4.4 Impact & treatment of redress payments on other entitlements

Summary

Legislative protections are in place to ensure that persons who receive a redress payment through the National Redress Scheme are not unduly exposed to additional liabilities as a result of having received a payment. These protections are to ensure that a person who receives a redress payment is not made worse off as a result of their sudden changes in financial circumstances. Additionally, for the purposes of the Social Security Act 1991 and Veterans' Entitlements Act a redress payment will not be considered as income.

Redress payments as compensation or damages

A redress payment is a payment of compensation under the Scheme, however for the purposes of the Social Security Act 1991 and Veterans' Entitlements Act 1986 the payment is not to be treated as a payment of compensation or damages.

This means any Commonwealth, state or territory legislation that would take into consideration payments of compensation or damages in order for a person to access or receive a product or service (including payments), cannot consider redress payments. This includes:

  • the Social Security Act 1991
  • the Veterans' Entitlements Act 1986.

This protection does not extend however to liability insurance contracts.

Inalienability of redress payments

Any redress payment received, and the entitlement to receive the redress payment, rests solely with the person found eligible to receive redress and nobody else. This inalienability is protected under legislation. This means that no Commonwealth, state or territory legislation can transfer or deprive from an eligible person their redress payment or entitlement to that payment, either by engaging in or because of any of the following mechanisms:

  • sale
  • assignment
  • charge
  • execution
  • bankruptcy
  • any other mechanism not otherwise described above.

The only exemption to this applies in the event that debt recovery provisions within the National Redress Scheme legislation apply to the person who received the redress payment because of any of the following:

  • the amount was paid to the wrong person
  • the amount exceeds the amount that was supposed to be paid to the person
  • the redress payment was received by the person as a consequence of a fraudulent act.

Deductions of redress payments

Commonwealth, state or territory legislation cannot require an amount be deducted from a redress payment received by a person. The redress payment is protected under legislation.

This means that if Commonwealth, state or territory legislation allows for a deduction to be drawn from a person's income or assets for any reason, this cannot be applied to redress payments.

Garnishee orders on an account

Where a redress payment is paid into an account and a court ordered garnishee order comes into force for that account, for the purposes of the NRSAct the court order does not apply to any saved amount in the account. The saved amount is determined by:

  • working out the amount of the redress payment that has been paid to the credit of the account in the year immediately before the court order came into force, and
  • subtract from the amount of the redress payment the total amount withdrawn from the account during that year. The result is the saved amount.

The saved amount cannot be garnisheed through the court order.

Act reference: NRSAct Part 2-5 Division 2 The redress payment, Part 6-3 Division 2 Debt recovery

Last reviewed: 13 August 2018