Schedule 5—Savings and transitional provisions
Section 197A
Part 1—General
1 Service pensions—changes introduced on 1 October 1995
(1) Despite Schedule 6, if:
(a) a person was receiving a service pension immediately before 1 October 1995; and
(b) the person was a member of a couple immediately before 1 October 1995; and
(c) the person’s partner was not, immediately before 1 October 1995, receiving a social security pension, a service pension or an income support supplement; and
(d) the amount that was the person’s maximum basic rate in respect of the service pension for the last payment period before 1 October 1995 exceeds the amount of the person’s maximum basic rate on 1 October 1995; and
(e) the amount of that excess exceeds, in relation to a particular period, the sum of:
(i) the increased amounts (if any) for the original components of the rate of service pension payable to the person in respect of the payment period; and
(ii) the new components (if any) of the rate of service pension payable to the person in respect of the payment period; and
(iii) the increased amounts (if any) for those new components; and
(f) this clause has not ceased to apply to the person because of subclause (2);
in calculating the amount of service pension payable to the person in respect of the payment period, an amount equal to the difference between:
(g) the amount of the excess referred to in paragraph (d); and
(h) the sum referred to in paragraph (e);
is to be added to the person’s maximum basic rate.
(2) This clause ceases to apply if:
(a) the person ceases to receive that service pension; or
(b) the person ceases to be a member of that couple; or
(c) the person’s partner receives a social security pension, a service pension or an income support supplement.
(3) In this clause:
increased amount, in relation to an original component or a new component, means the amount (if any) by which the amount of the component exceeds the lowest amount of the component payable in any payment period ending after 1 October 1995.
original component means:
(a) a person’s maximum basic rate that was used in calculating the person’s rate of service pension for the last payment period before 1 October 1995; or
(b) an additional amount that was added to the person’s maximum basic rate in calculating the person’s rate of service pension for that payment period.
new component means:
(a) any additional amount that, in calculating a person’s rate of service pension, is added to the person’s maximum basic rate, being an additional amount that would not have been so added in respect of the last payment period before 1 October 1995; or
(b) any amount by which a person’s rate of service pension has increased as a result of a change in the person’s circumstances on or after 1 October 1995.
payment period means the period in respect of which a payment of service pension is payable.
4 Rent assistance—retirement village residents (changes introduced on 12 June 1989)
(1) If:
(a) immediately before 3 November 1988:
(i) a person was receiving a service pension; and
(ii) the person’s pension rate included an amount by way of rent assistance under or because of this Act as in force at that time; and
(b) at all times since 3 November 1988:
(i) the person has been entitled to a pension under this Act or a social security payment under the Social Security Act; and
(ii) the person’s principal home has been in a retirement village; and
(c) immediately before the commencement of this clause, subsection 31(1) of the Social Security and Veterans’ Affairs Legislation Amendment Act 1988 applied to the person;
the person is taken not to be an ineligible property owner or an excluded property owner for the purposes of this Act.
(2) If:
(a) immediately after 12 June 1989:
(i) a person was receiving a social security payment under the Social Security Act; and
(ii) the person’s pension, benefit or allowance rate included an amount by way of rent assistance because of the operation of subsection 19(1) of the Social Security and Veterans’ Affairs Legislation Amendment Act 1988; and
(b) after 12 June 1989, the person began or begins to receive a pension; and
(c) subsection 19(1) of the Social Security and Veterans’ Affairs Legislation Amendment Act 1988 applied to the person at all times between 12 June 1989 and the person’s beginning to receive the pension; and
(d) at all times since the person began to receive the pension:
(i) the person has continued to receive a pension; and
(ii) the person’s principal home has continued to be in the retirement village; and
(e) either of the following subparagraphs applies to the person:
(i) if the person began to receive the pension before the commencement of this clause, subsection 31(2) of the Social Security and Veterans’ Affairs Legislation Amendment Act 1988 applied to the person immediately before that commencement;
(ii) if the person begins to receive the pension after that commencement—that subsection would have applied to the person immediately before he or she began to receive the pension if it had not been repealed;
the person is taken not to be an ineligible property owner or an excluded property owner for the purposes of this Act.
(3) Despite subclause (1) or (2), the rate of rent assistance or residential care allowance payable to a person to whom that subclause applies (whether that rate is required to be worked out under this Act (other than this Schedule) or is required to be worked out under subclause (4) of clause 4) is reduced by the sum of any indexation or adjustment increases occurring after the commencement of this clause to the person’s pension rate.
(4) If, because of subclause (3), the rate of rent assistance or residential care allowance payable to a person to whom subclause (1) or (2) applies is reduced to nil, subclause (1) or (2), as the case may be, ceases to apply to the person.
(5) If subclause (1) or (2) ceases to apply to a person, that subclause does not apply to the person again.
(6) In this clause:
indexation or adjustment increase means an increase resulting from the operation of Division 18 of Part IIIB.
5 Rent assistance (changes introduced on 20 March 1993)
(1) This clause applies to a person if:
(a) immediately before 20 March 1993:
(i) the person was receiving a service pension; and
(ii) the person’s pension included an amount by way of rent assistance; and
(b) immediately before the commencement of this clause, section 111 of the Veterans’ Affairs Legislation Amendment Act (No. 2) 1992 applied to the person; and
(c) this subclause continues to apply to the person.
(2) If:
(a) a decision was made on or after 20 March 1993 under this Act that a person was entitled to rent assistance in respect of a period; and
(b) the period started before 20 March 1993; and
(c) the period continued until at least 19 March 1993;
the person is taken, for the purposes of this clause, to have been receiving rent assistance under this Act immediately before 20 March 1993.
(3) This clause applies to a person if:
(a) immediately before 20 March 1993, the person was receiving rent assistance under the Social Security Act; and
(b) on or after that date, the person became or becomes entitled to be paid a pension; and
(c) either of the following subparagraphs applies to the person:
(i) if the person became entitled to be paid the pension before the commencement of this clause—section 111 of the Veterans’ Affairs Legislation Amendment Act (No. 2) 1992 applied to the person immediately before that commencement;
(ii) if the person becomes entitled to be paid the pension after that commencement—that section would have applied to the person immediately before he or she became so entitled if it had not been repealed; and
(d) this subclause continues to apply to the person.
(4) Subject to subclauses (7), (8), (9), (10) and (11), if subclause (1) or (3) applies to a person, the amount by way of rent assistance to be used to calculate the person’s pension rate is the amount (the floor amount) by way of rent assistance that would be included in the person’s pension rate if:
(a) the person’s pension rate were neither income reduced nor assets reduced; and
(b) the amount of rent assistance were calculated under this Act as in force immediately before 20 March 1993.
(5) Subclause (1) or (3) ceases to apply to a person if:
(a) the person no longer receives a service pension, an income support supplement, or a social security pension under the Social Security Act; or
(b) the person ceases to be eligible for rent assistance; or
(c) the pension rate that is applicable to the person because of that subclause is equal to or less than the rate that would be the person’s pension rate if that subclause did not apply to the person; or
(d) the Commission considers that there is a significant change in the person’s circumstances that would affect the amount of rent assistance that is payable to the person apart from this clause.
(6) If:
(a) subclause (1) or (3) ceases to apply to a person because of subclause (5); and
(b) within 42 days, or any longer period that the Commission determines, after the day on which that subclause ceases to apply to the person, there is a change in the person’s circumstances; and
(c) the Commission considers that the change in the person’s circumstances is so significant that subclause (1) or (3) should apply to the person;
the Commission may determine in writing that subclause (1) or (3) is to apply to the person from a stated date.
(7) Subject to subclauses (11) and (13), if:
(a) subclause (1) or (3) applies to a person; and
(b) the person has become or becomes a member of a couple; and
(c) the person’s partner is receiving a pension, or a social security payment under the Social Security Act, but:
(i) is not a person to whom subclause (1) or (3) applies; and
(ii) is not a person to whom clause 63 of Schedule 1A to the Social Security Act applies;
the amount by way of rent assistance to be used to calculate the person’s pension rate or the person’s partner’s pension rate is not to fall below one‑half of the person’s floor amount.
(8) Subject to subclause (11), if:
(a) subclause (1) or (3) applies to a person; and
(b) the person has become or becomes a member of a couple; and
(c) the person’s partner is a person to whom subclause (1) or (3) applies;
the amount by way of rent assistance to be used to calculate the person’s pension rate or the person’s partner’s pension rate is not to fall below one‑half of the person’s floor amount or one‑half of the person’s partner’s floor amount, whichever is the greater.
(9) Subject to subclause (11), if:
(a) subclause (1) or (3) applies to a person; and
(b) the person has become or becomes a member of a couple; and
(c) the person’s partner is a person to whom clause 63 of Schedule 1A to the Social Security Act applies;
the amount by way of rent assistance to be used to calculate the person’s pension rate is not to fall below one‑half of the person’s floor amount or one‑half of the amount that would be the person’s partner’s floor amount if subsection (1) or (3) applied to the partner, whichever is the greater.
(10) Subject to subclause (11), if:
(a) a person is receiving a pension; and
(b) neither subclause (1) nor (3) applies to the person; and
(c) the person has become or becomes a member of a couple; and
(d) the person’s partner is receiving a social security payment under the Social Security Act and is a person to whom clause 63 of Schedule 1A to the Social Security Act applies;
the amount by way of rent assistance to be used to calculate the person’s pension rate is not to fall below one‑half of the amount that would be the person’s partner’s floor amount if subclause (1) or (3) applied to the partner.
(11) Despite anything in the preceding provisions of this clause, the rate of rent assistance payable to a person to whom this clause applies is reduced by the sum of any indexation or adjustment increases occurring after the commencement of this clause to the person’s pension rate.
(12) Subject to subclause (6), if subclause (1) or (3) ceases to apply to a person because of subclause (5), it does not again apply to the person.
(13) Subclause (7) ceases to apply to the partner of a person to whom subclause (1) or (3) applies if the pension rate that is applicable to the partner because of subclause (7) is equal to or less than the rate that would be the partner’s pension rate if subclause (7) did not apply to the partner.
(14) If subclause (7) ceases to apply to the partner of a person to whom subclause (1) or (3) applies, subclause (7) does not again apply to the partner.
(16) In this clause:
floor amount has the meaning given by subsection (4).
indexation or adjustment increase means an increase resulting from the operation of Division 18 of Part IIIB.
6 Saving: Determinations under repealed sections 46Z and 46ZF
A determination in force under section 46Z or 46ZF immediately before the commencement of this section continues to have effect after that commencement as if:
(a) section 46L of this Act, as in force immediately after the commencement of this section, had been in force when the determination was made; and
(b) the determination had been made under that section as so in force; and
(c) any reference in the determination to section 46W, 46ZD or 46ZE were a reference to sections 46D to 46E of this Act.
7 Transitional and saving provisions applicable to the amendments relating to the pension loans scheme
(1) If:
(a) a person has made a request to participate in the previous pension loans scheme; and
(b) Schedule 17 to the Amending Act commences before the first pension payday after the lodging of the request;
for the purposes of this clause, the person is to be treated as a person who is participating in the previous pension loans scheme.
(2) Subject to subclause (3), in relation to a person who is participating in the previous pension loans scheme, subsections 5L(1) and 52(1) and Subdivision E of Division 11 of Part IIIB of this Act, as in force immediately before the commencement of Schedule 17 to the Amending Act, continue to have effect as if the Amending Act had not been enacted.
(3) If a person who is participating in the previous pension loans scheme:
(a) is eligible to participate in the current pension loans scheme; and
(b) makes a request to participate in the current scheme;
and the Commission is satisfied that the amount of any debt that would become payable by the person to the Commonwealth under the current scheme would be readily recoverable, the current scheme applies to the person on and after the day on which the request is lodged.
(4) The debt owed by a person who was participating in the previous pension loans scheme and who is participating in the current pension loans scheme by operation of subclause (3) is, for the purposes of working out the debt owed by the person under the current scheme, to be added to the basic amount of debt accrued under the current scheme.
(5) In this clause:
Amending Act means the Social Security and Veterans’ Affairs Legislation Amendment Act 1995.
current pension loans scheme means the pension loans scheme in operation under the provisions of this Act, as amended by the Amending Act.
participating in the pension loans scheme has the same meaning as in subsection 52ZAAA(3).
previous pension loans scheme means the pension loans scheme in operation under the provisions of this Act, as in force immediately before the commencement of Schedule 17 to the Amending Act.
8 Transitional and saving provisions: amendments relating to the transfer of carers
(1) If:
(a) a person was receiving a carer service pension immediately before the transfer day; and
(b) neither subclause (2) nor (4) applies to the person;
an instalment of carer service pension is payable to the person on the transfer day at the rate worked out using the following formula:
where:
reduced annual rate means the rate payable in accordance with this Act on the last pension payday before the transfer day, excluding any pharmaceutical allowance payable to a person under this Act.
pharmaceutical allowance means the amount of pharmaceutical allowance that would have been included in the person’s carer service pension if the payment was an instalment under section 58A.
