EXPLANATORY STATEMENT
Issued by the authority of the Secretary of the Department of Social Services
Social Security Act 1991
Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025
Purpose
The Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025 (Determination) ensures that certain one-off payments of $10,000 made by the South Australian Government to eligible metropolitan taxi licence holders for the buyback and cancellation of their taxi licence (buyback payments), are exempt lump sums under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
The lump sum buyback payments are issued pursuant to a prescribed scheme under section 52AB of the Passenger Transport Act 1994 (SA) as in force from time to time (the Scheme).
By determining that this payment is an exempt lump sum under the Act, the amount of the payment will not be assessed as income for the purposes of the recipient’s social security payment.
Background
Exempt lump sums
An income amount earned, derived or received for a person’s own use or benefit is generally assessed as income under the social security law. However, paragraph 8(11)(d) of the Act allows the Secretary of the Department of Social Services, or their delegate, to determine that an amount, or class of amounts, received by a person is an exempt lump sum for the purposes of the Act.
An exempt lump sum is excluded from the definition of “ordinary income” in subsection 8(1) of the Act. This means the amount is not taken into account under the social security income test, and will not have any effect on the person’s social security payment.
The exemption of a lump sum payment from the income test does not affect the assessment of any ongoing income generated by the lump sum, nor any assessable asset produced from the lump sum. These will be counted under the social security income and assets tests respectively. This is consistent with the treatment of other amounts as exempt lump sums under paragraph 8(11)(d) of the Act.
South Australian Prescribed Scheme
The South Australian Government undertook a review of the Passenger Transport Act 1994 (SA) and released its findings on 30 August 2024. This included recommendations on the reform of the taxi, access taxi, chauffer and rideshare industries, including enacting a buyback scheme of eligible taxi licences from Adelaide metropolitan taxi licence holders.
The Passenger Transport (Point to Point Transport Services) Amendment Act 2025 (SA) inserted section 52AB into the Passenger Transport Act 1994 (SA), which, as part of broader reforms to the transport services industry in South Australia, enabled the South Australian Minister for Infrastructure and Transport to establish a scheme for buyback and cancellation of perpetual metropolitan taxi licences. The Scheme was established for this purpose and will commence on 27 November 2025. The Scheme is administered by the South Australian Government Department for Infrastructure and Transport.
Under the Scheme, eligible metropolitan licence holders will receive a one-off $10,000 payment to buy back their taxi licence. These buyback payments are expected to commence in early December 2025.
The Determination will exempt only those one-off $10,000 payments issued to licence holders under the Scheme buyback. The Determination does not operate to exempt other amounts provided pursuant to a scheme determined under section 52AB of the Passenger Transport Act 1994 (SA).
Authority
The Determination is made under paragraph 8(11)(d) of the Act, which provides that the Secretary may determine an amount, or class of amounts, to be an exempt lump sum for the purposes of the Act.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Commencement
The Determination commences on the day after it is registered on the Federal Register of Legislation.
Consultation
The Department of Social Services consulted the South Australian Department for Infrastructure and Transport on the text of the Determination as the South Australian Department for Infrastructure and Transport is responsible for the Scheme. The South Australian Department for Infrastructure and Transport supported the Determination.
The Department of Social Services also consulted the following agencies on the intention to make this Determination:
- Services Australia, given the impact on income support recipients;
- the Department of Veterans’ Affairs because determinations under paragraph 8(11)(d) of the Act apply automatically under the Veterans’ Entitlements Act 1986; and
- the Department of Agriculture, Fisheries and Forestry because paragraph 8(11)(d) determinations apply automatically under the Farm Household Support Act 2014.
The above agencies supported the Determination.
The Department of Social Services did not consult with income support recipients likely to be affected by the Determination, given it is beneficial in nature.
Availability of independent review
A decision made under the social security law, as informed by the Determination, is subject to internal and external review under Parts 4 and 4A of the Social Security (Administration) Act 1999.
Explanation of the provisions
Details of the Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025
Section 1 - Name
This section states that the name of the Determination is the Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025.
Section 2 – Commencement
This section specifies that the Determination commences on the day after it is registered.
Section 3 - Authority
This section provides that the Determination is made under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
Section 4 - Definition
This section defines a term used in the Determination.
The term “Taxi Industry Reform Package payment” is defined by reference to a particular type of payment made to eligible metropolitan taxi licence holders by the South Australian Government pursuant to the prescribed scheme established under section 52AB of the Passenger Transport Act 1994 (SA) (the Scheme).
The relevant payment, for the purposes of this definition, is the $10,000 payment made under the Scheme. This is a one-off, lump sum payment to eligible taxi licence holders under the Scheme for the buyback of their licence.
Section 5 – Exempt lump sum
This section prescribes that, for the purposes of paragraph 8(11)(d) of the Act, the amount of a payment that is a “Taxi Industry Reform Package payment” (as defined in section 4) is an exempt lump sum.
The effect of section 5 is that payments made to eligible persons under the Scheme will not be assessed as income under the Act. This means that the amount of the payment will not have any impact on a recipient’s social security payments, in terms of the social security income test.
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 Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025
The Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025 (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 Determination ensures that certain one-off payments of $10,000 made by the South Australian Government to eligible metropolitan taxi licence holders for the buyback and cancellation of their taxi licence (buyback payments), are exempt lump sums under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
The lump sum buyback payments are issued pursuant to a prescribed scheme under section 52AB of the Passenger Transport Act 1994 (SA) as in force from time to time (the Scheme).
By determining that this payment is an exempt lump sum under the Act, the amount of the payment will not be assessed as income for the purposes of the recipient’s social security payment.
Human rights implications
The Determination engages the right to social security and the right to an adequate standard of living.
Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right to social security and requires a social security scheme be established under domestic law that provides 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.
Article 11 of the ICESCR recognises the right to an adequate standard of living, which provides that everyone is entitled to adequate food, clothing and housing and to the continuous improvement of living conditions.
Under the Act, social security payments are subject to a means test which assess the person’s income and assets to determine their eligibility for the payment, and their rate of payment. The Determination will operate beneficially as a $10,000 buyback payment made under the South Australian prescribed scheme pursuant to section 52AB of the Passenger Transport Act 1994 (SA) will not be taken into account under the social security income test. This exemption also flows through to means tested payments under the Veterans’ Entitlements Act 1986 and the Farm Household Support Act 2014.
If buyback payments are 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 may be reduced.
Conclusion
The Determination is compatible with human rights as it promotes and supports a person’s right to social security and the right to an adequate standard of living.
Kirsty Johnson
Branch Manager of the Payment Structures and Seniors Branch
Delegate of the Secretary of the Department of Social Services