EXPLANATORY STATEMENT
Social Security Exempt Lump Sum (Tasmanian Government Stolen Generations of Aboriginal Children) (DEEWR) Determination 2008
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Education, Employment and Workplace Relations (DEEWR) and the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to determine that an amount, or class of amounts, is an exempt lump sum for the purpose of the Act. This instrument provides that, for the purpose of social security payments for which the Minister for Education and the Minister for Employment and Workplace Relations is responsible, a one off ex gratia payment of up to $5,000.00 (with a maximum of $20,000 per eligible ‘family group of children’) or a sum of money paid out of the Stolen Generations Fund under the Stolen Generations of Aboriginal Children Act 2006 (Tas) (the Tasmanian Act) will be an exempt lump sum.
Under the Tasmanian Act, a Stolen Generations Fund (the Fund) of five (5) million dollars was established for payment to members of the stolen generations. Under the Fund children of deceased members of the stolen generations were eligible for a payment of up to $5,000.00 and up to $20,000.00 to be paid per eligible ‘family group of children’. The Tasmanian Government has advised that twenty two applicants satisfied the criteria as children of a deceased member of the stolen generations and a total payment of $100,000.00 was made to this group.
As provided under the Tasmanian Act, the balance of the Fund was then equally shared among other successful claimants. One hundred and four persons were considered eligible and each claimant received a payment of $58,333.33.
Background
The Tasmanian Act was passed unanimously by all members of the Tasmanian State Parliament in November 2006. The Tasmanian Act enables payments to be made to living members of the stolen generations of Aborigines removed from their families as children by the State Government. Further, the Tasmanian Act enables children from deceased members of the stolen generations to apply for a payment.
The Fund is administered by the Tasmanian Department of Premier and Cabinet with a sum of five (5) million dollars to be paid into the Fund from the Tasmanian Consolidated Fund. All ex gratia payments made under the Tasmanian Act were to be paid from the Fund.
This instrument determines that a payment made by the Secretary of the Department of Premier and Cabinet under the Tasmanian Act to a person or his or her partner is an exempt lump sum under paragraph 8(11)(d) of the Act. These payments are designed to acknowledge the hurt and distress suffered by eligible Aboriginal persons who have been admitted or declared a ward of the State or Child of the State under relevant Tasmanian legislation or have been removed from his or her family with the active intervention of a State Agency without the approval or following undue pressure or duress. The ex gratia payment does not represent a receipt of money for services rendered directly or indirectly.
The Secretary of the Department of Premier and Cabinet has already issued the payments to eligible persons from the Fund. Some persons receiving payments were in receipt of income support and included age pensioners, students as well as persons of working age.
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 the responsible Secretary 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 an ex gratia payment made by the Secretary of the Department of Premier and Cabinet under the Tasmanian Act is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Act.
The effect of this instrument is that an ex gratia payment made by the Secretary of the Department of Premier and Cabinet under the Tasmanian Act will not be regarded as income under the Act. Consequently, if a person of a DEEWR administered social security payment or their partner receives an ex gratia payment made by the Secretary of the Department of Premier and Cabinet under the Tasmanian Act, it will be exempt from the income test under the social security law.
Explanation of Provisions
Part 1
Section 1 of the instrument states the name of the instrument.
Section 2 states that the instrument commences on the day after it is registered.
Section 3 contains interpretation provisions.
The term ex gratia payment has the same meaning as in the Stolen Generations of Aboriginal Children Act 2006. That Act provides that a payment of up to $5,000.00 is payable to children of deceased members of the stolen generations (or a payment of up to $20,000.00 for a ‘family group of children’ divided equally amongst the children) and an equal share of the amount remaining in the Stolen Generation Fund after deducting the ex gratia payments referred to in paragraph 11(1)(a) of the Stolen Generations of Aboriginal Children Act 2006.
The eligibility criteria are outlined in the Stolen Generations of Aboriginal Children Act 2006 (Tas) and an applicant’s eligibility is determined by a ‘stolen generation assessor’.
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 an ex gratia payment as defined in section 3, then any amount of such a payment received by the person is an exempt lump sum.
Section 5 specifies that an ex gratia payment 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. Any person who has been paid income support with the ex gratia payment recorded as income will be able to seek arrears of payment on the basis of the ex gratia payment being exempt. This has a beneficial effect.
Consultation
The Department of Families, Housing, Community Services and Indigenous Affairs was consulted during the preparation of this determination. FaHCSIA also consulted with the Department of Veterans’ Affairs (DVA) during the preparation of this determination. This was done to ensure a co-ordinated and consistent approach to the income test treatment for this one-off payment for all social security payments under the Act.
This instrument is beneficial to income support customers because it exempts from the income test a payment made by the Secretary of the Department of Premier and Cabinet under the Tasmanian Act. Public consultation was therefore seen as unnecessary.
Regulatory Impact Analysis
This exemption does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator Figure. 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 as a result of this exemption.