(2) Subject to subclause (5), if:
(a) a person (the carer) was receiving a carer service pension immediately before the transfer day; and
(b) the veteran partner who is being cared for by the carer is receiving an age service pension or an invalidity service pension; and
(c) the carer would, apart from subsection 38(1B), be eligible for a partner service pension;
this Act continues to apply to the person in relation to carer service pension as if the amendments made by Division 1 of Part 5 of Schedule 1 to the amending Act had not been made.
(3) Subject to subclause (5), if:
(a) a person was receiving income support supplement immediately before the transfer day; and
(b) subsection 45AB(1) applied to the person; and
(c) the person would, apart from paragraph 45A(1)(b) and section 45AB, be eligible for income support supplement;
this Act continues to apply to the person in relation to income support supplement as if the amendments made by Division 1 of Part 5 of Schedule 1 to the amending Act had not been made.
(4) Subject to subclause (5), if:
(a) a person (the carer) is receiving a carer service pension immediately before the transfer day; and
(b) the veteran who is being cared for by the carer is not receiving an age service pension or an invalidity service pension but passes the income test under section 53AA and either passes the assets test under section 53AD or is the subject of a decision in force under section 53AN that the assets test does not apply to the veteran;
this Act continues to apply to the person in relation to carer service pension as if the amendments made by Division 1 of Part 5 of Schedule 1 to the amending Act had not been made.
(5) If carer service pension or income support supplement ceases to be payable to the person after the transfer day, then subclause (2), (3) or (4), as the case requires, ceases to apply to the person.
(6) References in this clause to other provisions of this Act are references to those provisions as they would be if the amendments made by Division 1 of Part 5 of Schedule 1 to the amending Act had not been made.
(7) In this clause:
amending Act means the Veterans’ Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997.
transfer day means the day on which Part 5 of Schedule 1 to the amending Act commences.
9 Transitional provisions applicable to the amendments relating to amounts in respect of children
(1) If:
(a) a determination is made on or after 1 January 1998 that a claim for a service pension or income support supplement is to be granted; and
(b) because of section 36M or 45R, the determination takes effect before that date; and
(c) had the amendments made by Schedule 1 to the Veterans’ Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 not been made, an instalment of the pension or supplement that was payable on a pension pay‑day that occurred before that date would have included a child‑related amount;
the instalment is to include that amount.
(2) If the amount of an instalment of a service pension or income support supplement that was payable on a pension pay‑day before 1 January 1998 would, had the amendments made by Schedule 1 to the Veterans’ Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 not been made, be taken to have been increased so as to include a child‑related amount, the instalment is taken to have been so increased.
(3) In this clause:
child‑related amount, at any relevant time, means an amount that was required at that time to be included in a service pension under Module C or Module D (as Module C or Module D was affected by Module DAA) of the Service Pension Rate Calculator at the end of section 42, or in an income support supplement under Module F or Module G (as Module F or Module G was affected by Module H) of the Income Support Supplement Rate Calculator at the end of section 45Y, of the Veterans’ Entitlements Act 1986 as in force at that time.
10 Saving provisions applicable to the amendments relating to amounts in respect of children
(1) This clause applies to a person if:
(a) immediately before 1 January 1998 a service pension or income support supplement was payable to the person at a rate that included one or more pension/supplement child‑related amounts in respect of a child or children; and
(b) the Commission determines on or before 31 March 1998, or after that date as a result of an application made by the person to the Commission on or before that date, that, on 1 January 1998, the person’s notional pension/supplement child‑related amount was or will be greater than the notional family allowance child‑related amount in relation to the person or the person’s partner.
(2) The rate of service pension or income support supplement payable to the person from time to time includes the person’s notional pension/supplement child‑related amount at that time until, in accordance with subclause (2A), it is no longer to be so included.
(2A) For the purposes of subclause (2), the rate of service pension or income support supplement payable to the person is no longer to include the person’s notional pension/supplement child‑related amount:
(a) in respect of any payment made at any time before 1 July 2000—if the person’s notional pension/supplement child‑related amount ceases to be greater than the notional family allowance child‑related amount in relation to the person or the person’s partner at that time; and
(b) in respect of any payment made at any time on or after 1 July 2000—if the person has elected, by written notice given to the Secretary, no longer to be covered by this clause.
(2B) For the purposes of Part IIIC, the rate of invalidity service pension, partner service pension, or income support supplement, that is payable to a person who has not reached pension age does not include the notional pension/supplement child‑related amount.
(3) If:
(a) at any time before 1 July 2000, the person’s notional pension/supplement child‑related amount ceases to be greater than the notional family allowance child‑related amount in relation to the person or person’s partner; and
(b) because of this fact, the rate of service pension or income support supplement payable to a person is no longer to include the first‑mentioned amount;
the rate of that pension or supplement is never thereafter to include the person’s notional pension/supplement child‑related amount even though that amount may again become greater than the notional family allowance child‑related amount in relation to the person or the person’s partner.
(3A) Subclause (2) ceases to apply to the rate of service pension or income support supplement payable to a person:
(a) from the start of the day the Social Security Legislation Amendment (Youth Allowance) Act 1998 commences, if the child or youngest child because of whom this clause applies to the person is 16 or over then; or
(b) from the start of the 16th birthday of the child or youngest child because of whom this clause applies to the person, if that child is under 16 on the day that Act commences.
(3B) In working out the amount of:
(a) a person’s notional pension/supplement child‑related amount; and
(b) the notional family allowance child‑related amount for a person or his or her partner;
at a time at or after the commencement of the Social Security Legislation Amendment (Youth Allowance) Act 1998, disregard a child who is 16 or over at the time.
(4) In this clause:
notional family allowance child‑related amount, in relation to a person or a person’s partner at any time before 1 July 2000, means the amount by which the rate of family allowance that would be payable to the person or the person’s partner at that time under the Social Security Act except for point 1069‑B8 of that Act, would be more than the minimum family allowance rate.
notional pension/supplement child‑related amount, in relation to a person at any time, means:
(a) if the time is a time occurring before 1 July 2000—the total of the pension supplement child‑related amounts that would have been included at that time in the rate of the service pension or income support supplement payable to the person in respect of any child or children referred to in paragraph (1)(a) if the amendments made by Schedule 1 to the Veterans Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 had not been made; and
(b) if the time is a time occurring on or after 1 July 2000—an amount that has been determined by the Commission, by instrument in writing, to be the amount of the pension/supplement child‑related amount at that time, having regard to the indexation of the Part A rate of family tax benefit to that time under the A New Tax System (Family Assistance) Act 1999.
pension/supplement child‑related amount, at any relevant time, means an amount that was or would be required at that time to be included in a service pension under Module C or Module D (as Module C or Module D was affected by Module DAA) of the Service Pension Rate Calculator at the end of section 42, or in an income support supplement under Module F or Module G (as Module F or Module G was affected by Module H) of the Income Support Supplement Rate Calculator at the end of section 45Y, of the Veterans’ Entitlements Act 1986 as in force immediately before 1 January 1998.
11 Saving provisions applicable to certain people who cease to be service pensioners on 1 January 1998
(1) Subject to subclause (2), this clause applies to a person at a particular time (the relevant time) if:
(a) a service pension is not payable to the person; and
(b) a service pension was payable to the person immediately before 1 January 1998 at a rate that included one or more pension child‑related amounts in respect of a child or children; and
(c) a service pension would have been payable to the person at the relevant time at a rate that included one or more pension child‑related amounts in respect of that child or those children if the amendments made by Schedule 1 to the Veterans’ Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 had not been made.
(2) This clause ceases to apply to a person, and does not afterwards again apply to the person, if:
(a) the service pension referred to in paragraph (1)(c) would have ceased to be payable to the person; or
(b) family payment under the Social Security Act is no longer payable to the person or the person’s partner or is no longer payable to the person or the person’s partner at a rate higher than the minimum family payment rate; or
(c) service pension becomes payable to the person.
(3) A person to whom this clause applies is taken for the purposes of subsection 85(7) to be in receipt of a service pension under Part III.
(4) In this clause:
pension child‑related amount, at any relevant time, means an amount that would be required at that time to be included in a service pension under Module C or Module D (as Module C or Module D was affected by Module DAA) of the Service Pension Rate Calculator at the end of section 42 of the Veterans’ Entitlements Act 1986 as in force immediately before 1 January 1998.
11A Amendments relating to treatment of income streams
(1) If:
(a) a person who had entered into a binding arrangement for the provision to the person of an income stream was, on 19 September 1998, receiving a service pension, an income support supplement or a social security payment; and
(b) the Minister declares, in writing, that the Minister is satisfied that the application of this Act (as amended by the amending Act) would cause the person significant disadvantage in relation to the treatment of the person’s income stream;
this Act applies to the person in relation to the income stream as if the amendments made by Part 2 of Schedule 3 to the amending Act had not been made.
(2) Subclause (1) ceases to have effect if:
(a) the service pension, income support supplement or social security payment referred to in subclause (1)(a) (the original payment) ceases to be payable to the person; and
(b) another service pension, income support supplement or social security payment does not become payable to the person immediately after the original payment ceases to be payable.
(3) If a person was receiving a service pension, an income support supplement or a social security payment on 19 September 1998, the person’s annual rate of ordinary income from:
(a) an asset‑test exempt income stream; or
(b) an asset‑tested income stream (long term);
that is a defined benefit income stream whose commencement day is earlier than 20 September 1998 is to be worked out as if the amendment made by item 81 of Schedule 3 to the amending Act had not been made.
(4) In this clause:
amending Act means the Social Security and Veterans’ Affairs Legislation Amendment (Budget and Other Measures) Act 1998.
binding arrangement, in relation to a person, means:
(a) an arrangement that does not allow the person to commute an income stream; or
(b) an arrangement that may only be terminated on terms that are, in the opinion of the Commission, likely to cause severe detriment to the person.
11B Transitional definition of deductible amount (commencing 1 July 2007)
(1) This clause applies if:
(a) a person has received at least one payment from a defined benefit income stream before 1 July 2007, and is still receiving payments from the income stream; and
(b) the person receives income support payment in respect of a continuous period starting before, and ending on or after, the person’s trigger day (see subclause (5)); and
(c) the amount of the income support payment received before the person’s trigger day was affected by the deduction of a deductible amount (within the meaning of this Act or the Social Security Act, as the case requires, apart from this clause) from the amount of the payments payable to the person for a year under the income stream; and
(d) if the person’s trigger day is after 1 July 2007—the income stream has not been partially commuted on or after 1 July 2007 and before the person’s trigger day.
Note 1: If the income stream is wholly commuted, this clause will stop applying because the person will no longer be receiving payments from the income stream (see paragraphs (1)(a) and (d)).
Note 2: For the deduction of a deductible amount from amounts payable under certain defined benefit income streams, see sections 46V and 46Y of this Act and sections 1099A and 1099D of the Social Security Act.
(2) Despite the amendment of this Act by Part 2 of Schedule 9 to the Tax Laws Amendment (Simplified Superannuation) Act 2007, for the purposes of working out the amount of any service pension or income support supplement received by the person on or after the trigger day in respect of the remaining part of the period mentioned in paragraph (1)(b), the deductible amount, in relation to the income stream for a year, is the greater of the following amounts:
(a) the deductible amount mentioned in paragraph (1)(c);
(b) the sum of the amounts that are the tax free components (worked out under subsections 307‑125(4) to (7) of the Income Tax (Transitional Provisions) Act 1997) of the payments received from the income stream during the year.
Note: Service pension and income support supplement are income support payments within the meaning of the Social Security Act (see subsection 23(1) of that Act).
(3) However, this clause stops applying to an income stream immediately after the time (if any) that the deductible amount in relation to the income stream is, under subclause (2), the amount mentioned in paragraph (2)(b).
(4) For the purposes of this clause, without limiting paragraph (1)(b), if the form of a person’s income support payment mentioned in paragraph (1)(b) changes during a period, the continuity of the period is not broken by the change.
Example: The form of a person’s income support payment may change from one kind of payment (for instance, a social security pension under the Social Security Act) to another (for instance, a service pension under this Act).
(5) In this clause:
income support payment has the same meaning as in the Social Security Act.
trigger day, for a person, means:
(a) if the person is under 60 years at the end of 30 June 2007—the day the person turns 60; or
(b) if the person is 60 years or over at the end of 30 June 2007—1 July 2007.
Part 2—Aged care accommodation bonds: certain transactions before 6 November 1997
12 Overview of Part
(1) The following is a basic summary of this Part.
