EXPLANATORY STATEMENT
Veterans’ Entitlements Income (Exempt Lump Sum – Tasmanian Child Abuse) Determination
2006 NO. R13
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.
Background
In 2004 the Tasmanian Government agreed to make ex gratia payments to people abused as children while they were in Tasmanian State care. These Tasmanian ex gratia payments are similar to five other types of payments that have been exempted from the social security income test since 1998.
The purpose of this instrument is to ensure that an ex gratia payment made by the Tasmanian Government to a person who was abused as a child while in Tasmanian 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 for which the Department of Veterans’ Affairs is responsible will not have their income support payment reduced because of the Tasmanian ex gratia payment that they receive as these payments will not be regarded as income for the purposes of the VEA income test.
Consultation
The Department of Prime Minister and Cabinet has advised the Department of Families, Community Services and Indigenous Affairs (FaCSIA) that the Prime Minister’s office supports exempting these payments in accordance with this instrument.
FaCSIA, the Department of Employment and Workplace Relations (DEWR) and the Department of Education, Science and Training (DEST) were also consulted to ensure a consistent approach to the administration of these Tasmanian ex gratia payments for all income support recipients.
This instrument is beneficial to customers because it exempts Tasmanian ex gratia payments from the VEA income test. Public consultation was therefore regarded as unnecessary.
Retrospectivity
A delegate of the Secretary of FaCSIA signed a similar instrument on
15 December 2004 in relation to social security payments within the FaCSIA portfolio (the Social Security Exempt Lump Sum Determination No. 8 of 2004). This instrument will also have effect from 15 December 2004 to ensure that Tasmanian ex gratia payments are treated consistently for clients of DVA from the same date. This retrospective commencement is beneficial to income support recipients in that it exempts their ex gratia payment on and from the income test from 15 December 2004. This instrument is entirely beneficial and does not disadvantage income support recipients in any way.
JR