EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum – Payments to former residents in South Australian State care) Determination
Instrument No. R10/2011
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 (collectively referred to as “income support payment”).
Background
On 29 January 2010, the State of South Australia announced a scheme, to make ex-gratia payments under the Victims of Crime Act 2001 for individuals who, as children, were abused while in State care.
The purpose of this instrument is to ensure that an ex-gratia payment made by the State of South Australia under the Victims of Crime Act 2001 to individuals who have suffered sexual abuse as children while they were in State care, 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 payment under the VEA will not have their payment reduced because of receiving an ex gratia payment as the ex gratia 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, Housing, Community Services and Indigenous Affairs (FaHCSIA) to ensure that this instrument has the same effect as a similar instrument proposed to be executed under the social security law.
This instrument is beneficial to customers because it exempts ex gratia payments made under the Victims of Crime Act 2001 from the VEA income test. Public consultation was therefore regarded as unnecessary.