EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum – Stolen Wages Reparation Scheme WA) Determination
Instrument No. R25/2012
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 7 March 2012 the Government of Western Australia announced the Scheme which provides for the payment of a one-off lump sum ex gratia payment of $2,000 to eligible individuals. Eligibility for the ex gratia payment will be assessed by the Western Australian Department of Indigenous Affairs. Individuals eligible for the Scheme include:
- Aboriginal or Torres Strait Islanders born prior to 1958;
- who were 14 years or older when they were residents of a Government Native Welfare settlement;
- who had all or part of their income controlled by the Western Australian State Government; and
- who have never been repaid any of the outstanding monies owed by the State Government.
The ex gratia payment is not a payment of money for services rendered directly or indirectly. Rather, the ex gratia payment is compensatory in nature and will be paid as an expression of regret on behalf of the Western Australian State Government for past mistreatment experienced by these individuals from 1905 to 1972.
The application process for the Scheme is administered by the Western Australian Department of Indigenous Affairs on behalf of the State Government of Western Australia. The applications process for the Scheme started on 7 March 2012 and will remain open until 6 September 2012. Payments from the Scheme are to be made to individuals once the Western Australian Department of Indigenous Affairs assessors have approved the applications.
Under the VEA, money earned, derived or received for a person’s own use or benefit, is generally assessable as income. However, some amounts that would otherwise be income, are specifically exempted from the VEA income test. Paragraph 5H(12)(c) of the VEA allows the Repatriation Commission to determine that an amount, or class of amounts, is an exempt lump sum for the purposes of the VEA. An exempt lump sum is excluded from the definition of “ordinary income” under sub section 5H(1) of the VEA. As a result, any such amount is not to be taken into account under the VEA income test.
The effect of this instrument is that a one-off lump sum ex gratia payment of $2,000 made by the Western Australian Department of Indigenous Affairs to a person under the Scheme, will not be regarded as income for the purposes of the VEA income test. Consequently, if a recipient of a DVA administered income support payment receives a payment under the Scheme, that payment will be exempt from 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 to be executed under the social security law. The nature of the consultation with FaHCSIA was an exchange of e-mails.
This instrument is beneficial to customers because it exempts ex gratia payments under the Stolen Wages Reparation Scheme WA from the VEA income test. Public consultation was therefore regarded as unnecessary.
Regulatory Impact Analysis
The Determination is not regulatory in nature, will not impact on business activity, and will have no, or minimal, compliance costs or competition impact.
Overview of the Legislative Instrument
The Determination is a class determination under paragraph 5H(12)(c) of the Veterans’ Entitlements Act 1986 (the VEA) to ensure that one-off ex gratia payments to individuals made by the Western Australian Department of Indigenous Affairs under the Stolen Wages Reparation Scheme WA will not be assessed as income for VEA income test purposes thereby ensuring that recipients retain the full value of the ex gratia payments.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
The Determination is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Human rights implications
The Determination engages and promotes the following human right:
Right of Equality and non-Discrimination in the International Covenant on Civil and Political Rights
The ex gratia payment that is made an exempt lump sum by the attached legislative instrument is compensation paid by the Government of West Australia (WA Government) to certain indigenous Australians who during 1905-1972 had all or part of their income controlled by the WA Government and who were not paid outstanding monies owed to them by the WA Government.
By making the ex gratia payment an exempt lump sum, thereby ensuring it is not assessed as income for VEA income test purposes, the attached legislative instrument enables recipients of the ex gratia payment to retain the full financial value of the payment. In this regard, therefore, the legislative instrument enhances compensation paid as redress for the mistreatment of indigenous Australians and would complement Australia’s obligations under the International Covenant on Civil and Political Rights.
There are conditions on the ex gratia payment being deemed to be an exempt lump sum, namely that the recipient or the recipient’s partner must be in receipt of a service pension or income support supplement but these conditions are not discretionary or intended to limit benefits and merely identify the income support payments that are subject to the VEA income test.
Conclusion
The legislative instrument in question is compatible with, and promotes, human rights because it ensures that the value of compensation paid by the WA Government for the past mistreatment of certain indigenous Australians is not diminished in value by the application of the Veterans’ Entitlements Act 1986.
The Repatriation Commission (by its delegate).