EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum – Compensation payments in respect of certain World War Two internments) Determination
Instrument No. R5/2008
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 or the person’s partner’s service pension or income support supplement.
Background
The Compensation payments in respect of certain World War Two internments are one-off payments of $25,000, made to a person or a person’s partner where the person was a former prisoner of war of the Axis force during World War Two. The payments are being made by on behalf of the Commonwealth by the Australian Government Department of Veterans’ Affairs under the Social Security and Veterans’ Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act 2007. The compensation payment is in recognition of the hardship and suffering endured by former prisoners of war, or their widows or widowers.
The purpose of this instrument is to ensure that a payment received under the Compensation payments in respect of certain World War Two internments under the Social Security and Veterans’ Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act 2007 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 Compensation payment in respect of certain World War Two internments because the payment 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 this instrument has the same effect as a similar instrument executed on 31 May 2007 under the social security law.
This instrument is beneficial to pensioners because it exempts from the VEA income test Compensation payments in respect of certain World War Two internments paid by the Australian Government Department of Veterans’ Affairs under the Social Security and Veterans’ Affairs Legislation Amendment (One-off Payments and Other 2007 Budget Measures) Act 2007.
Public consultation was therefore seen as unnecessary.
Retrospectivity
FaHCSIA has already exempted Compensation payments in respect of certain World War Two internments. The relevant instrument under the social security law operates from 31 May 2007. This instrument is effective from the same date. The instrument is entirely beneficial for pensioners receiving income support payments from the Department of Veterans’ Affairs and does not disadvantage them in any way.