Part 3.12A—Provisions for Seniors Health Card taxable income test
Division 1—Purpose of this Part
1157A(1) Division 2 of this Part describes the kind of benefits that can be assessable fringe benefits. Division 3 to 7 tell you how to work out the value of the assessable fringe benefits received by a person in a tax year. Division 8 deals with foreign currency conversions.
These provisions are necessary for the purposes of the Seniors Health Card Taxable Income Test Calculator.
Note 1: For assessable fringe benefit see section 10A.
Note 2: A fringe benefit is one that is provided by an employer to an employee in respect of the employee’s employment (see section 10A).
1157A(2) Section 10A contains many of the definitions that are relevant to the provisions of this Part.
Division 2—Benefits that may be assessable fringe benefits
1157B Benefits received in or outside Australia
This Part applies to a fringe benefit whether the benefit is received in or outside Australia.
1157C(1) A person (the employee) receives a car benefit if:
(a) a car held by another person (the provider):
(i) is applied to a private use by the employee or an associate of the employee; or
(ii) is taken under subsection (2), (3) or (4) to be available for the private use of the employee or an associate of the employee; and
(b) either:
(i) the provider is the employer, or an associate of the employer, of the employee; or
(ii) the car is applied or available in that way under an arrangement between:
(A) the provider or another person; and
(B) the employer or an associate of the employer.
1157C(2) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if:
(a) the car is held by a person who is:
(i) the employer; or
(ii) an associate of the employer; or
(iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and
(b) the car is garaged or kept at or near a place of residence of the employee or of an associate of the employee.
1157C(3) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if:
(a) the car is held by a person who is:
(i) the employer; or
(ii) an associate of the employer; or
(iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and
(b) the car is not at business premises of:
(i) the employer; or
(ii) an associate of the employer; or
(iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and
(c) either:
(i) the employee is entitled to apply the car to a private use at that time; or
(ii) the employee is not performing the duties of his or her employment at that time and has custody or control of the car; or
(iii) an associate of the employee is entitled to use the car at that time; or
(iv) an associate of the employee has custody or control of the car at that time.
1157C(4) For the purposes of subsection (3), if a prohibition on the use of a car, or on the application of a car for a private use, by a person is not consistently enforced, the person is taken to be entitled to use the car, or to apply the car to a private use, despite the prohibition.
1157C(5) For the purposes of this section, a car that is let on hire to a person under a hire‑purchase agreement is taken:
(a) to have been purchased by the person at the time when the person first took the car on hire; and
(b) to have been owned by the person at all material times.
1157C(6) A reference in this Part to a car held by a person (the provider) does not include a reference to:
(a) a taxi let on hire to the provider; or
(b) a car let on hire to the provider under an agreement of a kind that is ordinarily entered into by persons taking cars on hire intermittently as occasion requires on an hourly, daily, weekly or other short‑term basis.
1157C(7) Paragraph (6)(b) does not apply if the car has been or may reasonably be expected to be on hire under successive agreements of a kind that result in substantial continuity of the hiring of the car.
1157D(1) Except in so far as section 1157C provides that the application or availability of a car held by a person is a car benefit, the application or availability of a car held by a person is exempt.
1157D(2) A car benefit provided in respect of the employment of the employee is exempt if:
(a) the car is:
(i) a taxi, panel van or utility truck; or
(ii) any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passengers); and
(b) the only private use of the car at a time when the benefit was provided was:
(i) work‑related travel of the employee; and
(ii) other minor, infrequent and irregular private use by the employee or an associate of the employee.
1157D(3) A car benefit provided in respect of the employment of the employee is exempt if the car was unregistered at all times when the car was held by the person who provided the car.
Payment to recipient
1157E(1) If:
(a) a person (the provider) pays an amount to another person (the recipient); and
(b) the amount is for fees for:
(i) tuition at primary or secondary level provided by a school; or
(ii) books or equipment provided by the school in relation to that tuition; and
(c) the tuition, books or equipment is provided to:
(i) a dependent child of the recipient or the recipient’s partner; or
(ii) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a newstart allowance, a sickness allowance or a youth allowance;
the payment constitutes a school fees benefit provided by the provider to the recipient.
Note: For school see section 10A.
Payment to or on behalf of the school
1157E(2) If:
(a) a person (the provider) pays an amount to or on behalf of a school; and
(b) the amount is for fees for:
(i) tuition at primary or secondary level provided by the school; or
(ii) books or equipment provided by the school in relation to that tuition; and
(c) the tuition, books or equipment is provided to:
(i) a dependent child of a person (the recipient) or the recipient’s partner; or
(ii) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a newstart allowance or a sickness allowance;
the payment constitutes a school fees benefit provided by the provider to the recipient.
Note: For school see section 10A.
Boarding fees
1157E(3) For the purposes of subsections (1) and (2), if:
(a) a school is providing tuition at primary or secondary level to a dependent child of a person; and
(b) the child is boarding at the school;
the fees that are payable for the child to board at the school are taken to be fees for the tuition provided by the school to the child.
1157F Health insurance benefits
Payment to recipient
1157F(1) If:
(a) a person (the provider) pays an amount to another person (the recipient); and
(b) the amount is for the cost of health insurance; and
(c) the health insurance covers:
(i) the recipient; or
(ii) the recipient’s partner; or
(iii) a dependent child of the recipient or the recipient’s partner; or
(iv) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a newstart allowance, a sickness allowance or a youth allowance;
the payment constitutes a health insurance benefit provided by the provider to the recipient.
Payment to the health insurance fund
1157F(2) If:
(a) a person (the provider) pays an amount to a health insurance fund; and
(b) the amount is for the cost of health insurance; and
(c) the health insurance covers:
(i) a person (the recipient); or
(ii) the recipient’s partner; or
(iii) a dependent child of the recipient or the recipient’s partner; or
(iv) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a newstart allowance or a sickness allowance;
the payment constitutes a health insurance benefit provided by the provider to the recipient.
1157G(1) Subject to subsection (1A), if a person (the provider) makes a loan to another person (the recipient), the making of the loan constitutes a loan benefit provided by the provider to the recipient.
1157G(1A) The making of the loan does not constitute a loan benefit provided by the provider to the recipient if:
(a) the provider is the Defence Force, or a body one of the objects or functions of which is making loans to employees of the Defence Force; and
(b) the recipient is an employee of the Defence Force.
Late payment of debt
1157G(2) For the purposes of this section, if:
(a) a person (the debtor) is under an obligation to pay or repay an amount (the principal amount) to another person (the creditor); and
(b) the principal amount is not the whole or a part of the amount of a loan; and
(c) after the due date for payment or repayment of the principal amount, the whole or part of the principal amount remains unpaid;
the following provisions have effect:
(d) the creditor is taken, immediately after the due date, to have made a loan (the deemed loan) of the principal amount to the debtor;
(e) at any time when the debtor is under an obligation to repay any part of the principal amount, the debtor is taken to be under an obligation to repay that part of the deemed loan;
(f) the deemed loan is taken to have been made:
(i) if interest accrues on so much of the principal amount as remains from time to time unpaid—at the rate of interest at which that interest accrues; or
(ii) in any other case—at a nil rate of interest.
1157G(3) Subject to subsection (4), a loan is a deferred interest loan if interest is payable on the loan at a rate that exceeds nil.
1157G(4) A loan is not a deferred interest loan if:
(a) the whole of the interest is due for payment within 6 months after the loan is made; or
(b) all of the following conditions are satisfied:
(i) interest on the loan is payable by instalments;
(ii) the intervals between instalments do not exceed 6 months;
(iii) the first instalment is due for payment within 6 months after the loan is made.
1157G(5) For the purposes of this section, if a person (the provider) makes a deferred interest loan (the principal loan) to another person (the recipient), the following provisions apply:
(a) the provider is taken, at the end of:
(i) the period of 6 months starting on the day on which the principal loan was made; and
(ii) each subsequent period of 6 months;
to have made a loan (the deemed loan) to the recipient;
(b) the amount of the loan is taken to be equal to the amount by which the interest (the accrued interest) that has accrued on the principal loan in respect of the period exceeds the amount (if any) paid in respect of the accrued interest before the end of the period;
(c) if any part of the accrued interest becomes payable or is paid after the time when the deemed loan is taken to have been made, the deemed loan is to be reduced accordingly;
(d) the deemed loan is taken to have been made at a nil rate of interest.
1157G(6) Paragraph (5)(a) only applies to a period of 6 months if the recipient is under an obligation during the whole of the period to repay the whole or a part of the principal loan.
1157G(7) For the purposes of this Part, if no interest is payable in respect of a loan, a nil rate of interest is taken to be payable in respect of the loan.
1157H(3) The making of a loan is exempt if:
(a) the loan consists of an advance by the employer to the employee; and
(b) the loan is made for the sole purpose of enabling the employee to meet expenses incurred in performing the duties of his or her employment; and
(c) the amount of the loan is not substantially greater than the amount of those expenses that could reasonably be expected to be incurred by the employee; and
(d) the employee is required:
(i) to account to the employer for expenses met from the loan; and
(ii) to repay (whether by set‑off or otherwise) any amount not so accounted for.
1157H(4) The making of a loan is exempt if:
(a) the loan consists of an advance by the employer to the employee; and
(b) the sole purpose of the making of the loan is to enable the employee to pay any of the following amounts payable by the employee in respect of accommodation:
(i) a rental bond;
(ii) a security deposit in respect of electricity, gas or telephone services;
(iii) any similar amount; and
(c) the employee is required to repay (whether by set‑off or otherwise) the loan amount of the advance.
