Social Security Exempt Lump Sum (New South Wales Aboriginal Trust Fund Repayment Scheme) (DEWR) Determination 2005

Administered by Department of Social Services

Legislation au F2005L02661 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Department of Employment and Workplace Relations

 

Social Security Exempt Lump Sum (New South Wales Aboriginal Trust Fund Repayment Scheme) (DEWR) Determination 2005

 

Summary

 

Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Employment and Workplace Relations (DEWR), the Department of Family and Community Services and the Department of Education, Science and Training to determine that an amount, or class of amounts, is an exempt lump sum for the purposes 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 descendants) 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 Employment and Workplace Relations 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 Secretaries 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 under the New South Wales Aboriginal Trust Fund Repayment Scheme to persons (or their descendants) 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 DEWR administered social security payment. The effect of this determination is that people receiving New South Wales Aboriginal Trust Fund Repayments under the Scheme will not be subject to a reduction in the amount of their DEWR 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

 

Section 1 of the determination states the name of the determination.

 

Section 2 states that the determination commences on 30 June 2005.

 

Section 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 Aboriginals (or their descendants) who had wages and other money that was paid into New South Wales trust funds between 1900 and 1968 and never repaid.

 

Part 2

 

Subsection 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.

 

Subsection 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.

 

Section 5 specifies that an amount received by a person referred to in subsection 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 Education, Science and Training 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, and does not disadvantage social security recipients.

 

Overview

The Social Security Exempt Lump Sum (New South Wales Aboriginal Trust Fund Repayment Scheme) (DEWR) Determination 2005 was enacted to address the specific issue of one-off payments made under the New South Wales Aboriginal Trust Fund Repayment Scheme, which aimed to repay wages or other monies that were never returned to Aboriginals or their descendants who had them paid into New South Wales trust funds between 1900 and 1968. This determination was made by the Secretaries of the Department of Employment and Workplace Relations, the Department of Family and Community Services, and the Department of Education, Science and Training. The policy objective behind this determination was to ensure that such repayments would not be assessed as income under the social security law, thereby preventing any reduction in social security payments for recipients who also received these trust fund repayments. This legislative measure was designed to provide a coordinated and consistent approach in treating these one-off payments under the Scheme for all social security payments administered under the Social Security Act 1991.

Scope and Application

The Social Security Exempt Lump Sum (New South Wales Aboriginal Trust Fund Repayment Scheme) (DEWR) Determination 2005 applies to individuals who received payments under the New South Wales Aboriginal Trust Fund Repayment Scheme, which aims to repay wages and other monies paid into New South Wales trust funds between 1900 and 1968 that were never repaid. This determination specifically addresses the application of these payments in the context of social security income tests, ensuring that such payments are considered exempt lump sums rather than ordinary income. Consequently, these payments do not affect the eligibility or amount of social security payments administered by the Department of Employment and Workplace Relations (DEWR). The geographic scope of this determination is limited to the Commonwealth, as it pertains to social security laws administered at the national level in Australia. It does not apply to state or territory laws, nor does it extend to any other jurisdictions outside of Australia. This determination does not include any specific exclusions or thresholds but operates on the basis that any one-off payments under the Scheme qualify as exempt lump sums, provided they are received after the commencement date of 30 June 2005. Subordinate instruments may further refine the application of this determination but do not alter its fundamental purpose or scope.

Key Provisions

The main sections of the determination clarify the specific exemption of payments made under the New South Wales Aboriginal Trust Fund Repayment Scheme from being treated as income for the purposes of the Social Security Act 1991. Section 3 provides a definition of key terms used in the determination, such as the "New South Wales Aboriginal Trust Fund Repayment Scheme" which refers to payments made to Aboriginals or their descendants who had wages or money paid into New South Wales trust funds between 1900 and 1968 and never repaid. Section 4(1) confirms that the Secretary can determine that amounts received by a person are exempt lump sums under paragraph 8(11)(d) of the Act. Section 4(2) and Section 5 further specify that payments under the Scheme are exempt lump sums, provided the payment is received after the determination commenced on 30 June 2005. The obligations and requirements imposed by this determination primarily involve ensuring that payments made under the New South Wales Aboriginal Trust Fund Repayment Scheme are not assessed as income for the purposes of social security. Social security recipients who also receive payments under the Scheme must ensure that these payments are identified as exempt lump sums as per Section 4(2) and Section 5 of the determination. Additionally, the departments involved in administering social security payments are required to implement this determination and ensure that these payments are not considered when assessing the income of beneficiaries. There are no specific offences, penalties, or consequences outlined in the determination itself for breaching the provisions, as the focus is on clarifying the treatment of certain payments under social security law. However, if a payment under the Scheme were incorrectly assessed as income, it could result in overpayments of social security benefits, which would need to be rectified. The potential consequences for such errors would be governed by the general provisions of the Social Security Act 1991, which may include repayment of the overpaid amount, interest, and possibly penalties. The maximum penalties for such breaches would be consistent with those outlined elsewhere in the Social Security Act 1991.

Legal classification tags

Area of Law
Social Security Law
Instrument
Determination
Concepts
Definitions & Interpretation
Commencement Provisions
Exempt Lump Sum

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