EXPLANATORY STATEMENT
Social Security (Exempt Lump Sum – Tasmanian Special Energy Bonus) Determination 2017
Summary
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 Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (DSS) 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 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.
The Tasmanian Government has established a Tasmanians First energy policy (the policy). As part of the policy, a one-off Special Energy Bonus of $125 will be introduced. The Special Energy Bonus is a one-off payment made by Aurora Energy Pty Ltd, a company owned by the State of Tasmania, to pensioner concession card and seniors health card holders in Tasmania to assist with their electricity bills.
This Determination provides that the payment of a Special Energy Bonus is an exempt lump sum for the purpose of paragraph 8(11)(d) of the Act.
The effect of this Determination is that such a payment will not be regarded as income under the Act, so that if a social security recipient receives such a payment, it will be exempt from the social security income test.
Explanation of Provisions
Section 1 of the Determination states the name of the Determination.
Section 2 provides that the Determination commences on 1 December 2017.
Section 3 provides that the authority for making this Determination is paragraph 8(11)(d) of the Social Security Act 1991.
Section 4 contains definitions of certain terms used in the Determination.
Section 5 specifies that the payment of a Special Energy Bonus to a person is an exempt lump sum for the purposes of paragraph 8(11)(d) of the Social Security Act 1991.
Such an amount will be regarded as an exempt lump sum from the date the payment is received by the person.
Consultation
This determination was made at the request of the Tasmanian Government.
The Department of Veterans' Affairs and the Department of Agriculture and Water Resources were consulted.
This determination will be beneficial to persons affected as it exempts Special Energy Bonus payments from the social security income test. As a result, public consultation was considered unnecessary.
Regulatory Impact Analysis
The Determination does not require a Regulatory Impact Statement. The Determination is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.
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 – Tasmanian Special Energy Bonus) Determination 2017
The effect of the Determination is that a person who receives a payment of a Special Energy Bonus from Aurora Energy Pty Ltd will not have that payment assessed as income under the social security law.
Human rights implications
This Determination is made under Section 8(11) of the Social Security Act 1991 (the Act) and determines that the payment of a Special Energy Bonus from Aurora Energy Pty Ltd will not be assessed under the social security income test for the purposes of the Act, thereby exempting such a payment received by a person from the social security income test.
The Determination ensures that people receiving a Special Energy Bonus will not have these payments assessed as income for social security purposes.
The Determination engages the right to social security.
The right to social security
The Determination will operate beneficially as a Special Energy Bonus will not be taken into account when assessing a person’s eligibility for, or rate of social security entitlements under the social security income test. If the Special Energy Bonus was not exempted, a person in receipt of a Special Energy Bonus may not be eligible for a social security payment or, if they are eligible, their rate of payment might be reduced. The Determination is therefore consistent with the promotion of the right to social security.
The exemption of the payment of a Special Energy Bonus from the income test on receipt does not alter the fact that any ongoing income generated by the lump sum is counted under the income test, and any assessable asset produced from the lump sum is counted under the social security assets test. This is consistent with the treatment of other lump sum payments exempted under paragraph 8(11)(d) of the Act.
Conclusion
This Determination supports a person’s human right to social security.
Anita Davis, Branch Manager, Payability and Integrity Branch, as a delegate of the Secretary of the Department of Social Services.