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Social Security Amendment (Supporting Australian Victims of Terrorism Overseas) Bill 2012

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2010 - 2011 - 2012

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

SOCIAL SECURITY AMENDMENT (SUPPORTING AUSTRALIAN VICTIMS OF TERRORISM OVERSEAS) BILL 2011

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

Amendments to be moved on behalf of the Government

 

 

 

(Circulated by authority of the Attorney-General,

the Honourable Nicola Roxon MP)



AMENDMENTS TO THE SOCIAL SECURITY AMENDMENT (SUPPORTING AUSTRALIAN VICTIMS OF TERRORISM OVERSEAS) BILL 2011

OUTLINE

The Social Security Amendment (Supporting Australian Victims of Terrorism Overseas) Bill will establish a framework for the provision of financial assistance for Australians who are injured overseas as a result of terrorist acts and for close family members of Australians who are killed overseas as a result of terrorist acts.

The proposed government amendments will:

·          clarify that a NIL amount of Australian Victim of Terrorism Overseas Payment can be made

·          ensure the Australian Victim of Terrorism Overseas Payment will not adversely affect a person’s entitlement to compensation or damages under another Commonwealth law

·          ensure the Australian Victim of Terrorism Overseas Payment will not be assessed for the purposes of family assistance benefits under A New Tax System (Family Assistance) Act 1999 , and

·          amend the Social Security (Administration) Act 1999 to enable the Secretary to determine a period longer than 13 weeks in which to determine Australian Victim of Terrorism Overseas Payment claims, and to determine the date on which the Australian Victim of Terrorism Overseas Payment can be made to a person.

 

FINANCIAL IMPACT STATEMENT

The financial impact is negligible, but proposed Amendment (10) could have some financial impact.  If the Secretary extends the period for the processing of claims, some claims that would have been deemed refused under the current statutory 13 week time limit could subsequently be paid under the extended timeframe, effectively increasing the amount of money paid out.



NOTES ON AMENDMENTS

Amendments to Part 1 of Schedule 1

Amendments (1) (2) and (3)

Amendment (1) will insert a new subsection 1061PAF(3).  The proposed new subsection 1061PAF(3) provides that the Australian Victim of Terrorism Overseas Payment Principles may specify the circumstances in which the amount of Australian Victim of Terrorism Overseas Payment is nil.

Amendment (2) will insert a new heading and Division, ‘Division 4-Other’ into the Social Security Act 1991.

Amendment (3) will insert a new section into the Social Security Act 1991 .  The proposed new section 1061PAH provides that the proposed Australian Victim of Terrorism Overseas Payment is not to be treated as compensation or damages under any Commonwealth law.  The effect of this amendment is to specifically exclude payments under the proposed scheme from the definition of ‘compensation’ or ‘damages’ for the purposes of any Commonwealth law so that benefits received under the proposed scheme will not have to be repaid under other regimes or schemes under Commonwealth law. 

The amendment will also ensure that the receipt of an Australian Victim of Terrorism Overseas Payment will not adversely impact on the receipt of compensation or damages under any Commonwealth law that is subsequently enacted unless that law specifically provides otherwise.

Amendments to Part 2 of Schedule 1

Amendments (4) and (5)

Amendments (4) and (5) will remove the amendments in the Bill relating to the A New Tax System (Family Assistance) Act 1999 , as they would have had an unintended consequence on the operation of that Act.

Amendment (4) will omit the heading “ A New Tax System (Family Assistance) Act 1999 ”.

Amendment (5) will omit Item 15 of the Bill.  Item 15 was intended to ensure that the Australian Victim of Terrorism Overseas Payment would not be assessed for the purposes of family assistance benefits.  However, the amendment in Item 15 would have the unintended consequence of including payments under the scheme as income for the purposes of the family assistance law.  An individual’s adjusted taxable income for family assistance takes into account the person’s ‘tax free pension or benefit’, as defined in clause 7 of Schedule 3 to the A New Tax System (Family Assistance) Act 1999 .  

As Item 15 of the Bill provides that the proposed Australian Victim of Terrorism Overseas Payment would be included as a ‘tax free pension or benefit’ under the relevant provision, this would have the unintended consequence of making the receipt of a payment under the scheme in an income year as adjusted taxable income for that year for the purposes of the family assistance law.   This would mean that receipt of Australian Victim of Terrorism Overseas Payment may affect a person’s eligibility for, and rate of, family tax benefit.  This was not the intention, as payments under the scheme are not to be considered as income for social security and family assistance purposes and will also be exempt from income tax.   If the payments are not included as a ‘tax free pension or benefit’ under the family assistance law, this will result in the payments not being ‘adjusted taxable income’ for family assistance purposes. 

The removal of Item 15 will achieve the intended outcome that payments under the proposed scheme will not be assessed for family assistance purposes .   This will also ensure that the payments are not adjusted taxable income for Paid Parental Leave purposes, due to the link to the family assistance law in section 38 of the Paid Parental Leave Act 2010 .

