EXPLANATORY STATEMENT
Department of Education, Science and Training
Social Security Exempt Lump Sum (New South Wales Aboriginal Trust Fund Repayment Scheme) (DEST) Determination 2005
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Family and Community Services, 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 determination provides that one-off payments made under the New South Wales Aboriginal Trust Fund Repayment Scheme (the Scheme) to persons (or their descendents) who had wages and/or other monies paid into New South Wales trust funds between 1900 and 1968 that were never repaid are exempt lump sums under paragraph 8(11)(d) of the Act.
The effect of this determination is that one-off payments made under the Scheme will not be regarded as ‘income’ for the purposes of the Act. The determination has effect in respect of social security payments for which the Minister for Education, Science and Training is responsible.
Background
Under the social security law all income earned, derived or received for a person’s own 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 the Secretary 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 determination provides that one-off payments made by the New South Wales Aboriginal Trust Fund Repayment Scheme to persons (or their descendents) who had wages and/or other monies paid into New South Wales trust funds between 1900 and 1968 that were never repaid, is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.
The New South Wales State Government Minister for Community Services and Minister for Ageing announced a scheme to repay wages or other money paid into the New South Wales Aboriginal Trust Fund between 1900 and 1968 and never repaid. Some New South Wales Aboriginal Trust Fund recipients may also be in receipt of a DEST administered social security payment. The effect of this determination is that customers receiving the New South Wales Aboriginal Trust Fund Repayments will not be subject to a reduction in the amount of their DEST administered social security payment, and the New South Wales Aboriginal Trust Fund Repayments will not be assessed as income under the social security law.
Explanation of Provisions
Part 1
Clause 1 of the determination states the name of the determination.
Clause 2 states that the determination commences on 30 June 2005.
Clause 3 contains interpretation provisions. In particular, the term New South Wales Aboriginal Trust Fund Repayment Scheme is defined as an ex gratia payment made to Aborigines (or their descendents) who had wages and other money that was paid into New South Wales trust funds between 1900 and 1968 and never repaid.
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 has received a payment under the “New South Wales Aboriginal Trust Fund Repayment Scheme” and they are also in receipt of a social security payment, then a one-off payment received by the person as an Aboriginal Trust Fund Repayment is an exempt lump sum.
Clause 5 specifies that an amount received by a person referred to in subclause 4(2) is 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 after the commencement of this determination (ie on or after 30 June 2005).
Consultation
This determination was made at the request of the New South Wales Government.
The Department of Family and Community Services and the Department of Employment and Workplace Relations were consulted to ensure a co-ordinated and consistent approach to the income test treatment of one-off payments under the Scheme in respect of all social security payments under the Act.
This determination is beneficial to customers because it exempts one-off payments under the Scheme from the social security income test. Public consultation was therefore seen as unnecessary.
Retrospectivity
This determination has effect from 30 June 2005, as one‑off payments may have been made to eligible people under the Scheme from this date. The retrospective commencement of this determination is beneficial to, and does not disadvantage, social security recipients.