EXPLANATORY STATEMENT
Social Security Exempt Lump Sum (Tasmanian Government Stolen Generations of Aboriginal Children) (FaHCSIA) Determination 2008
Summary
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretaries of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and the Department of Education, Employment and Workplace Relations (DEEWR) 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 Families, Housing, Community Services and Indigenous Affairs is responsible, a one off ex gratia payment of up to $5,000.00 (with a maximum of $20,000 per family group of children) and a sum of money paid out of the balance of the Stolen Generations Fund paid by the Tasmanian Secretary of the relevant Department (Tasmanian Department) under the Stolen Generations of Aboriginal Children Act 2006 (Tas) (the Tasmanian Act) will be exempt lump sums.
Under the Tasmanian Act, the Tasmanian Department established a Stolen Generations Fund (the Fund) of five (5) million dollars for payment to members of the stolen generations. The criteria for payment to be made from the Fund include:
- Children of deceased members of the stolen generations were eligible for a payment of up to $5,000.00, with a maximum of $20,000.00 to be paid per family group of children. The Tasmanian Department 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 equally shared among other successful claimants. The Tasmanian Department has advised that 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 Tasmanian Department determined who was eligible for an ex gratia payment in accordance with its own criteria, including the criteria noted above. The Fund was to be administered by the Tasmanian Department with a sum of five (5) million dollars to be paid into the Fund from the Tasmanian Consolidated Fund. An Assessor was appointed to decide all applications for ex gratia payments made under the Tasmanian Act and which were paid from the Fund.
This instrument determines that a payment made by the Tasmanian Department under the Tasmanian Act to a person or their 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/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 Tasmanian Department 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 Tasmanian Department 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 Tasmanian Department under the Tasmanian Act will not be regarded as income under the Act. Consequently, if a person of a FaHCSIA administered social security payment or their partner receives an ex gratia payment made by the Tasmanian Department 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 which it is registered.
Section 3 contains interpretation provisions.
The term ex gratia payment is defined as either or both:
(a) a one-off payment of up to $5,000.00 (with a maximum of $20,000 per family group of children) made by the Tasmanian Department under the Stolen Generations of Aboriginal Children Act 2006 (Tas) from the Stolen Generations Fund. The criteria and eligibility are determined by the Stolen Generations of Aboriginal Children Act 2006 (Tas);
(b) an amount of money paid from the balance remaining in the Stolen Generations Fund after claims made by eligible persons in (a) above have been paid by the Tasmanian Department. The criteria and eligibility are determined by the Stolen Generations of Aboriginal Children Act 2006 (Tas).
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 from the date that this determination commences, 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.
Consultation
The Department of Education, Employment and Workplace Relations, and the Department of Veterans’ 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 income support customers because it exempts from the income test a payment made by the Tasmanian Department 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 (against the nine categories listed) as a result of this exemption.