Amendments (6) and (7)

Amendments (6) and (7) will remove the amendments in the Bill relating to the Health and Other Services (Compensation) Act 1995.   These amendments are consequential on amendments (2) and   (3).

Amendment (6) will omit the heading “ Health and Other Services (Compensation) Act 1995” from the Bill .

Amendment (7) will omit Item 16 of the Bill.  Item 16 lists a payment of Australian Victim of Terrorism Overseas Payment under Part 2.24AA of the Social Security Act 1991 .  The effect of this amendment is to specifically exclude Australian Victim of Terrorism Overseas Payments from the definition of ‘compensation’ for the purposes of that Act.  The purpose is to ensure that benefits received under Medicare or other services received from the Commonwealth are not required to be repaid from benefits received under the proposed scheme

However, Item 16 of the Bill is no longer required.  Proposed subsection 1061PAH(1) in Amendments (2) and (3) will provide a provision of general application that will ensure the proposed Australian Victim of Terrorism Overseas Payment is not treated as compensation or damages under any Commonwealth law, including the Health and Other Services (Compensation) Act 1995.

Amendments (8) and (9)

Amendments (8) and (9) achieve a similar outcome to Amendments (6) and (7) and are also consequential on amendments (2) and (3).

Amendments (8) and (9) will remove the amendments in the Bill relating to the Safety, Rehabilitation and Compensation Act 1988.

Amendment (8) will omit the heading “ Safety, Rehabilitation and Compensation Act 1988”.

Amendment (9) will omit Item 19 of the Bill and would re-insert the current existing exclusion in subsection 48(9) of the Safety, Rehabilitation and Compensation Act 1988

Item 19 provides that damages do not include Australian Victim of Terrorism Overseas Payments under Part 2.24AA of the Social Security Act 1991 However, as with the amendment in Item 16, the amendment in Item 19 is no longer required.  Proposed subsection 1061PAH(1) in Amendments (2) and (3) will provide a provision of general application that will ensure the proposed Australian Victim of Terrorism Overseas Payment is not treated as compensation or damages under any Commonwealth law, including the Safety, Rehabilitation and Compensation Act 1988.

The existing exclusion in relation to an amount of damages paid in accordance with section 76 of the Veterans’ Entitlements Act 1986 is not affected.

Amendment (10)

Amendment (10) will insert new Item 25A into the Bill, which will insert three new subsections at the end of section 39 of the Social Security (Administration) Act 1999 .

Under the existing section 39, where the Secretary does not make a determination regarding a claim within the period of 13 weeks after the day on which the claim was made, the Secretary is deemed to have rejected the claim.

Proposed new subsection 39(6) would enable the Secretary to determine a specified period that is longer than 13 weeks as applying for the processing of claims for an Australian Victim of Terrorism Overseas Payment in relation to a declared overseas terrorist act.  This recognises that a longer period of time may be needed to assess claims under the proposed scheme, particularly in circumstances where there are a large number of victims. 

Proposed subsection 39(7) would provide that, if the Secretary has determined a longer period in accordance with subsection 39(6) and the Secretary does not make a determination within the longer period so specified, the Secretary is deemed to have made, at the end of that longer period, a determination rejecting the claim in accordance with subsection 39(1).  In addition, proposed subsection 39(7) would provide that, where a person who makes a claim for an Australian Victim of Terrorism Overseas Payment is not qualified for the Australian Victim of Terrorism Overseas Payment on the date on which the claim is made, but becomes qualified within the longer period determined by the Secretary, the claim is taken to have been made on the day on which the person becomes qualified.

Proposed amendment (10) could have an increased financial impact.  This is because, if the Secretary determines that a longer period should apply for the processing of claims, there is a possibility that some claims that would have been deemed refused under the normal 13 week period could be paid under the extended timeframe, effectively increasing the amount of money paid out. 

However, the inclusion of a provision allowing the Secretary to extend the period for determining claims, and thereby reduce the number of deemed refusals, should also reduce the number of avoidable appeals, particularly following an incident with a large number of victims where there are insufficient resources to consider all claims within the normal 13 week period.  The costs associated with appeals and reviews can be high, and it is desirable to avoid unnecessary appeals and reviews.

Proposed subsection 39(8) would provide that a determination made by the Secretary under subsection 39(6) is not a legislative instrument.  This provision is included to assist readers.  It is merely declaratory of the law and not an exemption.  The declaration is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

Amendment (11)

Amendment (11) will omit proposed subsection 46B(1) of the Social Security (Administration) Act 1999 which was to be inserted by Item 26 of the Bill.  Amendment (11) provides that, unless the Secretary has determined it is appropriate for a person’s Australian Victim of Terrorism Overseas Payment to be paid by instalment in accordance with proposed subsection 46B(2), the payment it is to be paid on the date that is determined by the Secretary as being the earliest date on which it is reasonably practicable for the payment to be made.