1157I(1) The subsistence of a housing right granted by a person (the provider) to another person (the recipient) constitutes a housing benefit provided by the provider to the recipient.
1157I(2) The payment of money or other valuable consideration by an employer directly or indirectly to an employee (other than an employee of the Defence Force) to enable or assist the employee to meet costs associated with a loan to which subsection (4) applies constitutes a housing benefit provided by the employer to the employee.
Note: For employee and employer see section 10A.
1157I(3) The payment of money or other valuable consideration by an employer directly or indirectly to an employee of the Defence Force to meet costs associated with a loan to which subsection (4) applies does not constitute a housing benefit provided by the employer to the employee.
1157I(4) This subsection applies to a loan made to, or used by, a person (whether in his or her own right or jointly with his or her partner) wholly:
(a) to enable the person to acquire a prescribed interest in land on which a dwelling or a building containing a dwelling was subsequently to be constructed; or
(b) to enable the person to acquire a prescribed interest in land and construct, or complete the construction of, a dwelling or a building containing a dwelling on the land; or
(c) to enable the person to construct, or complete the construction of, a dwelling or a building containing a dwelling on land in which the person held a prescribed interest; or
(d) to enable the person to acquire a prescribed interest in land on which there was a dwelling or a building containing a dwelling; or
(e) to enable the person to acquire a prescribed interest in a stratum unit in relation to a dwelling; or
(f) to enable the person to extend a building that:
(i) is a dwelling or contains a dwelling; and
(ii) is constructed on land in which the person held a prescribed interest;
by adding a room or part of a room to the building or part of the building containing the dwelling, as the case may be; or
(g) if the person held a prescribed interest in a stratum unit in relation to a dwelling—to enable the person to extend the dwelling by adding a room or part of a room to the dwelling; or
(h) to enable the person to repay a loan that was made to, and used by, the person wholly for a purpose mentioned in paragraph (a) to (g).
Note 1: For dwelling see subsection 10A(7).
Note 2: For prescribed interest see subsections 10A(10) to (14).
Note 3: For stratum units see subsection 10A(8).
1157I(5) The payment of money or other valuable consideration by an employer directly or indirectly to an employee to enable or assist the employee to meet costs associated with enjoying a housing right constitutes a housing benefit provided by the employer to the employee.
Note: For employee, employer and housing right see section 10A.
1157I(6) For the avoidance of doubt, subsection (5) does not apply to payments to which subsection (2) or (3) applies.
1157J Exempt housing benefits—live‑in residential care workers
1157J(1) If, during a period:
(a) the employer of an employee is:
(i) a government body; or
(ii) a religious institution; or
(iii) a non‑profit company;
whose activities consist of, or include, caring for mature persons or disadvantaged persons; and
(b) the duties of the employee’s employment consist of, or consist principally of, caring for mature or disadvantaged persons; and
(c) in the performance of those duties, the employee lives, together with mature persons or disadvantaged persons, in residential premises of the employer; and
(d) the fact that the employee lives in those premises is directly related to the provision, in the course of the performance of the duties of the employee’s employment, of care to the mature persons or disadvantaged persons living in those premises;
any benefit arising from the provision, during that period, of that accommodation to the employee or to the employee and a partner or dependent child of the employee who resides in those premises with the employee is exempt.
1157J(2) In this section:
residential premises means a house or hostel used exclusively for the provision of residential accommodation to:
(a) mature persons or disadvantaged persons and dependent children of mature persons or disadvantaged persons; and
(b) persons the duties of whose employment consist of, or consist principally of, caring for persons referred to in paragraph (a); and
(c) partners and children of persons referred to in paragraph (b).
1157JA(1) A person (the employee) receives an expense benefit if an amount is paid to, or on behalf of, the employee or a person connected with the employee by:
(a) an employer of the employee; or
(b) an associate of the employer; or
(c) a person (the arranger), other than the employer or an associate of the employer, under an arrangement between:
(i) the employer or an associate of the employer; and
(ii) the arranger or another person;
and is so paid in connection with an expense or expenses of a private nature that have been, or will or may be, incurred by the employee or person connected with the employee.
1157JA(2) The following are persons connected with the employee:
(a) a partner of the employee;
(b) a dependent child of the employee or of the employee’s partner;
(c) a person who would be a dependent child of the employee or of the employee’s partner if the person was not receiving a newstart allowance or a sickness allowance.
An amount paid as mentioned in subsection 1157JA(1) is exempt if:
(a) the amount is paid to reimburse expenses incurred in connection with the employee’s employment; or
(b) the employee requires the amount to be applied in paying expenses related to the employee’s employment.
1157JC Financial investment benefit
1157JC(1) A person (the employee) receives a financial investment benefit if:
(a) an employer of the employee; or
(b) an associate of the employer; or
(c) a person (the arranger), other than the employer or an associate of the employer, under an arrangement between:
(i) the employer or an associate of the employer; or
(ii) the arranger or another person;
pays for, or reimburses the cost of, the acquisition of a financial investment by the employee or a person connected with the employee.
1157JC(2) The making by a person, for the benefit of another person, of contributions to a superannuation fund or an ATO small superannuation account does not constitute payment for the acquisition of a financial investment by the other person.
1157JC(3) The following are persons connected with the employee:
(a) a partner of the employee;
(b) a dependent child of the employee or of the employee’s partner;
(c) a person who would be a dependent child of the employee or of the employee’s partner if the person was not receiving a newstart allowance or a sickness allowance.
Division 3—Value of car fringe benefits
1157K Method of valuing car fringe benefits
1157K(1) Subject to subsection (2), the value of a car fringe benefit is to be worked out in accordance with section 1157L.
1157K(2) If a determination is in force under section 1157M, the value of a car fringe benefit is to be worked out in accordance with the determination.
1157L Value of car fringe benefits
1157L(1) This is how to work out the value of a car fringe benefit:
Method statement
Step 1. Work out the engine capacity of the car and go to the relevant Part of the Car Fringe Benefits Value Table.
Step 2. Work out how old the car is and go to the appropriate row in the Table.
Step 3. Work out how many complete months in the appropriate tax year the person had or will have the car fringe benefit and go to the appropriate column in the Table: the number where that row and column intersect is the value of the car fringe benefit.
Note: If the person is a member of a couple, the value of the car fringe benefit is to be halved in certain circumstances (see subsection (3)).
1157L(2) The following Table is to be used in working out the value of a car fringe benefit:
CAR FRINGE BENEFITS VALUE TABLE | |||||||||||||||||||||
PART A—Car engine size up to 1600cc | |||||||||||||||||||||
| car age |
| |||||||||||||||||||
item | (years) | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | ||||||||
1. | 1 | 93.8 | 188 | 281 | 375 | 469 | 563 | 656 | 750 | 844 | 938 | 1031 | 1125 | ||||||||
2. | 2 | 83.6 | 168 | 252 | 336 | 420 | 504 | 588 | 672 | 756 | 840 | 923.8 | 1008 | ||||||||
3. | 3 | 74.2 | 148 | 223 | 297 | 371 | 445 | 520 | 594 | 668 | 742 | 816.4 | 890.6 | ||||||||
4. | 4 | 64.5 | 129 | 193 | 258 | 322 | 387 | 451 | 516 | 580 | 645 | 709 | 773.4 | ||||||||
5. | 5 | 54.7 | 109 | 164 | 219 | 273 | 328 | 383 | 438 | 492 | 547 | 601.6 | 656.3 | ||||||||
6. | 6 | 44.9 | 89.8 | 135 | 180 | 225 | 270 | 314 | 359 | 404 | 449 | 494.1 | 539.1 | ||||||||
7. | 7 | 35.2 | 70.3 | 105 | 141 | 176 | 211 | 246 | 281 | 316 | 352 | 386.7 | 421.9 | ||||||||
8. | 8 | 25.4 | 50.8 | 76.2 | 102 | 127 | 152 | 178 | 203 | 229 | 254 | 279.3 | 304.7 | ||||||||
9. | 9 | 15.6 | 31.3 | 46.9 | 62.5 | 78.1 | 93.8 | 109 | 125 | 141 | 156 | 171.9 | 187.5 | ||||||||
10. | 10+ | 5.86 | 11.7 | 17.6 | 23.4 | 29.3 | 35.2 | 41 | 46.9 | 52.7 | 58.6 | 64.45 | 70.31 | ||||||||
| |||||||||||||||||||||
PART B—Car engine size 1601cc to 2850cc | |||||||||||||||||||||
11. | 1 | 229 | 458 | 688 | 917 | 1146 | 1375 | 1604 | 1833 | 2063 | 2292 | 2521 | 2750 | ||||||||
12. | 2 | 210 | 422 | 633 | 844 | 1055 | 1266 | 1477 | 1688 | 1898 | 2109 | 2320 | 2531 | ||||||||
13. | 3 | 193 | 385 | 578 | 771 | 964 | 1156 | 1349 | 1442 | 1734 | 1927 | 2120 | 2313 | ||||||||
14. | 4 | 174 | 349 | 523 | 698 | 872 | 1047 | 1221 | 1396 | 1570 | 1745 | 1919 | 2094 | ||||||||
15. | 5 | 156 | 313 | 469 | 625 | 781 | 938 | 1094 | 1250 | 1406 | 1563 | 1719 | 1875 | ||||||||
16. | 6 | 138 | 276 | 414 | 552 | 690 | 828 | 966 | 1104 | 1242 | 1380 | 1518 | 1656 | ||||||||
17. | 7 | 120 | 240 | 359 | 479 | 599 | 719 | 839 | 958 | 1078 | 1198 | 1318 | 1438 | ||||||||
18. | 8 | 102 | 203 | 305 | 406 | 508 | 609 | 711 | 813 | 914 | 1016 | 1117 | 1219 | ||||||||
19. | 9 | 83.3 | 167 | 250 | 333 | 417 | 500 | 583 | 667 | 750 | 833 | 916.7 | 1000 | ||||||||
20 | 10+ | 65.1 | 130 | 195 | 260 | 326 | 391 | 456 | 521 | 586 | 651 | 716.1 | 781.3 | ||||||||
| |||||||||||||||||||||
PART C—Car engine size more than 2850cc | |||||||||||||||||||||
21. | 1 | 354 | 708 | 1063 | 1417 | 1771 | 2125 | 2479 | 2833 | 3188 | 3542 | 3896 | 4250 | ||||||||
22. | 2 | 327 | 656 | 984 | 1313 | 1641 | 1969 | 2297 | 2625 | 2953 | 3281 | 3609 | 3938 | ||||||||
23. | 3 | 302 | 604 | 906 | 1208 | 1510 | 1813 | 2115 | 2417 | 2719 | 3021 | 3323 | 3625 | ||||||||
24. | 4 | 276 | 552 | 828 | 1104 | 1380 | 1656 | 1932 | 2208 | 2484 | 2760 | 3036 | 3313 | ||||||||
25. | 5 | 250 | 500 | 750 | 1000 | 1250 | 1500 | 1750 | 2000 | 2250 | 2500 | 2750 | 3000 | ||||||||
26. | 6 | 224 | 448 | 672 | 896 | 1120 | 1344 | 1568 | 1792 | 2016 | 2240 | 2464 | 2688 | ||||||||
27. | 7 | 198 | 396 | 594 | 792 | 990 | 1188 | 1385 | 1583 | 1781 | 1979 | 2177 | 2375 | ||||||||
28. | 8 | 172 | 344 | 516 | 688 | 859 | 1031 | 1203 | 1375 | 1547 | 1719 | 1891 | 2063 | ||||||||
29. | 9 | 146 | 292 | 438 | 583 | 729 | 875 | 1021 | 1167 | 1313 | 1458 | 1604 | 1750 | ||||||||
30. | 10+ | 120 | 240 | 359 | 479 | 599 | 719 | 839 | 958 | 1078 | 1198 | 1318 | 1438 | ||||||||
1157L(3) If:
(a) the person is a member of a couple; and
(b) the person’s partner receives a car fringe benefit in the appropriate tax year; and
(c) the person’s and the partner’s car fringe benefits relate to the same car;
the value of the car fringe benefit is to be halved.
