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.
Overview
The Social Security (Personal Care Support Scheme - Pflegegeld) Determination 2005 was enacted to address the issue of Australian social security recipients who also receive personal care support payments under Austria's Pflegegeld scheme, ensuring these payments are not considered as income under Australia's social security income test. This determination was made under section 35A of the Social Security Act 1991, allowing Ministers to designate certain personal care support schemes as "approved schemes" for the purposes of the Act. The policy objective of this instrument is to exempt Pflegegeld payments from the income test, thereby ensuring that Australian social security recipients who also receive these payments in Austria do not experience a reduction in their Australian social security benefits. The determination was made in response to a request from the Austrian government and was supported by consultations with relevant Australian government departments. The instrument, which is retrospective, was designed to ensure consistent treatment of Pflegegeld payments for all social security payments under the Act from 17 December 2004.
Scope and Application
The Social Security (Personal Care Support Scheme - Pflegegeld) Determination 2005 applies to individuals living in Austria who receive Pflegegeld payments and concurrently draw Australian social security benefits. Under this legislation, the Pflegegeld scheme, which is an initiative by the Austrian government to provide personal care support to individuals with disabilities, has been recognised as an "approved scheme" under section 35A of the Social Security Act 1991. Consequently, Pflegegeld payments are exempted from the social security income test for the beneficiaries of these payments, meaning that their Australian social security payments will not be reduced on account of the Pflegegeld they receive. This determination extends to the Commonwealth of Australia and ensures that the exemption applies uniformly across all social security payments governed by the Act. Notably, this exemption is confined to the individuals receiving the Pflegegeld payments; payments made to caregivers remain subject to the income test. No significant exclusions or exemptions are specified in this determination, although the exemption applies only to the income of the care recipients and not to any payments made to their caregivers.
Key Provisions
The main operative sections of this instrument (sections 3 and 4) determine that the Austrian Pflegegeld scheme of personal care support is an “approved scheme” under section 35A of the Social Security Act 1991 (the Act). This means that Pflegegeld payments made to individuals in Austria, who also receive Australian social security payments, will not be considered income for the purposes of the social security income test (section 35A(1)). This determination applies from 17 December 2004, ensuring that the exemption from the income test applies retrospectively to all relevant payments made from that date (section 4).
The Act imposes obligations on both the Australian and Austrian governments regarding the administration and recognition of Pflegegeld payments. The Australian government must ensure that Pflegegeld payments are not taken into account when assessing the income of individuals receiving Australian social security payments (section 35A(1)). Conversely, the Austrian government must continue to make Pflegegeld payments to eligible individuals in accordance with their domestic laws and regulations. These obligations ensure that the benefits of the approved scheme are effectively realised and administered for the intended recipients (section 3).
Breach of the provisions outlined in this instrument could lead to administrative errors in the assessment and payment of social security benefits. Specifically, if Pflegegeld payments were mistakenly considered as income, this could result in the overpayment or underpayment of social security benefits, leading to financial hardship for the recipients or potential misuse of public funds. However, the instrument itself does not specify particular offences, penalties, or civil/criminal consequences for non-compliance with these obligations. Instead, any legal consequences for improper administration would stem from the broader provisions of the Social Security Act 1991 and related administrative laws. The potential penalties for such breaches could include financial penalties, corrective actions, or other administrative measures as prescribed under the Act.