Social Security Exempt Lump Sum (Restructuring Grants under the Tobacco Grower Adjustment Assistance Package 2006) (DEST) Determination 2007

Administered by Department of Social Services

Legislation au F2007L00479 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Social Security Exempt Lump Sum (Restructuring Grants under the Tobacco Grower Adjustment Assistance Package 2006) (DEST) Determination 2007

 

Summary

 

Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Education, Science and Training (DEST), the Department of Families, Community Services and Indigenous Affairs and the Department of Employment and Workplace Relations to determine that an amount, or class of amounts, is an exempt lump sum for the purpose of the Act.  This instrument determines that, for the purpose of social security payments for which the Minister for Education, Science and Training is responsible, a Restructuring Grant (a one-off payment of up to $150,000 per recipient) made by the Department of Agriculture, Fisheries and Forestry to persons under the Tobacco Grower Adjustment Assistance Package 2006 is an exempt lump sum under paragraph 8(11)(d) of the Act.

 

The effect of this instrument is that a Restructuring Grant under the Tobacco Grower Adjustment Assistance Package 2006 will not be regarded as income under the Act.  Consequently, if a recipient of a DEST administered social security payment receives a Restructuring Grant under the Tobacco Grower Adjustment Assistance Package 2006, the Grant will not affect their social security payment

 

 

Background

 

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 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 instrument determines that a Restructuring Grant made under the Tobacco Grower Adjustment Assistance Package 2006 is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.

 

Explanation of Provisions

 

Part 1

 

Section 1 of the instrument states the name of the instrument.

 

Section 2 states that the instrument commences on 23 February 2007.  The 23 February 2007 is the first date that a person may lodge a claim under the Tobacco Grower Adjustment Assistance Package 2006.

 

Section 3 contains interpretation provisions.  In particular, the term Restructuring Grant under the Tobacco Grower Adjustment Assistance Package 2006 is defined as a payment (up to $150,000) made to a person by the Australian Government Department of Agriculture, Fisheries and Forestry under the Tobacco Grower Adjustment Assistance Package 2006 in order to assist that person to readjust into economic activities other than tobacco growing.

 

 

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 Restructuring Grant under the Tobacco Grower Adjustment Assistance Package 2006 from the Commonwealth Department of Agriculture, Fisheries and Forestry and they are also in receipt of a social security payment, then the Restructuring Grant made under the Tobacco Grower Adjustment Assistance Package 2006 received by the person is an exempt lump sum.

 

Section 5 specifies that a Restructuring Grant  under the Tobacco Grower Adjustment Assistance Package 2006 received by a person referred to in subsection 4(2) 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.

 

 

COMMENCEMENT

 

This instrument commences on 23 February 2007.

 

 

Consultation

 

The Department of Employment and Workplace Relations and the Department of Families, Community Services and Indigenous Affairs 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 customers because it exempts from the income test a Restructuring Grant under the Tobacco Grower Adjustment Assistance Package 2006 made by the Department of Agriculture, Fisheries and Forestry.  Public consultation was therefore seen as unnecessary.

 

 

Business Cost Calculator

 

This exemption does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator.  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.

Overview

The Social Security Exempt Lump Sum (Restructuring Grants under the Tobacco Grower Adjustment Assistance Package 2006) (DEST) Determination 2007 was enacted to address the gap in social security law concerning the treatment of Restructuring Grants under the Tobacco Grower Adjustment Assistance Package 2006. The instrument was introduced to ensure that these grants, which are one-off payments made to tobacco growers to assist them in transitioning to other economic activities, are not counted as income for the purposes of social security payments. This determination was made by the Secretaries of the relevant departments, including the Department of Education, Science and Training (DEST), in accordance with paragraph 8(11)(d) of the Social Security Act 1991. The policy objective of this instrument is to provide a coordinated and consistent approach to the income test treatment of these grants across all social security payments under the Act, thereby ensuring that recipients of these grants are not adversely affected in their eligibility or amount of social security benefits.

Scope and Application

The Social Security Exempt Lump Sum (Restructuring Grants under the Tobacco Grower Adjustment Assistance Package 2006) (DEST) Determination 2007 applies to individuals who receive Restructuring Grants under the Tobacco Grower Adjustment Assistance Package 2006 and are also recipients of social security payments administered by the Minister for Education, Science and Training. These grants, which are one-off payments of up to $150,000 per recipient, are provided by the Department of Agriculture, Fisheries and Forestry to assist tobacco growers in transitioning to other economic activities. The Determination ensures that these grants are considered exempt lump sums under the Social Security Act 1991, meaning they will not be regarded as income and will not affect the social security payments of the recipients. This instrument is in effect from 23 February 2007, the date on which the first claims under the Tobacco Grower Adjustment Assistance Package 2006 could be lodged. The geographic reach of this legislation is national, as it pertains to federal social security payments and grants issued by a Commonwealth department. There are no stated exclusions or exemptions within this Determination, and it does not extend or restrict application through subordinate instruments.

Key Provisions

The main operative sections of this legislation (sections 4(1) and 4(2)) clarify that a Restructuring Grant made by the Department of Agriculture, Fisheries and Forestry under the Tobacco Grower Adjustment Assistance Package 2006 is deemed an exempt lump sum for the purposes of the Social Security Act 1991. This means that such grants will not be considered as income for the purposes of social security payments, provided the grant recipient is also receiving a social security payment administered by the Department of Education, Science and Training (DEST). This provision is intended to assist individuals transitioning from tobacco growing to other economic activities by ensuring that the grant does not negatively impact their social security entitlements. The Act imposes several obligations on the relevant parties. Firstly, the Secretaries of DEST, the Department of Families, Community Services and Indigenous Affairs, and the Department of Employment and Workplace Relations are authorised to determine that certain amounts are exempt lump sums under paragraph 8(11)(d) of the Act. Secondly, the legislation specifies that a Restructuring Grant under the Tobacco Grower Adjustment Assistance Package 2006 qualifies as an exempt lump sum if it is received by an individual who is also receiving a social security payment. This determination ensures that the grant is not treated as income for the purposes of the social security income test. Furthermore, the legislation mandates that the grant will be regarded as an exempt lump sum from the date it is received, provided this date is on or after the instrument’s commencement on 23 February 2007. The legislation does not explicitly outline specific offences, penalties, or civil or criminal consequences for breaches of its provisions. However, any misuse or misapplication of the exempt lump sum provisions could potentially lead to complications or penalties under the broader social security framework. For instance, if a Restructuring Grant is incorrectly treated as income, it could result in overpayments of social security benefits, which may subsequently require repayment and could incur interest and administrative costs. Although the legislation itself does not detail maximum penalties, any breach of the broader social security provisions could attract penalties under the Social Security Act 1991 or related legislation.

Legal classification tags

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

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.