1157M Minister may determine alternative method of valuing car fringe benefits
1157M(1) The Minister may determine an alternative method for valuing car fringe benefits.
1157M(2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1157M(3) A determination in subsection (1):
(a) starts to have effect on the day on which it is notified in the Gazette; and
(b) ceases to have effect at the end of 6 months after the day on which it is notified in the Gazette if it has not been revoked before then.
Division 4—Value of school fees fringe benefits
1157N Value of school fees fringe benefits
The value of a school fees fringe benefit is the amount of the payment that constitutes the school fees benefit.
Division 5—Value of health insurance fringe benefits
1157O Value of health insurance fringe benefits
The value of a health insurance fringe benefit is the amount of the payment that constitutes the health insurance benefit.
Division 6—Value of loan fringe benefits
1157P Method of valuing loan fringe benefits
1157P(1) Subject to subsection (2), the value of a loan fringe benefit is to be worked out in accordance with section 1157Q.
1157P(2) If a determination is in force under section 1157R, the value of a loan fringe benefit is to be worked out in accordance with the determination.
1157Q Value of loan fringe benefits
1157Q(1) This is how to work out the value of a loan fringe benefit:
Method statement
Step 1. Work out whether the loan is a housing loan or another type of loan.
Note: For housing loan see subsection 10A(9).
Step 2. Work out the notional rate of interest for the loan using subsection (2), (3) or (4).
Step 3. Work out the actual rate of interest for the loan in the appropriate tax year using subsection (5).
Step 4. Work out whether the actual rate of interest exceeds the notional rate of interest.
Step 5. If the actual rate of interest is equal to or exceeds the notional rate of interest, the value of the loan fringe benefit is nil.
Note: If the value of the loan fringe benefit is nil, you do not have to go any further in the Method statement.
Step 6. If the actual rate of interest is less than the notional rate of interest, take the actual rate of interest away from the notional rate of interest.
Step 7. Work out the amount of the loan (both the principal and interest) that is outstanding in the appropriate tax year using subsection (6).
Step 8. Multiply the rate of interest obtained in Step 6 and the amount obtained in Step 7: the result is the interim value of the loan.
Step 9. Work out how many complete weeks in the appropriate tax year the person had or will have the loan: the result is the number of allowable weeks.
Step 10. Apply the formula:
Step 11. The amount obtained by applying the formula in Step 10 is the value of the loan fringe benefit.
Note: If the person is a member of a couple, the value of the loan fringe benefit is to be halved in certain circumstances (see subsection (7)).
1157Q(2) The notional rate of interest for the tax year ending 30 June 1993 is:
(a) 10% for a housing loan; and
(b) 13.5% for any other loan.
1157Q(3) The notional rate of interest for the tax years ending 30 June 1994 and 30 June 1995 is:
(a) 6.95% for a housing loan; and
(b) 11.75% for any other loan.
1157Q(4) The notional rate of interest for any subsequent tax year is the market rate of interest for 1 April in the preceding tax year.
1157Q(4A) For the purposes of subsection (4):
market rate of interest, for a particular day, means:
(a) for a housing loan—the lowest variable rate of interest for a housing loan; or
(b) for any other loan—the lowest variable rate of interest for any other loan;
that is available on that day from a bank which is one of 4 banks specified in a written determination made by the Minister.
1157Q(4B) A determination under subsection (4A) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1157Q(5) The actual rate of interest for the loan is:
(a) if the loan starts after 1 July in the appropriate tax year—the rate of interest that is payable under the loan on the day on which the loan starts; and
(b) in any other case—the rate of interest that is payable under the loan on 1 July in the appropriate tax year.
1157Q(6) The amount of the loan that is outstanding is:
(a) if the loan starts after 1 July in the appropriate tax year—the amount that is outstanding on the day on which the loan starts; and
(b) in any other case—the amount that is outstanding on 1 July in the appropriate tax year.
1157Q(7) If:
(a) the person is a member of a couple; and
(b) the person’s partner receives a loan fringe benefit in the appropriate tax year; and
(c) the person’s and the partner’s loan fringe benefits relate to the same loan;
the value of the loan fringe benefit obtained in Step 11 of the Method statement is to be halved.
1157R Minister may determine alternative method of valuing loan fringe benefits
1157R(1) The Minister may determine an alternative method for valuing loan fringe benefits.
1157R(2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1157R(3) A determination in subsection (1):
(a) starts to have effect on the day on which it is notified in the Gazette; and
(b) ceases to have effect at the end of 6 months after the day on which it is notified in the Gazette if it has not been revoked before then.
Division 7—Value of housing fringe benefits
Subdivision A—Grants of housing rights
1157S Methods of valuing housing fringe benefits—grants of housing rights
1157S(1) Subject to subsection (3), the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to a person who is not an employee of the Defence Force is to be worked out in accordance with section 1157T.
1157S(2) Subject to subsection (3), the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to an employee of the Defence Force is to be worked out in accordance with section 1157TA.
1157S(3) If:
(a) a determination is in force under section 1157U; and
(b) the determination applies to housing fringe benefits to which subsection 1157I(1) applies;
the value of a housing fringe benefit to which subsection 1157I(1) applies is to be worked out in accordance with the determination.
1157T Value of grants of housing rights—general
1157T(1) This is how to work out the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to a person who is not an employee of the Defence Force:
Method statement
Step 1. Work out the location of the unit of accommodation and go to the appropriate row of the Housing Fringe Benefits Value Table.
Step 2. Work out the type of accommodation and go to the appropriate column in the Table: the number where the row and column intersect is the weekly market rent of the unit of accommodation.
Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)).
Step 3. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person.
Step 4. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 3: the result is the provisional value of the housing fringe benefit.
Step 5. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3).
Note: If the person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)).
Step 6. Take the allowable rent away from the provisional value of the housing fringe benefit: the result is the value of the housing fringe benefit.
1157T(2) The following Table is to be used in working out the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to a person who is not an employee of the Defence Force:
Housing fringe benefits value table | |||
Location | Type of accommodation | ||
House, flat or home unit | Any other unit of accommodation | ||
3 or more bedrooms | 1‑2 bedrooms | ||
Metropolitan | 140 | 120 | 85 |
Non‑metropolitan | 100 | 90 | 70 |
Special housing | 80 | 80 | 25 |
Outside Australia | 140 | 120 | 85 |
Note 1: For unit of accommodation, metropolitan location, non‑metropolitan location and special housing location see section 10A.
Note 2: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B).
Note 3: For Australia see subsection 23(1).
1157T(3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by:
(a) if the person is not a member of a couple—the person; or
(b) if the person is a member of a couple—the person and the person’s partner.
1157T(4) If:
(a) the person is a member of a couple; and
(b) the person’s partner receives a housing fringe benefit in the appropriate tax year; and
(c) the person’s and the partner’s housing fringe benefits relate to the same unit of accommodation;
the weekly market rent obtained in Step 2 of the Method statement and the allowable rent obtained in Step 5 of the Method statement are both to be halved.
