Social Security (Pension Bonus Bereavement Payment — Disregarded Income) Specification 2007

Administered by Department of Social Services

Legislation au F2007L04985 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Social Security (Pension Bonus Bereavement Payment — Disregarded Income) Specification 2007

 

Summary

 

This specification is made by the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs under subsection 93WB(2) of the Social Security Act 1991 (the Act).  It is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The purpose of this specification is to specify kinds of income for the purposes of subparagraph 93WB(1)(b)(ii) of the Act. 

 

The effect of this instrument is that a compensation amount paid in the form of periodic payments to a person or their partner is disregarded in the calculation of any pension bonus bereavement payment that may be payable to the person.

 

Background

 

The Families, Community Services and Indigenous Affairs Legislation Amendment (Further 2007 Budget Measures) Act 2007 inserted into the Act a new Division 12 in Part 2.2A to introduce a new one-off payment called pension bonus bereavement payment.  

 

Under the new Division, a person is qualified for a pension bonus bereavement payment if the person’s partner dies and, immediately before their death, the partner was a registered member of the pension bonus scheme but had not made a claim for age pension or a pension bonus. 

 

To work out the amount of pension bonus bereavement payment, the amount of pension bonus that would have been payable had the partner of the person made claims for both age pension and pension bonus just before the partner died is determined.  However, in determining the amount payable, any ‘PBBP employment income’ (a term that is defined in the new Division 12 of Part 2.2A) is disregarded as well as any income that is specified in this instrument.

 

This instrument specifies that a payment of compensation, so long as it is paid as a periodic payment, is also to be disregarded when calculating the quantum of any pension bonus bereavement payment that may be payable to a person.  For the purposes of this instrument, the term “compensation” means a  payment of damages, a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme, a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme, or any other compensation or damages payment (but excluding compensation for a criminal injury) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.

 


Explanation of Provisions

 

Section 1 states the name of the instrument.

 

Section 2 states that the instrument commences on 1 January 2008.  This means that the instrument will have effect on and from that date.

 

Section 3 contains the interpretation of the term Act as it is used in the instrument.  It means the Social Security Act 1991.

 

Section 4 specifies an income type to be disregarded in determining a pension bonus bereavement payment that may be payable to a person.  That income is specified as compensation within the meaning of subsection 17(2) in the Act that is paid in the form of periodic payments. 

 

Relevantly, compensation is defined by the Act as:

 

(a)   a payment of damages; or

(b)   a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or

(c)   a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or

(d)   any other compensation or damages;

 

(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.

 

However, compensation excludes a payment under a law of the Commonwealth, a State or a Territory that provides for the payment of compensation for a criminal injury suffered, or a disease or injury contracted, as a result of the commission of an offence (see subsection 17(2B) of the Act).

 

The effect of this section is that such compensation, provided it is paid in the form of periodic payments, is disregarded whether it is payable to the person who may be eligible for a pension bonus bereavement payment or their partner. 

 

Consultation

 

The Department of Veterans’ Affairs was consulted during the preparation of this specification.  This was done to ensure a co-ordinated and consistent approach to the treatment of income types disregarded for the purpose of calculating pension bonus bereavement payments under both the social security law and the Veterans’ Entitlements Act 1986.

 

This instrument is beneficial to persons whose deceased partners were members of the pension bonus scheme because it has the effect of either increasing or not affecting the amount of any pension bonus bereavement payment that may be payable to them.  Public consultation was therefore seen as unnecessary.

 

Regulatory Impact Analysis

 

This specification does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator Figure.  This Specification is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition impact.  It is not expected that any compliance costs will be incurred by business as a result of the effect of this instrument.

Overview

The Social Security (Pension Bonus Bereavement Payment — Disregarded Income) Specification 2007 was enacted to address a specific gap in the Social Security Act 1991, particularly in relation to the calculation of pension bonus bereavement payments. This legislative instrument, made by the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs, aims to clarify and specify types of income that are disregarded when determining the amount of pension bonus bereavement payments that may be payable to eligible persons. The underlying policy objective is to ensure that compensation payments, paid as periodic payments, are not considered in the calculation of these bereavement payments, thereby potentially increasing the amount payable or leaving it unaffected. The specification was developed following the introduction of the pension bonus bereavement payment under the Families, Community Services and Indigenous Affairs Legislation Amendment (Further 2007 Budget Measures) Act 2007. By specifying that compensation payments are disregarded, the instrument aims to provide clarity and fairness in the calculation process, ensuring that such payments do not adversely affect the amount of pension bonus bereavement payments to which beneficiaries may be entitled. This legislative instrument was not subject to public consultation as it was deemed not to require one, given its minimal impact on business activity and compliance costs.

Scope and Application

The Social Security (Pension Bonus Bereavement Payment — Disregarded Income) Specification 2007 applies to individuals who may be eligible for a pension bonus bereavement payment under the Social Security Act 1991, specifically in relation to the income disregarded for the purposes of calculating such a payment. This legislative instrument is relevant to those who have a deceased partner who was a registered member of the pension bonus scheme but had not made a claim for age pension or pension bonus before their death. The instrument specifies that compensation paid in the form of periodic payments to the eligible person or their partner is disregarded in the calculation of the pension bonus bereavement payment. This legislation extends across the Commonwealth of Australia and is applicable to all states and territories. The instrument does not introduce any exclusions, exemptions, or thresholds beyond those specified in the Social Security Act 1991. The application of this legislation may be further extended or detailed through subordinate instruments, although the current specification focuses on clarifying the types of income that are disregarded for the purpose of calculating pension bonus bereavement payments.

Key Provisions

The main operative sections of the Social Security (Pension Bonus Bereavement Payment — Disregarded Income) Specification 2007 (F2007L04985) focus on the types of income that are disregarded in the calculation of pension bonus bereavement payments under the Social Security Act 1991 (the Act). Section 4 of this specification (section 4) explicitly states that compensation payments, which include payments of damages, insurance or compensation under Commonwealth, State or Territory laws, and other forms of compensation or damages, are to be disregarded if they are paid in the form of periodic payments. This provision ensures that such compensation, whether paid to the person eligible for the pension bonus bereavement payment or their partner, does not affect the amount of the payment (section 4(a)-(d)). The obligations imposed by this Act on the parties governed by it are primarily concerned with the accurate calculation of pension bonus bereavement payments. According to section 4, any compensation paid periodically must be disregarded when determining the amount of the pension bonus bereavement payment. This means that entities such as the Department of Families, Housing, Community Services and Indigenous Affairs, and individuals who may be eligible for the payment, must ensure that such compensation is excluded from the calculation process (section 4). The Act also requires that compensation for criminal injuries, diseases, or injuries contracted as a result of the commission of an offence, is excluded from the definition of compensation (subsection 17(2B) of the Act). Failure to comply with the requirements of the Act can result in several consequences. However, this specification does not explicitly outline specific offences or penalties. The primary focus is on the accurate calculation of pension bonus bereavement payments, ensuring that compensation payments are correctly disregarded. Given the nature of this instrument, it is unlikely that it would directly result in civil or criminal penalties, but it is essential for compliance to ensure that the specified income types are correctly disregarded to avoid any potential administrative or financial discrepancies. The instrument itself is not regulatory in nature and is not expected to incur compliance costs or significantly impact business activities or competition.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.