(2) For people who either:
(a) became liable to pay an accommodation bond at any time from the beginning of 1 October 1997 until the end of 5 November 1997 but then agreed to switch to an accommodation charge; or
(b) sold their principal home on or before 5 November 1997 in order to be able to pay certain accommodation bonds;
and for the partners of such people, certain amounts relating to refunds of such bonds, or to the proceeds of such sales, are excluded from the income and assets tests under this Act.
Note: Accommodation bond and accommodation charge have the same meanings as in the Aged Care Act 1997: see subsection 5L(1) of this Act.
13 Scope of Part
(1) This Part applies to a person if:
(a) at any time from the beginning of 1 October 1997 until the end of 5 November 1997, the person became liable to pay an accommodation bond for entry to a residential care service; and
(b) either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44‑8B and Division 57A of the Aged Care (Transitional Provisions) Act 1997 been in force at the time of the entry; and
(c) the person later made an agreement (a refund agreement) with the provider of the service that the person’s liability to pay an accommodation bond for the entry was to be replaced with a liability to pay an accommodation charge for the entry, and that any payment of any of the bond was to be refunded to the person.
Note 1: Accommodation bond and accommodation charge have the same meanings as in the Aged Care Act 1997: see subsection 5L(1) of this Act.
Note 2: Charge exempt resident has the same meaning as in the Aged Care (Transitional Provisions) Act 1997: see clause 17 of this Schedule.
(2) This Part also applies to a person if the Commission is satisfied that:
(a) on or before 5 November 1997, the person sold his or her principal home for the sole or principal purpose of raising money to pay an accommodation bond for entry to a residential care service; and
(b) either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44‑8B and Division 57A of the Aged Care (Transitional Provisions) Act 1997 been in force at the time of the entry.
Note 1: Accommodation bond and accommodation charge have the same meanings as in the Aged Care Act 1997: see subsection 5L(1) of this Act.
Note 2: Charge exempt resident has the same meaning as in the Aged Care (Transitional Provisions) Act 1997: see clause 17 of this Schedule.
(3) This Part also applies to the partner of a person covered by subclause (1) or (2) (even if the person so covered is now deceased).
(4) For the purposes of subclause (2), the time at which a person sells his or her home is the time when he or she comes under a legal obligation to transfer the home to the buyer.
14 Person’s ordinary income reduced using financial asset rules
(1) For the purposes of this clause, assume that the person’s exempt bond amount (see clause 16) were a financial asset of the person.
(2) The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 3 of Part IIIB of this Act (Deemed income from financial assets).
(3) In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold (deeming threshold is a term used in that Division).
15 Value of person’s assets reduced
For the purposes of this Act (other than sections 52FA, 52G, 52GA, 52H, 52JA, 52JB, 52JC and 52JD), the total value of the person’s assets is reduced by the person’s exempt bond amount (see clause 16).
16 Meaning of exempt bond amount
(1) The following is how to work out a person’s exempt bond amount.
(2) If the person is covered by subclause 13(1) (but not subclause 13(2)), the person’s exempt bond amount is any amount of accommodation bond payment refunded to the person under the refund agreement mentioned in that subclause.
(3) If the person is covered by subclause 13(2) (but not subclause 13(1)), the person’s exempt bond amount is the gross proceeds of the sale mentioned in that subclause, less:
(a) any costs incurred in the course of the sale; and
(b) the amount of any debt the person or the person’s partner owed immediately before the sale, so far as the debt was secured by the home at that time.
(4) If the person is covered by both subclauses 13(1) and (2), the person’s exempt bond amount is the greater of the 2 amounts worked out under subclauses (2) and (3) of this clause.
(5) If the person is covered by subclause 13(3), the person’s exempt bond amount is equal to the exempt bond amount of the person’s partner, as worked out under subclause (2), (3) or (4) of this clause.
(6) But in all of the above cases, if the person currently has a partner (who is not deceased), the person’s exempt bond amount is half of what it would otherwise be.
Part 2A—Charge exempt residents under the Aged Care (Transitional Provisions) Act 1997
17 Meaning of charge exempt resident
In this Part:
charge exempt resident has the same meaning as in the Aged Care (Transitional Provisions) Act 1997.
17A Persons who became charge exempt residents before commencement
(1) This clause applies if a person first became a charge exempt resident before the commencement of this clause.
(2) If, at any time after becoming a charge exempt resident but before the commencement of this clause, the person, or the person’s partner, was earning, deriving or receiving any rent from the person’s principal home from another person, any such rent earned, derived or received while the person is a charge exempt resident is not income in relation to the person, or the person’s partner, for the purposes of this Act.
Note 1: For rent, see subsection 5N(2).
Note 2: Under subsections 5LA(8) and (9), and subclause (3) of this clause, the principal home of a person in a care situation may be a place other than the place where the person receives care.
(3) A residence of a person is taken to be the person’s principal home for the purposes of this Act during:
(a) if:
(i) the Commission is satisfied that the residence was previously the person’s principal home but that the person left it for the purpose of going into a care situation or becoming an aged care resident; and
(ii) at any time after leaving the residence but before the commencement of this clause, the person, or the person’s partner, earned, derived or received rent for the residence from another person;
any period during which:
(iii) the person is a charge exempt resident; and
(iv) the person, or the person’s partner, is earning, deriving or receiving rent for the residence from another person; and
(b) any period during which the residence is, because of paragraph (a), the principal home of the person’s partner.
Note 1: For rent see subsection 5N(2). For in a care situation see subsection 5NC(2). For aged care resident see subsection 5NC(5).
Note 2: This subclause is not meant to imply that a person may have more than one principal home at the same time.
17B Refunds of accommodation charge
(1) Clauses 17C and 17D apply to an amount (the refunded amount) that is refunded as mentioned in paragraph 56‑1(kc) or 56‑3(ic) of the Aged Care Act 1997 (as in force before 1 July 2014) to a person because the person is or was a charge exempt resident.
(2) Those clauses also apply to an amount (also called the refunded amount) that is paid to a person under paragraph 44‑8A(6)(b) of the Aged Care (Transitional Provisions) Act 1997 because the person is or was a charge exempt resident.
(3) To avoid doubt, those clauses do not apply if the amount is paid to the person’s estate or to any other person.
17C Person’s ordinary income reduced using financial asset rules
(1) For the purposes of this clause, assume that the refunded amount were a financial asset of the person.
(2) The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 3 of Part IIIB of this Act (Deemed income from financial assets).
(3) In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold (deeming threshold is a term used in that Division).
17D Value of person’s assets reduced
For the purposes of this Act (other than sections 52FA, 52G, 52GA, 52H, 52JA, 52JB, 52JC and 52JD), the total value of the person’s assets is reduced by the refunded amount.
17E Application of Part
This Part applies in relation to a person who is a charge exempt resident at any time, whether before or after the commencement of the Part.
Part 3—Transitional provisions: changes made by the Social Security and Veterans’ Affairs Legislation Amendment (Payment Processing) Act 1998
18 Definitions
In this Part:
amending Act means the Social Security and Veterans’ Affairs Legislation Amendment (Payment Processing) Act 1998.
pension means service pension under Part III or income support supplement under Part IIIA.
19 Payability and payment of pension during transition period
(1) In spite of the commencement of Schedule 4 to the amending Act, until and including 12 July 1999, the question whether pension is payable to a person is to be determined in accordance with this Act as in force immediately before 1 July 1999.
(2) In spite of the commencement of Schedule 4 to the amending Act, until and including 15 July 1999, instalments of pension are to be paid in accordance with this Act as in force immediately before 1 July 1999.
20 Continued operation of Act in relation to cancellation etc. of pensions
(1) In spite of the commencement of Schedule 4 to the amending Act, this Act, as in force immediately before 1 July 1999, continues to apply in relation to the cancellation and suspension of pensions, and the variation of the rates of such pensions, until and including 12 July 1999.
(2) Without limiting subclause (1), that subclause has effect:
(a) in relation to the day on which a cancellation, suspension or variation takes effect; and
(b) whether the cancellation, suspension or variation is effected by the operation of a provision of this Act or by a determination under this Act.
(3) A cancellation, suspension or variation that, but for this subclause, would have taken effect on 15 July 1999 takes effect on 13 July 1999.
21 First pension period
A pension period under this Act, as amended by Schedule 4 to the amending Act, must not commence earlier than 13 July 1999.
22 Continued operation of certain notices given before 13 July 1999
If:
(a) at any time before 13 July 1999, the Secretary has given a person a notice under section 54; and
(b) the notice has not been revoked;
the notice continues to have effect on and after 13 July 1999 as if:
(c) the notice had been given under this Act as amended by Schedule 4 to the amending Act; and
(d) the notification period specified in the notice had been so specified in accordance with this Act as so amended.
23 Consequences of occurrence of certain events etc.
(1) If:
(a) the Secretary has, before 13 July 1999, given a person a notice under section 54; and
(b) an event or change in circumstances specified in the notice occurs before 13 July 1999; and
(c) the person to whom the notice was given notifies the Secretary, before 13 July 1999, of the occurrence of the event or change in circumstances;
this Act, as in force immediately before the commencement of Schedule 4 to the amending Act, has effect in relation to the day on which any cancellation or suspension of the pension that is being received by the person, or any variation of the rate of the pension, takes effect.
(2) If:
(a) the Secretary has, before 13 July 1999, given a person a notice under section 54; and
(b) an event or change in circumstances specified in the notice occurs before 13 July 1999; and
(c) the person to whom the notice was given does not notify the Department of the occurrence of the event or change in circumstances before 13 July 1999;
this Act, as amended by Schedule 4 to the amending Act, has effect, subject to subclause 20(3), in relation to the day on which any cancellation or suspension of the pension being received by the person, or any variation of the rate of the pension, takes effect.
24 Transitional regulations
(1) Regulations made under section 216 may prescribe matters in relation to any transitional matters (including prescribing any saving or application provisions) arising out of amendments of this Act made by Schedule 4 to the amending Act.
(2) Without limiting subclause (1), and in spite of any other provision in this or any other Act, regulations made by virtue of subclause (1) may:
(a) modify the effect of a provision of this Part (other than this clause); or
(b) substitute another provision for any provision of this Part (other than this clause).
Part 4—Transitional provisions: changes made by Schedule 5 to the Veterans’ Affairs Legislation Amendment (Budget Measures) Act 2000
25 Definitions
In this Part:
amending Act means the Veterans’ Affairs Legislation Amendment (Budget Measures) Act 2000.
pension means a pension under Part II or Part IV or an allowance under Part VI.
26 Payability and payment of pension during transition period
(1) In spite of the commencement of Schedule 5 to the amending Act, until and including 9 July 2001, the question whether pension is payable to a person is to be determined in accordance with this Act as in force immediately before 1 July 2001.
(2) In spite of the commencement of Schedule 5 to the amending Act, until and including 12 July 2001, instalments of pension are to be paid in accordance with this Act as in force immediately before 1 July 2001.
27 Continued operation of Act in relation to cancellation etc. of pensions
(1) In spite of the commencement of Schedule 5 to the amending Act, this Act, as in force immediately before 1 July 2001, continues to apply in relation to the cancellation and suspension of pensions, and the variation of the rates of such pensions, until and including 9 July 2001.
(2) Without limiting subclause (1), that subclause has effect:
(a) in relation to the day on which a cancellation, suspension or variation takes effect; and
(b) whether the cancellation, suspension or variation is effected by the operation of a provision of this Act or by a determination under this Act.
(3) A cancellation, suspension or variation that, but for this subclause, would have taken effect on 12 July 2001 takes effect on 10 July 2001.
28 First pension period
A pension period under this Act, as amended by Schedule 5 to the amending Act, must not commence earlier than 10 July 2001.
29 Transitional regulations
(1) Regulations made under section 216 may prescribe matters in relation to any transitional matters (including prescribing any saving or application provisions) arising out of amendments of this Act made by Schedule 5 to the amending Act.
(2) Without limiting subclause (1), and in spite of any other provision in this or any other Act, regulations made by virtue of subclause (1) may:
(a) modify the effect of a provision of this Part (other than this clause); or
(b) substitute another provision for any provision of this Part (other than this clause).
Part 5—Transitional provisions: changes on 20 September 2009
30 Transitional rates of service pension and income support supplement on and after 20 September 2009
Application
(1) This clause applies if:
(a) on 19 September 2009 a person was receiving one of the following payments:
(i) service pension or income support supplement;
(ii) age pension, disability support pension, wife pension, carer payment, bereavement allowance, widow B pension or special needs pension under the Social Security Act; and
(b) either:
(i) the person continues (without a break) to receive one of those payments (whether or not of the same sort as the one the person received on that day); or
(ii) subclause (1A) applies to the person.
