Social Security Exempt Lump Sum (Murray-Darling Basin Small Block Irrigators Grant) (FaHCSIA) Determination 2008

Administered by Department of Social Services

Legislation au F2008L04670 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Social Security Exempt Lump Sum (Murray-Darling Basin Small Block Irrigators Grant) (FaHCSIA) Determination 2008

 

Summary

 

The Social Security Exempt Lump Sum (Murray-Darling Basin Small Block Irrigators Grant) (FaHCSIA) Determination 2008 is made under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).  The effect of this determination is that if a recipient of a FaHCSIA-administered social security payment receives a payment under the Murray-Darling Basin Small Block Irrigators Grant, it will be exempt from the income test under the social security law.  This determination has effect in relation to the provisions of the Act in so far as they relate to matters for which the Minister for Families, Housing, Community Services and Indigenous Affairs has responsibility under the Administrative Arrangements Order.

 

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 a Murray-Darling Basin Small Block Irrigators Grant  paid to an individual as part of the Water for the Future plan is an exempt lump sum for the purposes of paragraph 8(11)(d). The Grant is not a periodic amount within the meaning of subsection 8(11A) of the Act; the Grant is not a leave payment within the meaning of point 1067G-H20, 1067L-D16 and 1068-G7AR; and the Grant is not income from remunerative work undertaken by the person, satisfying paragraphs 8(11)(a) to (c) of the Act.

 

The effect of this Determination is that customers receiving a Murray-Darling Basin Small Block Irrigators Grant will not be subject to a reduction in the amount of their FaHCSIA-administered social security payment due to the operation of the social security income test and as a result of receiving that grant.

 

This Determination is a legislative instrument. The Department of Education, Employment and Workplace Relations will make a complementary Determination in relation to those matters that the Minister for Education and the Minister for Employment and Workplace Relations have responsibility for under the Administrative Arrangements Order to ensure that a Murray-Darling Basin Small Block Irrigators Grant received by a recipient of a DEEWR-administered social security payment will also be exempt from the income test under the social security law.

 

 

Explanation of Provisions

 

Part 1

 

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 contains interpretation provisions.  In particular, the term Murray-Darling Basin Small Block Irrigators Grant is defined as a one-off payment, to eligible irrigators on blocks of 15 hectares or less, that is part of an exit package to assist small block irrigators to remain in the community while selling their water entitlements to the Commonwealth and to leave irrigation farming for at least five years.

 

Part 2

 

Section 4 provides that if a person receives a Murray-Darling Basin Small Block Irrigators Grant, any amount of that Grant is an exempt lump sum in respect of the person for the purposes of the income test.

 

Consultation

 

The Department of Agriculture, Fisheries and Forestry and the Department of Education, Employment and Workplace Relations 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 social security income test, a Murray-Darling Basin Small Block Irrigators Grant made by the Department of Agriculture, Fisheries and Forestry and the Department of the Environment, Water, Heritage and the Arts.  Public consultation was therefore seen as unnecessary.

Regulatory Impact Analysis

The Determination does not require a Regulatory Impact Statement or a 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.  It is not expected that any compliance costs will be incurred by business, as a result of this Determination, against the nine categories listed in the Business Compliance Cost Checklist contained in the Best Practice Regulation Handbook prepared by the Office of Best Practice Regulation.

Overview

The Social Security Exempt Lump Sum (Murray-Darling Basin Small Block Irrigators Grant) (FaHCSIA) Determination 2008 was enacted to address the specific issue of ensuring that recipients of the Murray-Darling Basin Small Block Irrigators Grant would not experience a reduction in their social security payments due to the income test. This determination was made under paragraph 8(11)(d) of the Social Security Act 1991 and was introduced by the Commonwealth Parliament. The policy objective is to exempt the Murray-Darling Basin Small Block Irrigators Grant from the income test, thereby ensuring that recipients of social security payments administered by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) are not financially penalised when they receive this grant. This determination ensures that the grant, which is a one-off payment to small-scale irrigators, is treated as an exempt lump sum and not as ordinary income, thus maintaining the integrity and support of social security payments for those affected by the Water for the Future plan.

Scope and Application

The Social Security Exempt Lump Sum (Murray-Darling Basin Small Block Irrigators Grant) (FaHCSIA) Determination 2008 applies to individuals who are recipients of a FaHCSIA-administered social security payment and receive a Murray-Darling Basin Small Block Irrigators Grant. The Determination ensures that such a grant is exempt from the income test under the social security law. This means that the receipt of this specific grant will not affect the income test and therefore will not result in a reduction of their social security payment. The Determination applies across Australia, given the national scope of the Social Security Act 1991, under which this Determination is made. There are no exclusions, exemptions, or thresholds specified within the Determination itself; however, the grant itself has eligibility criteria such as being a one-off payment to small block irrigators on blocks of 15 hectares or less. The application of the Determination may be further defined through subordinate instruments, although none are mentioned in the Explanatory Statement.

Key Provisions

The key provisions of the Social Security Exempt Lump Sum (Murray-Darling Basin Small Block Irrigators Grant) (FaHCSIA) Determination 2008 are primarily found in Section 4, which stipulates that any amount received from the Murray-Darling Basin Small Block Irrigators Grant is classified as an exempt lump sum for the purposes of the income test (s. 4). This means that recipients of this grant will not have their social security payments reduced due to the income test (s. 4). The Determination provides clear definitions and interpretations of terms such as "Murray-Darling Basin Small Block Irrigators Grant," which is defined as a one-off payment to eligible irrigators with blocks of 15 hectares or less as part of an exit package (s. 3). The Act imposes specific obligations on the parties involved. Firstly, it requires that the Murray-Darling Basin Small Block Irrigators Grant be exempt from the income test, ensuring that recipients of this grant do not face reductions in their social security payments. The obligation falls upon the Department of Agriculture, Fisheries and Forestry to administer the grant and ensure its compliance with the Determination. Additionally, the Department of Education, Employment and Workplace Relations is tasked with ensuring that the grant is also exempt from the income test for recipients of Department of Education, Employment and Workplace Relations-administered social security payments (s. 2). The Determination does not create specific offences or penalties for breach but provides that the Murray-Darling Basin Small Block Irrigators Grant is not considered a periodic amount, leave payment, or income from remunerative work, thereby satisfying the criteria set out in the Social Security Act 1991 (s. 4). The primary consequence of non-compliance would be that the grant would not be exempt from the income test, potentially leading to a reduction in social security payments for the recipients. The Determination aims to ensure clarity and consistency in the application of the income test across various social security payments.

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Area of Law
Social Security Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Exemptions & Exclusions

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.