EXPLANATORY STATEMENT

Veterans’ Entitlements Income (Exempt Lump Sum – Payment to

Victims of Bali Bombing) Determination

2006 NO. R6

Subsection 5H(12) 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 once it is stated to be an exempt lump sum by a determination under paragraph 5H(12)(c) of the Veterans’ Entitlements Act 1986 (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 following assistance payments to victims of the Bali bombing, which occurred on 12 October 2002, are exempt from the VEA income test:

• Commonwealth, State and Territory Government assistance with home, vehicle and workplace modifications and associated costs because the person was injured in the Bali bombings;
• Commonwealth Government emergency assistance and assistance with out of pocket expenses because that person was affected by the Bali bombings;
• Assistance from the Australian Red Cross Bali Appeal Fund; and
• Commonwealth Government assistance associated with travel because that person was affected by the Bali bombings.

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.

Consultation

The Department of Family and Community Services (FaCS) has exempted the above payments.  Consideration of the appropriate means test policy position was taken in the context of the Prime Minister’s request that assistance to victims of the Bali bombings be provided expeditiously and sensitively to help minimise the suffering of those affected by the bombings.

Both FaCS and DVA take the point of view that the assistance provided by the Government and the Australian Red Cross should not be counted as ordinary income.

The purpose of this determination is that it should provide scope for further assistance to Bali victims that may be funded by the Commonwealth Government or from the Australian Red Cross Bali Appeal Fund.  The means test treatment of any other assistance that may be announced by the private sector or NGOs can be considered on a case-by-case basis.

Given the beneficial nature of the determination, in that it exempts payments made to victims of the Bali bombing from the VEA income test, public consultation was not seen to be necessary.