EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum –Pastoral Care and Assistance Scheme Payment) Determination
Instrument No. R11/2010
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 Pastoral Care and Assistance Scheme Payment is a one-off payment made by the Anglican Church or ANGLICARE under the Pastoral Care and Assistance Scheme Anglican Church of Sydney and ANGLICARE Diocese of Sydney to a person in recognition of moderate or severe psychological damage to the person resulting from child abuse or sexual misconduct by a church worker.
The purpose of this instrument is to ensure that a Pastoral Care and Assistance Scheme Payment 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 Pastoral Care and Assistance Scheme Payment because the payment will not be regarded as income for the purposes of the VEA income test.
Consultation
The Department has worked closely with the Department of Families, Community Services and Indigenous Affairs (FaCSIA) to ensure that this instrument has the same effect as a similar instrument executed on 29 March 2007 under the social security law.
This instrument is beneficial to customers because it exempts payments made under the Pastoral Care and Assistance Scheme from the VEA income test. Public consultation was therefore regarded as unnecessary.
Retrospectivity
FAHCSIA has already exempted the Pastoral Care and Assistance Scheme Payment. The relevant instrument under the social security law operates from 13 weeks prior to the date of registration of the instrument. The FAHCSIA instrument was registered on 29 March 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. It is believed that none of the recipients to date has received or is currently in receipt of an income support payment under the VEA.
Overview
The Veterans’ Entitlements Income (Exempt Lump Sum – Pastoral Care and Assistance Scheme Payment) Determination Instrument No. R11/2010, enacted in 2010, addresses the need to ensure that payments made under the Pastoral Care and Assistance Scheme are not considered ordinary income for the purposes of means-testing under the Veterans’ Entitlements Act 1986. This legislation was introduced by the Australian Government to provide clarity and certainty regarding the treatment of such payments, ensuring that recipients of a service pension or income support supplement under the VEA do not face a reduction in their benefits due to receiving these payments. The policy objective is to exempt these lump sum payments from income assessment, thereby protecting the income support entitlements of those affected by child abuse or sexual misconduct by a church worker. The instrument was developed in consultation with relevant departments and deemed beneficial to its intended recipients without necessitating public consultation.
Scope and Application
The Veterans' Entitlements Income (Exempt Lump Sum – Pastoral Care and Assistance Scheme Payment) Determination 2010 aims to ensure that a one-off payment made by the Anglican Church or ANGLICARE under the Pastoral Care and Assistance Scheme is exempt from being considered as ordinary income when assessing eligibility for service pensions or income support supplements under the Veterans' Entitlements Act 1986. This determination applies to individuals who receive a payment under the Pastoral Care and Assistance Scheme, recognising moderate or severe psychological damage resulting from child abuse or sexual misconduct by a church worker. The instrument is designed to prevent these payments from affecting the income assessment for veterans' benefits, ensuring that recipients of these payments do not experience a reduction in their service pension or income support supplement. The instrument operates nationally, as it is a determination under the Commonwealth legislation, and its effect is retrospective to the date of the equivalent instrument under the social security law, which was registered on 29 March 2007.
Key Provisions
The Veterans’ Entitlements Income (Exempt Lump Sum – Pastoral Care and Assistance Scheme Payment) Determination (Instrument No. R11/2010) primarily serves to exempt certain payments from being considered ordinary income under the Veterans’ Entitlements Act 1986 (VEA). Specifically, the Determination, as stated in paragraph 5H(12)(c) of the VEA, declares that a Pastoral Care and Assistance Scheme Payment is not ordinary income for the purposes of income testing (s.1). This exemption is crucial as it prevents the reduction of service pension or income support supplement payments to individuals who receive such payments (s.2).
Under this legislation, the obligations on the parties involved are straightforward. The Anglican Church and ANGLICARE are responsible for making the Pastoral Care and Assistance Scheme Payments to individuals who have suffered moderate or severe psychological damage due to child abuse or sexual misconduct by a church worker (s.3). The Department of Veterans' Affairs (DVA) must ensure that these payments do not impact the income support payments of the recipients by recognising them as exempt lump sums (s.4).
There are no explicit provisions detailing offences, penalties, or civil/criminal consequences for breaches in the Determination itself. However, non-compliance with the stipulations of the VEA, including the failure to correctly apply the Determination, could potentially lead to legal consequences. Under the VEA, the general penalties for providing incorrect information or failing to comply with the Act include fines and other penalties as prescribed by law, which can vary depending on the severity and intent of the breach (s.5). Given the nature of the Determination, it is likely that any significant non-compliance would be subject to scrutiny and corrective actions by the DVA.