EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum – River Red Gum Structural Adjustment Package Payment) Determination
Instrument No. R59/2010
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 section 1.2 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 NSW Government made an announcement on 2 March 2010 to establish protection over significant river red gum plantations. The Adjustment Package provides one-off payments to eligible workers in the forestry industry who are employed by, providing services under contract to, or in the case of a Working Principal, engaged in the day to day operations of, sawmills deciding to close as a result of the 2 March announcement. Worker Assistance would only apply to eligible workers as at 7 August 2009 who have been eligible workers for a continuous period of at least 6 months prior to 7 August 2009 until made redundant or had their contract or work terminated as a result of the 2 March announcement and who have made a formal application for assistance by 30 June 2011.
The purpose of this instrument is to ensure that a River Red Gum Structural Adjustment Package 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 River Red Gum Structural Adjustment Package 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 Education, Employment and Workplace Relations (DEEWR) 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 River Red Gum Structural Adjustment Package Payments from the VEA income test. Public consultation was therefore regarded as unnecessary.
Overview
The Veterans’ Entitlements Income (Exempt Lump Sum – River Red Gum Structural Adjustment Package Payment) Determination 2010, made under the authority of the Veterans’ Entitlements Act 1986, was enacted to address the issue of income testing for veterans receiving payments from the River Red Gum Structural Adjustment Package. This package was introduced by the New South Wales Government on 2 March 2010 to provide financial assistance to eligible forestry workers affected by the closure of sawmills due to the protection of significant river red gum plantations. The objective of this legislative instrument is to ensure that the payments made under this adjustment package do not affect the income support pensions of veterans, thus preserving their entitlements under the Veterans’ Entitlements Act. The instrument was developed in consultation with the Department of Education, Employment and Workplace Relations to harmonise its effects with similar provisions under social security law, and public consultation was deemed unnecessary as the instrument directly benefits the intended recipients.
Scope and Application
The Veterans’ Entitlements Income (Exempt Lump Sum – River Red Gum Structural Adjustment Package Payment) Determination 2010 applies to eligible workers in the forestry industry who are affected by the closure of sawmills due to the River Red Gum Structural Adjustment Package established by the NSW Government. Specifically, it covers workers who were employed by, providing services under contract to, or engaged in the day-to-day operations of sawmills that closed as a result of the government's 2 March 2010 announcement. These workers must have been eligible for a continuous period of at least six months prior to 7 August 2009, made a formal application for assistance by 30 June 2011, and become redundant or had their contract or work terminated as a consequence of the aforementioned announcement. The Act ensures that recipients of income support pensions under the Veterans’ Entitlements Act 1986 will not have their payments reduced due to receiving a River Red Gum Structural Adjustment Package Payment, as such payments are deemed exempt lump sums for the purposes of the VEA income test. The geographic reach of this instrument is confined to those workers in the forestry industry who meet the specified criteria within the jurisdiction of the Commonwealth of Australia. The instrument does not require public consultation as it is deemed beneficial to the targeted group of workers.
Key Provisions
The Veterans’ Entitlements Income (Exempt Lump Sum – River Red Gum Structural Adjustment Package Payment) Determination (R59/2010) serves to classify a specific payment as an exempt lump sum under the Veterans’ Entitlements Act 1986 (VEA). According to section 1.2 of the Schedule, the amount specified as an exempt lump sum is not considered ordinary income for the purposes of the VEA's income test. This ensures that individuals receiving service pensions or income support supplements under the VEA will not face a reduction in their payments due to the receipt of these one-off payments.
The obligations imposed by this legislation primarily concern the exemption of the River Red Gum Structural Adjustment Package Payment from income assessment. To qualify for this exemption, eligible workers must have been employed by, or under contract to, sawmills that closed as a result of the NSW Government's announcement on 2 March 2010. These workers must have been continuously employed for at least six months prior to 7 August 2009, and they must have made a formal application for assistance by 30 June 2011. This ensures that only those who meet specific criteria receive the benefits of the exemption.
Failure to comply with the provisions of the Determination could lead to civil or criminal consequences. Although the legislation does not explicitly outline specific penalties, breaches of the VEA can result in significant consequences under the broader framework of the Act. Penalties for non-compliance with the VEA can include fines and, in severe cases, imprisonment. The exact penalties would depend on the specific nature and severity of the breach, as well as other relevant legal provisions.