1157TA Value of grants of housing rights—employees of the Defence Force
1157TA(1) This is how to work out the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to an employee of the Defence Force:
Method statement
Step 1. Work out the type of accommodation and go to the appropriate column in the Housing Fringe Benefits Value Table (Defence Force Employees): the number in the appropriate column is the weekly market rent of the unit of accommodation.
Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)).
Step 2. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person.
Step 3. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 2: the result is the provisional value of the housing fringe benefit.
Step 4. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3).
Note: If a person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)).
Step 5. Take the allowable rent away from the provisional value of the housing fringe benefit: the result is the value of the housing fringe benefit.
Note: For employee see section 10A.
1157TA(2) The following Table is to be used in working out the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to an employee of the Defence Force:
Housing Fringe Benefits Value Table (Defence Force Employees) | ||
Type of accommodation | ||
House, flat or home unit | Any other unit of accommodation | |
3 or more bedrooms | 1‑2 bedrooms | |
80 | 80 | 25 |
Note 1: For employee see section 10A.
Note 2: For unit of accommodation see section 10A.
Note 3: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B).
Note 4: For Australia see subsection 23(1).
1157TA(3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by:
(a) if the person is not a member of a couple—the person; or
(b) if the person is a member of a couple—the person and the person’s partner.
1157TA(4) If:
(a) the person is a member of a couple; and
(b) the person’s partner receives a housing fringe benefit in the appropriate tax year; and
(c) the person’s and the partner’s housing fringe benefits relate to the same unit of accommodation;
the weekly market rent obtained in Step 1 of the Method statement and the allowable rent obtained in Step 4 of the Method statement are both to be halved.
Subdivision B—Payments associated with loans
1157TB Method of valuing housing fringe benefits—payments associated with loans
1157TB(1) Subject to subsection (2), the value of a housing fringe benefit to which subsection 1157I(2) applies is to be worked out in accordance with section 1157TC.
1157TB(2) If:
(a) a determination is in force under section 1157U; and
(b) the determination applies to housing fringe benefits to which subsection 1157I(2) applies;
the value of a housing fringe benefit to which subsection 1157I(2) applies is to be worked out in accordance with the determination.
1157TC Value of payments associated with loans
The value of a housing fringe benefit to which subsection 1157I(2) applies is the amount of the payment that constitutes the housing benefit.
Subdivision C—Payments associated with enjoying housing rights
1157TD Methods of valuing housing fringe benefits—payments associated with enjoying housing rights
1157TD(1) Subject to subsection (3), the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to a person who is not an employee of the Defence Force is to be worked out in accordance with section 1157TE.
1157TD(2) Subject to subsection (3), the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to an employee of the Defence Force is to be worked out in accordance with section 1157TF.
1157TD(3) If:
(a) a determination is in force under section 1157U; and
(b) the determination applies to housing fringe benefits to which subsection 1157I(5) applies;
the value of a housing fringe benefit to which subsection 1157I(5) applies is to be worked out in accordance with the determination.
1157TE Value of payments associated with enjoying housing rights—general
1157TE(1) This is how to work out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to a person who is not an employee of the Defence Force:
Method statement
Step 1. Work out the location of the unit of accommodation and go to the appropriate row of the Housing Fringe Benefits Value Table.
Step 2. Work out the type of accommodation and go to the appropriate column in the Table: the number where the row and column intersect is the weekly market rent of the unit of accommodation.
Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)).
Step 3. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person.
Step 4. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 3: the result is the provisional value of the housing fringe benefit.
Step 5. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3).
Note: If a person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)).
Step 6. Work out the amount the employer paid or will pay by way of the housing fringe benefits in respect of the unit of accommodation in the appropriate tax year: the result is the employer subsidy.
Step 7. Work out the amount (if any) by which the allowable rent exceeds the employer subsidy: the result is the employee contribution.
Note: If the employer subsidy equals or exceeds the allowable rent, the employee contribution is nil.
Step 8. Take the employee contribution away from the provisional value of the housing fringe benefit: the result is the value of the housing fringe benefit.
1157TE(2) The following Table is to be used in working out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to a person who is not an employee of the Defence Force:
Housing fringe benefits value table | |||
Location | Type of accommodation | ||
House, flat or home unit | Any other unit of accommodation | ||
3 or more bedrooms | 1‑2 bedrooms | ||
Metropolitan | 140 | 120 | 85 |
Non‑metropolitan | 100 | 90 | 70 |
Special housing | 80 | 80 | 25 |
Outside Australia | 140 | 120 | 85 |
Note 1: For unit of accommodation, metropolitan location, non‑metropolitan location and special housing location see section 10A.
Note 2: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B).
Note 3: For Australia see subsection 23(1).
1157TE(3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by:
(a) if the person is not a member of a couple—the person; or
(b) if the person is a member of a couple—the person and the person’s partner.
1157TE(4) If:
(a) the person is a member of a couple; and
(b) the person’s partner receives a housing fringe benefit in the appropriate tax year; and
(c) the person’s and the partner’s housing fringe benefits relate to the same unit of accommodation;
the weekly market rent obtained in Step 2 of the Method statement and the allowable rent obtained in Step 5 of the Method statement are both to be halved.
1157TF Value of payments associated with enjoying housing rights—employees of the Defence Force
1157TF(1) This is how to work out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to an employee of the Defence Force:
Method statement
Step 1. Work out the type of accommodation and go to the appropriate column in the Housing Fringe Benefits Value Table (Defence Force Employees): the number in the appropriate column is the weekly market rent of the unit of accommodation.
Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)).
Step 2. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person.
Step 3. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 2: the result is the provisional value of the housing fringe benefit.
Step 4. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3).
Note: If a person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)).
Step 5. Work out the amount the employer paid or will pay by way of the housing fringe benefits in respect of the unit of accommodation in the appropriate tax year: the result is the employer subsidy.
Step 6. Work out the amount (if any) by which the allowable rent exceeds the employer subsidy: the result is the employee contribution.
Note: If the employer subsidy equals or exceeds the allowable rent, the employee contribution is nil.
Step 7. Take the employee contribution away from the provisional value of the housing fringe benefit: the result is the value of the housing fringe benefit.
1157TF(2) The following Table is to be used in working out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to an employee of the Defence Force:
Housing Fringe Benefits Value Table (Defence Force Employees) | ||
Type of accommodation | ||
House, flat or home unit | Any other unit of accommodation | |
3 or more bedrooms | 1‑2 bedrooms | |
80 | 80 | 25 |
Note 1: For employee see section 10A.
Note 2: For unit of accommodation see section 10A.
Note 3: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B).
Note 4: For Australia see subsection 23(1).
1157TF(3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by:
(a) if the person is not a member of a couple—the person; or
(b) if the person is a member of a couple—the person and the person’s partner.
1157TF(4) If:
(a) the person is a member of a couple; and
(b) the person’s partner receives a housing fringe benefit in the appropriate tax year; and
(c) the person’s and the partner’s housing fringe benefits relate to the same unit of accommodation;
the weekly market rent obtained in Step 1 of the Method statement and the allowable rent obtained in Step 4 of the Method statement are both to be halved.
Subdivision D—Alternative methods of valuing housing fringe benefits
1157U Minister may determine alternative method of valuing housing fringe benefits
1157U(1) The Minister may determine an alternative method for valuing housing fringe benefits.
1157U(1A) A determination under subsection (1) may apply to all housing fringe benefits or only to specified kinds of housing fringe benefits.
1157U(2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1157U(3) A determination in subsection (1):
(a) starts to have effect on the day on which it is notified in the Gazette; and
(b) ceases to have effect at the end of 6 months after the day on which it is notified in the Gazette if it has not been revoked before then.
Division 8—Value of expense fringe benefit
1157UA Value of expense fringe benefits
The value of an expense fringe benefit is the amount of the payment that constitutes the expense benefit.
Division 9—Value of financial investment fringe benefit
1157UB Value of financial investment fringe benefit
The value of a financial investment fringe benefit is the value of the financial investment benefit that constitutes the financial investment fringe benefit when the financial investment benefit is received.
Division 8—Foreign currency rates
1157V(1) If:
(a) it is necessary, for the purposes of this Part, to work out an amount or value of a fringe benefit; and
(b) the amount or value of the benefit is expressed in a foreign currency;
the amount or value in Australian currency is to be worked out using the market exchange rate for 1 July in the appropriate tax year.
1157V(2) If there is no market exchange rate for 1 July in the appropriate tax year (for example, because of a national public holiday), the market exchange rate to be used is the market exchange rate that applied on the last working day immediately before that 1 July.
1157V(3) For the purposes of this section, the market exchange rate of a foreign currency is the on‑demand airmail buying rate for that currency available at the Commonwealth Bank of Australia.
An instalment of a social security pension, a social security benefit, a parenting payment, a mobility allowance or a pensioner education supplement is not payable to a person in respect of a day on which the person is:
(a) in gaol; or
(b) undergoing psychiatric confinement because the person has been charged with an offence.
Note 1: For in gaol see subsection 23(5).
Note 2: For psychiatric confinement see subsections 23(8) and (9).
1159 Payment may be redirected to dependent partner or child
1159(1) If:
(a) a social security pension (other than pension PP (single)) is not payable to a person on a pension payday because of section 1158; and
(b) the person’s partner is dependent on the person;
the Secretary may authorise the payment of all or some of the instalment that would otherwise have been payable to the person to be paid to:
(c) the partner; or
(d) someone else for the benefit of the partner.
1159(2) If:
(a) a social security pension (other than pension PP (single)) is not payable to a person on a pension payday because of section 1158; and
(b) a young person is dependent on the person;
the Secretary may authorise the payment of all or some of the instalment that would otherwise have been payable to the person to be paid to:
(c) the young person; or
(d) someone else for the benefit of the young person.
