The Point to Point Transport Industry Adjustment Assistance Package

The NSW Government established the industry adjustment assistance package of up to $250 million. The assistance funds were made available across three schemes:

• up to $98 million for transitional assistance for eligible taxi licence holders and taxi training schools,
• up to $10 million for an additional assistance scheme for eligible hire car licence holders, and
• up to $142 million for a further additional assistance scheme, targeting those detrimentally impacted by the point to point transport reforms and in financial hardship.

A Taxi and Hire Vehicle Industries Assistance Panel (the Panel) was established to oversee the industry adjustment assistance package.

These schemes are all now finalised.

Transitional Assistance Payments Scheme

Under the Transitional Assistance Payment Scheme (TAP scheme) holders of eligible Taxi-cab licences could apply for payment of $20,000 for each eligible ordinary licence up to a maximum of two eligible ordinary licences.  

These payments were intended to assist taxi licence holders to adjust to changes to the regulation of the point to point transport industry. 

Over $94.2 million was distributed to more than 4000 eligible taxi licence holders under the TAP Scheme.

Eligibility for TAP

To have been eligible for the TAP scheme a person must have been a holder of an eligible taxi licence as set out in legislation. Eligible licences were ‘ordinary’ taxi licences, i.e. taxi licences that were transferable (or tradeable). Short term or annual licences (which may not be transferred) were not eligible.

To have been be eligible for the TAP scheme the taxi licence holder must have acquired their eligible licence prior to 1 July 2015 and continued to hold that licence up to the date of the TAP scheme payment. 

Phases 1 and 2

The TAP Scheme was conducted in two phases. The first phase took place from July 2016 – July 2017. More than $92.4 million in payments were made in phase 1. Phase 2 took place from July 2018 to March 2019. The main purpose of the second phase was to allow persons who were eligible under phase 1 (but who did not lodge an application and were not paid under phase 1) to apply. 

The TAP scheme distributed $94.2 million to 4058 eligible taxi licence holders. 

The Minister also approved TAP 2 payments to be made to certain eligible taxi training schools that provided training courses to the taxi industry.

Taxi training schools

To be eligible for a transitional assistance payment a taxi training school must have been a registered training organisation (as defined in the National Vocational Education and Training Regulator Act 2011) and, immediately before 18 December 2015, be carrying on the business of providing training courses approved by Transport for NSW to taxi drivers and/or taxi operators. In addition the taxi training school must have been able to demonstrate that they were detrimentally affected by the changes made to the regulation of the taxi industry. 

The amount of transitional assistance funds paid to each eligible taxi training school was determined by Transport for NSW in accordance with guidelines issued by the Panel. 

Taxation and pension implications

Transport for NSW was successful in obtaining a ruling from the Department of Social Services that transitional assistance payments were an exempt lump sum payment for the purposes of the social security income test. (Social Security Exempt Lump Sum – Taxi Reform Transitional Assistance Payment Determination 2016).

The Australian Taxation Office deemed TAP payments as income support and as such they were treated as income for tax purposes.

Transport for NSW recommended that all payment recipients seek independent advice about the possible implications of TAP payments. 

Additional Assistance Hire Vehicles Payments Scheme

Up to $10 million was allocated to the Additional Assistance Hire Vehicles Payment (AAHVP) Scheme for eligible hire vehicle licence holders, in recognition that from December 2015 hire vehicle licences were no longer required. 

Applications for the AAHVP Scheme opened on 14 December 2017 and closed on 13 April 2018. 

The AAHVP Scheme distributed almost $8.3 million to 99 eligible hire vehicle licence holders, for 150 eligible hire vehicle licences.

Transport for NSW obtained a ruling from the Department of Social Services that AAHVP is an exempt lump sum payment for the purposes of the social security income test. (Social Security (Exempt Lump Sum – New South Wales Additional Assistance Hire Vehicle Payment) Determination 2017).

Transport for NSW recommended that all payment recipients seek independent advice about the possible implications of AAHVP payments.

Additional Assistance Payment Scheme

Purpose of the scheme

The Additional Assistance Payment Scheme (AAPS) was established by the NSW Government to provide financial assistance to persons who were involved in or connected to the taxi and hire vehicle industry and were detrimentally impacted by the Point to Point Transport reforms. Additional assistance payments were directed towards eligible applicants who were most likely to be vulnerable to financial hardship.

