EXPLANATORY STATEMENT
Social Security (Exempt Lump Sum – Western Australian Government Taxi Transition Adjustment Assistance Grant) 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 Western Australian Government has established a Transition Assistance Package (TAP). The TAP was established to assist taxi plate owners to transition to a more competitive market as a result of the Western Australian Government regulatory and policy reforms of the on-demand transport industry.
This Determination provides that a payment made by the Western Australian Department of Transport in the form of an Adjustment Assistance Grant from the TAP 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 October 2016, being the first day on which an application for a payment can be made. This Determination has retrospective effect, but it is beneficial in nature so does not adversely impact on any individual.
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 an Adjustment Assistance Grant to a person from the Transition Assistance Package, established by the Western Australian Government, 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 Western Australian Government. The Department of Veterans’ Affairs and the Department of Agriculture and Water Resources have been consulted.
This determination will be beneficial to persons affected as it exempts Adjustment Assistance Grants made from the Transition Assistance Package 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 – Western Australian Government Taxi Transition Adjustment Assistance Grant) Determination 2017
The effect of the Determination is that a person who receives a payment of an Adjustment Assistance Grant from the Western Australian Government from the Transition Assistance Package 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 an Adjustment Assistance Grant from the Western Australian Government 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 under the Transition Assistance Package from the social security income test.
The Determination ensures that people receiving Adjustment Assistance Grants 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 an Adjustment Assistance Grant 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 Adjustment Assistance Grant was not exempted, a person in receipt of an Adjustment Assistance Grant 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 an Adjustment Assistance Grant 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, Acting Branch Manager, International and Means Test Policy Branch, as a delegate of the Secretary of the Department of Social Services.