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 Prescribed Compensation Payment) Determination 2026
Purpose
The Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Prescribed Compensation Payment) Determination 2026 (the Determination) ensures that the prescribed compensation amount payable under the prescribed scheme made under section 52AB of the Passenger Transport Act 1994 (SA) (the prescribed scheme), is an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
The prescribed scheme made by the South Australian Minister for Infrastructure and Transport, as in force at 4 December 2025, is available at:
https://www.governmentgazette.sa.gov.au/2025/December/2025_070.pdf.
The Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025 (2025 Determination) covers the $10,000 payments to eligible metropolitan taxi licence holders for the buyback and cancellation of their taxi licence under the prescribed scheme. The Determination provides for separate lump sum payments of $190,000 (referred to as the prescribed compensation amount in the prescribed scheme), which are to be adjusted for indexation in each financial year, to be exempt lump sums.
By determining that the prescribed compensation amount payable under the prescribed scheme 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 prescribed scheme for the buyback and cancellation of perpetual metropolitan taxi licences by notice in the South Australian Government Gazette.
The prescribed scheme was made by the South Australian Minister for Infrastructure and Transport on 3 December 2025 and commenced on 4 December 2025 by notice in the South Australian Government Gazette. The prescribed scheme is available from page 4787 in Gazette No. 70 of 2025 and can be accessed at:
https://www.governmentgazette.sa.gov.au/2025/December/2025_070.pdf.
The 2025 Determination exempted a one-off $10,000 lump sum payment, referred to as the base compensation amount in the prescribed scheme, following the South Australian Government cancelling existing metropolitan taxi licences prior to introducing an annual taxi licence. The Determination additionally exempts payments of the prescribed compensation amount, being a lump sum of $190,000 that will be indexed each financial year in accordance with the prescribed scheme, to certain eligible metropolitan taxi licence holders.
The Determination does not operate to exempt other amounts provided pursuant to the prescribed scheme determined under section 52AB of the Passenger Transport Act 1994 (SA). The Determination only captures payments of the prescribed compensation amount payable under the prescribed scheme as in force at 4 December 2025.
Repeal of 2017 Determination
The Determination also repeals the Social Security (Exempt Lump Sum – South Australia Taxi Industry Assistance Package Payment) Determination 2017 (2017 Determination). The 2017 Determination exempted one-off lump sum payments, known as taxi industry assistance package payments, made by the then South Australian Government Department of Planning, Transport and Infrastructure. These payments were to assist metropolitan Adelaide taxi licence holders and lessees offset any impact of regulatory framework for point to point passenger transport introduced in July 2016. As these payments are no longer being made, the income test exemption provided by the 2017 Determination is no longer required.
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.
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 shall be 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. In repealing the 2017 Determination, the Secretary is relying on this subsection in conjunction with the power in paragraph 8(11)(d) of the Act.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to disallowance.
Retrospective Commencement
The Determination commences on 4 December 2025. This aligns with the commencement of the prescribed scheme made pursuant to section 52AB of the Passenger Transport Act 1994 (SA).
The retrospective commencement is beneficial to social security recipients and ensures that a payment of the prescribed compensation amount is treated as an exempt lump sum under the Act, including from the date of the prescribed scheme commencing.
The retrospective operation of the Determination does not infringe section 12 of the Legislation Act 2003 because the retrospective operation does not disadvantage any person or impose a liability on a person other than the Commonwealth.
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 prescribed 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 the 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 in relation to payments of farm household allowance 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 Prescribed Compensation Payment) Determination 2026
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 Prescribed Compensation Payment) Determination 2026 (the Determination).
Section 2 – Commencement
This section specifies that the Determination commences retrospectively on 4 December 2025.
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 – Schedules
This section provides that each instrument specified in a Schedule to the Determination is amended or repealed as set out in the applicable items in the Schedule concerned, and any other items in a Schedule to this Determination have affect according to its terms.
Section 5 – Definitions
This section defines terms used in the Determination.
The term “Taxi Industry Reform Package prescribed compensation payment” is defined by reference to a separate 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 prescribed scheme). That is, a payment of the prescribed compensation amount under the prescribed scheme as in force at 4 December 2025.
The relevant payment, for the purposes of this definition, is a $190,000 lump sum payment, to be adjusted for indexation in each financial year, under the prescribed scheme.
Section 6 – 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 prescribed compensation payment” (as defined in section 5) is an exempt lump sum.
The effect of section 6 is that payments of the prescribed compensation amount made to eligible persons under the prescribed 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.
Schedule 1 – Repeals
Social Security (Exempt Lump Sum – South Australia Taxi Industry Assistance Package Payment) Determination 2017
Item 1 proactively repeals the Social Security (Exempt Lump Sum – South Australia Taxi Industry Assistance Package Payment) Determination 2017 (2017 Determination) ahead of the sunset date of 1 April 2028. This is because the payments referred to in the 2017 Determination are no longer being made, and the exemption is no longer required.
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 Prescribed Compensation Payment) Determination 2026
The Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Prescribed Compensation Payment) Determination 2026 (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 the prescribed compensation amount payable under the prescribed scheme made under section 52AB of the Passenger Transport Act 1994 (SA) (the prescribed scheme), is an exempt lump sum under paragraph 8(11)(d) of the Social Security Act 1991 (the Act).
The prescribed scheme made by the South Australian Minister for Infrastructure and Transport, as in force at 4 December 2025, is available at:
https://www.governmentgazette.sa.gov.au/2025/December/2025_070.pdf.
The Social Security (Exempt Lump Sum – South Australia Taxi Industry Reform Package Payment) Determination 2025 covers the $10,000 payments to eligible metropolitan taxi licence holders for the buyback and cancellation of their taxi licence under the prescribed scheme. The Determination provides for separate lump sum payments of $190,000 (referred to as the prescribed compensation amount in the prescribed scheme), which are to be adjusted for indexation in each financial year, to be exempt lump sums.
By determining that the prescribed compensation amount payable under the prescribed scheme 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 assesses 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 $190,000 prescribed compensation amount payable under the prescribed scheme 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 payments made under the prescribed scheme 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