Part 3.14—Compensation recovery
1160(1) This Part operates in certain specified circumstances to do one or more of the following:
(a) reduce a person’s compensation affected payment;
(b) render a person’s compensation affected payment not payable;
(c) require the repayment of some or all of a person’s compensation affected payment;
because of the receipt of compensation by the person or the person’s partner.
1160(2) This Part applies whether or not there is any connection between the circumstances that give rise to the person’s qualification for the compensation affected payment and the circumstances that give rise to the receipt of compensation by the person or the person’s partner.
1161(1) Subject to subsections (2) to (7), payments of a compensation affected payment are affected under this Part if:
(a) whether the compensation was received before or after the commencement of this Part, the compensation affected payment is:
(i) a newstart allowance in relation to which, under Subdivision BA of Division 1 of Part 2.12, the recipient of the allowance is not required to satisfy the activity test; or
(ii) a sickness allowance; or
(iii) a sickness benefit under the 1947 Act; or
(iv) a rehabilitation allowance under the 1947 Act payable in place of sickness benefit under the 1947 Act; or
(b) in the case of any other kind of compensation affected payment, the compensation was received on or after 1 May 1987 and the claim for the compensation affected payment was made on or after 1 May 1987.
1161(2) This Part applies to a pension PP (single) if:
(a) the compensation was received on or after 20 March 1992; and
(b) the claim for the pension was made on or after 20 March 1992.
1161(3) This Part applies to carer payment if:
(a) the compensation was received on or after 1 January 1993; and
(b) the claim for the carer payment was made on or after 1 January 1993.
1161(4) This Part applies to a mature age allowance or mature age partner allowance if:
(a) the compensation was received on or after 20 March 1994; and
(b) the claim for the allowance was made on or after 20 March 1994.
1161(5) This Part applies to partner allowance if:
(a) the compensation was received on or after 20 September 1994; and
(b) the claim for the allowance was made on or after 20 September 1994.
1161(6) This Part applies to age pension if:
(a) the compensation was received on or after 20 March 1997; and
(b) the person’s provisional commencement day or start day for the age pension is on or after 20 March 1997.
1161(6A) Subject to section 1161A, this Part applies to a compensation affected payment to which paragraph (l), (m) or (n) of the definition of that expression in subsection 17(1) applies if:
(a) the compensation is received on or after 1 July 2004; and
(b) either:
(i) if the compensation affected payment to which that paragraph applies is one in respect of which a claim must be made for a person to be qualified for the payment—a claim is made for the payment on or after 1 July 2004; or
(ii) if the compensation affected payment to which that paragraph applies is not one in respect of which a claim must be made for a person to be qualified for the payment—the compensation affected payment is received on or after 1 July 2004.
1161(7) In spite of subsection (1), Division 4 does not apply to:
(a) a disability support wife pension; or
(b) a special needs disability support wife pension;
received by a person if:
(c) the compensation was received by the person on or after 1 May 1987 but before 1 January 1994; and
(d) the claim for the pension was made on or after 1 May 1987 but before 1 January 1994.
1161A Application of Part to supplementary compensation affected payments
1161A(1) For the purposes of this section:
(a) a reference to a supplementary compensation affected payment is a reference to a compensation affected payment to which paragraph (l), (m) or (n) of the definition of compensation affected payment in subsection 17(1) applies; and
(b) a supplementary compensation affected payment relates to any allowance, supplement, pension or payment of a kind that, in the applicable paragraph of the definition of compensation affected payment in subsection 17(1), is labelled as the underlying compensation affected payment.
1161A(2) Except as mentioned in this section, this Part does not apply to a supplementary compensation affected payment.
1161A(3) If:
(a) as a result of the operation of section 1169, any underlying compensation affected payment to which a supplementary compensation affected payment relates was not payable in relation to the day on which the supplementary compensation affected payment was received; or
(b) as a result of the operation of section 1173 or 1174, the rate of any underlying compensation affected payment to which a supplementary compensation affected payment relates was reduced to nil in relation to the day on which the supplementary compensation affected payment was received; or
(c) the following conditions are satisfied:
(i) the rate of any of the compensation affected payments that would have been made as mentioned in subparagraph 1181(1)(b)(ii) or (2)(d)(ii) or 1184A(2)(c)(ii) or (3)(d)(ii) is nil;
(ii) the compensation affected payment is an underlying compensation affected payment to which a supplementary compensation affected payment relates;
(iii) the underlying compensation affected payment was made in relation to the day on which the supplementary compensation affected payment was received; or
(d) an adverse determination mentioned in subsection 1184I(1) has the effect that:
(i) any underlying compensation affected payment to which a supplementary compensation affected payment relates is cancelled or suspended in relation to the day on which the supplementary compensation affected payment was received; or
(ii) the rate of any underlying compensation affected payment to which a supplementary compensation affected payment relates is reduced to nil in relation to the day on which the supplementary compensation affected payment was received;
then:
(e) in any case—the supplementary compensation affected payment is not payable; and
(f) if paragraph (d) applies—for the purposes of subsection 1184I(1), the amount of the supplementary compensation affected payment is taken to be an amount that the person in relation to whom it was made is liable to pay to the Commonwealth because of the determination.
1161A(4) If:
(a) any of:
(i) the payments of the compensation affected payment mentioned in paragraph 1179(b); or
(ii) the compensation affected payments mentioned in paragraph 1184A(1)(a);
is an underlying compensation affected payment to which a supplementary compensation affected payment relates; and
(b) the underlying compensation affected payment was made in relation to the day on which the supplementary compensation affected payment was received;
then the sum mentioned in that paragraph is increased by the amount of the supplementary compensation affected payment.
1161A(5) If:
(a) the rate of any of the compensation affected payments that would have been made as mentioned in subparagraph 1181(1)(b)(ii) or (2)(d)(ii) or 1184A(2)(c)(ii) or (3)(d)(ii) is nil; and
(b) the compensation affected payment is an underlying compensation affected payment to which a supplementary compensation affected payment relates; and
(c) the underlying compensation affected payment was made in relation to the day on which the supplementary compensation affected payment was received;
then the difference mentioned in paragraph 1181(1)(b) or (2)(d) or 1184A(2)(c) or (3)(d) is increased by the amount of the supplementary compensation affected payment.
1161A(6) If a compensation affected payment that would have been reduced as mentioned in subsection 1184A(4):
(a) would have been reduced to nil; and
(b) is an underlying compensation affected payment to which a supplementary compensation affected payment relates; and
(c) was received in relation to the day on which the supplementary compensation affected payment was received;
then the recoverable amount mentioned in subsection 1184A(4) is increased by the amount of the supplementary compensation affected payment, but only to the extent that the sum of all increases under this subsection in relation to the periodic compensation payments does not exceed the sum of the amounts of those payments.
This Part binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory, of the Northern Territory and of Norfolk Island.
1163(1) In a provision of this Part (other than section 1164), a reference to the payment or receipt of periodic compensation payments includes a reference to the payment or receipt, as the case may be, of arrears of periodic compensation payments.
1163(2) A reference in this Part to periodic compensation payments is a reference to:
(a) a periodic compensation payment; or
(b) if 2 or more periodic compensation payments relate to the same period, those payments.
1163(3) In this Part, a reference to a person’s partner receiving or claiming a compensation affected payment includes a reference to the partner receiving or claiming a compensation affected pension within the meaning of the Veterans’ Entitlements Act.
1164 Certain lump sums to be treated as though they were received as periodic compensation payments
If:
(a) a person was entitled to periodic compensation payments under a law of a State or Territory; and
(b) the person’s entitlement to the periodic payments was converted under the law of the State or Territory into an entitlement to a lump sum; and
(c) the lump sum was calculated by reference to a period;
this Part applies to the person as if:
(d) the person had not received:
(i) the lump sum; or
(ii) if the lump sum was to be paid in instalments—any of the instalments; and
(e) the person had received in each fortnight during the period a periodic compensation payment equal to:
where:
lump sum amount is the amount of the lump sum referred to in paragraph (b);
number of fortnights in the period is the number of whole fortnights in the period referred to in paragraph (c).
1165 Effect of certain State and Territory laws
If:
(a) a law of a State or Territory provides for the payment of compensation; and
(b) the law includes a provision to the effect that a person’s compensation under the law is to be or may be reduced or cancelled if the person is qualified for or receives payments under this Act;
this Act applies as if the person had received under the law the compensation that the person would have received under the law if the provision referred to in paragraph (b) had not been enacted.
Division 2—Enforcement of compensation rights
1166 Secretary may require person to take action to obtain compensation
1166(1) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person or the person’s partner is, or, in the Secretary’s opinion, may be, entitled to compensation; and
(c) the person or the partner:
(i) has taken no action to claim or obtain the compensation; or
(ii) has taken no action that the Secretary considers reasonable to claim or obtain the compensation;
the Secretary may require the person or the partner to take the action specified by the Secretary.
1166(2) The action specified by the Secretary is to be the action that the Secretary considers reasonable to enable the person to claim or obtain the compensation.
1166(3) Even though a person has entered into an agreement to give up the person’s right to compensation, the Secretary may form the opinion that the person may be entitled to compensation if the Secretary is satisfied that the agreement is void, ineffective or unenforceable.
1166(4) For the purposes of subsection (3), a person enters into an agreement to give up the person’s right to compensation if the person:
(a) enters into an agreement to waive the person’s right to compensation; or
(b) enters into an agreement to withdraw the person’s claim for compensation.