The AAPS was not intended as a compensation scheme.

Role of the Panel

The Taxis and Hire Vehicle Industry Assistance Panel (the Panel) was established to provide advice and recommendations to the NSW Minister for Transport and Roads in relation to industry assistance for the taxi and hire vehicle industries. 

The Panel included representatives from Transport for NSW, NSW Department of Premier and Cabinet, NSW Treasury and the NSW Taxi Council. 

The Panel’s functions included developing procedures for the assessment of applications for the AAPS as well as making recommendations to the Minister for Transport and Roads on the criteria for assessing AAPS applications.

Panel recommendations

In accordance with its functions, the Panel identified four key groups it considered most likely to be detrimentally impacted by the point to point reforms. These were:

• Taxi licence holders who are dependent on the income from their taxi licence lease to meet their day to day living expenses. 
• Taxi licence holders who hold a high level of debt directly associated with their licence, possibly secured by a mortgage on their property and who may not be able to service their debt from income from their licence or other income sources. 
• Taxi licence holders and operators at or near retirement age with few other assets or sources of income. 
• Applicants who demonstrated the greatest financial hardship.

The Panel recommended to the Minister that payments of AAPS should be directed at these groups. The Minister accepted this recommendation. 

The Panel’s view was informed by the Point to Point Transport Taskforce recommendation that the fund of up to $142 million should be targeted at “taxi licensees facing hardship as a result of the changes”, and “those who are especially adversely affected, such as those at or near retirement with few other assets or sources of income”. (See page 130 of the Point to Point Transport Taskforce report, December 2015 (PDF, 1.38 MB))

Financial hardship criteria

The financial hardship criteria was the criteria developed by the Panel for the purpose of assessing applications for the AAPS. 

The Panel recommended (and the Minister accepted) that the income and assets test for eligibility for the aged pension (as set by the Commonwealth Department of Social Services) should be used as a guide when considering a person’s circumstances, including whether a person was suffering financial hardship.

The following thresholds apply for a person to be eligible for the aged pension:

These thresholds were used as a guide, with determinations of additional assistance made based on consideration of the individual circumstances of each applicant including any provided information and other evidence. 

The Panel also recommended that the following indicators should also be used to help determine whether a person was in financial hardship. These possible indicators of financial hardship include where a person:

• has qualified for financial hardship with a financial institution or utility provider;
• is unable to raise $1000 in a week for something important;
• could not afford to pay a gas, electricity or other utility bill on time;
• could not pay car registration or insurance on time;
• pawned or sold something to raise cash to pay bills; or
• sought help from a welfare/community organisation.

These indicators were used to assist in identifying those applicants most likely to be in financial hardship and most likely to be suffering detriment.

AAPS applications process

AAPS applications opened in July 2018 and closed in December 2018. TfNSW wrote to all eligible taxi licence holders in July 2018 and again in September 2018 to invite them to apply for the AAPS.

All applications received were reviewed to identify whether they were completed correctly and required information was included. In November 2018, TfNSW wrote to identified applicants requesting that missing information be provided.

TfNSW wrote to all applicants again in December 2018 to advise that the AAPS was closing and to request they provide any missing documents or other relevant information. 

Assistance to applicants

To assist applicants to complete and submit applications TfNSW established the Industry Assistance Contact Centre (Contact Centre). The Contact Centre was available to provide assistance to applications throughout the application process.  

The Contact Centre contacted applicants where it was identified that that a particular document (or documents) was missing from their application.

The TfNSW website provided detailed information about the AAPS including facts sheets providing guidance on how to apply. Fact sheets were also available in Greek, Cantonese, Mandarin and Arabic. 

In addition, TfNSW engaged Business Connect to provide support and advisory services to AAPS applicants and to provide advice and assistance to applicants to complete their application form. 

Assessing net wealth

In accordance with the Panel’s recommendations, applicants for the AAPS were asked to provide information about their net wealth, including their net assets and net liabilities. This information was used to help ensure that AAPS payments were directed to those person’s most likely to be detrimentally impacted by the point to point reforms. 

A person’s net wealth is calculated by adding up all the person’s assets then subtracting any liabilities. 

For the purpose of the AAPS an applicant’s net wealth was calculated based on their household. This meant that if an applicant was a member of a couple then their partner’s assets and liabilities were included in their assessment of net wealth.

