EXPLANATORY STATEMENT
Social Security (Personal Care Support Scheme - Pflegegeld) Determination 2005
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 instrument determines that the Austrian Pflegegeld scheme of personal care support is an “approved scheme” under section 35A.
The effect of this instrument is that people living in Austria who receive a Pflegegeld payment, and who also receive an Australian social security payment, will not have their Pflegegeld payments 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. The only exceptions are items specifically exempted under the social security law. 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 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, only fourteen schemes have been approved for the purposes of section 35A.
Explanation of the instrument
This instrument approves the Austrian Pflegegeld scheme as an “approved scheme” under section 35A of the Act.
The Austrian government makes payments under the Pflegegeld scheme to people with disabilities to pay specifically for their personal care support. Pflegegeld payments do not provide income support for people with disabilities. Instead, Pflegegeld 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.
Some Pflegegeld recipients living in Austria may also receive an Australian social security payment, such as disability support pension. The effect of this instrument is that these customers will not have their social security payments reduced because of the Pflegegeld payments that they receive, because their Pflegegeld payments will not be regarded as income in accordance with paragraph 8(8)(zi) of the Act.
Pflegegeld payments are similar to other personal care support payments made by Italy and the United Kingdom which have already been exempted from the social security income test under similar instruments.
Payments made under approved personal care support schemes are only exempt in relation to the person receiving care. As payments made under approved schemes are not exempt in relation to the person providing care, payments made directly to a carer are not affected by this instrument.
Consultation
This instrument was made in response to a request from the Austrian government.
The Department of Family and Community Services and the Department of Education, Science and Training were also consulted to ensure a co-ordinated and consistent approach to the administration of Pflegegeld payments for all social security payments under the Act.
This instrument is beneficial to customers because it exempts Austrian Pflegegeld payments from the social security income test. Public consultation was therefore seen as unnecessary.
Retrospectivity
The Minister for Family and Community Services signed a similar instrument on 17 December 2004 in relation to social security payments within her portfolio responsibilities. This instrument will also have effect from 17 December 2004 to ensure that Pflegegeld payments are treated consistently for all social security payments under the Act from the same date. This retrospective commencement is beneficial to social security recipients in that it exempts their Pflegegeld payments from the income test from 17 December 2004. This instrument does not disadvantage social security recipients in any way.