1167 Failure to comply with a requirement to take action to obtain compensation
1167(1) If the Secretary, under section 1166, requires a person who receives or claims a compensation affected payment to take action to claim or obtain compensation, the compensation affected payment is not payable to the person or is not to be granted, as the case may be, unless the person complies with the requirement.
1167(2) If the Secretary requires the partner of a person who receives or claims a compensation affected payment to take action to claim or obtain compensation, the compensation affected payment is not payable to the person or is not to be granted, as the case may be, unless the partner complies with the requirement.
Division 3—Receipt of compensation
A provision of this Division that refers to a person receiving or claiming a compensation affected payment and receiving a lump sum compensation payment has effect regardless of whether the lump sum compensation payment was received before or after the person received or claimed the compensation affected payment.
1169 Compensation affected payment not payable during lump sum preclusion period
1169(1) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person receives a lump sum compensation payment;
the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.
1169(2) In this section:
lump sum compensation payment does not include a lump sum payment:
(a) to which section 1164 applies; or
(b) that relates only to arrears of periodic compensation payments.
1170 Lump sum preclusion period
1170(1) Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:
(a) begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
1170(2) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:
(a) begins on the first day on which the person’s periodic compensation payment is a reduced payment because of that choice; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
` 1170(3) If neither of subsections (1) and (2) applies, the lump sum preclusion period is the period that:
(a) begins on the day on which the loss of earnings or loss of capacity to earn began; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
1170(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
1170(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number.
1171 Deemed lump sum payment arising from separate payments
1171(1) If:
(a) a person receives 2 or more lump sum payments in relation to the same event that gave rise to an entitlement of the person to compensation (the multiple payments); and
(b) at least one of the multiple payments is made wholly or partly in respect of lost earnings or lost capacity to earn;
the following paragraphs have effect for the purposes of this Act and the Administration Act:
(c) the person is taken to have received one lump sum compensation payment (the single payment) of an amount equal to the sum of the multiple payments;
(d) the single payment is taken to have been received by the person:
(i) on the day on which he or she received the last of the multiple payments; or
(ii) if the multiple payments were all received on the same day, on that day.
1171(2) A payment is not a lump sum payment for the purposes of paragraph (1)(a) if it relates exclusively to arrears of periodic compensation.
1172 Lump sum compensation not counted as ordinary income
If an amount of a compensation affected payment is not payable to a person under section 1169 because the person has received a lump sum compensation payment, that lump sum compensation payment is not to be regarded as ordinary income of either the person or the person’s partner (if any) for the purposes of a provision of this Act, other than point 1071A‑4.
1173 Effect of periodic compensation payments on rate of person’s compensation affected payment
1173(1) If:
(a) a person receives periodic compensation payments; and
(b) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the rate of the person’s compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2).
1173(2) The person’s daily rate of compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.
1173(3) The reference in subsection (2) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.
1173(4) If:
(a) a person receives periodic compensation payments; and
(b) at the time of the event that gave rise to the entitlement of the person to compensation, the person was qualified for, and was receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the periodic compensation payments are to be treated as ordinary income of the person for the purposes of this Act.
1174 Effect of periodic compensation payments on rate of partner’s compensation affected payment
1174(1) If:
(a) a person receives periodic compensation payments; and
(b) the person is a member of a couple; and
(c) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(d) the person is qualified for a compensation affected payment in relation to a day or days in the periodic payments period but, solely because of the operation of this Part, does not, or would not, receive the payment; and
(e) the person’s partner receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the amount (if any) by which the daily rate of periodic compensation payable to the person exceeds the daily rate of the compensation affected payment for which the person is qualified in relation to a day or days in the periodic payments period (the excess amount) is to be treated as ordinary income of the person’s partner for the purpose of the calculation of the amount of the compensation affected payment referred to in paragraph (e).
1174(2) The reference in subsection (1) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.
1174(3) For the purposes of subsection (1):
(a) the amount that would, apart from this section, be the amount of the partner’s ordinary income in relation to the day or days referred to in paragraph (1)(e) is to be increased by the excess amount; and
(b) the increased amount is to be taken to be the amount of the partner’s ordinary income in relation to that day or those days, as the case may be.
1175 Rate reduction under both income/assets test and this Part
If the rate of a person’s compensation affected payment is reduced under this Part, the reduction applies to the person’s rate as reduced under the ordinary income test Module or the assets test Module of the relevant Rate Calculator.
1176 Periodic compensation not counted as ordinary income
If an instalment of a compensation affected payment payable to a person is reduced under section 1173 because of the receipt of periodic compensation payments, those payments are not to be regarded as ordinary income of the person for the purposes of a provision of this Act, other than point 1071A‑4.
Division 4—Recoverable amounts
If:
(a) a person is liable to make a compensation payment to another person; or
(b) an authority of a State or Territory has determined that it will make a compensation payment to another person, whether or not it is liable to make the payment;
then, for the purposes of this Division, in relation to the person to whom the compensation is payable or is to be paid, the following paragraphs have effect:
(c) a reference to the lump sum preclusion period is a reference to the period that would represent the lump sum preclusion period if the compensation were paid in accordance with the liability or determination;
(d) a reference to the periodic payments period is a reference to the period that would represent the periodic payments period if the compensation were paid in accordance with the liability or determination.
Subdivision B—Recovery from recipient of compensation affected payment
1178(1) If:
(a) a person receives a lump sum compensation payment; and
(b) the person receives payments of a compensation affected payment in relation to a day or days in the lump sum preclusion period;
the Secretary may, by written notice to the person, determine that the person is liable to pay to the Commonwealth the amount specified in the notice.
1178(2) The amount to be specified in the notice is the recoverable amount under section 1179.
1179 The section 1178 recoverable amount
The recoverable amount under this section is equal to the smaller of the following amounts:
(a) the compensation part of the lump sum compensation payment;
(b) the sum of the payments of the compensation affected payment made to the person in relation to a day or days in the lump sum preclusion period.
1180(1) If:
(a) a person receives periodic compensation payments; and
(b) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c) the person receives payments of a compensation affected payment in relation to a day or days in the periodic payments period; and
(d) the payments referred to in paragraph (c) have not been reduced to nil as a result of the operation of section 1173;
the Secretary may, by written notice to the person, determine that the person is liable to pay to the Commonwealth the amount specified in the notice.
1180(2) The amount to be specified in a notice for the purpose of subsection (1) is the recoverable amount under section 1181.
1181 The section 1180 recoverable amount
1181(1) Subject to subsection (2), the recoverable amount under this section is equal to the smaller of the following amounts:
(a) the sum of the periodic compensation payments;
(b) the difference between:
(i) the sum of the compensation affected payments made to the person in relation to a day or days in the periodic payments period; and
(ii) the sum of the compensation affected payments that would have been made to the person in relation to any such day or days had those payments been made at the rate to which the payments were reduced as a result of the operation of section 1173.
1181(2) If:
(a) a person is a member of a couple; and
(b) the person’s partner receives a compensation affected payment in relation to a day or days in the periodic payments period;
the recoverable amount under this section is equal to the smaller of the following amounts:
(c) the sum of the periodic compensation payments;
(d) the difference between:
(i) the sum of the compensation affected payments made to the person and the person’s partner in relation to a day or days in the periodic payments period; and
(ii) the sum of the compensation affected payments that would have been made to the person and the person’s partner in relation to any such day or days had those payments been made at the rates to which the payments were reduced as a result of the operation of sections 1173 and 1174.
Subdivision C—Recovery from compensation payers and insurers
1182 Secretary may send preliminary notice to potential compensation payer or insurer
1182(1) If:
(a) a person (the claimant) makes a claim against another person (the potential compensation payer) for compensation; and
(b) the claimant claims a compensation affected payment in relation to a day or days in the periodic payments period or the lump sum preclusion period, as the case may be;
the Secretary may give written notice to the potential compensation payer that the Secretary may wish to recover an amount from the potential compensation payer.
1182(2) If:
(a) a person (the claimant) makes a claim against a person (the potential compensation payer) for compensation; and
(b) the claimant claims a compensation affected payment for a day or days in the periodic payments period or the lump sum preclusion period, as the case may be; and
(c) an insurer, under a contract of insurance, may be liable to indemnify the potential compensation payer against any liability arising from the claim for compensation;
the Secretary may give written notice to the insurer that the Secretary may wish to recover an amount from the insurer.
1182(3) A notice must contain:
(a) a statement of the potential compensation payer’s or insurer’s obligation under section 1183; and
(b) a statement of the effect of section 1184D so far as it relates to the notice.
1183 Potential compensation payer or insurer must notify Secretary of liability
1183(1) If a person (the potential compensation payer):
(a) is given a notice under subsection 1182(1) in relation to a person; and
(b) whether before or after receiving the notice, the potential compensation payer becomes liable to pay compensation to the person;
the potential compensation payer must give written notice to the Secretary of the liability within 7 days after:
(c) becoming liable; or
(d) receiving the notice;
whichever happens later.
Penalty: Imprisonment for 12 months.
1183(2) If an insurer:
(a) is given a notice under subsection 1182(2) in relation to a claim by a person; and
(b) whether before or after receiving the notice, the insurer becomes liable to indemnify the potential compensation payer, either wholly or partly, in relation to the claim;
the insurer must give written notice to the Secretary of the liability within 7 days after:
(c) becoming liable; or
(d) receiving the notice;
whichever happens later.
Penalty: Imprisonment for 12 months.
1183(3) Strict liability applies to:
(a) an element of an offence against subsection (1) that a notice is a notice under subsection 1182(1); and
(b) an element of an offence against subsection (2) that a notice is a notice under subsection 1182(2).