(1A) This subclause applies to a person if:
(a) a payment by the Thalidomide Australia Fixed Trust:
(i) is made to, or applied for the benefit of, the person as a beneficiary of the Trust; or
(ii) is made to, or applied for the benefit of, the person’s partner as a beneficiary of the Trust; or
(iii) is made to the person or the person’s partner in respect of a beneficiary of the Trust; and
(b) subparagraph (1)(b)(i) applies to the person immediately before the payment is made; and
(c) any of the payments mentioned in paragraph (1)(a) is payable to the person at the commencement of item 7 of Schedule 4 to the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Act 2011; and
(d) after that commencement, that payment, or any of the other payments referred to in paragraph (1)(a), continues (without a break) to be payable to the person.
Purpose
(2) This clause has effect for the purposes of working out the rate of service pension or income support supplement under this Act for the person for a day (the relevant day) after 19 September 2009 under subpoint SCH6‑A1(2), (3), (4) or (6).
Note: This clause does not make a person entitled to receive service pension or income support supplement if the person is not otherwise entitled to receive it.
Provisional payment rate for service pension
(3) For working out the person’s rate of service pension, the person’s provisional payment rate is taken to be the amount worked out under subclause (4) if that amount is greater than the person’s provisional payment rate (for that purpose) apart from this clause.
Note: The provisional payment rate is an amount worked out under the method statement in subpoint SCH6‑A1(2). That subpoint may be relevant of its own force or because of subpoint SCH6‑A1(3) or (4).
(4) The amount is the one that would be the provisional payment rate under subpoint SCH6‑A1(2) if:
(a) the maximum payment rate under that subpoint for the person were the total of:
(i) the amount worked out under whichever of subclauses 31(1), (2), (3) and (4) is relevant to the person; and
(ia) the person’s energy supplement (if any) worked out using Module BB of the Rate Calculator; and
(ii) the amount (if any) per year calculated for the person under Module C of the Rate Calculator (for rent assistance);
reduced, if subclause 31(1) or (2) is relevant to the person and an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, by the person’s minimum pension supplement amount; and
(b) the amendments made by Schedules 6 and 7 to the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been made.
Note 1: The maximum payment rate is an amount used in subpoint SCH6‑A1(2).
Note 2: Subclause 31(1) deals with a person in Australia who is not a member of a couple or is a member of an illness separated couple or respite care couple.
Note 3: Subclause 31(2) deals with a person in Australia who is a member of a couple (but not a member of an illness separated couple or respite care couple).
Note 4: Subclause 31(3) deals with a person who has been outside Australia for more than 6 weeks and is not a member of a couple or is a member of an illness separated couple or respite care couple.
Note 5: Subclause 31(4) deals with a person who has been outside Australia for more than 6 weeks and is a member of a couple (but not a member of an illness separated couple or respite care couple).
Note 6: The amount described in subparagraph (4)(a)(i) is indexed under Subdivision B (CPI indexation) of Division 18 of Part IIIB on and after 20 March 2010.
Note 7: Section 65A may affect the inclusion of the energy supplement described in subparagraph (4)(a)(ia).
Provisional payment rate for income support supplement
(5) For working out the person’s rate of income support supplement, the person’s provisional payment rate is taken to be the amount worked out under subclause (6) if that amount is greater than the person’s provisional payment rate (for that purpose) apart from this clause.
Note: The provisional payment rate is an amount worked out under the method statement in subpoint SCH6‑A1(6).
(6) The amount is the one that would be the provisional payment rate under subpoint SCH6‑A1(6) if:
(a) the maximum payment rate under that subpoint for the person were the total of:
(i) the amount worked out under whichever of subclauses 32(1) and (2) is relevant to the person; and
(ii) the amount (if any) per year calculated for the person under Module C of the Rate Calculator (for rent assistance); and
reduced, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, by the person’s minimum pension supplement amount; and
(b) the amendments made by Schedules 6 and 7 to the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been made; and
(c) the increased rate were the amount worked out under subclause 32(3).
Note 1: The maximum payment rate and increased rate are amounts used in subpoint SCH6‑A1(6).
Note 2: Subclause 32(1) deals with a person who is not a member of a couple or is a member of an illness separated couple or respite care couple.
Note 3: Subclause 32(2) deals with a person who is a member of a couple (but not a member of an illness separated couple or respite care couple).
Note 4: The amount described in subparagraph (6)(a)(i) is indexed under Subdivision B (CPI indexation) of Division 18 of Part IIIB on and after 20 March 2010.
Note 5: The amount described in paragraph (6)(c) is affected by indexation because the components of that amount are indexed.
Limit on application of subclauses (3) and (5)
(7) Neither subclause (3) nor subclause (5) applies for working out the rate of service pension or income support supplement of the person for the relevant day if the relevant day is after a day for which one of the following conditions was met:
(a) the amount worked out for the day under subclause (4) (in a previous application of this clause) was less than or equal to the person’s provisional payment rate for service pension apart from this clause;
(b) the amount worked out for the day under subclause (6) (in a previous application of this clause) was less than or equal to the person’s provisional payment rate for income support supplement apart from this clause;
(c) the amount worked out for the day under subclause 146(4) of Schedule 1A to the Social Security Act was less than or equal to the person’s provisional annual payment rate, apart from clause 146 of that Schedule, for a social security pension described in that clause.
(8) However, subclause (7) does not prevent subclause (3) or (5) from applying for working out the rate of service pension or income support supplement of the person for the relevant day if:
(a) on the relevant day the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and
(b) on each day for which a condition in paragraph (7)(a), (b) or (c) was met, the person was a member of a respite care couple; and
(c) on a day before all the days described in paragraph (b):
(i) the person was a member of a couple, but not a member of an illness separated couple or respite care couple, and not partnered (partner in gaol) within the meaning of the Social Security Act; and
(ii) either this clause affected the rate at which service pension or income support supplement was payable to the person or clause 146 of Schedule 1A to the Social Security Act affected the rate at which a social security pension described in that clause was payable to the person.
Note: For member of a couple, illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.
31 Amounts affecting transitional rate of service pension
Single Australian resident in Australia
(1) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:
(a) the person’s family situation is any of the following:
(i) not a member of a couple;
(ii) member of an illness separated couple;
(iii) member of a respite care couple; and
(b) the person is residing in Australia; and
(c) the person either:
(i) is in Australia; or
(ii) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
Method statement
Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB or Part XII on that day, if the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:
(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a person who is not a member of a couple assuming that section 59EA did not apply on 20 September 2009;
(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is not (and was not on 1 July 2000) a member of a couple;
(c) PA (service pension) rate (within the meaning of Division 18 of Part IIIB);
(d) the rate of telephone allowance in subsection 118SA(1);
(e) the rate of utilities allowance in section 118OC for a person who is not a member of a couple.
Step 2. Identify the greater of the amount described in paragraph (e) of step 1 and $525.20 (or either of them if they are the same).
Step 3. Add up all the amounts worked out under step 1 and the amount identified under step 2.
Step 4. If the result of step 3 is not a multiple of $2.60, round that result up to the next multiple of $2.60.
Note 1: For member of a couple, illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.
Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.
Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.
Partnered Australian resident in Australia
(2) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:
(a) the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and
(b) the person is residing in Australia; and
(c) the person either:
(i) is in Australia; or
(ii) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
Method statement
Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB or Part XII on that day, if the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:
(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a member of a couple (other than an illness separated couple or a respite care couple) assuming that section 59EA did not apply on 20 September 2009;
(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is (and was on 1 July 2000) a member of a couple (other than an illness separated couple or a respite care couple);
(c) PA (service pension) rate (within the meaning of Division 18 of Part IIIB);
(d) the rate of telephone allowance in subsection 118SA(2);
(e) the rate of utilities allowance in section 118OC for a member of a couple (other than an illness separated couple or a respite care couple).
Step 2. Identify the greater of the amount described in paragraph (e) of step 1 and $262.60 (or either of them if they are the same).
Step 3. Add up all the amounts worked out under step 1 and the amount identified under step 2.
Step 4. If the result of step 3 is not a multiple of $2.60, round that result up to the next multiple of $2.60.
Note 1: For member of a couple, illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.
Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.
Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.
Single person not covered by subclause (1)
(3) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:
(a) the person’s family situation is any of the following:
(i) not a member of a couple;
(ii) member of an illness separated couple;
(iii) member of a respite care couple; and
(b) the person either:
(i) is not residing in Australia; or
(ii) is absent from Australia and has been so for a continuous period exceeding 6 weeks.
Method statement
Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation under Division 18 of Part IIIB on that day, if the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:
(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a person who is not a member of a couple assuming that section 59EA did not apply on 20 September 2009;
(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is not (and was not on 1 July 2000) a member of a couple.
Step 2. Add up the amounts worked out under step 1.
Note 1: For member of a couple, illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.
Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.
Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.
Partnered person not covered by subclause (2)
(4) For the purposes of subparagraph 30(4)(a)(i), work out the amount as follows if, on the relevant day:
(a) the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and
(b) the person either:
(i) is not residing in Australia; or
(ii) is absent from Australia and has been so for a continuous period exceeding 6 weeks.
Method statement
Step 1. Work out what each of the following amounts would have been on 20 September 2009, taking account of indexation under Division 18 of Part IIIB on that day, if the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:
(a) the amount that would be the pension MBR (within the meaning of Division 18 of Part IIIB) for a member of a couple (other than an illness separated couple or a respite care couple) assuming that section 59EA did not apply on 20 September 2009;
(b) pension supplement (within the meaning of Division 18 of Part IIIB) for a person who is (and was on 1 July 2000) a member of a couple (other than an illness separated couple or a respite care couple).
Step 2. Add up the amounts worked out under step 1.
Note 1: For member of a couple, illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.
Note 2: Subsection 5G(1A) is relevant to determining whether a person is residing in Australia.
Note 3: Section 59A explains the abbreviations used in Division 18 of Part IIIB.
32 Amounts affecting transitional rate of income support supplement
Single person’s component of maximum basic rate
(1) For the purposes of subparagraph 30(6)(a)(i), work out the amount as follows if, on the relevant day, the person’s family situation is:
(a) not a member of a couple; or
(b) member of an illness separated couple; or
(c) member of a respite care couple.
Method statement
Step 1. Work out what each of the following amounts (described using the abbreviation in section 59A for the amount) would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB on that day, if the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:
(a) the amount that would be the pension MBR for a person who is not a member of a couple assuming that section 59EA did not apply on 20 September 2009;
(b) pension supplement for a person who is not (and was not on 1 July 2000) a member of a couple.
Step 2. Add up all the amounts worked out under step 1.
Note: For member of a couple, illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.
Partnered person’s component of maximum basic rate
(2) For the purposes of subparagraph 30(6)(a)(i), work out the amount as follows if, on the relevant day, the person is a member of a couple, but not a member of an illness separated couple or respite care couple:
Method statement
Step 1. Work out what each of the following amounts (described using the abbreviation in section 59A for the amount) would have been on 20 September 2009, taking account of indexation (if any) under Division 18 of Part IIIB on that day, if the Veterans’ Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been enacted:
(a) the amount that would be the pension MBR for a member of a couple (other than an illness separated couple or a respite care couple) assuming that section 59EA did not apply on 20 September 2009;
(b) pension supplement for a person who is (and was on 1 July 2000) a member of a couple (other than an illness separated couple or a respite care couple).
Step 2. Add up all the amounts worked out under step 1.
Note: For member of a couple, illness separated couple and respite care couple see subsections 5E(1) and 5R(5) and (6) respectively.
Increased rate
(3) For the purposes of paragraph 30(6)(c), work out the amount for the person as follows:
Method statement
Step 1. Work out the ceiling rate for the person (see Module A of the Rate Calculator).
Step 2. Work out the amount per year (if any) for rent assistance for the person (see Module C of the Rate Calculator).
Step 3. Add up the results of steps 1 and 2 and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount.
33 Rate of payments to partners of persons affected by clause 30
(1) This clause applies if clause 30 applies to a person who is a member of a couple and that clause affects the rate at which service pension or income support supplement is payable to the person.
(2) In working out the amount of a payment under this Act payable to a partner of the person, assume that the service pension or income support supplement payable to the person is payable at the rate at which it would be payable if clause 30 had not been enacted.
34 Payment and income tax consequences of receiving service pension or income support supplement at rate affected by clause 30
Application
(1) This clause applies if clause 30 affects the rate at which service pension or income support supplement is payable to a person.
Purpose
(2) The purpose of this clause is to ensure that the person is treated appropriately in relation to the payment, and income taxation, of the pension or supplement by modifying the operation of this Act (and thus affecting the related income tax law) in relation to the person and the pension or supplement.
