EXPLANATORY STATEMENT
Social Security (Exempt Lump Sum – Queensland Government Reconciliation Plan) Determination 2017
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (DSS) to determine that an amount or class of amounts received by a person is an exempt lump sum for the purposes of the Act. The effect of this Determination is that a payment made under the Queensland Government Reconciliation Plan for children who, as wards of the State, were placed in adult mental health facilities is an exempt lump sum under paragraph 8(11)(d) of the Act.
Background
Under social security law, an income test is used to determine a person’s eligibility for a social security payment and, if they are eligible, the rate of a social security payment that is payable. An income amount earned, derived or received for a person’s own use or benefit is generally assessable as income. However, some amounts that would otherwise be income are specifically exempted.
Paragraph 8(11)(d) of the Act allows the DSS 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 excluded from the definition of ‘ordinary income’ under subsection 8(1) of the Act, meaning the lump sum amount is not to be taken into account under the social security income test.
In 2010, the Queensland Government apologised to those who, as children in the care of the State, were inappropriately placed in Queensland adult mental health facilities. As part of the apology, the Government undertook to plan formal reconciliation in consultation with those who were harmed. The Queensland Government Reconciliation Plan realises the Government’s 2010 commitment.
The Reconciliation Plan will provide assistance to individuals who have been identified as having been inappropriately placed in adult mental health facilities in Queensland. The Reconciliation Plan includes four separate elements and eligible individuals may accept any or all of the following:
(a) an ex gratia payment;
(b) up to $1,000 for legal advice from a legal practitioner to assist the person in deciding whether to accept some or all of the elements of the Reconciliation Plan and to understand any legal implications;
(c) up to $1,000 for financial advice from a licensed financial advisor to help with the financial implications of accepting some or all of the elements of the Reconciliation Plan; and/or
(d) up to $2,000 for professional counselling or debriefing sessions for eligible individuals to provide support as a consequence of participating in the reconciliation planning process.
The payment of each of the elements of the Reconciliation Plan may be made as separate lump sums.
This Determination provides that each element of the Queensland Government Reconciliation Plan is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.
The effect of this Determination is that such a payment will not be regarded as income under the Act, so that if a social security recipient receives such a payment, it will be exempt from the social security income test.
Explanation of Provisions
Section 1 of the Determination states the name of the Determination.
Section 2 provides that the Determination commences on 13 November 2017. This Determination has retrospective effect, but as it is beneficial in nature does not adversely impact on any individual.
Section 3 provides that the authority for making this Determination is paragraph 8(11)(d) of the Act.
Section 4 contains definitions of certain terms used in the Determination.
Section 5 specifies that a Reconciliation Plan Payment made by the Queensland Government Department of Health under the Reconciliation Plan for children who, as wards of the State, were placed in adult mental health facilities is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.
The Reconciliation Plan Payment is made up of four elements and eligible individuals may accept any or all four elements under this Determination. The payment of each of these elements may be made separately as a one-off lump sum that is exempt for the purposes of paragraph (8)(11)(d) of the Act.
Consultation
This determination was made at the request of the Queensland Government. The Department of Veterans’ Affairs and Department of Agriculture and Water Resources were consulted.
This determination will be beneficial as it exempts the Reconciliation Plan Payment made by the Queensland Government Department of Health from the social security income test. As a result, public consultation was considered unnecessary.
Regulatory Impact Analysis
The Determination does not require a Regulatory Impact Statement. The Determination will operate in a beneficial manner. It is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.
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 – Queensland Government Reconciliation Plan) Determination 2017
The effect of the Determination is that a person who receives a Reconciliation Plan Payment from the Queensland Government Department of Health will not have that payment assessed as income under the social security law.
Human rights implications
This Determination is made under Section 8(11) of the Social Security Act 1991 (the Act) and determines that the Reconciliation Plan Payment from the Queensland Government Department of Health will not be assessed under the social security income test for the purposes of the Act.
The Determination ensures that people receiving the Reconciliation Plan Payment will not have these payments assessed as income for social security purposes.
The Determination engages the right to social security.
The right to social security
The Determination will operate beneficially as a Reconciliation Plan Payment from the Queensland Government Department of Health 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 the Reconciliation Plan Payment was not exempted, a person in receipt of the 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 the Reconciliation Plan Payment from the income test on receipt does not alter the fact that any ongoing income generated by the lump sum is counted under 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 exempted under paragraph 8(11)(d) of the Act.
Conclusion
This Determination supports a person’s human right to social security.
Anita Davis, Branch Manager, Payability and Integrity Branch, as a delegate of the Secretary of the Department of Social Services