EXPLANATORY STATEMENT

Veterans’ Entitlements Income (Exempt Lump Sum – New South Wales Aboriginal Trust Fund Repayment Scheme) Determination

2006 NO. R8

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

This determination provides that one-off payments made under the New South Wales Aboriginal Trust Fund Repayment Scheme (the Scheme), to persons (or their descendants) who had wages and/or other monies paid into New South Wales trust funds between 1900 and 1968 that were never repaid, are exempt from the VEA income test.

The effect of this determination is that a person who receives a payment under the Scheme, and who also receives an income support payment from the Department of Veterans’ Affairs (DVA), will not have their income support payment reduced, as these payments will not be regarded as income for the purposes of the veterans’ entitlements income test.

Consultation

This determination was made at the request of the New South Wales Government.

The Department of Family and Community Services has consulted with the Department of Employment and Workplace Relations and the Department of Education, Science and Training, as well as DVA to ensure a coordinated and consistent approach to the administration of these one-off payments.

This determination is beneficial to clients as it exempts one-off payments under the Scheme from the veterans’ entitlements income test. Public consultation was therefore seen as unnecessary.

Retrospectivity

This determination has effect on and from 30 June 2005, as one-off payments may have been made to eligible people under the Scheme from this date. The retrospective commencement of this determination is beneficial, and does not disadvantage income support recipients.