4.3.2.31 Income Exempt from Assessment - Specifically Approved

Summary

This topic provides information about the following income with specifically approved exemption from the income test:

• ministerial determination: 'approved' scholarships awarded outside Australia,
• ministerial determination: 'approved' personal care support schemes,
• secretarial approval: credits from 'approved' exchange trading systems,
• secretarial determination: lump sums exempted under section 8(11), and
• solar feed-in tariffs.

 

Information about other income exempt from assessment can be found in 4.3.2.30.

 

Act reference: SSAct section 8(11) An amount received by a person is an exempt lump sum if:…

 

Ministerial determinations: 'approved' scholarships awarded outside Australia

Certain scholarships that have been approved by Ministers are NOT assessed for income test purposes.

 

Under current Administrative Arrangements Orders (AAOs), different departments are responsible for administering different types of payments under the social security law. Determinations are signed by Secretaries or their delegates in FaHCSIA, DEEWR and DIICCSRTE.

 

Approval of these schemes for income test purposes is obtained through FaHCSIA Means Test Policy Section following referral from the appropriate Centrelink Help Desk.

Explanation: For a scholarship to be an approved scholarship, or an approved class of scholarships, it must be awarded outside Australia and not intended to be used wholly or partly to assist recipients to meet living expenses.

Date of Effect	Name of Approved Scheme	Operated by…
01/09/1990	'Cambridge Commonwealth Trust Fees Scholarship'	Cambridge Overseas Research Students Scheme
01/09/1990	'Scholarship awarded by the Association of Mouth and Foot Artists, Liechtenstein'	Association of Mouth and Foot Artists, Liechtenstein
13/12/2000	'Rotary Foundation Ambassadorial Scholarship'	Trustees of the Rotary Foundation

 

Act reference: SSAct section 24A Approved scholarship, section 8 (8) Excluded amounts-general, see (zj)

Policy reference: SS Guide 4.3.9.40 Income from Scholarships

 

Ministerial determination: 'approved' personal care support schemes

Ministers may approve personal care support schemes under section 35A of the SSAct. Payments from 'approved schemes' are paid towards the cost of personal care support services and do not provide income support for the person who is receiving care. Payments made from an 'approved scheme' are exempt from the income test under section 8(8)(zi) of the SSAct, but ONLY in the hands of the person who is receiving care. Payments that do not belong to the person receiving care are not exempt under section 35A. Payments are not exempt in the hands of the carer.

 

Administrative Arrangements Orders (AAOs) issued by the Governor General on 3 December 2007 changed the previous responsibilities of Departments in terms of social security legislation. Two different Departments became responsible for administering different types of payments under the social security law. All subsequent determinations are now signed by Ministers, or their delegates in Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and Education, Employment and Workplace Relations (DEEWR). The previous AAOs issued by the Governor General on 26 October 2004 and 16 December 2004 provided that 3 different Departments were responsible for administering different types of payments made under the social security law. Determinations were signed by Ministers, or their delegates, in FaCSIA, DEWR and DEST, with the same date of commencement, to ensure uniform application across the social security system.

 

Agencies and organisations that provide assistance to people with care needs can apply to have their schemes considered as 'approved schemes' under section 35A of the SSAct. Approval of these schemes for income test purposes is obtained through FaHCSIA Means Test Policy Section.

Explanation:

Some organisations and agencies give a person with a disability money to:

• meet the cost of a carer or attendant to provide personal care, and
• reimburse the carer for expenses incurred in providing personal care support services.

Payments are either made to the person:

• with a disability to pay the person providing the care, or
• providing the personal care for the person with a disability.

 

Ministers may approve personal care support schemes for both groups and individuals.

 

Ministerial determination: date of effect of determination

The Minister's power, under section 35A to determine an 'approved personal care support scheme' is exercised by making a legislative instrument that is lodged with the Federal Register of Legislative Instruments. A determination, once made, is subject to disallowance by either House of Parliament in accordance with the Legislative Instruments Act 2003. The interaction between section 35A and the date of effect rules in the SS(Admin)Act, mean that a rate increase decision or a resumption of payment decision after suspension resulting from the impact of section 35A determination can only be backdated in some cases, for up to 13 weeks, to the date the section 35A determination causes the relevant rate increase decision or resumption decision.

