EXPLANATORY STATEMENT
Social Security (Exempt Lump Sums – MH17 Family Support Package) Determination 2019
Purpose
Paragraph 8(11)(d) of the Social Security Act 1991 (the Act) allows the Secretary of the Department of Social Services (DSS) to determine, by legislative instrument, that an amount or class of amounts received by a person is an exempt lump sum for the purposes of the Act.
The effect of the Social Security (Exempt Lump Sums – MH17 Family Support Package) Determination 2019 (the instrument) is that a payment made to individuals by the Australian Government under the MH17 Family Support Package, is an exempt lump sum.
Background
Under social security law, an income test is used to determine a person’s eligibility for a social security payment and, if they are eligible, the rate of a social security payment that is payable. Income received for a person’s own use or benefit is generally assessable. However, some amounts that would otherwise be income are specifically exempted.
Paragraph 8(11)(d) of the Act allows the Secretary of DSS 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 excluded from the definition of ‘ordinary income’ under subsection 8(1) of the Act, meaning the lump sum amount is not to be taken into account under the social security income test.
MH17 Family Support Package
Under the MH17 Family Support Package, the Australian Government will provide a financial contribution to the next of kin of Australian MH17 victims, and their nominated support person(s) where applicable, for travel to the Netherlands to observe or participate in the Dutch national prosecution of the individuals responsible for the downing of Malaysia Airlines flight MH17, scheduled to commence on 9 March 2020.
Each eligible person may claim one ex-gratia payment each financial year from 2019‑20 until 2021-22. The payments are to be provided to assist with travel costs such as airfares, travel insurance and ground transport to the proceedings and/or a living allowance for the cost of accommodation and meals.
Some of the people receiving a payment under the MH17 Family Support Package may also be in receipt of a social security payment. Under this instrument, if a social security customer receives such a payment, it will be exempt from the social security income test.
For completeness, the exemption of payments in relation to the MH17 Family Support Package from the income test on receipt does not alter the fact that any ongoing income generated by the lump sum is not exempt from the income test. This is consistent with the treatment of other lump sum payments under paragraph 8(11)(d) of the Act.
Commencement
The instrument commences on the day after it is registered.
Consultation
The Department of Foreign Affairs and Trade has policy responsibility for the MH17 Family Support Package, and was consulted during the preparation and drafting of this instrument.
The Department of Agriculture and the Department of Veterans’ Affairs were notified of this instrument as this income test exemption may affect payments administered by those agencies.
Public consultation was not undertaken due to the beneficial nature of the instrument.
Regulation Impact Statement (RIS)
This instrument does not require a Regulatory Impact Statement (OBPR ID 25772). The instrument is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.
Explanation of the provisions
Section 1
This section states the name of the instrument.
Section 2
This section states that the instrument commences on the day after registration.
Section 3
This section states that the instrument is made under paragraph 8(11)(d) of the Act.
Section 4
This section provides definitions for terms used in the instrument.
exempt lump sum has the meaning provided in subsection 8(11) of the Act.
MH17 Family Support Package is defined as the financial assistance provided by the Australian Government to assist with travel expenses for the following to observe or participate in the Dutch national prosecution relating to the downing of Malaysia Airlines flight MH17:
(a) next of kin of Australians on that flight;
(b) nominated support persons of persons mentioned in paragraph (a).
relevant amount means, in relation to a person, an amount received by the person from the Australian Government under the MH17 Family Support Package.
This definition is drafted in similar terms to the item (table item 282) in Part 4 of Schedule 1AB of the Financial Framework (Supplementary Powers) Regulations 1997. That item was inserted to establish legislative authority for government spending to assist with the travel expenses of the next of kin of deceased Australian victims and nominated support persons to observe or participate in the Dutch national prosecution.
Section 5
This section states that payments made under the MH17 Family Support Package are a class of amounts determined by a delegate of the Secretary of DSS to be an exempt lump sum for the purposes of the social security law. This means that a MH17 Family Support Package payment will not be considered ‘income’ for the purposes of the social security income test.
The Secretary of DSS has delegated the power to determine an exempt lump sum or class of exempt lump sums to Group Managers within DSS.
Emma Kate McGuirk, Acting Group Manager, Pensions Group, as a delegate of the Secretary of the Department of Social Services
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security (Exempt Lump Sums – MH17 Family Support Package) Determination 2019
The Social Security (Exempt Lump Sums – MH17 Family Support Package) Determination 2019 (the instrument) 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.
Overview of the legislative instrument
The effect of the instrument is that for recipients of the MH17 Family Support Package, the receipt of one-off payments provided by the Australian Government to the next of kin of Australian MH17 victims for travel to the Netherlands to observe or participate in the Dutch national prosecution relating to the downing of Malaysia Airlines flight MH17, will not have these payments assessed as income under the social security law.
Human rights implications
The instrument 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 instrument will operate beneficially as payments in relation to the MH17 Family Support Package 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 these payments were not exempted, a person in receipt of these payments may not be eligible for social security payment or, if they are eligible, their rate of payment might be reduced. The instrument is therefore consistent with the promotion of the right to social security.
The exemption of payments in relation to the MH17 Family Support Package from the income test on receipt does not alter the fact that any ongoing income generated by the lump sum is not exempt from the income test. This is consistent with the treatment of other lump sum payments under paragraph 8(11)(d) of the Act.
Conclusion
The instrument is compatible with human rights as it supports a person’s right to social security.
Emma Kate McGuirk, Acting Group Manager, Pensions Group, as a delegate of the Secretary of the Department of Social Services