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.
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Overview
The Veterans’ Entitlements Income (Exempt Lump Sum – Tasmanian Child Abuse) Determination 2006 aims to address a gap in the means-testing provisions of the Veterans’ Entitlements Act 1986, specifically concerning payments made by the Tasmanian Government to individuals who were abused as children while in Tasmanian State care. This instrument ensures that such payments are not considered ordinary income for the purposes of assessing eligibility for service pensions or income support supplements under the Act, thereby preventing any reduction in income support payments for veterans' affairs recipients. Enacted by the Department of Families, Community Services and Indigenous Affairs, the policy objective is to exempt these payments from the income test, ensuring that veterans and their partners do not face financial penalties due to these payments.
The determination was made to align with a similar instrument signed on 15 December 2004, concerning social security payments, and was enacted to ensure consistency in treatment of these payments across different government departments. This retrospective application from 15 December 2004 ensures that veterans and their partners are not disadvantaged, and their income support payments are protected from the income test for these specific lump sum payments. The instrument reflects the government’s commitment to providing equitable treatment to individuals affected by historical child abuse while in care.
Scope and Application
The Veterans’ Entitlements Income (Exempt Lump Sum – Tasmanian Child Abuse) Determination 2006 applies to individuals who are recipients of service pensions or income support supplements under the Veterans’ Entitlements Act 1986 and who also receive an ex gratia payment from the Tasmanian Government as compensation for abuse suffered as children while in Tasmanian State care. This instrument ensures that these ex gratia payments are deemed exempt lump sums for the purposes of the income test under the VEA, thereby preventing any reduction in their income support payments. The instrument extends to the Commonwealth jurisdiction and its application is consistent with the Social Security Exempt Lump Sum Determination No. 8 of 2004, which was signed on 15 December 2004. The retrospective commencement of this instrument from the same date ensures uniform treatment of the Tasmanian ex gratia payments for all relevant income support recipients, and it does not disadvantage any of them.
Key Provisions
The Veterans' Entitlements Income (Exempt Lump Sum - Tasmanian Child Abuse) Determination 2006 (No. R13) is an instrument that ensures certain payments are exempt from the income test for means-testing under the Veterans' Entitlements Act 1986 (VEA). Specifically, the determination outlines that ex gratia payments made by the Tasmanian Government to individuals who were abused as children while in State care are not to be considered ordinary income (section 1). This means that these payments do not affect the income support payments received by the beneficiaries from the Department of Veterans' Affairs (DVA). The instrument is designed to ensure consistency in the treatment of such payments across different types of income support.
Under the VEA, the determination imposes an obligation on the DVA to treat the specified Tasmanian ex gratia payments as exempt lump sums for the purposes of calculating income support. This requirement ensures that individuals receiving service pensions or income support supplements from the DVA will not experience a reduction in their benefits due to these payments. The obligations extend to ensuring that these payments are excluded from the income assessment process entirely, thereby protecting the recipients' entitlement to their income support payments.
There are no direct offences or penalties specified within the Determination itself; however, non-compliance with the VEA's requirements for exempt lump sums could lead to legal consequences. Such non-compliance might result in civil or criminal penalties, depending on the nature and severity of the breach. Although the maximum penalties are not detailed in the Determination, they are typically outlined in the VEA or other relevant legislation. The Determination's primary focus is on ensuring the correct application of the exemption to avoid any unjust reduction in income support payments for eligible recipients.