 

Group personal care support schemes approved by ministers are as follows:

Date of Effect	Name of Approved Scheme	Operated by…
27/06/1991	Attendant Care Scheme	Multiple Sclerosis Society
27/06/1991	Cash Allowance Attendant Scheme	Spastic Society of Victoria
28/02/1993	Individual and Family Grants Scheme (replaced by the 'Support Grant for Families and Carers Scheme' in 1993)	WA Government Bureau for Disabilities Services
27/11/1993	Support Grant for Families and Carers Scheme (replaced by the 'Individual Family and Carer Support Scheme' in 1995)	WA Government Disability Services Commission
10/05/1994	Attendance Allowance	UK Government
10/05/1994	Disability Living Allowance	UK Government
16/02/1995	Interchange Program	Loddon-Mallee Region Inc
03/11/1995	Individual Family and Carer Support Scheme	WA Government Disability Services Commission
10/04/1997	Family Options Program	Victorian Government
02/09/1997	Indennita di Accompagnamento (Italian Carers Payment)	Italian Ministry of Internal Affairs
01/07/2000	Local Area Coordination Scheme	NT Government
19/05/2004	Disability Services Queensland personal care support	Qld Government Disability Services Qld
17/12/2004	Austrian Long-term Care Allowance (Pflegegeld)	Austrian Government
01/09/2005 (Note A)	Future Care Payments	Tasmanian Motor Accident Insurance Board (MAIB)
01/09/2005 (Note A)	Attendant Care Service, and Post Acute Service	Victorian Transport Accident Commission (TAC)
24/03/2006	Direct Payment Pilot Project (changed 1 July 2008 to the Attendant Care Program Direct Funding Model, refer to approval 25 Aug 2008)	NSW Department of Ageing, Disability and Home Care's Attendant Care Program
14/08/2007 (Note B)	Direct Payment Pilot Project	Victorian Department of Human Services
25/08/2008	Attendant Care Program Direct Funding Model	NSW Department of Ageing, Disability and Home Care's Attendant Care Program
18/11/2009 (Note C)	Phase One: Self-managed Funding Initiative	South Australian Department for Families and Communities
09/06/2011 (Note D)	(NSW Lifetime Care and Support Scheme - Self-purchasing of treatment, rehabilitation and care services	Lifetime Care and Support Authority of NSW

Note A: This applies for income test purposes not for the compensation provisions. See 4.13.1.10 What is Compensation.

Note B: Date of determination for FaCSIA and DEWR payments is 14/08/2007 and 19/09/2007 for DEST payments.

Note C: Date of determination for FaHCSIA is 18 November 2009 and 3 December 2009 for DEEWR payments.

Note D: Date of determination for FaHCSIA is 9 June 2011 and 10 June 2011 for DEEWR payments.

 

Act reference: SSAct section 35A Personal Care Support, section 8(8) Excluded amounts-general, see (zi)

SS(Admin)Act Part 3 Division 9 Date of effect of determinations

Policy reference: SS Guide 10.11.100 Austrian Glossary, see Austrian Personal Care Benefit

 

Individual personal care support schemes

Individuals with individually exempted schemes will hold, or have access to, documentation signed by ministers.

 

Act reference: SSAct section 35A Personal Care Support

 

Secretarial approval: approved exchange trading systems

Credits received from participation in approved ETS are NOT treated as income for social security purposes (see list below for approved ETS).

 

Where the ETS does not have specific approval, its credits are assessed as income. The value of one credit is usually equivalent to one dollar unless there is another means of placing a reasonable dollar value on the credits.

Example: An ETS may pay a person $15 cash an hour, but if paying for the same task in credits, the person may accrue 60 credits. In this case, each credit is equivalent to 25 cents.

 

IF both cash and credits in ETS schemes are received, the cash amount IS assessed as income.

Explanation: ETS are community-based schemes where goods and services are exchanged without money. ETS schemes have a local unit of exchange, often called an 'eco', but other names for the unit of exchange are also used.

 

To be exempt from the income test the scheme has to be an 'approved scheme' under the Act.

The Secretary may class an ETS as an 'approved scheme' if it meets criteria stated in the Act that:

• it is a local community-based system, and
• its primary purpose is to help persons maintain their labour skills and keep them in touch with the labour market, and
• it is not a system run by a person or organisation for profit.

 

Approved exchange trading systems

CURRENT approved ETS are listed in the table below.

