EXPLANATORY STATEMENT
Social Security Exempt Lump Sum (Queensland Government Redress Scheme) (FaCSIA) Determination 2007
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Families, Community Services and Indigenous Affairs (FaCSIA), the Department of Employment and Workplace Relations (DEWR) 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 instrument provides that, for the purpose of social security payments for which the Minister for Families, Community Services and Indigenous Affairs is responsible, a ‘first level payment’ and ‘second level payment’ made by the Queensland Government under the scheme known as the Redress Scheme will be exempt lump sums.
A first level payment is an initial payment of $7,000.00 made by the Queensland Government under the scheme known as the Redress Scheme. Broadly, such payments are made by the Queensland Government to an individual who:
- was in a Queensland licensed government or non-government institution or detention centre covered by the terms of reference of the Forde Inquiry;
- on or before 31 December 1999, turned 18 years of age, and was released from an institution or centre; and
- suffered abuse or neglect while in the care, protection or detention of such an institution or centre.
In addition to the payment of $7,000.00 the Queensland Government has also made available a second payment. This ‘second level payment’ is up to $33,000.00 and is available to an individual who;
- has been determined as eligible for the first level payment; and
- can satisfy a three person expert panel established by the Queensland Government that he or she has suffered significant abuse or neglect while in the care, protection or detention of an institution or centre covered by the terms of the reference of the Forde Inquiry.
The Queensland Government will determine who is eligible for a first level payment and a second level payment in accordance with its own criteria, including the criteria noted above. In accordance with the criteria set down by the Queensland Government, the total payment available to an individual under the Redress Scheme is $40,000.00 (inclusive of first and second level payments).
This instrument determines that a payment made by the Queensland Government under the Redress Scheme (being either a first or a second level payment) to a person or their partner is an exempt lump sum under paragraph 8(11)(d) of the Act. These payments are designed to acknowledge the impact of past institutional abuse and neglect and to provide opportunities for the recipients’ future. Neither the first level payment nor the second level payment represents receipt of money for services rendered directly or indirectly.
Background
The Queensland Government Redress Scheme was announced on 31 May 2007 in response to the Forde Inquiry, commissioned by the Queensland Government in 1998-1999, to investigate the treatment of children in licensed government and non-government institutions in Queensland. The terms of reference of the inquiry covered 159 institutions during the period 1911 to 1999 and excluded foster care and institutions providing care for children with disabilities or those suffering from acute or chronic health problems. The Redress Scheme will provide ex-gratia payments from 1 October 2007 to eligible individuals. It is estimated that there are approximately 6,000 individuals who may be eligible to apply for payments under the Redress Scheme.
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 items specifically exempted under the social security law. Paragraph 8(11)(d) of the Act allows the responsible 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 instrument determines that a first level payment and a second level payment made by the Queensland Government under the scheme known as the Redress Scheme is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.
The effect of this instrument is that a first level payment and a second level payment made by the Queensland Government under the scheme known as the Redress Scheme will not be regarded as income under the Act. Consequently, if a person or their partner receives a FaCSIA administered social security payment and receives a first level payment or a second level payment made by the Queensland Government under the scheme known as the Redress Scheme, it will be exempt from the income test under the social security law.
Explanation of Provisions
Part 1
Section 1 of the instrument states the name of the instrument.
Section 2 states that the instrument commences on the day after the day on which it is registered with the Federal Register of Legislative Instruments.
Section 3 contains interpretation provisions.
The term first level payment is defined as a one-off payment of $7,000.00 made by the Queensland Government under the scheme known as the Redress Scheme. The criteria and eligibility are determined by the Queensland Government.
The term second level payment is defined as a payment of up to $33,000.00 made by the Queensland Government under the scheme known as the Redress Scheme. This second level payment may be made in addition to a first level payment and only if a person is eligible to receive a first level payment. As is the case with the first level payment, the criteria and eligibility are determined by the Queensland Government.
The total payment made to a person under the scheme known as the Redress Scheme is $40,000.00 (inclusive of the first and second level payments).
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 receives a first level payment as defined in section 3, then any amount of such a payment received by the person is an exempt lump sum.
Subsection 4(3) provides that if a person receives a second level payment, as defined in section 3, then any amount of such a payment received by the person is an exempt lump sum.
Section 5 specifies that a first level payment received by a person referred to in subsection 4(2) or a second level payment received by a person referred to in subsection 4(3) will be regarded as an exempt lump sum from the date that the amount was received by the person, provided that date is on or after the commencement of this instrument.
Consultation
The Department of Employment and Workplace Relations, and the Department of Education, Science and Training 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 income support customers because it exempts from the income test a payment made by the Queensland Government under the scheme known as the Redress Scheme. Public consultation was therefore seen as unnecessary.
Regulatory Impact Analysis
This exemption does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator Figure. This exemption 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 (against the nine categories listed) as a result of this exemption.