Bali Bombings Travel Assistance Payment Guidelines are exempt lump sums for the purposes of paragraph 8(11)(d) of the Act.
Background
Income earned, derived or received for a person’s own use or benefit is generally assessable as income under social security law. An amount, or class of amounts, received by a person may be specifically exempt under paragraph 8(11)(d) of the Act. This paragraph allows the Secretary or their delegate to determine that an amount or class of amounts is an exempt lump sum. An exempt lump sum is excluded from the definition of ‘ordinary income’ under subsection 8(1) of the Act, meaning the exempt lump sum amount is not taken into account as part of the social security income test.
The exemption of a lump sum payment from the income test does not alter the fact that any ongoing income generated, or any assessable asset produced, by the lump sum is counted under the social security income or assets tests.
Memorial Services for Bali Bombings Travel Assistance Payment Guidelines
The Financial Framework (Supplementary Powers) Act 1997 empowers Services Australia, on behalf of the Department of Foreign Affairs and Trade, to provide Australians who meet the eligibility criteria set out in the Memorial Services for Bali Bombings Travel Assistance Payment Guidelines (the Guidelines), lump sum grant payments to assist with their travel expenses to attend the 20 year anniversary commemorations of the 2002 Bali bombings, anticipated to be in either Canberra, Australia or Bali, Indonesia. This supports the participation of victims, families and first responders who wish to attend a 2022 Australian Government memorial service.
Under the Guidelines, persons eligible for payments are:
(a) family members of deceased Australian victims of the 2002 Bali bombings and their partners or nominated persons;
(b) Australians seriously injured in the 2002 Bali bombings and their families and required attendant carers;
(c) representatives of recognised clubs; and
(d) first responders who provided assistance at the 2002 Bali bombings and received Australian Bravery Decorations on 17 October 2003.
The Determination provides that amounts paid in relation to travel expenses as part of the Guidelines are exempt lump sums for the purposes of paragraph 8(11)(d) of the Act
The terms and conditions of the Guidelines can be found on the GrantConnect website (www.grants.gov.au – GO ID:GO5763)
Commencement
The Determination commences on the day after it is registered.
Consultation
The Department of Social Services consulted the following agencies on the intention to make this legislative instrument:
- The Department of Foreign Affairs and Trade;
- Department of Veterans’ Affairs;
- Department of Agriculture, Fisheries and Forestry; and
- Services Australia.
The Department of Foreign Affairs and Trade and Services Australia were consulted on the text of the instrument. This is because the 2022 Memorial Services for Bali Bombings Travel Assistance Payment grants and process will be administered by Services Australia on behalf of DFAT, and it was best placed to provide comments on the proposed provisions.
Regulation Impact Statement (RIS)
The Office of Best Practice Regulation (OBPR) has advised that the Determination does not require a Regulation Impact Statement (OBPR Reference: OBPR22-03304) as it considers the proposal is unlikely to have a more than minor regulatory impact.
Availability of independent review
The Determination specifies that lump sum payments made under the Guidelines are exempt from the social security income test.
A decision on the assessment of an individual’s income as part of the social security income test, which may involve a payment covered by this Determination, is subject to internal and external review under the Act and Parts 4 and 4A of the Social Security (Administration) Act 1999.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Explanation of the provisions
Section 1 states that the name of the Determination is the Social Security (Exempt Lump Sum – Memorial Service for Bali Bombings Travel Assistance Payment) Determination 2022.
Section 2 sets out that the Determination commences on the day after it is registered on the Federal Register of Legislation.
Section 3 provides that the authority for making the Determination is paragraph 8(11)(d) of the Act.
Section 4 lists definitions of terms used in the Determination.
Bali bombings travel assistance payment means a lump sum payment made to an individual in accordance with the ‘Memorial Services for Bali Bombings Travel Assistance Payment Guidelines’ for attendance at a Memorial Service.
Memorial Service means an official memorial service for the 2002 Bali bombings held on 12 October 2022 at a location identified in the Memorial Services for Bali Bombings Travel Assistance Payment Guidelines.
Memorial Services for Bali Bombings Travel Assistance Payment Guidelines means the grant guidelines dated 19 September 2022, and published on the GrantConnect website (www.grants.gov.au – GO ID:GO5763), for a grant program operated by the Australian Government to support the participation of eligible Australians attending a Memorial Service.
Section 5 states that for the purposes of paragraph 8(11)(d) of the Act, Bali bombings travel assistance payments made under the Guidelines are exempt lump sums.
Section 6 means that the determination will apply to the calculation of the rate of social security payment payable to Bali bombings travel assistance payment recipients for days on or after 30 June 2022. Together with section 5, this provision has some beneficial prospective operation. As the retrospectivity is only beneficial, it is consistent with subsection 12(2) of the Legislation Act 2003.
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 – Memorial Service for Bali Bombings Travel Assistance Payment) Determination 2022
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 effect of the Social Security (Exempt Lump Sum – Memorial Service for Bali Bombings Travel Assistance Payment) Determination 2022 (the Determination) is that an individual who receives a payment under the Memorial Services for Bali Bombings Travel Assistance Payment Guidelines (the Guidelines) 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. 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, foodstuff, and the most basic forms of education.
The Determination will operate beneficially as payments under the Guidelines will not be taken into account when assessing a person’s eligibility for or rate of social security entitlements under the social security income test. If payments under the Guidelines are not exempted, a person in receipt of that payment may not be eligible for a social security payment or, if they are eligible, their rate of payment might be reduced. The Determination is therefore consistent with the promotion of the right to social security.
The exemption of payments under the Guidelines from the income test on receipt does not alter the fact that any ongoing income generated by the lump sum is not exempt from the income test, and any assessable asset produced from the lump sum is counted under the social security assets test. This is consistent with the treatment of other lump sum payments under paragraph 8(11)(d) of the Social Security Act 1991.
Conclusion
The Determination is compatible with human rights as it supports a person’s right to social security.
Andrea-Wallace Green, Acting Branch Manager, Payment Structures and Seniors Branch, Department of Social Services