Explanatory Memorandum
(Circulated by authority of the Minister for Indigenous Australians, the Honourable Ken Wyatt AM MP)NOTES ON CLAUSES
Preliminary
Clause 1 - Short title
8. This clause provides for the Act to be cited as the Territories Stolen Generations Redress Scheme (Consequential Amendments) Act 2021.
Clause 2 - Commencement
9. The table in subclause 2(1) provides for when the provisions will commence. Table item 1 provides that sections 1 to 3, and anything not elsewhere covered by the table, will commence on the day the Act receives the Royal Assent.
10. Table item 2 provides that Part 1 of Schedule 1 (which contains the amendments to the ITA Act) will commence on the first 1 January, 1 April, 1 July or 1 October to occur after the day the Act receives the Royal Assent. This will ensure that the amendments to the ITA Act will commence on the first day of the quarter following the Royal Assent.
11. Table item 3 provides that Part 2 of Schedule 1 (which contains amendments to the Bankruptcy Act, the Social Security Act, the Social Security Administration Act and the Veterans' Entitlements Act) will commence at the same time as the Territories Stolen Generations Redress Scheme (Facilitation) Act 2021 (the Facilitation Act) commences. The Facilitation Act provides that it will commence on a single day to be fixed by Proclamation (expected to be 1 March 2022 to coincide with the date the Scheme is scheduled to open). The Facilitation Act also provides that, if the provisions do not commence within the period of 12 months beginning on the day that Act receives the Royal Assent, it (and, consequently, this Act) will commence on the day after the end of that period.
12. The note following the table in subclause 2(1) confirms that this table relates only to the provisions of this Act as originally enacted. The table will not be amended to deal with any later amendments of this Act.
13. Subclause 2(2) confirms that any information in column 3 of the table in subclause 2(1) is not part of this Act. Information may be inserted in column 3, or information in it may be edited, in any published version of this Act.
Clause 3 - Schedules
14. Clause 3 provides that legislation that is specified in a Schedule is amended or repealed as set out in that Schedule.
SCHEDULE 1 - AMENDMENTS
Part 1 - Amendment of the Income Tax Assessment Act 1997
Income Tax Assessment Act 1997
Item 1 - section 11-15
15. Item 1 inserts a new table item after the item headed 'superannuation and related business' into the table of ordinary or statutory income which is exempt in section 11-15 of the ITA Act. This new table item refers to the new section 53-30 that is added to Division 53 of the ITA Act by Item 2 of Part 1 of this Schedule. This is a consequential amendment as a result of the amendment made by Item 2.
Item 2 - new section 53-30
16. Item 2 inserts a new section 53-30 into Division 53 of the ITA Act. The new section provides that redress payments made under the Scheme (either made in a lump sum or in instalments) to a person will be exempt from income tax, thereby excluding the payment from being assessable income or being subject to capital gains tax. This amendment will have the consequential effect of preventing a redress payment from being considered in determining eligibility for some other Commonwealth payments and benefits. For example, by being exempt from income tax, a redress payment will also not be considered as part of a person's taxable income under the A New Tax System (Family Assistance) Act 1999.
Item 3 - application of amendments
17. Item 3 provides that the amendments made by Items 1 and 2 above apply to assessments for the 2021-22 income year and later income years. Although the amendments can apply from 1 July 2021 and accordingly have retrospective effect, it is intended that no payments will be made until after the Bill has commenced. Also, the amendments referred to in Items 1 and 2 above are wholly beneficial in operation for affected individuals.
Part 2 - Other amendments
Bankruptcy Act 1966
Item 4 - subsection 116(2)
18. Item 4 inserts new paragraph (gb) into subsection 116(2) of the Bankruptcy Act. This provides that a redress payment under the Scheme is not available to creditors of the recipient for the purpose of recovering money under bankruptcy proceedings. This will be the case regardless of whether the redress payment was received before or after the person became a bankrupt. A redress payment may be paid to a recipient either in a lump sum or in instalments. As either will be a payment under the Scheme, the lump sum payment or any of the instalments is not divisible amongst the bankrupt's creditors.
19. This amendment has been included to ensure that the recipient will receive the full benefit of the payment in circumstances where the recipient is bankrupt.
Social Security Act 1991
Item 5 - subsection paragraph 8(8)
20. Item 5 inserts new paragraph (jd) into subsection 8(8) of the Social Security Act. This means that redress payments made to a person under the Scheme are not 'income' in relation to that person for the purposes of the Social Security Act, and other legislation, legislative provisions or instruments that rely on the definition of income in the Social Security Act. This will have the effect of exempting the redress payments from the applicable income test under the Social Security Act and ensuring that receipt of the redress payments will not reduce payments under that Act because of any income test.
Social Security (Administration) Act 1999
Item 6 - subsection 202(1)
21. Item 6 inserts a new paragraph (i) into subsection 202(1) of the Social Security Administration Act. This paragraph provides that a person may obtain protected information if the information is obtained for the purposes of the Scheme.
Item 7 - subsection 202(2)
22. Item 7 inserts a new paragraph (df) into subsection 202(2) of the Social Security Administration Act. This paragraph provides that a person may make a record of, disclosure or otherwise use such protected information for the purposes of the Scheme.
23. The Scheme is survivor-focused and trauma-informed, and applying for a redress payment is intended to be as simple as possible. Some applicants, as a result of their forced removal from family, may be, or have been, known by different names or may not have ready access to identity documentation. The amendments made by items 6 and 7 will permit a person within the agency administering the Scheme to obtain protected information for the purposes of the Scheme. This could include obtaining information to verify applicants' identities to progress their applications without the need for applicants' to provide extensive documentation to prove their identities.
24. The protections applying to social security protected information continue to apply to that information. Those protections include criminal penalties for unauthorised obtaining, recording, disclosure or use of protected information.
25. Use of protected information for the purposes of the Scheme would be limited to identity verification for the applicant, and undertaking any necessary investigations to allow the application to be decided and would not be anticipated to be broader than the limited uses to which social security protected information may be put under social security law. This will ensure all aspects of the Scheme's ability to share and gather social security information is underpinned by law.
Veterans' Entitlements Act 1986
Item 8 - subsection 5H(8)
26. Item 8 inserts new paragraph (mc) into subsection 5H(8) of the Veterans' Entitlements Act. This means that redress payments made to a person under the Scheme are not 'income' in relation to that person for the purposes of that Act. This will have the effect of exempting the redress payments from the applicable income test under the Veterans' Entitlements Act.