1184 Secretary may send recovery notice to compensation payer or insurer
1184(1) If:
(a) a person (the compensation payer):
(i) is liable to pay compensation to a person (a claimant); or
(ii) where the compensation payer is an authority of a State or Territory, has determined that a payment by way of compensation is to be made to a claimant; and
(b) the claimant has received a compensation affected payment in relation to a day or days in the periodic payments period or the lump sum preclusion period, as the case may be;
the Secretary may give written notice to the compensation payer that the Secretary proposes to recover from the compensation payer the amount specified in the notice.
1184(2) If:
(a) an insurer is liable, under a contract of insurance, to indemnify a compensation payer against any liability arising from a person’s claim for compensation; and
(b) the person has received a compensation affected payment in relation to a day or days in the periodic payments period or the lump sum preclusion period, as the case may be;
the Secretary may give written notice to the insurer that the Secretary proposes to recover from the insurer the amount specified in the notice.
1184(3) If a compensation payer or insurer is given notice under subsection (1) or (2), as the case may be, the compensation payer or insurer is liable to pay to the Commonwealth the amount specified in the notice.
1184(4) The amount to be specified in the notice is the recoverable amount under section 1184A.
1184(5) A notice under this section must contain a statement of the effect of section 1184D so far as it relates to such a notice.
1184(6) This section applies to an amount payable by way of compensation in spite of any law of a State or Territory (however expressed) under which the compensation is inalienable.
1184A The section 1184 recoverable amount
1184A(1) If a person receives compensation affected payments in relation to a day or days in a lump sum preclusion period, the recoverable amount under this section is equal to the smallest of the following amounts:
(a) the sum of all compensation affected payments made to the person that relate to a day or days in a lump sum preclusion period;
(b) the compensation part of the lump sum payment;
(c) in the case of a compensation payer—the maximum amount that the compensation payer is liable to pay to the person in relation to the matter at any time after receiving:
(i) a notice under section 1182 in relation to the matter; or
(ii) if the compensation payer has not received a notice under section 1182—the notice under section 1184 in relation to the matter;
(d) in the case of an insurer—the maximum amount for which the insurer is liable to indemnify the compensation payer in relation to the matter at any time after receiving:
(i) a notice under section 1182 in relation to the matter; or
(ii) if the insurer has not received a notice under section 1182—the notice under section 1184 in relation to the matter.
1184A(2) Subject to subsection (4), if:
(a) a person receives compensation affected payments in relation to a day or days in a periodic payments period; and
(b) either:
(i) the person is not a member of a couple; or
(ii) the person’s partner neither receives nor claims a compensation affected payment in relation to any day in the periodic payments period;
the recoverable amount under this section is equal to the smallest of the following amounts:
(c) the difference between:
(i) the sum of all compensation affected payments made to the person that relate to a day or days in a periodic payments period; and
(ii) the sum of all compensation affected payments that would have been made to the person in relation to any such day or days had those payments been reduced in accordance with section 1173;
(d) the sum of the amounts of the periodic compensation payments;
(e) in the case of a compensation payer—the maximum amount that the compensation payer is liable to pay to the person in relation to the matter at any time after receiving:
(i) a notice under section 1182 in relation to the matter; or
(ii) if the compensation payer has not received a notice under section 1182—the notice under section 1184 in relation to the matter;
(f) in the case of an insurer—the maximum amount for which the insurer is liable to indemnify the compensation payer in relation to the matter at any time after receiving:
(i) a notice under section 1182 in relation to the matter; or
(ii) if the insurer has not received a notice under section 1182—the notice under section 1184 in relation to the matter.
1184A(3) Subject to subsection (4), if:
(a) the person claiming compensation is a member of a couple; and
(b) compensation affected payments received by the person were received in relation to a day or days in a periodic payments period; and
(c) the person’s partner receives a compensation affected payment in relation to a day or days in the periodic payments period;
the recoverable amount under this section is equal to the smallest of the following amounts:
(d) the difference between:
(i) the sum of all compensation affected payments made to the person and the person’s partner in relation to a day or days in the periodic payments period; and
(ii) the sum of all compensation affected payments that would have been made to the person and the person’s partner in relation to any such day or days had those payments been reduced as a result of the operation of section 1173 or 1174;
(e) the sum of the amounts of the periodic compensation payments;
(f) in the case of a compensation payer—the maximum amount that the compensation payer is liable to pay to the person in relation to the matter at any time after receiving:
(i) a notice under section 1182 in relation to the matter; or
(ii) if the compensation payer has not received a notice under section 1182—the notice under section 1184 in relation to the matter;
(g) in the case of an insurer—the maximum amount for which the insurer is liable to indemnify the compensation payer in relation to the matter at any time after receiving:
(i) a notice under section 1182 in relation to the matter; or
(ii) if the insurer has not received a notice under section 1182—the notice under section 1184 in relation to the matter.
1184A(4) If:
(a) at the time of the event that gave rise to the entitlement of a person to compensation, the person was qualified for, and was receiving, a compensation affected payment; and
(b) the person or the person’s partner received or claimed a compensation affected payment in relation to a day or days in the periodic payments period;
the recoverable amount is the amount determined by the Secretary to be the total amount by which the person’s, or the person’s partner’s, compensation affected payment in relation to a day or days in the periodic payments period would have been reduced if a determination had been made under Division 7 of Part 3 of the Administration Act because of point 1064‑E3, 1066A‑F2A, 1067G‑H25, 1067L‑D24, 1068‑G8A, 1068A‑E13 or 1068B‑D21 of this Act.
1184B Preliminary notice or recovery notice suspends liability to pay compensation
1184B(1) If a compensation payer has been given a notice under section 1182 or 1184 in relation to the compensation payer’s liability, or possible liability, to pay compensation, the compensation payer is not liable to pay that compensation while the notice has effect.
1184B(2) If an insurer has been given a notice under section 1182 or 1184 in relation to the insurer’s liability, or possible liability, to indemnify a compensation payer against a liability arising from a claim for compensation:
(a) the insurer is not liable to so indemnify the compensation payer; and
(b) the compensation payer is not liable to pay that compensation;
while the notice has effect.
1184C(1) Payment to the Commonwealth of an amount that a compensation payer is liable to pay under section 1184 in relation to a person operates, to the extent of the payment, as a discharge of the compensation payer’s liability to pay compensation to the person.
1184C(2) Payment to the Commonwealth of an amount that an insurer is liable to pay under section 1184 in relation to a person operates, to the extent of the payment, as a discharge of:
(a) the insurer’s liability to the compensation payer; and
(b) the compensation payer’s liability to pay compensation to the person.
1184D Offence to make compensation payment after receiving preliminary notice or recovery notice
1184D(1) If a person (the potential compensation payer) has been given a notice under section 1182 or 1184 in relation to the payment of compensation to a person, the potential compensation payer must not make the compensation payment to the person.
Penalty: Imprisonment for 12 months.
1184D(1A) Subsection (1) does not apply if:
(a) in the case of a notice under section 1182—the Secretary has given the potential compensation payer written notice that the notice under section 1182 is revoked; or
(b) in the case of a notice under section 1184—the potential compensation payer has paid to the Commonwealth the amount specified in the notice; or
(c) the Secretary has given the potential compensation payer written permission to pay the compensation.
1184D(2) If an insurer has been given a notice under section 1182 or 1184 in relation to the insurer’s liability to indemnify a compensation payer, the insurer must not make any payment to the compensation payer in relation to that liability.
Penalty: Imprisonment for 12 months.
1184D(2A) Subsection (2) does not apply if:
(a) in the case of a notice under section 1182—the Secretary has given the insurer written notice that the notice under section 1182 is revoked; or
(b) in the case of a notice under section 1184—the insurer has paid to the Commonwealth the amount specified in the notice; or
(c) the Secretary has given the insurer written permission to pay the amount.
1184D(3) Strict liability applies to an element of an offence against subsection (1) or (2) that:
(a) a notice is a notice under section 1182; or
(b) a notice is a notice under section 1184.
1184E(1) A compensation payer or insurer who contravenes section 1184D is, in addition to being liable under that section, liable to pay to the Commonwealth:
(a) if the contravention relates to a notice under section 1182—an amount determined by the Secretary; or
(b) if the contravention relates to a notice under section 1184—the recoverable amount specified in the notice.
1184E(2) The amount determined by the Secretary under paragraph (1)(a) must not be more than the smallest of the amounts worked out:
(a) if the person is not a member of a couple—under subsection 1184A(1), (2) or (4), as the case requires; or
(b) if the person is a member of a couple—under subsection 1184A(1), (2), (3) or (4), as the case requires.
1184E(3) This section applies in relation to a payment by way of compensation in spite of any law of a State or Territory (however expressed) under which the compensation is inalienable.
1184F Debts resulting from notices under section 1178 or 1180
If the Secretary gives a person a notice under section 1178 or 1180 determining that the person is liable to pay to the Commonwealth the amount specified in the notice, the amount so specified is a debt due by the person to the Commonwealth.
1184G Debts resulting from notices under section 1184
If the Secretary gives a person a notice under section 1184 that the Secretary proposes to recover a specified amount from the person, the specified amount is a debt due by the person to the Commonwealth.
1184H Debts resulting from contravention of section 1184D
1184H(1) An amount payable by a compensation payer under section 1184E is a debt due by the compensation payer to the Commonwealth.
1184H(2) An amount payable by an insurer under section 1184E is a debt due by the insurer to the Commonwealth.
