EXPLANATORY STATEMENT

Veterans' Entitlements Income (Exempt Lump Sum — Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project) Determination

2005 No.R19

Subsection 5H(12) of the Veterans’ Entitlements Act 1986

The Purpose and Operation of the Attached Instrument

A payment is deemed not to be ordinary income for means-testing once it is stated to be an exempt lump sum by a determination under paragraph 5H(12)(c) of the Veterans' Entitlements Act 1986 (VEA).  The amount specified in the Determination at Part 2 of the Schedule as an exempt lump sum is an exempt lump sum for the purposes of the definition of 'ordinary income' in subsection 5H(1) of the VEA.

The attached instrument provides for the exemption of these payments from the income assessment of the person or the person’s partner’s service pension or income support supplement.

Background

This determination determines that a one-off payment made by the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project is an exempt lump sum for the purposes of subsection 5H(12).

The Community Inclusion Board, part of the Australian Capital Territory Government's Canberra Social Plan has determined that tackling household debt is a key priority. On 21 December 2004 the Chief Executive of the Chief Minister’s Department authorised commencement of the Household Debt Pilot Project. Some Household Debt Pilot Project recipients may also be in receipt of a social security payment administered by the Department of Family and Community Services. The effect of this determination is that a payment received by a customer under the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project will not be assessed as income under the Veterans’ Entitlements Act (1986).

Consultation

This determination was made at the request of the Australian Capital Territory Government.

This determination is beneficial to customers because it exempts this Australian Capital Territory Government’s payment from the social security and veterans' entitlements income tests. Public consultation was therefore seen as unnecessary.

Retrospectivity

This determination has effect from 23 March 2005, any funds paid under the Australian Capital Territory Government’s Community Inclusion and Household Debt Pilot Project is paid to people who are eligible from this date. The retrospective       JR

commencement of this determination is beneficial to, and does not disadvantage social security or veterans' entitlements recipients.

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