EXPLANATORY STATEMENT
Social Security (Exempt Lump Sum – Victorian Industry Transition Assistance Payment) 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 Victorian Parliament passed the Commercial Passenger Vehicle Industry Act 2017 on 10 August 2017. In order to assist existing taxi and hire car licence holders, the Victorian Government has created the Industry Transition Assistance package to make ex-gratia lump sum payments. The payments will be made by the Taxi Services Commission (TSC) within the Victorian Department of Economic Development, Jobs, Transport and Resources.
The Victorian industry transition assistance payment will be paid to an entity that is registered as a taxi or hire car licence holder with the Victorian Taxi Services Commission. If an entity owns more than four licences in total, and the licences are different types, the total payment will be calculated in relation to the four highest value licences.
To be eligible for the payments, the licence holder must have held the licence on
15 August 2016 and must have continuously held their licence from that date until the time that payment is made.
This Determination provides that a Victorian industry transition assistance payment is an exempt lump sum for the purpose of paragraph 8(11)(d) of the Act.
The effect of this Determination is such that 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 the provisions
Section 1 of the Determination states that the name of the Determination is the Social Security (Exempt Lump Sum – Victorian Industry Transition Assistance Payment) Determination 2017.
Section 2 provides that the Determination commences on the day that the instrument is registered.
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, including the definition of a Victorian industry transitional assistance payment. This is defined as a one-off ex-gratia lump sum payment made by the Victorian Taxi Services Commission to an entity that is registered with the Commission as a taxi or hire car licence holder. If an entity owns more than four licences in total, and the licences are different types, the total payment will be calculated in relation to the four highest value licences.
Section 5 specifies that a payment made to a person as a Victorian industry transition assistance payment 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 Victorian Government Department of Economic Development, Jobs, Transport and Resources. The Departments of Veterans’ Affairs and Agriculture and Water Resources have also been consulted.
This Determination will be beneficial to persons affected as it exempts a Victorian industry transition assistance payment from the social security income test. As a result, public consultation was considered unnecessary.
Regulation Impact Statement (RIS)
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 – Victorian Industry Transition Assistance Payment) Determination 2017
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.
The effect of the Determination is that a person who receives a Victorian industry transition assistance payment will not have that payment assessed as income under the social security law.
Human rights implications
This Determination is made under paragraph 8(11)(d) of the Social Security Act 1991 (the Act) and determines that Victorian Government Industry Transition Assistance payments to eligible taxi and hire car licence holders will not be assessed under the social security income test for purposes of the Act.
The Determination engages the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The right to social security requires that a system be established under domestic law, and that public authorities must take responsibility for the effective administration of the system. The social security scheme must provide 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.
The Determination will operate beneficially as a Victorian industry transition assistance payment will not be taken into account when assessing a person’s eligibility or rate of social security entitlements under the social security income test. If the Victorian industry transition assistance payment is 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 might be reduced. The Determination is therefore consistent with the promotion of the right to social security.
The exemption of the Victorian industry transition assistance payment from the income test does not mean that any ongoing income generated by the lump sum is exempt from the income test, nor does it mean that any asset produced from the lump sum is exempt from 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
The Determination supports a person’s human right to social security and is therefore compatible with human rights.
Anita Davis, Branch Manager, Payability and Integrity Branch, as a delegate of the Secretary of the Department of Social Services.