EXPLANATORY STATEMENT
Social Security Act 1991
Social Security (Exempt Lump Sum – South Australia – Marine Scalefish Fishery Reform: Voluntary Licence Surrender Program) Determination 2020
Purpose
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (DSS) 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 DSS has delegated the power to determine an exempt lump sum or class of exempt lump sums to persons in DSS who from time to time occupy, hold or perform the duties of Group Manager.
The effect of the Social Security (Exempt Lump Sum – South Australia – Marine Scalefish Fishery Reform: Voluntary Licence Surrender Program) Determination 2020 (this instrument) is that certain payments made to persons under the South Australian Government’s Marine Scalefish Fishery Reform: Voluntary Licence Surrender Program (the Voluntary Surrender Program) are exempt lump sums.
Background
Exempt Lump Sum
Under the 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. Income received for a person’s own use or benefit is generally assessable. However, some amounts that would otherwise be income are specifically exempted.
Paragraph 8(11)(d) of the Act allows the Secretary of DSS 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.
Voluntary Surrender Program
On 8 May 2020, the Government of South Australia announced funding of $24.51 million over four years to implement a reform package for the commercial Marine Scalefish Fishery. The reform package includes a $22 million fund in 2020-21 to remove up to 150 Marine Scalefish Fishery licences through the Voluntary Surrender Program. The Voluntary Surrender Program will provide an opportunity for licence holders to voluntarily exit the fishery before other reforms take place.
The Voluntary Surrender Program includes the surrender of licenses granted by the Marine Scalefish Fishery and Restricted Marine Scalefish Fishery authorities. The specific type of licence, and the corresponding value has been determined by the South Australian Minister for Primary Industries and Regional Development to be:
- $140,000 for a line licence (ex GST);
- $180,000 for a net licence (ex GST).
The Voluntary Surrender Program is administered by Primary Industries and Regions South Australia (PIRSA), on behalf of the South Australian Minister for Primary Industries and Regional Development and the Government of South Australia. PIRSA has published material in relation to how the Voluntary Surrender Program will be conducted and how applications can be submitted.
The Voluntary Surrender Program commenced on 25 May 2020 and will remain open until 13 November 2020.
This instrument ensures that one-off payments made by PIRSA under the Voluntary Surrender Program will be exempt lump sums for the purposes of the Act.
For completeness, the exemption of payments in relation to the Voluntary Surrender Program 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. This is consistent with the treatment of other lump sum payments under paragraph 8(11)(d) of the Act.
Authority
This instrument is made under paragraph 8(11)(d) of the Act
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power is construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
This instrument is a legislative instrument for the purposes of the
Legislation Act 2003. This instrument is disallowable.
Commencement
This instrument commences on the day after it is registered.
Consultation
PIRSA is the agency responsible for administering the Voluntary Surrender Program, and was consulted during the preparation and drafting of this instrument.
Services Australia, the Department of Agriculture, Water and Environment and the Department of Veterans’ Affairs have also been notified about the making of this instrument.
Regulation Impact Statement (RIS)
This instrument does not require a Regulatory Impact Statement. This instrument is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact (OBPR ID: 42668).
Explanation of the provisions
Section 1 provides that the name of this instrument is the Social Security (Exempt Lump Sum – South Australia – Marine Scalefish Fishery Reform: Voluntary Licence Surrender Program) Determination 2020.
Section 2 provides that this instrument commences on the day after this instrument is registered on the Federal Register of Legislation.
Section 3 provides that the authority for making this instrument is paragraph 8(11)(d) of the Act.
Section 4 contains definitions and terms used in this instrument.
Act is defined to mean the Social Security Act 1991.
exempt lump sum is defined as having the same meaning given under subsection 8(11) of the Act.
relevant amount is defined to mean, in relation to a person, the amounts received by the person under the Voluntary Surrender Program.
Voluntary Surrender Program is defined to mean the Marine Scalefish Fishery Reform: Voluntary Licence Surrender Program under which the South Australian State Government Minister for Primary Industries and Regional Development provides monetary compensation to certain Marine Scalefish Fishery licence holders who voluntarily surrender their fishery licence.
Section 5 specifies that, if a person receives a relevant amount, 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 payment is received by the person.
Andrew Whitecross, Group Manager, Pensions and Family Payments Group, as a delegate of the Secretary of the Department of Social Services
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 – South Australia -– Marine Scalefish Fishery Reform: Voluntary Licence Surrender Program) Determination 2020
This instrument 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
Under the voluntary licence surrender program, Marine Scalefish fishery or Restricted Marine Scalefish fishery licence holders will be eligible to receive a one off payment from the South Australian Government. This program is part of broader reforms to the South Australian Marine Scalefish fishery industry. To be eligible for the program the applicants must hold a Marine Scalefish fishery or Restricted Marine Scalefish fishery licence and be willing to accept the value of $140,000 (ex GST) for a line licence or $180,000 (ex GST) for a net licence. Some of these licence holders may already receive, or may apply for social security as a result of giving up their licences. This instrument ensures that recipients of a payment under this program will not have their payments assessed as income under the social security law.
Human rights implications
This instrument 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.
This instrument will operate beneficially as payments in relation to the voluntary licence surrender 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 these payments were not exempted, a person in receipt of these payments may not be eligible for social security payment or, if they are eligible, their rate of payment might be reduced. This instrument is therefore consistent with the promotion of the right to social security.
The exemption of payments in relation to the voluntary licence surrender program 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. This is consistent with the treatment of other lump sum payments under paragraph 8(11)(d) of the Act.
Conclusion
This instrument is compatible with human rights as it supports a person’s right to social security.
Andrew Whitecross, Group Manager, Pensions and Family Payments Group, as a delegate of the Secretary of the Department of Social Services