EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum – Murray-Darling Basin Small Block Irrigators Grant) Determination
Instrument No. R8/2009
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 attached 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 Murray-Darling Basin Small Block Irrigators Grant is a one-off payment to eligible irrigators on blocks of 15 hectares or less. The grant is part of an exit package to assist small block irrigators to remain in the community while selling their water entitlements to the Commonwealth, and to leave irrigation farming for at least five years.
The Grant is part of the Water for the Future plan. The maximum value of the grant is $150,000 for irrigators with net assets of $350,000 or less. The grant is taxable and tapers by $2 for every $3 over the asset limit with no grant payable where net assets of $575,000 are reached. Funding is only available to irrigators who own no more than 15 hectares of farm land and sell all their water entitlement to the Commonwealth.
Irrigators or partners of irrigators who have previously received a Government
Re-establishment or Exit Type Grant are ineligible for the Murray-Darling Basin Small Block Irrigators Grant.
The effect of this instrument is that people who are in receipt of an income support payment under the VEA will not have their income support payment reduced because of receiving a Murray-Darling Basin Small Block Irrigators Grant (or part thereof).
Consultation
In the interest of consistency of approach, the Department has worked closely with the Department of Families, Housing, Community Service 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 16 December 2008.
The attached instrument is beneficial to eligible Department of Veterans’ Affairs income support recipients because it exempts a Murray-Darling Basin Small Irrigators Grant from the VEA income test. Public consultation was therefore seen as unnecessary.