EXPLANATORY STATEMENT
Social Security Act 1991
Social Security (Exempt Lump Sum – Relocation Assistance to Take Up a Job) Determination 2021
Purpose
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (department) 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.
The Secretary of the department has delegated the power to determine an exempt lump sum, or class of exempt lump sums, to senior officers of the department, including the Branch Manager of the Older Australians Branch.
The Social Security (Exempt Lump Sum – Relocation Assistance to Take Up a Job) Determination 2021 (the Determination) ensures that an amount paid by, or on behalf of, the Commonwealth to assist with an individual’s expenses associated with relocating for paid work as part of the Relocation Assistance to Take Up a Job program is an exempt lump sum under paragraph 8(11)(d) of the Act.
Background
Under the social security law, an income test is used to determine a person’s entitlement to a social security payment, and if they are qualified, 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 Secretary of the department 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 taken into account under the social security income test.
The exemption of a Program payment 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 Act.
Relocation Assistance to Take Up a Job program
Relocation Assistance to Take Up a Job (the Program) is an Australian Government program that assists participants to relocate to take up an offer of employment. Relocation assistance helps participants accept work outside of their area by removing the financial barriers that can prevent people relocating.
To be eligible for payments under the Program an individual must have an offer of ongoing employment and relocate to a location;
- at least 90 minutes away from where the individual currently lives, based on their normal mode of transport;
- that is not within the same capital city where the individual currently lives.
If an eligible individual relocates to take up work, they may be entitled to receive up to:
- $3,000 if they relocate to a capital city*;
- $6,000 if they relocate to a regional area; and
- an extra $3,000 if they relocate with a dependent.
* relocations between capital cities must be to a city with a lower unemployment rate.
In order to access payments under the Program, job seekers participating in employment services programs will need to complete a Relocation Assistance to Take Up a Job Agreement (Agreement) with their employment services providers.
Once an agreement is in place, an employment services provider (at the provider’s discretion) can make upfront payments of up to $2000 for initial relocation expenses. Payments can also be made directly to suppliers or as reimbursements for agreed costs, up to the maximum amount offered under the Agreement.
Payments under the Program are made by certain employment service providers (e.g. jobactive, Transition to Work, ParentsNext, Harvest Trail Services and Disability Employment Services) on behalf of the Australian Government Department of Education, Skills and Employment.
Payments under the Program are flexible and can be used for a range of items such as rent, travel and some employment-related expenses.
If an individual has an offer of short-term agricultural work, they may be eligible for support under the Program if the new job is:
- in one of the 16 designated Harvest Trail Service areas; or
- in a regional or remote area, and
- at least 90 minutes away from where the individual currently lives, based on their normal mode of transport;
- not within the same capital city or in a metropolitan area where the individual currently lives.
Commencement
The Determination commences on the day after this instrument is registered on the Federal Register of Legislation.
Consultation
The Department of Education, Skills and Employment has policy responsibility for the Program, and was consulted during the preparation and drafting of this instrument. Additionally, the Department of Education, Skills and Employment undertook external consultation during the implementation of the original Relocation Assistance to Take Up a Job program.
The Determination will be beneficial to the persons affected as it exempts relocation assistance payments from the social security income test. As such, public consultation was considered unnecessary.
The Department of Veterans’ Affairs and the Department of Agriculture, Water and the Environment were consulted on the intention to make this instrument.
Regulation Impact Statement (RIS)
The Office of Best Practice Regulation (OBPR) was consulted on 31 March 2021 and confirmed that the Determination does not require a Regulatory Impact Statement (OBPR Reference 43954). This Determination will operate in a beneficial manner. It is not regulatory in nature, will not impact business activity and will have no, or minimal, compliance cost or competition impact.
Explanation of the provisions
Section 1 provides that the Determination is to be cited as the Social Security (Exempt Lump Sum – Relocation Assistance to Take Up a Job) Determination 2021.
Section 2 provides that the Determination commences on the day after the instrument is registered on the Federal Register of Legislation.
Section 3 provides that the authority for making the Determination is paragraph 8(11)(d) of the Act.
Section 4 contains definition of certain terms used in the Determination.
“Act” is defined to mean the Social Security Act 1991.
“eligible participant” is defined to mean an individual who enters into a Relocation Assistance to Take-Up a Job Agreement on or after 1 May 2021.
“Relocation Assistance to Take-Up a Job Agreement” is defined to mean an agreement for the purposes of the program established by the Commonwealth and known as “Relocation Assistance to Take-Up a Job” (see table item 33 in Part 4 of Schedule 1AB to the Financial Framework (Supplementary Powers) Regulations 1997).
In order to receive a payment under the Program an eligible participant must enter into a Relocation Assistance to Take-Up a Job Agreement with their employment services provider.
“relocation assistance payment” is defined to mean, in the case of an eligible participant, an amount:
(a) paid by, or on behalf of, the Commonwealth, to assist with the individual’s relocation expenses in accordance with a Relocation Assistance to Take-Up a Job Agreement; and
(b) received by any means including an advance payment to the individual; a reimbursement to the individual; or a direct payment to a supplier who provides a good or service to the individual.
Section 5 specifies that, if an eligible participant receives a relocation assistance payment, that amount is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act. Such an amount will be regarded as an exempt lump sum from the date the relocation assistance payment is received by the eligible participant (including by way of a discrete reimbursement, or as a good or service provided by the supplier).
Under the Program an employment services provider (at their discretion) can support job seekers with up to $2,000 for initial relocation expenses. Payments can also be made directly to suppliers or as reimbursements for agreed costs, up to the maximum amount offered under the Agreement.
Accordingly, payments under the Program that are exempt lump sums as a result of the Determination include payments paid directly to program participants (whether in advance or by way of reimbursement), as well as payments made to suppliers of goods and services to program participants (of which the participants receive the benefit).
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security Act 1991
Social Security (Exempt Lump Sums – Relocation Assistance to Take-Up a Job) Determination 2021
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 Determination is that an individual participating in the Relocation Assistance to take up a Job program (the Program) who receives an amount to assist with an individual’s expenses associated with relocation will not have that payment assessed as income under the social security law.
Human rights implications
The Determination engages the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). 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, foodstuffs, and the most basic forms of education.
The Determination will operate beneficially as a payment under the Program will not be taken into account when assessing a person’s eligibility or rate of social security entitlements under the social security income test. If a payment under the Program is 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 a Program payment 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 Act.
Conclusion
The Determination is compatible with human rights as it supports a person’s right to social security.
Caitlin Delaney, Branch Manager, Older Australians, as Delegate of the Secretary of the Department of Social Services