EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum – Climate Change Adjustment Program Re-establishment Grant) Determination
Instrument No. R13/2008
Paragraph 5H(12)(c) 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 under the Veterans’ Entitlements Act 1986 (VEA) once it is stated to be an exempt lump sum by a determination under paragraph 5H(12)(c) of the 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’s service pension or income support supplement.
Background
The Climate Change Adjustment Program Re-establishment Grant
(“Re-establishment Grant”) is part of the response to assist primary industries prepare for a different future due to the long term challenges facing Australian agriculture through the impact of climate change. The Re-establishment Grant is designed to assist farmers leaving the land to have capacity to continue their lives outside of farming the land.
In general terms, the Re-establishment Grant is a one-off payment of up to $150,000.00 made to a person where the person was an Australian farm owner who has sold their farm enterprise and who meets the Commonwealth Department of Agriculture, Fisheries and Forestry eligibility guidelines under the Australia’s Farming Future Initiative 2008.
The purpose of the attached instrument is to ensure that a Re-establishment Grant paid under the Australia’s Farming Future Initiative 2008 is an exempt lump sum for the purposes of paragraph 5H(12)(c) of the VEA.
The effect of this instrument is that people who are in receipt of an income support pension under the VEA will not have their income support payment reduced because of receiving a Re-establishment Grant under the Australia’s Farming Future Initiative 2008 because the Re-establishment Grant will not be regarded as income for the purposes of the VEA income test.
Consultation
In the interest of consistency of approach, the Department has worked closely with the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to ensure that the attached instrument has the same effect as a similar instrument executed under the social security law. The relevant instrument under social security law operates from 1 July 2008.
The attached instrument is beneficial to eligible Department of Veterans’ Affairs income support recipients because it exempts from the VEA income test a
Re-establishment Grant under the Australia’s Farming Future Initiative 2008. Public consultation was therefore seen as unnecessary.