Note: This clause does not modify the operation of subsection 5GA(3), which provides for working out the person’s minimum pension supplement amount.
Pension supplement amount
(3) This Act applies in relation to the person’s pension or supplement as if each of the following:
(a) the amount described in subparagraph 30(4)(a)(i), as affected by any indexation and any relevant reduction described in paragraph 30(4)(a);
(b) the amount described in subparagraph 30(6)(a)(i), as affected by any indexation and any relevant reduction described in paragraph 30(6)(a);
were an amount worked out and added under the pension supplement Module of the Rate Calculator.
Note 1: One effect of subclause (3) is that whichever of the amounts described in paragraphs (3)(a) and (b) is relevant is the person’s pension supplement amount (as defined in subsection 5Q(1) of this Act).
Note 2: If that amount exceeds the person’s pension supplement basic amount (as affected by subclause (4)), another effect of subclause (3) is that the excess affects the tax‑exempt pension supplement under subsection 5GA(5) of this Act in some cases.
Note 3: Yet another effect of subclause (3) is that clause 4 of Schedule 6 will affect the operation of reductions of the maximum payment rate because of the income test and assets test in some cases.
Pension supplement basic amount
(4) This Act applies in relation to the person’s service pension or income support supplement as if:
(a) each reference in the table in subsection 5GA(4) to $509.60 were a reference to $14,903.20; and
(b) the reference in the table in subsection 5GA(4) to $426.40 were a reference to $12,448.80.
Note 1: This affects the person’s pension supplement basic amount.
Note 2: The provisions for indexing amounts in the table in subsection 5GA(4) apply to the higher figures mentioned in this subclause.
Energy supplement
(5) If subclause 31(1) or (2) is relevant to the person, this Act applies in relation to the person’s service pension as if the person’s energy supplement (if any) resulting from Module BB of the Rate Calculator were used to work out the rate of the person’s service pension.
Note 1: This energy supplement is included in the total worked out under paragraph 30(4)(a) (see subparagraph 30(4)(a)(ia)).
Note 2: Subclause (5) causes section 62E to apply. If quarterly energy supplement is payable, then no energy supplement will be available to be included in the total worked out under paragraph 30(4)(a) (see point SCH6‑BB2 of the Rate Calculator).
Note 3: Other effects of subclause (5) include:
(a) the possibility of the minimum amount of fortnightly instalments of the pension being affected under section 58A; and
(b) clause 4 of Schedule 6 affecting the operation of reductions of the maximum payment rate because of the ordinary/adjusted income test and assets test.
35 Special rules for indexation of rates payable under clause 30
(1) This clause applies if clause 30 affects the rate at which service pension is payable to a person for a day on or after 20 March 2013.
(2) Subsection 198MA(2), and the definition of brought forward CPI indexation amount (except paragraph (b) of that definition) in subsection 198MA(3), apply in relation to the amount described in subparagraph 30(4)(a)(i) of this Schedule for the person in the same way as they apply in relation to the person’s PS minimum rate.
(3) The following provisions do not affect the rate of the person’s service pension worked out under clause 30 or an amount worked out in relation to the person’s pension because of clause 34:
(a) subparagraph 198MA(2)(b)(vi);
(b) section 198MB.
Schedule 6—Calculation of rates of service pension, income support supplement and veteran payment
Part 1—Preliminary
1 Steps in rate calculation
(1) The following are the usual steps in the rate calculation process:
(a) start with a maximum basic rate;
(b) add any additional amounts that are subject to income or assets testing;
(c) apply the income and assets tests;
(d) add any additional amounts that are not subject to income or assets testing.
Note 1: The additional amounts referred to in paragraph (b) are amounts for pension supplement, energy supplement and rent assistance.
Note 2: The only additional amount for the purposes of paragraph (d) at this time is remote area allowance.
(2) The overall rate calculation process is described in the relevant Method statement in Module A of the Rate calculator.
2 Standard categories of family situations
(1) The Rate Calculator uses the following standard categories of family situations:
(a) not member of a couple;
(b) member of a couple or partnered;
(c) member of an illness separated couple;
(d) member of a respite care couple;
(e) partnered (partner getting neither pension nor benefit);
(f) partnered (partner getting pension);
(g) partnered (partner getting benefit).
Note: See sections 5E and 5R for definitions of those terms.
(2) If it is necessary to distinguish between the members of sub‑categories of these standard categories, further words of description are added to the standard category label.
3 Explanation of Rate Calculator
(1) The Rate Calculator is divided into Modules (for example, Module A).
(2) A Module of the Rate Calculator is divided into points.
(3) The points in a Module are identified by:
(a) the letters and number SCH6 (followed by a dash), which indicate that the Module is in the Rate Calculator in this Schedule; and
(b) a letter that is the letter allocated to the Module in which the point occurs; and
(c) a number that identifies the order of the point within the Module.
Example: Point SCH6‑E2 is the 2nd point in Module E of the Rate Calculator in this Schedule.
(4) A point in a Module may be divided into subpoints.
4 Application for income tax purposes of reductions in respect of service pension, income support supplement or veteran payment
Service pension and veteran payment
(1) If a person’s rate of service pension or veteran payment is affected by a reduction under any or all of the following:
(a) Module E (ordinary/adjusted income test) of the Rate Calculator;
(b) Module F (assets test) of the Rate Calculator;
(c) section 59T (compensation recovery);
the reduction is to be applied as follows (in descending order):
Item | Component of the rate |
1 | all of the rate apart from the person’s pension supplement amount and any increase under Module C (rent assistance) of the Rate Calculator |
2 | the portion of the person’s pension supplement amount equal to the person’s pension supplement basic amount |
3 | (a) if an election by the person under subsection 60A(1) is in force—any remaining portion of the person’s pension supplement amount; or (b) otherwise—any remaining portion of the person’s pension supplement amount to the extent to which it exceeds the person’s minimum pension supplement amount |
4 | the amount of any increase under Module C |
4A | the amount of any increase under Module BB |
5 | the person’s minimum pension supplement amount |
Note 1: Table item 4A will not apply if an election by the person under subsection 60A(1) is in force, as there will not be any increase under Module BB (see point SCH6‑BB2 of the Rate Calculator).
Note 2: Table item 5 will not apply if an election by the person under subsection 60A(1) is in force, as the rate would have already been reduced to nil.
Note 3: Section 60A applies to a person receiving a service pension (but does not apply to a person receiving a veteran payment).
(2) If a person’s rate of service pension:
(a) is worked out under subpoint SCH6‑A1(4) of Schedule 6 and is the revised rate; or
(b) is worked out under subpoint SCH6‑A1(5) of Schedule 6;
subclause (1) applies in relation to the person and the pension as if:
(c) paragraphs (1)(a) and (b) were omitted; and
(d) the person had a pension supplement amount equal to what would be the person’s pension supplement amount if the person were receiving the service pension at the rate worked out under subpoint SCH6‑A1(4) of Schedule 6 and equal to the provisional rate.
Income support supplement
(3) If a person’s rate of income support supplement is affected by a reduction under any or all of the following:
(a) Module E (ordinary/adjusted income test) of the Rate Calculator;
(b) Module F (assets test) of the Rate Calculator;
(c) section 59T (compensation recovery);
the reduction is to be applied as follows (in descending order):
Item | Component of the rate |
1 | all of the rate apart from any increase under Module C (rent assistance) of the Rate Calculator and the person’s minimum pension supplement amount |
2 | the amount of any increase under Module C |
3 | the person’s minimum pension supplement amount |
Quarterly pension supplement
(4) If:
(a) the rate (the main rate) of a person’s service pension or income support supplement is to be reduced as described in subclause (1) (applying of its own force or as affected by subclause (2)) or subclause (3); and
(b) an election by the person under subsection 60A(1) is in force;
the person’s quarterly pension supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s minimum pension supplement amount would be reduced under subclause (1) or (3) were the election not in force.
Note: The reduction will be disregarded unless the person’s quarterly pension supplement is reduced to nil (see subsection 60C(4)).
Quarterly energy supplement for service pension
(5) If:
(a) the rate (the main rate) of a person’s service pension is to be reduced as described in subclause (1) (applying of its own force or as affected by subclause (2)); and
(b) an election by the person under subsection 60A(1) is in force;
the person’s quarterly energy supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s energy supplement would be reduced under subclause (1) were the election not in force.
Note: The reduction will be disregarded unless the main rate would be reduced to nil (see subsection 62E(6)).
5 Commencing rates
(1) The amounts and rates set out in the Rate Calculator at the time of commencement of this Schedule (the commencing time) are the same as the corresponding amounts and rates that applied under this Act as in force on 1 January 1997.
(2) However, each amount or rate so set out that is subject to indexation or adjustment under Division 18 of Part IIIB is taken to be replaced immediately after the commencing time by the amount or rate that would have been in force at that time as a result of the application of that Division if this Schedule had commenced on 1 January 1997.
Part 2—Rate Calculator
Module A—Overall rate calculation process
Rate to be an annual rate
SCH6‑A1(1) The rate of service pension, income support supplement or veteran payment is an annual rate (fortnightly amounts are provided for information only).
Method statement 1 (service pension, not blind, not war widow/war widower—pensioner)
(2) The rate of service pension for a person who:
(a) is not permanently blind; and
(b) is not a war widow/war widower—pensioner;
is worked out in accordance with Method statement 1.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 1
Step 1. Work out the person’s maximum basic rate using MODULE B below.
Step 1A. Work out the amount of pension supplement using Module BA below.
Step 1B. Work out the amount of energy supplement (if any) using Module BB below.
Step 2. Work out the amount per year (if any) by way of rent assistance using MODULE C below.
Step 4. Add up the amounts obtained in Steps 1, 1A, 1B and 2: the result is called the maximum payment rate.
Note: Section 65A may affect whether the amount obtained in step 1B is added.
Step 5. Apply the ordinary/adjusted income test using MODULE E below to work out the reduction for ordinary/adjusted income.
Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate.
Step 7. Apply the assets test using MODULE F below to work out the reduction for assets.
Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 9. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional payment rate.
Step 10. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 11. Add any amount obtained in Step 10 to the person’s provisional payment rate (see Step 9). The result is the person’s rate of service pension.
Note 1: For ordinary/adjusted income see point SCH6‑E1.
Note 2: If a person’s assets reduced rate is less than the person’s ordinary/adjusted income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 52Y and 52Z).
Note 4: If a person’s rate is reduced under step 9, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.
Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 9.
Note 5: The rate calculation for a member of a couple is affected by the operation of point SCH6‑A2.
Note 6. The amount of a fortnightly instalment of service pension will be rounded to the nearest cent (see subsection 58A(5)).
Note 7: For the minimum amount of a fortnightly instalment of service pension, see subsection 58A(9).
Note 8: An amount of remote area allowance is to be added under Step 11 only if the person’s rate of service pension is greater than nil or, apart from section 36A, 37A or 38A, the person’s rate of service pension would be nil.
Note 9: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 2 (service pension, blind, not war widow/war widower—pensioner)
(3) The rate of service pension for a person who:
(a) is permanently blind; and
(b) is not a war widow/war widower—pensioner;
is worked out in accordance with Method statement 2.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 2
Step 1. Work out what would be the person’s rate of service pension if Method statement 1 applied to the person: the result is called the notional income/assets tested rate.
Note: This is the only situation in which a blind person’s pension can be made subject to an income test or assets test (see point SCH6‑A3).
Step 2. Work out the person’s maximum basic rate using MODULE B below.
Step 2A. Work out the amount of pension supplement using Module BA below.
Step 2B. Work out the amount of energy supplement (if any) using Module BB below.
Step 4. Add up the amounts obtained in Steps 2, 2A and 2B: the result is called the maximum payment rate.
Note: Section 65A may affect whether the amount obtained in step 2B is added.
Step 5. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 6. Add:
(a) the maximum payment rate; and
(b) any amount obtained under Step 5.
The result is called the non‑income/assets tested rate.
Step 7. Compare the notional income/assets tested rate and the non‑income/assets tested rate: whichever is the greater is the person’s rate of service pension.
Note 1: The amount of a fortnightly instalment of service pension will be rounded to the nearest cent (see subsection 58A(5)).
Note 2: For the minimum amount of a fortnightly instalment of service pension, see subsection 58A(9).
Note 3: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 3 (service pension, not blind, war widow/war widower—pensioner)
(4) The rate of service pension for a person who:
(a) is not permanently blind; and
(b) is a war widow/war widower—pensioner;
is worked out in accordance with Method statement 3.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 3
Step 1. Work out what would be the person’s rate of service pension if Method statement 1, except step 1B of that method statement, applied to the person: the result is called the provisional rate.
Step 2. Work out the person’s ceiling rate in accordance with points SCH6‑A4 to SCH6‑A9.
