EXPLANATORY STATEMENT
Social Security (Exempt Lump Sum) (Murray-Darling Basin Small Block Irrigators Exit Grant) (DEEWR) Determination 2008 (No. 1)
Summary
Paragraph 8 (11) (d) of the Social Security Act 1991 (the Act) empowers the Secretary of the Department of Education, Employment and Workplace Relations (DEEWR) and the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to determine that a payment or class of payments will be an exempt lump sum for the purposes of income tests under the Act.
The effect of a determination that a payment is an exempt lump sum is that it is not part of a person’s “ordinary income” for the purposes of the Act, and hence not taken into account in determining the extent to which the person’s ordinary income affects the amount of a social security payment they are entitled to.
This instrument determines that, for the purpose of social security payments for which the Minister for Education, Employment and Workplace Relations is responsible, a Murray-Darling Basin Small Block Irrigators Exit Grant (an Exit Grant) made under the Murray-Darling Basin Small Block Irrigators Exit Grant package is an exempt lump sum.
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 income amounts specifically exempted under the social security law. 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 section 8 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 Determination provides that an Exit Grant made to a person under the Murray-Darling Basin Small Block Irrigators Exit Grant package (part of the Government’s Water for the Future plan) is an exempt lump sum for the purposes of paragraph 8 (11) (d) of the Act. An Exit Grant is not a periodic amount within the meaning of subsection 8 (11A) of the Act; not a leave payment within the meaning of point 1067G-H20, 1067L-D16 and 1068-G7AR of the Act; and is not income from remunerative work undertaken by the person. An Exit Grant satisfies paragraphs 8 (11) (a), (b) and (c) of the Act and as a consequence of this determination, is an “exempt lump sum” as defined in subsection 8 (11) of the Act.
Information on the Murray-Darling Basin Small Block Irrigators Exit Grant package can be found on the web site of the Department of Environment, Water, Heritage and the Arts:
http://www.environment.gov.au/water/programs/entitlement-purchasing/small-block-irrigators.html
This Determination is a legislative instrument. 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 Exit Grant paid under the Murray-Darling Basin Small Block Irrigators Grant package 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.
Section 2 states that the determination commences on the day after it is registered.
Section 3 provides that a Murray-Darling Basin Small Block Irrigators Exit Grant is an exempt lump sum. The two other kinds of grant under the Murray-Darling Basin Small Block Irrigators Exit Grant package – the Murray-Darling Basin Small Block Irrigators Grant Package Advice and Re-Training Grant; and the Murray-Darling Basin Small Block Irrigators Exit Grant Package Removal Grant – are not exempt lump sums.
Consultation
The Department of Families, Housing, Community Services and Indigenous Affairs was consulted during the preparation of this determination. This was done to ensure a co-ordinated and consistent approach for all social security payments under the Act.
This instrument is beneficial to recipients of social security payments and no other people are affected by the instrument. Public consultation was therefore seen as unnecessary.
Business Cost Calculator Figure
This Determination does not require a Regulatory Impact Statement (RIS) or a Business Cost Calculator Figure. This Determination is not regulatory in nature, will not impact on business activity and will have no compliance costs or competition impact.