EXPLANATORY STATEMENT
Social Security (Personal Care Support– Direct Payments Project) (DEWR) Determination 2007
Summary
Section 35A of the Social Security Act 1991 (the Act) allows Ministers to determine that a scheme for the provision of personal care support is an ‘approved scheme’ for the purposes of the Act. This determination provides that the ‘Direct Payments Project’, that provides personal care support, administered by the Victorian Department of Human Services, is an ‘approved scheme’ under section 35A of the Act.
The effect of this determination is that people who receive a payment under the Direct Payments Project, and who also receive a social security payment, will not have their payments under the Direct Payments Project taken into account for the purposes of the social security income test.
Background
Under the social security law all income earned, derived or received for a person’s own use or benefit, is generally counted as income. However, items can be specifically exempted under the social security law from the income test. Specific provisions in the Act allow Ministers to exempt certain kinds of payments from the social security income test, within principles defined in the Act, without the need for legislative change.
In particular, section 35A of the Act allows Ministers to determine that a scheme or project for the provision of personal care support is an ‘approved scheme’ for the purposes of the Act. Payments made under an ‘approved scheme’ are exempt from the income test in relation to the person who is receiving care under paragraph 8(8)(zi) of the Act. Since 1992, a number of schemes have been approved for the purposes of section 35A of the Act.
Explanation of the determination
This determination approves the Direct Payments Project as an ‘approved scheme’ under section 35A of the Act.
The Victorian Department of Human Services makes payments under the Direct Payments Project to people with disabilities to pay specifically for their personal care support. Payments under the Direct Payments Project do not provide income support for people with disabilities. Instead, these payments help these people to live independent lives outside of a public institution by contributing toward the cost of their long-term personal care support.
The effect of this determination is that these customers will not have their social security payments reduced because the payments, in relation to the person who is receiving care under the Direct Payments Project, will not be regarded as income.
Payments made under the Direct Payments Project are similar to personal care support payments made by other State and Territories, including Western Australia, Queensland, Victoria and the Northern Territory, which have already been exempted from the social security income test under similar determinations.
Payments made under approved personal care support schemes are only exempt when the funds are those of the person with a disability, paid either to the person with the disability or to a person they have agreed can administer the payments for them.
Payments made under Direct Payments Project to carers or guardians of the disabled person entitled to receive the payment will not be considered income for the purposes of calculating the carer or guardian’s entitlement to social security payments.
Commencement
This determination will take effect the day after its registration with the Federal Register of Legislative Instruments.
Consultation
This determination was made in response to a request from the Victorian Department of Human Services.
The Commonwealth Department of Families, Communities and Indigenous Affairs and the Commonwealth Department of Education, Science and Training were also consulted to ensure a co-ordinated and consistent approach to the administration of the Direct Payments Project payments for all social security payments under the Act. Each of these Departments will sign corresponding determinations.
This determination is beneficial to customers because it exempts these Direct Payment Project payments from the social security income test. Public consultation was therefore seen as unnecessary.
Business Cost Calculator
This determination does not require a Regulatory Impact Statement (RIS) and/or a Business Cost Calculator Figure. This determination 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 against the nine categories listed as a result of this determination.
Overview
The Social Security (Personal Care Support– Direct Payments Project) (DEWR) Determination 2007, enacted by the Australian Government, aims to address the issue of income testing for personal care support payments. This determination was made under section 35A of the Social Security Act 1991, allowing Ministers to designate specific personal care support schemes as 'approved schemes', exempting them from the social security income test. Specifically, this determination designates the Direct Payments Project, administered by the Victorian Department of Human Services, as an approved scheme. This means that individuals receiving care under this project will not have their social security payments reduced due to these personal care support payments being exempted from the income test. The policy objective is to support people with disabilities to live independently by ensuring that payments made under the Direct Payments Project do not impact their social security entitlements.
Scope and Application
The Social Security (Personal Care Support– Direct Payments Project) (DEWR) Determination 2007 applies to individuals receiving payments under the Direct Payments Project administered by the Victorian Department of Human Services, specifically targeting those with disabilities who require personal care support. This determination, made under section 35A of the Social Security Act 1991, aims to ensure that such payments are exempt from the social security income test. By classifying the Direct Payments Project as an approved scheme, the Act ensures that the income derived from these payments does not affect the eligibility or amount of social security payments for the beneficiaries. The exemption applies only when the payments are intended for the person with the disability, either directly to them or to a person they have authorised to administer the payments on their behalf. The exemption does not extend to payments made to carers or guardians, which remain subject to the social security income test.
The jurisdictional reach of this determination is national, as it pertains to the administration of social security payments under the Commonwealth's Social Security Act 1991. However, the project itself is managed by the Victorian Department of Human Services. This determination complements similar exemptions already in place in other states and territories, ensuring a consistent approach across Australia. There are no exclusions or exemptions explicitly stated in the determination, but it does specify that the payments must be for personal care support and not general income support. The determination took effect on the day after its registration with the Federal Register of Legislative Instruments and was made without the need for public consultation, given its minimal impact on business activities and compliance costs.
Key Provisions
The Social Security (Personal Care Support– Direct Payments Project) (DEWR) Determination 2007 (F2007L02555) is an administrative tool under section 35A of the Social Security Act 1991. This determination classifies the Direct Payments Project, administered by the Victorian Department of Human Services, as an 'approved scheme'. As such, it exempts payments made under this project from the income test for social security recipients (section 35A). The primary purpose of this determination is to ensure that individuals who receive payments from the Direct Payments Project, in addition to their social security payments, are not penalised under the social security income test. These payments, intended for personal care support, are designed to enable people with disabilities to live independently by covering the costs of their long-term personal care needs.
The obligations imposed by this determination on the relevant parties are straightforward. The Victorian Department of Human Services must ensure that payments made under the Direct Payments Project are used solely for the intended purpose of providing personal care support to eligible individuals. These payments should be directed either to the individual with a disability or to an agreed administrator. Importantly, payments made to carers or guardians of the disabled person are not considered income for the purposes of calculating the carer or guardian's social security entitlement. By approving the Direct Payments Project as an 'approved scheme', the determination aims to facilitate a coordinated approach in administering these payments, ensuring that they are not treated as income under the social security system.
There are no specific offences or penalties outlined in this determination. However, any misuse of funds under the Direct Payments Project could potentially lead to broader implications under the Social Security Act 1991, including the possibility of being deemed non-compliant with the conditions of the approved scheme. While the determination itself does not stipulate maximum penalties, the Social Security Act 1991 provides a framework for addressing breaches, which could include administrative actions or legal proceedings. The determination is designed to have minimal compliance costs and impact on business activities, focusing on exempting these vital personal care support payments from the social security income test to benefit eligible individuals.