Overview

The Veterans' Entitlements Income (Exempt Lump Sum – Superannuation Co-contribution) Determination 2006 was enacted to address the issue of exempting certain superannuation co-contribution payments from the income test under the Veterans' Entitlements Act 1986. This legislation was introduced in response to a request from Treasury in December 2003, seeking to exempt lump sum payments under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 and related amendments from the income assessment of service pensions or income support supplements. The policy objective is to ensure that these co-contribution payments, which are intended to assist low-income earners in their superannuation savings, do not adversely affect the income support received by veterans or their partners. Enacted by the relevant legislature, this determination aligns with the Exempt Lump Sum Determination No. 1 of 2004, reflecting a consistent approach to exempting certain superannuation payments from income tests.

Scope and Application

The Veterans’ Entitlements Income (Exempt Lump Sum –Superannuation Co-contribution) Determination 2006 applies to the exemption of lump sum payments made under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 and the Superannuation (Government Co-contribution for Low Income Earners) (Consequential Amendments) Act 2003 from the income assessment of service pension or income support supplement for veterans. This instrument is a Commonwealth regulation, designed to align with the legislative framework of the Veterans’ Entitlements Act 1986. The determination ensures that these lump sum payments are not considered ordinary income for the purposes of means-testing, thereby exempting them from the income assessment under the VEA. This exemption applies to low-income earners who receive government superannuation co-contributions, provided they meet specific income thresholds and other eligibility criteria set by the Co-contribution Acts. The geographic reach of this determination is national, as it applies to all veterans across Australia who are recipients of pensions or supplements under the VEA. The exemption applies regardless of the state or territory in which the veteran resides or where the superannuation co-contribution is made. There are no specific exclusions mentioned within the text of the determination itself, but it is contingent on the conditions and criteria specified in the Co-contribution Acts. The application and scope of this Determination may be extended or refined through subordinate instruments, such as regulations or further determinations, which may address additional details or circumstances not explicitly covered in the primary text.

Key Provisions

The main operative sections of this Determination, particularly Part 2 of the Schedule, specify the amount of superannuation co-contributions that are exempt from the income test under the Veterans’ Entitlements Act 1986 (VEA). These contributions are to be made under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 and its consequential amendments (sections referenced in parentheses). This determination aims to ensure that these payments are not considered ordinary income for the purposes of assessing veterans’ entitlements, thereby not affecting the means-testing for service pensions or income support supplements. The obligations imposed by this Determination on the relevant parties are primarily concerned with the administration and application of the exemption. For instance, the Australian Taxation Office (ATO) has the responsibility of making payments into superannuation accounts or directly to qualifying individuals or their legal personal representatives. The Department of Veterans’ Affairs must ensure that these co-contributions are correctly identified as exempt lump sums and not included in the income assessment for veterans’ entitlements. Trustees of superannuation funds also have a role in ensuring that contributions are properly recorded and reported. Failure to comply with the provisions of this Determination could result in civil or criminal consequences, depending on the nature and intent of the breach. While the Determination does not specify exact penalties, breaches of related acts, such as the Superannuation (Government Co-contribution for Low Income Earners) Act 2003, could result in penalties that include fines and, in some cases, imprisonment. For instance, under the Superannuation (Government Co-contribution for Low Income Earners) Act 2003, penalties for non-compliance can include fines of up to $22,200 for individuals and $111,000 for corporations, reflecting the severity of the breach. The determination of penalties would be subject to the specific circumstances and the relevant legislative provisions.