Step 2A. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 4. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 5. Add:
(a) the ceiling rate; and
(b) any amount obtained under step 2A; and
(c) any amount obtained under step 4;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the revised rate.
Step 6. Compare the provisional rate and the revised rate: the person’s rate of service pension is:
(a) the provisional rate if it is lower than the revised rate; or
(b) the revised rate if it is lower than or equal to the provisional rate.
Note: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 4 (service pension, blind, war widow/war widower—pensioner)
(5) The rate of service pension for a person who:
(a) is permanently blind; and
(b) is a war widow/war widower—pensioner;
is worked out in accordance with Method statement 4.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
Method statement 4
Step 1. Work out the person’s ceiling rate in accordance with points SCH6‑A4 to SCH6‑A9.
Step 1A. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 3. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 4. Add:
(a) the ceiling rate; and
(b) any amount obtained under step 1A; and
(c) any amount obtained under step 3;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the person’s rate of service pension.
Note: The amount of a fortnightly instalment of service pension may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 5 (income support supplement, not blind)
(6) The rate of income support supplement for a person who is not permanently blind is worked out in accordance with Method statement 5.
Method statement 5
Step 1. Work out the amount of the person’s maximum basic rate using MODULE B below.
Step 1A. Work out the amount of pension supplement using Module BA below.
Step 2. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 4. Add up the amounts obtained in Steps 1, 1A and 2: the result is called the maximum payment rate.
Step 5. Apply the ordinary/adjusted income test using MODULE E below to work out the reduction for ordinary/adjusted income.
Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate.
Step 7. Apply the assets test using MODULE F below to work out the reduction for assets.
Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 9. Work out the person’s ceiling rate in accordance with points SCH6‑A4 to SCH6‑A9.
Step 9A. Add:
(a) the ceiling rate; and
(b) any amount obtained under step 2;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the increased rate.
Step 10. Compare the income reduced rate (see Step 6), the assets reduced rate (see Step 8) and the increased rate (see step 9A): the person’s provisional payment rate is equal to:
(a) whichever is the lowest of those rates; or
(b) if 2 of those rates are the same and the third one is higher—the lower rate; or
(c) if the 3 rates are the same—the income reduced rate.
Step 11. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 12. Add any amount obtained in Step 11 to the person’s provisional payment rate (see Step 10): the result is the person’s rate of income support supplement.
Note 1: For ordinary/adjusted income see point SCH6‑E1.
Note 2: If a person’s assets reduced rate is less than the person’s adjusted income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 52Y and 52Z).
Note 4: If a person’s rate is reduced under Step 10, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.
Note 4A: Clause 30 of Schedule 5 may affect the provisional payment rate in step 10.
Note 5: The rate calculation for a member of a couple is affected by the operation of point SCH6‑A2.
Note 6. The amount of a fortnightly instalment of income support supplement will be rounded to the nearest cent (see subsection 58A(5)).
Note 7: For the minimum amount of a fortnightly instalment of income support supplement, see subsection 58A(9).
Note 8: The amount of a fortnightly instalment of income support supplement may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 6 (income support supplement, blind)
(7) The rate of income support supplement for a permanently blind person is worked out in accordance with Method statement 6.
Method statement 6
Step 1. Work out the person’s ceiling rate in accordance with points SCH6‑A4 and SCH6‑A5.
Step 1A. Work out the amount per year (if any) for rent assistance using MODULE C below.
Step 3. Work out the amount per year (if any) payable by way of remote area allowance using MODULE G below.
Step 4. Add:
(a) the ceiling rate; and
(b) any amount obtained under step 1A; and
(c) any amount obtained under step 3;
and, if an election by the person under subsection 60A(1) (about quarterly pension supplement) is in force, subtract the person’s minimum pension supplement amount. The result is the person’s rate of income support supplement.
Note: The amount of a fortnightly instalment of income support supplement may be reduced by an advance payment deduction (see Division 6 of Part IVA).
Method statement 7 (veteran payment, not blind)
(8) The rate of veteran payment for a person who is not permanently blind is worked out in accordance with method statement 7.
Method statement 7
Step 1. Work out the person’s maximum basic rate using Module B below.
Step 2. Work out the amount of pension supplement using Module BA below.
Step 3. Work out the amount per year (if any) by way of rent assistance using Module C below.
Step 4. Add up the amounts obtained in steps 1, 2, and 3: the result is called the maximum payment rate.
Step 5. Apply the ordinary/adjusted income test using Module E below to work out the reduction for ordinary/adjusted income.
Step 6. Take the reduction for ordinary/adjusted income away from the maximum payment rate: the result is called the income reduced rate.
Step 7. Apply the assets test using Module F below to work out the reduction for assets.
Step 8. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 9. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional payment rate.
Step 10. Work out the amount per year (if any) payable by way of remote area allowance using Module G below.
Step 11. Add any amount obtained in step 10 to the person’s provisional payment rate (see step 9). The result is the person’s rate of veteran payment.
Note 1: For ordinary/adjusted income see point SCH6‑E1.
Note 2: If a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 52Y and 52Z).
Note 3: If a person’s rate is reduced because of Module E or F, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by clause 4 of Part 1.
Note 4: The rate calculation for a member of a couple is affected by the operation of point SCH6‑A2.
Note 5: The rate of veteran payment for a day will be rounded to the nearest cent (see subsection 58A(5)).
Note 6: For the minimum amount of a fortnightly instalment of veteran payment, see subsection 58A(9).
Note 7: An amount of remote area allowance is to be added under step 11 only if the person’s rate of veteran payment is greater than nil.
Method statement 8 (veteran payment, blind)
(9) The rate of veteran payment for a person who is permanently blind is worked out in accordance with method statement 8.
Method statement 8
Step 1. Work out what would be the person’s rate of veteran payment if method statement 7 applied to the person: the result is called the notional income/assets tested rate.
Note: This is the only situation in which a blind person’s veteran payment can be made subject to an income test or assets test (see point SCH6‑A3).
Step 2. Work out the person’s maximum basic rate using Module B below.
Step 3. Work out the amount of pension supplement using Module BA below.
Step 4. Add up the amounts obtained in steps 2 and 3: the result is called the maximum payment rate.
Step 5. Work out the amount per year (if any) payable by way of remote area allowance using Module G below.
Step 6. Add:
(a) the maximum payment rate; and
(b) any amount obtained under step 5.
The result is called the non‑income/assets tested rate.
Step 7. Compare the notional income/assets tested rate and the non‑income/assets tested rate: whichever is the greater is the person’s rate of veteran payment.
Note 1: The rate of veteran payment for a day will be rounded to the nearest cent (see subsection 58A(5)).
Note 2: For the minimum amount of a fortnightly instalment of veteran payment, see subsection 58A(9).
Members of couple
SCH6‑A2 If 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing those resources on a 50/50 basis (see points SCH6‑E3 and SCH6‑F2 below). They will also be treated as sharing expenses (eg for rent) on a 50/50 basis (see points SCH6‑C10 and SCH6‑C11 below).
Ordinary/adjusted income test and assets test generally not to apply to permanently blind people
SCH6‑A3 Except for the purposes of Step 1 in Method statement 2 (applicable in respect of permanently blind service pensioners who are not war widows/war widowers—pensioners) or in method statement 8 (applicable in respect of permanently blind veteran payment recipients), a permanently blind person’s service pension or veteran payment is not subject to an ordinary/adjusted income test (compare Module E) or an assets test (compare Module F).
Note: For war widow/war widower—pensioner see subsection 5Q(1).
Ceiling rate
SCH6‑A4 The ceiling rate for a war widow/war widower—pensioner is $3,247.40 unless point SCH6‑A5 applies to him or her.
Note 1: For war widow/war widower—pensioner see subsection 5Q(1).
Note 2: The ceiling rate is adjusted 6 monthly in line with service pensions (see section 59LA).
SCH6‑A5 If:
(a) a person became a war widow/war widower—pensioner before 1 November 1986; and
(b) immediately before that day the person was receiving a social security pension at a rate (the pre‑November 1986 rate) equal to or more than $3,122.60; and
(c) since that day the person has been continuously receiving the social security pension or income support supplement;
his or her ceiling rate is, subject to point SCH6‑A5A, equal to the pre‑November 1986 rate.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
SCH6‑A5A On and after 1 July 2000, the ceiling rate referred to in point SCH6‑A5 is taken to be equal to the pre‑November 1986 rate increased by 4%.
SCH6‑A6 However, if:
(a) a war widow/war widower—pensioner is a person:
(i) to whom income support supplement or service pension is payable; and
(ii) who is not permanently blind; and
(b) the person’s pension under Part II or IV is compensation reduced;
the ceiling rate for the war widow/war widower—pensioner is the sum of:
(c) the rate applying under point SCH6‑A4 or SCH6‑A5, as the case may be; and
(d) the amount of the reduction in the pension under Part II or IV worked out under points SCH6‑A7 to SCH6‑A9.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
Compensation reduced pension under Part II or IV
SCH6‑A7 A pension under Part II payable to a war widow/war widower—pensioner is compensation reduced if that pension has been reduced:
(a) by taking into account (under subsection 30(3)) the rate, or amount, of any payment that he or she is entitled to receive under the law of a State or of a foreign country; or
(b) by taking into account (under Division 5A of that Part) the rate at which any compensation is payable to him or her.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
SCH6‑A8 A pension under Part IV payable to a war widow/war widower—pensioner is compensation reduced if that pension has been reduced by taking into account (under Division 4 of that Part) the rate at which any compensation is payable to him or her.
Note: For war widow/war widower—pensioner see subsection 5Q(1).
SCH6‑A9 The amount of the reduction in the pension under Part II or IV is worked out by using the formula:
where:
full pension rate means the amount per annum that would have been the annual rate of the pension under Part II or IV if it had not been reduced.
compensation reduced rate means the annual rate of pension under Part II or IV payable after that pension has been reduced.
Module B—Maximum basic rate
Maximum basic rate for service pension or income support supplement
SCH6‑B1 A person’s maximum basic rate for service pension or income support supplement depends on the person’s family situation. Work out which family situation in Table B‑1 applies to the person. The maximum basic rate is the corresponding amount in column 3.
Table B‑1—Maximum basic rates for service pension or income support supplement |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate per year $ | Column 4 Rate per fortnight $ |
1. | Not a member of a couple | 9,006.40 | 346.40 |
| A member of an illness separated couple | | |
| A member of a respite care couple | | |
2. | Partnered | 7,511.40 | 288.90 |
Note 1: For member of a couple and partnered see section 5E, and for illness separated couple and respite care couple see subsections 5R(5) and (6).
Note 2: The maximum basic rates are adjusted 6 monthly: see sections 59B to 59G.
Maximum basic rate for veteran payment
SCH6‑B2 A person’s maximum basic rate for veteran payment depends on the person’s family situation. Work out which family situation in Table B‑2 applies to the person. The maximum basic rate is the corresponding amount in column 3.
Table B‑2—Maximum basic rates for veteran payment |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate per year $ | Column 4 Rate per fortnight $ |
1 | Not a member of a couple | 23,764 | 914 |
| A member of an illness separated couple | | |
| A member of a respite care couple | | |
2 | Partnered | 18,553.60 | 713.60 |
Note 1: For member of a couple and partnered see section 5E, and for illness separated couple and respite care couple see subsections 5R(5) and (6).
Note 2: The maximum basic rates are adjusted 6‑monthly in line with service pensions (see section 59LB).
Module BA—Pension supplement
Pension supplement
SCH6‑BA1 A pension supplement amount is to be added to the person’s maximum basic rate.
Residents in Australia etc.
SCH6‑BA2 If the person is residing in Australia and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks;
the person’s pension supplement amount is:
(c) if an election by the person under subsection 60A(1) is in force—the amount worked out under point SCH6‑BA4; and
(d) otherwise—the amount worked out under point SCH6‑BA3.
Note: Section 60A applies to a person receiving a service pension or income support supplement (but does not apply to a person receiving a veteran payment).
Residents in Australia etc.—no election in force
SCH6‑BA3 The person’s pension supplement amount is the amount worked out by:
(a) applying the applicable percentage in the following table to the combined couple rate of pension supplement; and
(b) if:
(i) the person is not partnered; and
(ii) the amount resulting from paragraph (a) is not a multiple of $2.60;
rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is not a multiple of $2.60 but is a multiple of $1.30).
Item | Person’s family situation | Use this % |
1 | Not member of couple | 66.33% |
2 | Partnered | 50% |
3 | Member of illness separated couple | 66.33% |
4 | Member of respite care couple | 66.33% |
Note: For combined couple rate of pension supplement, see subsection 5GA(1).
