EXPLANATORY STATEMENT
Social Security (Income Exempt Lump Sum – Queensland Stolen Wages Reparation Payment Scheme) Determination 2015
Summary
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. The effect of this Determination is that a payment made by the Queensland Government under the Stolen Wages Reparation Payment Scheme is an exempt lump sum under paragraph 8(11)(d) of the Act.
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. An income amount earned, derived or received for a person’s own use or benefit is generally assessable as income. However, some amounts that would otherwise be income are specifically exempted.
Paragraph 8(11)(d) of the Act allows the DSS 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 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.
This determination provides that a payment made by the Queensland Government under the Stolen Wages Reparation Payment Scheme is an exempt lump sum for the purpose of paragraph 8(11)(d) of the Social Security Act 1991.
Under the Stolen Wages Reparation Payment Scheme, the Queensland Government is providing ex gratia lump sum payments to Aboriginal and Torres Strait Islander people whose wages and savings were controlled by the Queensland Government under the legislative regime known as the “Protection Acts”.
A previous instrument made in 2003 (the Social Security Exempt Lump Sum Determination Number 2 of 2003) excluded payments made under this Queensland Government Indigenous Wages and Savings Reparations Process in respect of persons whose wages and savings were controlled in the period 1897 to 1965. In 2005, the Social Security Exempt Lump Sum Determination No. 2 of 2005 extended the earlier process to people whose wages and savings were controlled up to 1986. This determination gives effect to the Queensland Government’s new Scheme.
The effect of this determination is that a person who receives a payment under the Queensland Stolen Wages Reparation Payment Scheme, and who also receives a social security payment, will not have their social security payments reduced because of the Queensland payments that they have received, because these payments will not be regarded as income for the purposes of the social security income test.
The initial exemption of these payments 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.
Purpose
The purpose of the reparation payments included in this determination is to provide ex gratia lump sum payments to Queensland Aboriginal and Torres Strait Islander people whose wages and savings were controlled by the Queensland Government under a legislative regime known as the “Protection Acts”.
This determination ensures that a person’s eligibility to social security payments is not affected by the receipt of the payment for reparation.
Commencement
The Determination commences on the day after it is registered.
Effect of Determination
This determination is a legislative instrument.
Explanation of Provisions
Part 1
Section 1 of the Determination states the name of the Determination.
Section 2 states that the Determination commences on the day after it is registered.
Section 3 contains definitions. In particular, the term “Queensland Stolen Wages Reparation Payment Scheme” is defined as a scheme operated by the Queensland Government to provide ex gratia lump sum payments to Aboriginal and Torres Strait Islander people whose wages and savings were controlled by the Queensland Government under a legislative regime known as the “Protection Acts”.
Part 2
Section 4 specifies that an amount paid to a person under the “Queensland Stolen Wages Reparation Payment Scheme” 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 Queensland Department of Aboriginal and Torres Strait Islander Partnerships.
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 payments made under the Queensland Stolen Wages Reparation Payment Scheme from the social security income test. Public consultation was therefore seen as 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 (Queensland Stolen Wages Reparation Payment Scheme) Determination 2015
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.
Overview of the Legislative Instrument
The effect of the Determination is that a person who receives a payment from the Queensland Government in respect of the Stolen Wages Reparation Payment Scheme (Reparation Payment) will not have that Reparation Payment assessed as income under the social security law.
Human rights implications
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 changes made by the Determination will operate beneficially as certain reparation payments 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 reparation payment is not exempted, a person in receipt of the reparation payment may not be eligible for a social security payment or, if they are eligible, their rate of payment might be reduced.
The exemption of the reparation 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.
The exemption provided by the Determination will ensure that receipt of a relevant reparation 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 and is therefore consistent with the promotion of the right to social security.
Conclusion
This Determination supports a person’s human right to social security.
Andrea Wallace-Green, Acting Branch Manager, Rates and Means Testing Policy Branch, as a delegate of the Secretary of the Department of Social Services.