Date approved	Name of approved system	Incorporation (Inc)/ Registered (Reg) Number
10/07/2012	Community Exchange North-West Tasmania (CENTs) managed by the North-West Environment Centre (part of the project 'Building employability via brokered time banks' funded by Skills Tasmania Equity Support Small Grants Program)	Certificate of 3/02/2003 by the Commissioner for Corporate Affairs (Consumer Affairs and Fair Trading, Department of Justice Incorporation Number IAO8667 Associations Incorporation Act 1964)

 

Approved ETS that are NOT CURRENT are listed in the table below.

Dates approved & ceased	Name of approved system	Incorporation (Inc)/ Registered (Reg) Number
Approved: 25/08/1995   Ceased: Stopped operating before Dec 1997	LETS Trade Inc	Reg No: A0021853P
Approved: 17/10/2000   Ceased: Approval revoked 14/10/2004 as association not active	Australian Community Trading Systems (ACTS) Employment Inc	Reg No: A0023688E
Approved: 16/06/1998   Ceased: Approval revoked 22/10/2008	Advance Jobs Australia Incorporated (prev Jobs by Barter Incorporated)	Reg No: A0023874X   (Prev Reg No: A0023874T)
Approved: 12/10/2000   Ceased: Approval revoked 21/12/2007	Barter Jobs Australia Incorporated	Inc No: A36516
Approved: 04/06/2003   Ceased: Approval revoked 21/12/2007	Go staff 40 Plus Incorporated	Inc No: A36988

 

Approval of these schemes for income test purposes is obtained through FaHCSIA Means Test Policy Section.

Note: Although these schemes are approved for income testing purposes this does not mean that they are approved for activity testing purposes.

 

Participation in this type of scheme is not an approved activity and is therefore not an acceptable activity for inclusion in a PFWA. This is because participation in such a scheme does not help or encourage job seekers to take up paid employment and leave income support. Because the remuneration provided is not treated as income under the SSAct, a participant can continue to receive their full rate of payment as well as their 'trade dollars', which could in fact provide an incentive for them to remain on income support. However, a job seeker can participate in such a scheme for up to 20 hours per week provided they continue to fully satisfy the activity test and demonstrate their commitment to obtaining full-time paid employment.

 

Act reference: SSAct section 8(8) Excluded amounts-general, see (zl), section 8(10) An exchange trading system is…

 

Secretarial determination: lump sums exempted under section 8(11)

For the list of exempt lump sums see 4.3.2.35 Income Exempt from Assessment - s8(11) Exempt Lump Sums.

 

Further references to more general exempt lump sums (such as a non-periodical lottery win) can be located in 4.3.2.30 Income Exempt from Assessment - Legislated, details in Exempt lump sums.

Note: The initial exemption of a lump sum amount from the income test does NOT mean that any on-going income generated by the lump sum is exempt, nor does it mean that the asset the lump sum turns into is exempt. The continuing assets and income tests treatment will be determined by how a person makes use of the funds. The funds may be used to obtain additional assets such as a car. For a purchase such as this the assets test would apply. Or, the funds may be placed in a financial investment. The funds have then become a financial asset (refer to SSAct section 9(1) for all the types of financial assets), assessable as an asset and subject to the income test deeming rules.

 

Act reference: SSAct section 8(11) An amount received by a person is an exempt lump sum if:…, section 9(1) Financial assets and income streams definitions

Policy reference: SS Guide 1.1.H.70 Home equity conversion agreement, 4.3.2.30 Income Exempt from Assessment - Legislated, 4.3.2.35 Income Exempt from Assessment - s8(11) Exempt Lump Sums, 4.3.5.10 How Income from DVA is Assessed, 4.4.1.30 Scope of Deeming, 4.6.2.10 General Provisions for Exempt Assets

 

Solar feed-in tariffs

On 14 May 2010 the Government announced that from 14 May 2010 feed-in tariffs paid as an electricity account credit will not be assessed as income for pension purposes. Feed-in tariffs paid as cash to pensioners (for example by cheque or by direct deposit) will continue to be counted as income for pension purposes.

 

Each feed-in tariff paid as cash will be considered as income for 12 months.

Example: A pensioner receiving a cheque from their electricity company for $260 has the amount counted as $10 income a fortnight for 26 fortnights.

 

Act reference: SSAct section 1073 Certain amounts taken to be received over 12 months

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Last reviewed: 12 November 2012