Residents in Australia etc.—election in force
SCH6‑BA4 The person’s pension supplement amount is the amount worked out as follows:
(a) work out the amount for the person under point SCH6‑BA3 as if the election were not in force;
(b) from that amount, subtract the person’s minimum pension supplement amount.
Persons absent from Australia for more than 6 weeks
SCH6‑BA5 If the person is not covered by point SCH6‑BA2, the person’s pension supplement amount is the person’s pension supplement basic amount.
Module BB—Energy supplement
When energy supplement is to be added
SCH6‑BB1 An energy supplement is to be added to the person’s maximum basic rate (of service pension) if the person is residing in Australia and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
Note: Section 65A may affect the addition of the energy supplement.
SCH6‑BB2 However, this Module does not apply if quarterly energy supplement for service pension is payable to the person.
Amount of energy supplement
SCH6‑BB3 The person’s energy supplement is the amount worked out using the following table:
Energy supplement |
Item | Person’s family situation | Amount of energy supplement |
1 | Not a member of a couple | $366.60 |
2 | Partnered | $275.60 |
3 | Member of an illness separated couple | $366.60 |
4 | Member of a respite care couple | $366.60 |
Note: For member of a couple, partnered, illness separated couple and respite care couple see subsections 5E(1) and (5) and 5R(5) and (6) respectively.
Module C—Rent assistance
Application
SCH6‑C1 Points SCH6‑C2 to SCH6‑C11 and point SCH6‑C15 apply to a person who is in receipt of a service pension, income support supplement or a veteran payment. Points SCH6‑C13 and SCH6‑C14 apply only to a person who is in receipt of a service pension or a veteran payment. Points SCH6‑C14B and SCH6‑C14C apply only to a person who is in receipt of an income support supplement.
Rent assistance
SCH6‑C2 Rent assistance is an amount that may be added to the maximum basic rate or ceiling rate to help cover the cost of rent. Subject to points SCH6‑C13 and SCH6‑C14 (which apply only to a person who is in receipt of a service pension or a veteran payment) and points SCH6‑C14B and SCH6‑C14C (which apply only to a person who is in receipt of an income support supplement), a person who is eligible for rent assistance under point SCH6‑C3 can have added to his or her maximum basic rate or ceiling rate the amount applying to that person under Table C‑2.
Eligibility for rent assistance
SCH6‑C3 Rent assistance is to be added to a person’s maximum basic rate or ceiling rate if:
(a) the person is not an aged care resident; and
(b) the person is not an ineligible property owner; and
(c) the person pays, or is liable to pay, rent (other than Government rent); and
(d) the rent is payable at a rate of more than the rent threshold rate; and
(e) either:
(i) the person is in Australia; or
(ii) the person is temporarily absent from Australia and the period in respect of which the rent assistance is sought is not a period after the first 26 weeks of the absence; and
(f) in a case where the person is entitled to be paid a family tax benefit—the person satisfies either point SCH6‑C3A or SCH6‑C3B.
Note 1: For aged care resident see subsection 5NC(5).
Note 2: For rent, Government rent and ineligible property owner see section 5N.
Note 3: For rent threshold rate see point SCH6‑C6.
Note 4: For illness separated couple and respite care couple see subsections 5R(5) and (6).
SCH6‑C3A A person satisfies this point if:
(a) the person is not a member of a couple, or is a member of an illness separated couple or a respite care couple, and is entitled to be paid a family tax benefit; and
(b) either:
(i) the person’s maximum Part A rate of family tax benefit does not include rent assistance; or
(ii) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit.
SCH6‑C3B A person satisfies this point if:
(a) the person is a member of a couple (other than an illness separated couple or a respite care couple) and the person, or the person’s partner, is entitled to be paid family tax benefit; and
(b) either:
(i) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance; or
(ii) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance and clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
No rent assistance if partner getting incentive allowance under the Social Security Act
SCH6‑C4 If a person is a member of a couple and the person’s partner is living with the person in their home, an additional amount is not to be added to the person’s maximum basic rate or ceiling rate under point SCH6‑C3 if an amount by way of incentive allowance is being added to the maximum basic rate or ceiling rate of the person’s partner.
Note: For incentive allowance see subsection 5Q(1); the provisions of the Social Security Act relating to incentive allowance were repealed with effect from 12 November 1991 but the allowance continues to be paid to certain existing recipients under clause 36 of Schedule 1A to that Act.
Partner with rent increased pension
SCH6‑C5 A person has a partner with a rent increased pension, for the purposes of this Module, if:
(a) the partner is living with the person in their home; and
(b) the partner is receiving a service pension, income support supplement, a veteran payment or a social security pension; and
(c) either of the following applies:
(i) the partner is receiving a service pension, income support supplement, a veteran payment or a social security pension the rate of which is increased to take account of rent paid or payable by the partner;
(ii) the partner is receiving a social security pension and is entitled to be paid family tax benefit at a rate higher than the base rate under clause 4 of Schedule 1 to the Family Assistance Act and which includes an amount to take account of rent paid or payable by the partner.
Note: For the treatment of rent paid by a member of a couple see points SCH6‑C10 and SCH6‑C11.
Rent threshold rate
SCH6‑C6 A person’s rent threshold rate depends on the person’s family situation. Work out which family situation in Table C‑1 applies to the person. The rent threshold rate is the corresponding amount in column 3.
Table C‑1—Rent threshold rates |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate per year $ | Column 4 Rate per fortnight $ |
1. | Not a member of a couple | 1,856.40 | 71.40 |
| A member of an illness separated couple | | |
| A member of a respite care couple | | |
| Partnered—partner without a rent increased pension | | |
2. | Partnered—partner with a rent increased pension | 1,510.60 | 58.10 |
Note 1: For member of a couple and partnered see section 5E.
Note 2: For partner with a rent increased pension see point C5.
Note 3: The column 3 amounts are indexed 6 monthly in line with CPI increases (see sections 59B to 59E).
Factors affecting rate of rent assistance
SCH6‑C7 The rate of rent assistance depends on:
(a) the annual rent paid or payable by the person; and
(b) whether or not the person has a partner with a rent increased pension; and
(c) whether or not the person, or the person’s partner, receives one or more of the following payments:
(i) disability pension;
(ii) permanent impairment compensation;
(iii) adjusted disability pension.
Note 1: For disability pension see section 5Q.
Note 2: For adjusted disability pension and permanent impairment compensation see point SCH6‑C16.
Rate of rent assistance
SCH6‑C8(1) The rate of rent assistance is whichever is the lesser of rate A and rate B applicable to the person in accordance with Table C‑2.
Table C‑2—Rate of rent assistance |
Column 1 Item | Column 2 Person’s family
situation | Column 3 Rate A $ | Column 4 Rate B $ |
1. | Not a member of a couple | 
| 1,939.60 |
| A member of an illness separated couple | | |
| A member of a respite care couple | | |
| Partnered—partner without a rent increased pension | | |
2. | Partnered—partner with a rent increased pension | 
| 915.20 |
Note 1: For member of a couple and partnered see section 5E.
Note 2: For partner with a rent increased pension see point C5.
Note 3: The column 4 amounts are indexed 6 monthly in line with CPI increases (see sections 59B to 59E).
(2) In Table C‑2:
AR means annual rent as provided by points SCH6‑C9 to SCH6‑C11.
RTR means the rent threshold rate applicable under column 3 of Table C‑1 in point SCH6‑C6.
Annual rent
SCH6‑C9 Annual rent is the annual rent paid or payable by the person whose service pension rate, income support supplement rate or veteran payment rate is being calculated.
Rent paid by a member of a couple
SCH6‑C10 If a person is a member of a couple and the person’s partner is living with the person in their home, any rent that the person’s partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person.
Note: For member of a couple see section 5E.
Rent paid by a member of an illness separated or respite care couple
SCH6‑C11 If a person is a member of an illness separated couple or a respite care couple, any rent that the person’s partner pays or is liable to pay in respect of the premises occupied by the person is to be treated as paid or payable by the person.
Note: For illness separated couple and respite care couple see subsections 5R(5) and (6).
Application
SCH6‑C12 Points SCH6‑C13 and SCH6‑C14 apply only to a person who is in receipt of a service pension or a veteran payment. If such a person or the partner of such a person receives either or both a disability pension and permanent impairment compensation, the amount of rent assistance worked out under Table C‑2 may be reduced under point SCH6‑C13.
Note 1: For disability pension see section 5Q.
Note 2: For permanent impairment compensation see point SCH6‑C16.
Effect of disability pension and permanent impairment compensation on rate of rent assistance
SCH6‑C13 This is how to work out the effect of a person’s disability pension and permanent impairment compensation on the person’s rate of rent assistance:
Method statement
Step 1. Work out the annual rate of the person’s disability pension and permanent impairment compensation: the result is the person’s disability income.
Note 1: For disability pension see section 5Q.
Note 1A: For permanent impairment compensation see point SCH6‑C16.
Note 2: For the treatment of the amount of disability pension and permanent impairment compensation of members of a couple see point SCH6‑C14.
Step 2. Work out the person’s rent assistance free area (see point SCH6‑C15 below).
Step 3. Work out whether the person’s disability income exceeds the person’s rent assistance free area.
Step 4. If the person’s disability income does not exceed the person’s rent assistance free area, the person’s rate of rent assistance worked out under Table C‑2 is not affected.
Step 5. If the person’s disability income exceeds the person’s rent assistance free area, take the person’s rent assistance free area away from the person’s disability income: the result is the person’s disability income excess.
Step 6. Multiply the person’s disability income excess by 0.5: the result is the rent assistance reduction amount.
Step 7. Take the person’s rent assistance reduction amount away from the rate of rent assistance worked out under Table C‑2: the result is the person’s rate of rent assistance.
Disability income
SCH6‑C14 If a person is a member of a couple, the person’s disability income for the purposes of this Module is worked out as follows:
(a) if each member of the couple receives either or both a disability pension and permanent impairment compensation—by adding the couple’s annual rates of disability pension and permanent impairment compensation and dividing the result by 2;
(b) if only one member of the couple receives either or both a disability pension and permanent impairment compensation:
(i) where the member receives both a disability pension and permanent impairment compensation—by adding the member’s annual rates of disability pension and permanent impairment compensation and dividing the result by 2; or
(ii) where subparagraph (i) does not apply—by dividing the member’s annual rate of disability pension or permanent impairment compensation by 2.
Note 1: For disability pension see section 5Q.
Note 2: For permanent impairment compensation see point SCH6‑C16.
Application
SCH6‑C14A Points SCH6‑C14B and SCH6‑C14C apply only to a person who is in receipt of an income support supplement. If such a person, or the partner of such a person, receives adjusted disability pension, the amount of rent assistance worked out under Table C‑2 may be reduced under point SCH6‑C14B.
Note: For adjusted disability pension see point SCH6‑C16.
Effect of adjusted disability pension on rate of rent assistance
SCH6‑C14B This is how to work out the effect of a person’s adjusted disability pension on the person’s rate of rent assistance:
Method statement
Step 1. Work out the annual rate of the person’s adjusted disability pension: the result is the person’s disability income.
Note 1: For adjusted disability pension see point SCH6‑C16.
Note 2: For the treatment of the amount of adjusted disability pension of members of a couple see point SCH6‑C14C.
Step 2. Work out the person’s rent assistance free area (see point SCH6‑C15 below).
Step 3. Work out whether the person’s disability income exceeds the person’s rent assistance free area.
Step 4. If the person’s disability income does not exceed the person’s rent assistance free area, the person’s rate of rent assistance worked out under Table C‑2 is not affected.
Step 5. If the person’s disability income exceeds the person’s rent assistance free area, take the person’s rent assistance free area away from the person’s disability income: the result is the person’s disability income excess.
Step 6. Multiply the person’s disability income excess by 0.5: the result is the rent assistance reduction amount.
Step 7. Take the person’s rent assistance reduction amount away from the rate of rent assistance worked out under Table C‑2: the result is the person’s rate of rent assistance.
Disability income
SCH6‑C14C If a person is a member of a couple, the person’s disability income for the purposes of SCH6‑C14B is worked out as follows:
(a) if each member of the couple receives adjusted disability pension—by adding the couple’s annual rates of adjusted disability pension and dividing the result by 2;
(b) if only one member of the couple receives adjusted disability pension—by dividing the member’s annual rate of adjusted disability pension by 2.
Note: For adjusted disability pension see point SCH6‑C16.
How to calculate a person’s rent free area
SCH6‑C15 A person’s rent assistance free area is worked out using Table C‑3. Work out which family situation in Table C‑3 applies to the person.
Table C‑3—Rent assistance free area |
Column 1 Item | Column 2 Category of person | Column 3 Free area per year $ | Column 4 Free area per fortnight $ |
1. | Not a member of a couple | 2,548 | 98 |
2. | Partnered | 2,236 | 86 |
Note 1: For member of a couple and partnered see section 5E.