Assets

Assets includes any property or item of value that a person own or have an interest in, including assets held outside Australia. Examples of assets include property, savings and investment accounts, superannuation, vehicles, caravans and boats as well as notable items of value as artwork, furniture, fine jewellery, or collectibles.

An applicant’s total liabilities are the sum total of any debts they owe. Examples of liabilities include mortgages, credit card debts, personal loans, vehicle loans, family loans, student loans, as well as any liens or judgments against the person. 

For the purpose of the AAPS a person’s net wealth did not include the value of the person’s principal residence or the amount of mortgage or loan owing on the principal residence. This is consistent with the approach taken by Centrelink when determining a person’s eligibility for a Commonwealth Government pension or benefit.

Income 

A person’s gross income was used when considering a person’s financial circumstances. Gross income is likely to be higher than a person’s taxable income because it may include reportable fringe benefits, Government pensions or benefits, reportable superannuation contributions and total net investment losses (for example a net rental property loss).

Gross income is used by Centrelink to determine eligibility for many Government Pensions and Benefits. 

Unsuccessful applications

All applications for AAPS were reviewed and a determination made after careful consideration of the information provided in the application, the particular circumstances of the applicant, and any other relevant evidence or information.

The three most common reasons why a person did not receive an AAPS payment were:

1. The applicant did not submit a completed application form.

Each applicant received at least three and up to six requests to complete their application form.

For applicant’s lodging an electronic application in the AAPS online portal email reminders were sent asking for any missing information or additional documentation to be provided.

If, after consideration of the evidence and information in the application the applicant’s financial circumstances were unable to be verified, an applicant’s claim of detriment resulting from the reforms could not be supported.

2. An application was missing key information that was necessary to verify an applicant’s financial circumstances.

In some instances completed application forms were received but were missing key information or evidence that meant that an assessment as to the financial circumstances of the applicant could not be made and therefore a determination could not be made.

For example some applicants declared that they owned or operated a business but did not provide further details about that business such as gross income or asset value. In this and other cases the financial circumstances of the applicant were unable to be verified.

3. The applicant didn’t receive a payment because of their reported assets and income were above the thresholds approved by the Panel

In some instances the person’s income and/or assets were above the thresholds for hardship determined by the Panel. After consideration of this and the other information provided in their application, their particular circumstances and taking into account the evidence regarding their gross income and net wealth their claim of detriment resulting from the reforms could not be supported.

AAPS payment amounts

Amounts of additional assistance payments were determined based on the individual circumstances of the applicant.

Factors that influenced the amount of a payment were:

• The gross income, assets and debts of the applicant’s household (this included the income, assets and debts of the applicant’s partner);
• The age of the applicant (whether the applicant was at or near the age of retirement); and
• Whether the applicant had a high level of debt directly associated with the purchase of a taxi licence.
• Whether the applicant had dependent children.

Lump sum and instalment payments

TfNSW recognised that AAPS payments may have impacts for an applicant’s social security payments or income tax. In order to provide greater flexibility to manage these impacts applicants were given the choice to receive AAPS payments in a lump sum or in three equal instalments over three financial years. 

Approximately 63% of applicants who received an AAPS payment elected to receive their payment in instalments.

TfNSW advised all recipients of AAPS payments to seek independent legal or professional financial / taxation advice in relation to their additional assistance payment.

AAPS and social security payments

TfNSW wrote to the Department of Social Security (DSS) in September 2018 seeking an exemption for the AAPS from Centrelink’s social security income test.

DSS replied in October 2018 to say that an exemption of an additional assistance payment for the purposes of the social security income test would not be granted.

This meant that an additional assistance payment would be treated as income and therefore could potentially impact on pension entitlements and allowances.

The NSW Government wrote to the Australian Government in August 2019 again seeking to have AAPS payments exempt under the social security income test.

The Australian Government replied on 5 September 2019 to reaffirm the original decision of the department.

Noting that AAPS payments can have impacts for a person’s social security eligibility (and may have other consequences in terms of taxation) applicants for the AAPS were encouraged to seek advice from an accountant, legal representative, or other specialist to determine what impacts the payment of additional assistance may have for them.

AAPS and income tax

The Australian Taxation Office has informed Transport for NSW that payments under the AAPS will be assessed as taxable income. This is set out in Taxation Ruling TR 2006/3.

Successful applicants were encouraged to seek advice from an accountant, legal representative, or other such specialist to determine what impacts the payment of additional assistance may have for them.