EXPLANATORY STATEMENT
Issued by the authority of the Branch Manager of Payment Structures and Seniors Branch, Department of Social Services
Social Security Act 1991
Social Security (Exempt Lump Sum - Native Forest Workforce Transition Program
(Program 2)) Determination 2023
Purpose
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (DSS) , or their delegate, to determine by legislative instrument that an amount, or class of amounts, received by a person is an exempt lump sum for the purposes of the Act, and does not count as income under the income test.
The Social Security (Exempt Lump Sum - Native Forest Workforce Transition Program (Program 2)) Determination 2023 (the Determination) provides that payments under the Native Forest Workforce Transition Program (Program 2) 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 counted as income under social security law. An amount, or class of amounts, received by a person may be specifically exempted 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 not included in the definition of ‘ordinary income’ under subsection 8(1) of the Act, so any such amount will not be 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 test.
Native Forest Workforce Transition Program (Program 2)
The Native Forest Workforce Transition Program (Program 2) assists forestry workers that are made redundant, or choose to leave the industry, as a result of the Western Australian Government’s decision to end native forest logging from the end of 2023. This Program will assist workers to transition out of the industry through a combination of reskilling, retraining or new employment support.
The Native Forest Workforce Transition Program (Program 2) is only available to workers who have left voluntarily or been made redundant after 8 September 2021 from a business with a current native timber production contract with the Forest Products Commission, and who otherwise meet the eligibility criteria as detailed in the Native Forest Transition: Workforce Transition Programs Step-by-step application guide and guidelines (the guidelines).
The Native Forest Workforce Transition Program (Program 2) is comprised of three payments for which a person may be eligible.
Program 2A provides for up to $2,500 in training support.
- A private Registered Training Organisation (up to $2,500 per worker), or
- Training support from TAFE or government contracted RTOs (up to $2,500 per worker)
Program 2B provides for up to $500 for resume preparation
- Support to help workers to prepare a resume in preparation for seeking employment
Program 2C provides for up to $5,000 for new employment support
- To assist with purchasing new work attire, a new uniform, PPE or tools or services (e.g. medical examination, eye tests for heavy haulage license) to engage new employment.
- To support relocation costs for workers that need to relocate for new employment within the native forest timber regions (refer to the map in the guidelines). This includes support for removalist costs or costs associated with the storage of furniture.
This determination provides that the amounts paid in relation to Program 2 of the Native Forest Workforce Transition Program are exempt lump sums for the purposes of paragraph 8(11)(d) of the Act.
The guidelines are found at Native Forest Transition. Workforce Transition Programs (www.wa.gov.au). Any references to the guidelines are current as of the date this instrument is made.
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 Government of Western Australia, Department of Jobs, Tourism, Science and Innovation is responsible for the administration of the Program;
- The Department of Agriculture, Fisheries and Forestry because section 8(11) determinations apply automatically under the Farm Household Support Act 2014; and
- The Department of Veterans’ Affairs because section 8(11) determinations apply automatically under the Veterans’ Entitlements Act 1986.
The Government of Western Australia, Department of Jobs, Tourism, Science and Innovation were consulted on the text of the instrument. This is because the Government of Western Australia, Department of Jobs, Tourism, Science and Innovation administers the Program, including payments made under the Program, and was best placed to provide comments on the proposed provisions.
Regulation Impact Statement (RIS)
The Office of Impact Analysis (OIA) has advised that the Determination does not require a Regulation Impact Statement (OBPR Reference No: OBPR22-03723) 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 Workforce Transition Program 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 - Native Forest Workforce Transition Program (Program 2)) Determination 2023.
Section 2 is the commencement provision. It sets out that the Determination commences on the day after the instrument is registered.
Section 3 provides that the authority for making the Determination is paragraph 8(11)(d) of the Social Security Act 1991.
Section 4 lists definitions of terms used in the Determination.
Act means the Social Security Act 1991.
Native Forest Workforce Transition Program (Program 2) means the Western Australian Government program under which payments are made to eligible native forestry workers in respect of their reskilling and retraining as they transition out of the industry.
Section 5 states that for the purposes of paragraph 8(11)(d) of the Act, payments made under the Native Forest Workforce Transition Program (Program 2) are exempt lump sums.
Section 6 means that the determination will apply to the calculation of the rate of social security payment payable to Native Forest Workforce Transition Program (Program 2) 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 - Native Forest Workforce Transition Program (Program 2)) Determination 2023
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 - Native Forest Workforce Transition Program (Program 2)) Determination 2023 (the Determination) is that an individual who receives a payment under the Workforce Transition Program (Program 2) will not have that payment assessed as income under the social security law.
The Native Forest Workforce Transition Program (Program 2) assists forestry workers that are made redundant, or choose to leave the industry, as a result of the Western Australian Government’s decision to end native forest logging from the end of 2023. This Program will assist workers to transition out of the industry through Reskilling, Retraining and/or new employment support.
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 Native Forest Workforce Transition Program (Program 2) 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 Native Forest Workforce Transition Program (Program 2) 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 Native Forest Workforce Transition Program (Program 2) 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.
Gillian Beer, Branch Manager, Payment Structures and Seniors Branch, Department of Social Services