Note 2: Item 2 of Table C‑3 applies to members of illness separated and respite care couples.
Note 3: The free areas are adjusted annually (see section 59GA).
Rent assistance examples
Note: The following examples are based on the amounts and rates set out in this Module at the commencement of this Schedule (see clause 5 of Part 1 of this Schedule).
Example 1:
Facts: Ross is a single service pensioner without children. Ross does not receive any disability pension and pays $120 per week rent.
Result: Item 1 in Table C‑2 applies to Ross.
Rate A for Ross is $3,287.70 calculated as follows:
Rate B for Ross is $1,939.60.
As the maximum rate of rent assistance is the lesser of Rates A and B, Ross’s rate of rent assistance is 1,939.60 per year. Ross will receive $74.60 per fortnight.
Example 2:
Facts: Ted and Pam are members of a pensioner couple without children. They rent a house for $160 per week. Ted receives 100% disability pension ($6,255.60 per year). Pam receives the wife’s component of disability pension ($210.60 per year).
Result: Item 2 in Table C‑2 applies to Ted and Pam.
Rate A for Ted is $2,553.50 calculated as follows:
Rate B for Ted is $915.20.
As the lesser rate is $915.20, this is the maximum rent assistance that Ted can receive. However, as both Ted and Pam receive disability pension, the Rent Assistance Income Test in point SCH6‑C13 applies.
Ted’s disability pension income is:
Item 2 of Table C‑3 applies. Ted’s disability pension income excess is the disability pension income less the rent assistance free area:
The reduction in rent assistance is:
The rent assistance Ted will receive per year is Rate B less amount of rent reduction:
Ted will receive $16.03 per fortnight.
The same calculation applies to Pam’s rate of rent assistance.
SCH6‑C16 In this Module:
adjusted disability pension has the same meaning as in section 118NA.
permanent impairment compensation means:
(a) any payment of a weekly amount under section 68, 71 or 75 of the MRCA (permanent impairment); and
(b) if the person was paid a lump sum under section 68, 71 or 75 of the MRCA (permanent impairment)—any weekly amounts that the person would have been paid if the person had not chosen the lump sum.
Module E—Ordinary/adjusted income test
Definition
SCH6‑E1 In this Module:
ordinary/adjusted income means:
(a) for the purpose of the calculation of the rate of service pension or veteran payment—ordinary income; or
(b) for the purpose of the calculation of the rate of income support supplement—adjusted income.
Note: For ordinary income and adjusted income see section 5H.
Effect of income on maximum payment rate
SCH6‑E2 This is how to work out the effect of a person’s ordinary/adjusted income on the person’s maximum payment rate:
Method statement
Step 1. Work out the annual rate of the person’s ordinary/adjusted income.
Note: For the treatment of the ordinary/adjusted income of members of a couple see point SCH6‑E3.
Step 2. Work out the person’s ordinary/adjusted income free area (see point SCH6‑E6 below).
Note: A person’s ordinary/adjusted income free area is the maximum amount of ordinary/adjusted income the person can have without affecting the person’s rate of service pension, income support supplement or veteran payment.
Step 3. Work out whether the person’s ordinary/adjusted income exceeds the person’s ordinary/adjusted income free area.
Step 4. If the person’s ordinary/adjusted income does not exceed the person’s ordinary/adjusted income free area, the person’s ordinary/adjusted income excess is nil.
Step 5. If the person’s ordinary/adjusted income exceeds the person’s ordinary/adjusted income free area, the person’s ordinary/adjusted income excess is the person’s ordinary/adjusted income less the person’s ordinary/adjusted income free area.
Step 6. Use the person’s ordinary/adjusted income excess to work out the person’s reduction for ordinary/adjusted income using point SCH6‑E11 below.
Note 1: See the Method statements in point SCH6‑A1 for the significance of the person’s reduction for ordinary/adjusted income.
Note 2: The application of the ordinary/adjusted income test is affected by provisions about the following:
(a) the general concept of ordinary income (sections 46 and 46A);
(aa) the work bonus (section 46AA);
(b) business income (sections 46B and 46C);
(c) income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 3 of Part IIIB);
(d) income from income streams not covered by Division 3 of Part IIIB (Division 4 of Part IIIB);
(e) disposal of income (sections 48‑48E).
Ordinary/adjusted incomes of members of couples
SCH6‑E3 If a person is a member of a couple, add the annual rates of the couple’s ordinary/adjusted incomes and divide by 2 to work out the amount of the person’s ordinary/adjusted income for the purposes of this Module. However, in making this calculation disregard any amount that is taken (whether for the purposes of this Act or of the Social Security Act) to be ordinary income of either partner because of section 59TA of this Act or section 1174 of the Social Security Act.
Additional ordinary income because of excess compensation payments
SCH6‑E3A Add to the amount derived for a person under point SCH6‑E3 any amount that is taken (whether for the purposes of this Act or of the Social Security Act) to be ordinary income of the person because of section 59TA of this Act or section 1174 of the Social Security Act.
Payment of arrears of periodic compensation payments
SCH6‑E4 If:
(a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected pension; and
(b) in relation to the entitlement, the person receives a payment (an arrears payment) of arrears of periodic compensation;
the person is taken to receive on each day in the periodic payments period an amount calculated by dividing the amount of the arrears payment by the number of days in the periodic payments period.
Note: For event that gives rise to an entitlement to compensation, compensation affected pension and periodic payments period see section 5NB.
Ordinary/adjusted income free area
SCH6‑E5 A person’s ordinary/adjusted income free area is the amount of ordinary/adjusted income the person can have without any deduction being made from the person’s maximum payment rate.
How to calculate a person’s ordinary/adjusted income free area
SCH6‑E6 A person’s ordinary/adjusted income free area is worked out using Table E‑1. Work out which family situation in Table E‑1 applies to the person. The ordinary/adjusted income free area is the corresponding amount in column 3.
Table E‑1—Ordinary/adjusted income free area |
Column 1 Item | Column 2 Category of person | Column 3 Basic income free area per year $ | Column 4 Basic income free area per fortnight $ |
1. | Not member of a couple | 2,548 | 98 |
2. | Partnered (partner getting neither pension nor benefit) Partnered (partner getting benefit) | 2,236 | 86 |
3. | Partnered (partner getting pension) | 2,236 | 86 |
Note 1: For member of a couple, partnered (partner getting neither pension nor benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 5E.
Note 3: Items 2 and 3 of Table E‑1 apply to members of illness separated and respite care couples.
Note 4: The basic free area is indexed annually in line with CPI increases (see sections 59B to 59E).
Reduction for ordinary/adjusted income in excess of ordinary/adjusted income free area
SCH6‑E11 (1) A person’s reduction for ordinary/adjusted income is:
(2) In this point:
ordinary/adjusted income excess, in relation to a person, means the person’s ordinary/adjusted income less the person’s ordinary/adjusted income free area.
Module F—Assets test
Effect of assets on maximum payment rate
SCH6‑F1 This is how to work out the effect of a person’s assets on the person’s maximum payment rate:
Method statement
Step 1. Work out the value of the person’s assets.
Note 1: For the treatment of the assets of members of a couple see point SCH6‑F2.
Note 2: For the assets that are to be disregarded in valuing a person’s assets see section 52.
Note 3: For the valuation of an asset that is subject to a charge or encumbrance see sections 52C and 52CA.
Step 2. Work out the person’s assets value limit (see point SCH6‑F3 below).
Note: A person’s assets value limit is the maximum value of assets the person can have without affecting the person’s rate of service pension, income support supplement or veteran payment.
Step 3. Work out whether the value of the person’s assets exceeds the person’s assets value limit.
Step 4. If the value of the person’s assets does not exceed the person’s assets value limit, the person’s assets excess is nil.
Step 5. If the value of the person’s assets exceeds the person’s assets value limit, the person’s assets excess is the value of the person’s assets less the person’s assets value limit.
Step 6. Use the person’s assets excess to work out the person’s reduction for assets using point SCH6‑F4 below.
Note 1: See the Method statements in point SCH6‑A1 for the significance of the person’s reduction for assets.
Note 2: The application of the assets test is affected by provisions about the following:
(a) disposal of assets (sections 52E – 52JE);
(b) special residences (sections 52KA – 52X);
(c) financial hardship (sections 52Y and 52Z);
(d) the pensions loans scheme (sections 52ZAAA – 52ZM.
Value of assets of members of couples
SCH6‑F2 For the purposes of this Module:
(a) the value of the assets of a member of a couple is taken to be 50% of the sum of:
(i) the value of the person’s assets; and
(ii) the value of the person’s partner’s assets; and
(b) the value of the assets of a particular kind of a member of a couple is taken to be 50% of the sum of:
(i) the value of the person’s assets of that kind; and
(ii) the value of the person’s partner’s assets of that kind.
Assets value limit
SCH6‑F3 A person’s assets value limit is worked out using Table F‑1. Work out the person’s family situation and property ownership situation. The assets value limit is the corresponding amount in column 3.
Table F‑1—Assets value limit |
Column 1 | Column 2 | Column 3
Assets value limit |
Item | Person’s family
situation | Column 3A Either person or partner property owner $ | Column 3B Neither person nor partner property owner $ |
1. | Not member of a couple | 250,000 | 450,000 |
2. | Partnered | 187,500 | 287,500 |
Note 1: For member of a couple and partnered see section 5E.
Note 2: For property owner see section 5L.
Note 3: Item 2 applies to members of illness separated and respite care couples.
Note 4: The assets value limit in column 3B of item 1 is adjusted annually under section 59H. The other assets value limits are indexed annually in line with CPI increases (see sections 59B to 59E).
Reduction for assets in excess of assets value limit
SCH6‑F4(1) A person’s reduction for assets is worked out by using the formula:
where:
assets excess means the value of the person’s assets less the person’s assets value limit.
(2) In calculating a person’s assets excess under subpoint (1), disregard any part of the excess that is not a multiple of $250.
Module G—Remote area allowance
Remote area allowance
SCH6‑G1 An amount by way of remote area allowance is to be included in a person’s rate of service pension, income support supplement or veteran payment if:
(a) one of the following subparagraphs applies:
(i) the person’s rate of service pension, income support supplement or veteran payment apart from this point is greater than nil; or
(ii) in the case of service pension or income support supplement—the person’s rate of service pension or income support supplement apart from this point is nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of the Social Security Act; or
(iii) in the case of service pension or income support supplement—the person’s rate of service pension or income support supplement apart from this point is nil merely because of the operation of Part IVA; and
(b) the person’s usual place of residence is situated in the remote area; and
(c) the person is physically present in the remote area.
Note: For remote area and physically present in the remote area see section 5Q.
Rate of remote area allowance
SCH6‑G2 The rate of remote area allowance payable to a person is worked out using Table G. Work out which family situation in the table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each FTB child, and each regular care child, of the person.
Table G—Remote area allowance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Basic allowance per year
$
| Column 4 Basic allowance per fortnight $ | Column 5 Additional allowance per year
$
| Column 6 Additional allowance per fortnight $ |
1. | Not member of a couple | 473.20 | 18.20 | 189.80 | 7.30 |
| A member of an illness separated couple | | | | |
| A member of a respite care couple | | | | |
| Partnered—partner not receiving remote area allowance | | | | |
2. | Partnered (partner receiving remote area allowance) | 405.60 | 15.60 | 189.80 | 7.30 |
Note 1: For FTB child and regular care child see subsection 5F(1).
Note 2: For member of a couple and partnered see section 5E.
Note 3: For illness separated couple and respite care couple see subsections 5R(5) and (5A).
Eligibility of FTB children and regular care children who are outside Australia
SCH6‑G3(1) If an FTB child, or a regular care child, leaves Australia otherwise than temporarily, additional allowance is not payable for the child on or after the day on which he or she left Australia.
(2) If an FTB child, or a regular care child, is temporarily absent from Australia for more than 8 weeks, additional allowance is not payable for the child after the first 8 weeks of the absence.
Special rule where partner has an FTB or regular care child but is not receiving a pension, benefit or allowance
SCH6‑G4 If:
(a) a person who is a member of a couple is qualified for an amount by way of remote area allowance; and
(b) the person’s partner is not receiving a service pension, income support supplement, a veteran payment, a social security pension, or a social security benefit; and
(c) the person’s partner has an FTB child or a regular care child;
the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.
Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child
SCH6‑G5 If:
(a) a person who is a member of a couple is qualified for an amount by way of remote area allowance; and
(b) the person’s partner has an FTB child or a regular care child; and
(c) the person’s partner is not receiving additional allowance for the child;
the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.
Special rule dealing with the death of an FTB or regular care child
SCH6‑G6 If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.
Note: This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.
