EXPLANATORY STATEMENT
Social Security (Tasmanian Motor Accidents Insurance Board Future Care Payments Exemption) (DEST) Determination 2005
Summary
Section 35A of the Social Security Act 1991 (the Act) allows the Minister 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 Tasmanian Motor Accidents Insurance Board Future Care Payments scheme for personal care support is an “approved scheme” under section 35A of the Act.
The effect of this instrument is that people who receive Tasmanian Motor Accidents Insurance Board Future Care Payments, and who also receive an Australian social security payment for which the Minister for Education, Science and Training is responsible, will not have these Future Care 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 counted as income. The only exceptions are items specifically exempted from the social security 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.
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 under paragraph 8(8)(zi) of the Act in relation to the person who is receiving care.
Explanation of the instrument
This instrument determines that the Tasmanian Motor Accidents Insurance Board Future Care Payments scheme is an “approved scheme” under section 35A of the Act.
The Tasmanian Motor Accidents Insurance Board makes payments under the Future Care Payments scheme to people who have an ongoing injury as a result of a transport accident for their personal care.
Some Tasmanian Motor Accidents Insurance Board Future Care Payments recipients may also receive an Australian social security payment, for which the Minister for Education, Science and Training is responsible. The effect of this instrument is that these customers will not have their social security payments reduced because of the Future Care Payments that they receive, because their Future Care Payments will not be regarded as income in accordance with paragraph 8(8)(zi) of the Act.
A payment that is made from a scheme that has been approved by the Minister under section 35A of the Act will not be assessed as income of the customer for social security means testing purposes. However, this amount may also be assessed as other than income under the Act, where the Act allows this to occur. For example, if a payment made from this scheme forms part of a compensation lump sum, then the amount will still be assessed as “compensation” for the purposes of the Act and assessed according to the rules in Part 3.14 of the Act.
The Tasmanian Motor Accidents Insurance Board Future Care Payments are similar to other personal care support schemes that have previously been approved under section 35A of the Act.
Explanation of the provisions
Clause 1 of the Determination states the name of the determination.
Clause 2 provides that the Determination commences on 1 September 2005.
Clause 3 provides that the Tasmanian Motor Accidents Insurance Board Future Care Payments Scheme is an approved scheme for the purposes of the Act.
Consultation
The Department of Family and Community Services and the Department of Employment and Workplace Relations were consulted to ensure a co-ordinated and consistent approach to the administration of Future Care Payments for all social security payments under the Act.
This instrument is beneficial to customers because it determines that this scheme is an “approved scheme” allowing the payments to be exempt from the social security income test for payments for which the Minister for Education, Science and Training is responsible. Public consultation was therefore seen as unnecessary.
Retrospectivity
This determination has effect from 1 September 2005, as any funds paid under the Tasmanian Motor Accidents Insurance Board Future Care Payments scheme for personal care support are paid to people who are eligible from this date. The retrospective commencement of this determination is beneficial to, and does not disadvantage, social security recipients.