EXPLANATORY STATEMENT
Issued by the authority of the Secretary of the Department of Social Services
Social Security Act 1991
Social Security (Special Disability Trust) Amendment Guideline 2016
Purpose
The primary purpose of the Social Security (Special Disability Trust) Amendment Guideline 2016 (guideline) is to add a new provision to Part 3 of the Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011.
Background
The guideline is made under subsection 1209U(4) of the Social Security Act 1991 (the Act). Subsection 1209U(4) provides that the Secretary may, by legislative instrument, make guidelines for deciding any or all of:
(a) whether or not to give waiver notices to trustees of trusts;
(b) what conditions to include in waiver notices;
(c) the periods during which waiver notices are to have effect.
The guideline adds a new provision to Part 3 of the Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011 to permit the Secretary to give a waiver notice to the trustees of a trust in relation to a contravention of the trust property requirements under paragraph 1209R(1)(b) in certain circumstances.
The guideline also updates the title of the Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011 in line with the Administrative Arrangements Order made on 23 December 2014.
Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
The guideline is a legislative instrument for the purposes of the Legislation Act 2003.
Commencement
The guideline commences on the day after it is registered on the Federal Register of Legislation.
Consultation
The Department of Veterans’ Affairs and Department of Human Services were consulted by electronic communication in the making of this Determination, to ensure a coordinated approach.
Regulation Impact Statement
Following consultation with the Office of Best Practice Regulation (ID-19445) it was determined that a Regulation Impact Statement is not required for this Determination because this Determination is not regulatory in nature, will not impact on business activity and will have no, or minimal, compliance costs or competition.
Explanation of the provisions
Section 1 sets out the name of the guideline.
Section 2 provides that the guideline takes effect on the day after it is registered on the Federal Register of Legislation.
Section 3 provides that the Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011 are amended as set out in Schedule 1 to the guideline.
Schedule 1 – Amendment
Items 1 and 2 substitutes a new name in the title and at section 1.1 to reflect the Administrative Arrangements Order made on 23 December 2014.
Item 3 adds new subsections 3.2(3) (4) and (5) to Part 3, Waiver of contravention of requirements.
New subsection 3.2(3) provides that the Secretary may, in certain circumstances, decide to give a waiver notice to the trustees of a trust in relation to a contravention of the trust property requirements under paragraph 1209R(1)(b) of the Act, subject to subsection 3.2(4).
Paragraph 3.2(3)(a) provides that the Secretary may decide to give a waiver notice if satisfied the contravention occurred as a result of court proceedings relating to the transferred asset. For example, this might occur where court proceedings relating to a bequest prevent the beneficiary, or the beneficiary’s partner, from dealing with the bequest.
Paragraph 3.2(3)(b) provides that the Secretary may decide to give a waiver notice in circumstances where a trust has failed to be a special disability trust (referred to as the ‘first trust’) and an asset that was transferred to the first trust is transferred to a special disability trust, provided that the asset was transferred to the first trust within the timeframe under paragraph 1209R(1)(b) of the Act.
Paragraph 3.2(3)(c) provides that the Secretary may decide to give a waiver notice where the transferor transferred the asset to a trust intended to be a special disability trust after the 3 year period mentioned in paragraph 1209R(1)(b) of the Act if the transferor can show there was an intention to transfer the asset within that 3 year period.
A waiver notice in this type of situation could enable an asset that is all or part of a bequest, or of a superannuation death benefit, to be transferred to a special disability trust where this is consistent with the policy intention in providing for the creation of special disability trusts, in accordance with the Act, but the transfer of the asset would otherwise be precluded because the transfer of the asset to the first trust has resulted in the timeframe under paragraph 1209R(1)(b) being exceeded.
In all cases, a waiver notice under subsection 3.2(3) must only be given if the Secretary is satisfied of the following matters:
(a) the contravention does not involve fraudulent conduct;
(b) the contravention in relation to the first trust does not involve fraudulent conduct;
(c) having regard to all the circumstances, including the nature of the contravention in relation to the first trust, the requirement should be waived.
Where a waiver notice is given to the trustees under new subsection 3.2(3), a trust will not be prevented from being a special disability trust by reason of contravention of the trust property requirements under paragraph 1209R(1)(b) of the Act.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Social Security (Special Disability Trust) Amendment Guideline 2016
The Social Security (Special Disability Trust) Amendment Guideline 2016 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 Instrument
The guideline is made under subsection 1209U(4) of the Social Security Act 1991 (the Act). Subsection 1209U(4) provides that the Secretary may, by legislative instrument, make guidelines for deciding any or all of:
(a) whether or not to give waiver notices to trustees of trusts;
(b) what conditions to include in waiver notices;
(c) the periods during which waiver notices are to have effect.
The guideline adds a new provision to Part 3 of the Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011 to permit the Secretary to give a waiver notice to the trustees of a trust in relation to a contravention of the trust property requirements under paragraph 1209R(1)(b) in certain circumstances.
The guideline also updates the title of the Social Security (Special Disability Trust) (FaHCSIA) Guidelines 2011 in line with the Administrative Arrangements Order made on 23 December 2014.
Human rights implications
The guideline engages the following human rights:
· the right to social security as recognised in Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR); and
· the right to an adequate standard of living as recognised in Article 11 of ICESCR and Article 28 of the Convention on the Rights of Persons with Disabilities (CPRD).
The guideline will promote the right to social security and the right to an adequate standard of living. The guideline promotes these rights by providing for a waiver notice to be given to the trustees of a trust in relation to a contravention of the trust property requirements under paragraph 1209R(1)(b) where the Secretary is satisfied:
(a) the contravention occurred as a result of court proceedings relating to the transferred asset; or
(b) a trust has failed to be a special disability trust (referred to as the ‘first trust’) and an asset that was transferred to the first trust is transferred to a special disability trust, provided that the asset was transferred to the first trust within the timeframe under paragraph 1209R(1)(b) of the Act; or
(c) the transferor transferred the asset to a trust intended to be a special disability trust after the end of the 3 year period in paragraph 1209R(1)(b) if the transferor can show there was an intention to transfer the asset within that 3 year period.
In all cases, a waiver notice under subsection 3.2(3) must only be given if the Secretary is satisfied of the following matters:
(a) the contravention does not involve fraudulent conduct;
(b) the contravention in relation to the first trust does not involve fraudulent conduct;
(c) having regard to all the circumstances, including the nature of the contravention in relation to the first trust, the requirement should be waived.
Conclusion
The Determination is compatible with human rights because it promotes the right to social security and the right to an adequate standard of living.
Finn Pratt, Secretary, Department of Social Services