1184I Compensation arrears debts
1184I(1) If an adverse determination is made in relation to a person because of point 1064‑E3, 1066A‑F2A, 1067G‑H25, 1067L‑D24, 1068‑G8A, 1068A‑E13 or 1068B‑D21, the amount that the person is liable to pay to the Commonwealth because of the determination is a debt due by the person to the Commonwealth.
1184I(2) In this section:
adverse determination means a determination under section 79, 80, 81 or 82 of the Administration Act.
1184J Secretary may give recovery notice either to compensation payer or to insurer but not to both
1184J(1) The Secretary is not to give a notice to an insurer under section 1184 about a matter if there is a notice to a compensation payer under section 1184 in force in relation to the same matter.
1184J(2) The Secretary is not to give a notice to a compensation payer under section 1184 about a matter if there is a notice to an insurer under section 1184 in force in relation to the same matter.
1184K Secretary may disregard some payments
1184K(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case.
1184K(2) If:
(a) a person or a person’s partner receives or claims a compensation affected payment; and
(b) the person receives compensation; and
(c) the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person’s or the person’s partner’s receipt of, or claim for, the compensation affected payment;
the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsection (1).
1184L Application to review compensation decision—disability support pension
1184L(1) This section applies if a person claims a disability support pension and:
(a) the Secretary decides under section 1167 that the pension is not to be granted or is not payable; or
(b) the Secretary decides under section 1169 that the pension is not payable; or
(c) the Secretary decides that, if the person were qualified for the pension, the rate of the pension would be reduced to nil under section 1173.
1184L(2) If:
(a) an application is made, under section 142 of the Administration Act, to the Social Security Appeals Tribunal for a review of that decision; and
(b) at the time of the application, the Secretary has not taken the necessary steps to satisfy himself or herself whether the person is qualified for the disability support pension or the disability wage supplement; and
(c) the person who claimed the disability support pension or disability wage supplement requests the Secretary, in writing, to take those steps;
the Secretary must take those steps as soon as practicable after the request is made.
1185 Special provision for certain recipients of dependency‑based payments
1185(1) This section applies to a person if:
(a) the person is a member of a couple; and
(b) the person was a member of the same couple immediately before 20 September 2001; and
(c) the person’s partner was receiving a compensation affected payment immediately before 20 September 2001; and
(d) the person was receiving a dependency‑based payment immediately before 20 September 2001; and
(e) the person was born on or before 1 July 1955.
1185(2) If this section applies to a person, the following paragraphs have effect:
(a) the dependency‑based payment does not cease to be payable to the person only because the person’s partner receives periodic compensation payments;
(b) in spite of Division 3, the person continues to be qualified for the dependency‑based payment to the same extent as he or she would have if the person’s partner had not received the payments of compensation.
1185(3) Paragraph (2)(b) does not prevent a dependency‑based payment being cancelled, or ceasing to be payable, under a provision of the social security law, other than a provision of this Part.
1185(4) Paragraph (2)(b) does not prevent the rate of a dependency‑based payment being reduced or cancelled under the social security law because of the operation of section 1174.
1185(5) In this section:
dependency‑based payment means:
(a) wife pension; or
(b) mature age partner allowance; or
(c) partner allowance.
Part 3.14A—Retirement assistance for farmers
This Part deals with the transfer of farming interests to family members of a younger generation. The purpose of the Part is to provide that, if the conditions set out in the Part are met, the value of any such interests transferred by a qualifying farmer, his or her partner, or a former partner of the qualifying farmer, will be disregarded in determining:
(a) whether a social security payment is payable; or
(b) at what rate a social security payment is payable.
1185AA Applicable cut‑off date
In this Part:
applicable cut‑off date means:
(a) in relation to a transfer, where:
(i) the transfer was not completed before 1 July 2001; and
(ii) a pre‑assessment request in relation to the transfer was lodged with the Department or the Agency before 1 August 2001; and
(iii) the Department or Agency responded affirmatively to the request;
the first day after the end of the period of 3 months beginning on the day on which the Department or Agency responded to the request; and
(b) in relation to any other transfer—1 July 2001.
Pre‑assessment request
1185AB(1) For the purposes of this Part, a pre‑assessment request is a written request by a person:
(a) for advice about whether this Part would apply to the person, or to the person’s partner, in the event that a proposed transfer were to take place; and
(b) that sets out sufficient information to enable the advice to be given.
1185AB(2) For the purposes of subsection (1), a written request does not include a request made by email.
Contact by telephone etc.—timing of request
1185AB(3) For the purposes of this Part, if:
(a) a person contacted the Department or the Agency:
(i) by telephone; or
(ii) by fax; or
(iii) by email; or
(iv) in person;
for advice about whether this Part would apply to the person, or to the person’s partner, in the event that a proposed transfer were to take place; and
(b) the person followed up that contact by lodging a pre‑assessment request with the Department or Agency within 21 days after the day on which the person contacted the Department or Agency;
the person is taken to have lodged the pre‑assessment request on the day on which the person contacted the Department or Agency.
Affirmative response to pre‑assessment request
1185AB(4) For the purposes of this Part, if a person lodges a pre‑assessment request, the Department or the Agency is taken to have responded affirmatively to that request if, and only if, the Secretary, or an officer of the Agency, gives the person a written notice:
(a) that contains advice to the effect that this Part would apply to the person, or to the person’s partner, in the event that the proposed transfer were to take place; and
(b) that specifies the date on which the notice was issued.
Timing of response
1185AB(5) The Department or the Agency is taken to have responded to a pre‑assessment request on the date specified in the notice as the date on which the notice was issued.
1185B Part to apply to certain transfers of estates in farms etc.
1185B(1) Subject to subsection (3), this Part applies to a person if:
(a) at any time after 14 September 1992 but before the applicable cut‑off date, the person, being then a qualifying farmer, transferred by way of gift to one, or more than one, eligible descendant (either solely to the eligible descendant or jointly to him or her and his or her partner):
(i) his or her qualifying interest in the farm or farms in which he or she had such an interest; and
(ii) all the qualifying interests that he or she had in relevant farm assets; and
(b) the person, or (if the person is a member of a couple) the person or his or her partner:
(i) has reached pension age; or
(ii) will reach pension age before 1 July 2001; and
(c) the total value for the purposes of this section of the farm or farms, and the relevant farm assets, referred to in paragraph (a) does not exceed $500,000; and
(d) during the last 3 years before the transfer was completed, the eligible descendant or each of the eligible descendants:
(i) had been actively involved with the farm or any of the farms; or
(ii) would, in the opinion of the Secretary, have been so involved but for exceptional circumstances beyond his or her control; and
(e) if the person is a member of a couple—the person’s partner does not have:
(i) a legal estate or interest in the farm or farms referred to in subparagraph (a)(i) or in any other farm; or
(ii) a legal interest in any relevant farm asset; and
(f) the person satisfies the farmers’ income test for the purposes of this Part.
Note 1: For qualifying farmer, transfer, eligible descendant, qualifying interest, farm and relevant farm assets, see subsection 17A(1).
Note 2: For pension age see subsection 23(1).
Note 3: For the value for the purposes of this section of a farm or relevant farm asset see subsection (4) and for actively involved with a farm see subsection (5).
Note 4: For the farmers’ income test see section 1185K.
1185B(2) Subject to subsection (3), this Part also applies to a person if:
(a) at any time after 14 September 1992 but before the applicable cut‑off date, the person, being then an eligible former partner of a qualifying farmer, transferred by way of gift to one, or more than one, eligible descendant of the farmer (either solely to the eligible descendant or jointly to him or her and his or her partner):
(i) his or her qualifying interest in the farm or farms in which he or she had such an interest; and
(ii) all the qualifying interests that he or she had in relevant farm assets; and
(b) the person has reached pension age or will reach pension age before 1 July 2001; and
(c) the total value for the purposes of this section of the farm or farms, and the relevant farm assets, referred to in paragraph (a) does not exceed $500,000; and
(d) during the last 3 years before the transfer was completed, the eligible descendant or each of the eligible descendants:
(i) had been actively involved with the farm or any of the farms; or
(ii) would, in the opinion of the Secretary, have been so involved but for exceptional circumstances beyond his or her control; and
(e) the person satisfies the farmers’ income test for the purposes of this Part.
Note 1: For eligible former partner of a qualifying farmer, transfer, eligible descendant, qualifying interest, farm, and relevant farm assets see subsection 17A(1).
Note 2: For pension age see subsection 23(1).
Note 3: For the value for the purposes of this section of a farm or relevant farm asset see subsection (4) and for actively involved with a farm see subsection (5).
Note 4: For the farmers’ income test see section 1185K.
1185B(3) This Part does not apply to the person if:
(a) immediately before the transfer, the eligible descendant, or one of the eligible descendants, referred to in paragraph (1)(a) or (2)(a) (as the case may be) had a qualifying interest in:
(i) the farm or one of the farms referred to in paragraph (1)(a)(i) or (2)(a)(i); or
(ii) any relevant farm asset; and
(b) the eligible descendant had acquired the qualifying interest in the farm, or in the relevant farm asset, after 14 September 1997; and
(c) the consideration, or part of the consideration, for the interest so acquired was the wages forgone by the eligible descendant while he or she was working as an employee on the farm or any of the farms.
Note: For transfer, eligible descendant, qualifying interest, farm and relevant farm asset see subsection 17A(1).
1185B(4) If a person transfers a qualifying interest that the person has in a farm or a relevant farm asset, then:
(a) if paragraph (b) does not apply—the value for the purposes of this section of the farm or relevant farm asset is its value when the transfer is completed; or
(b) if, immediately before the transfer by the person of his or her qualifying interest in the farm or relevant farm asset, the transferee had a qualifying interest in the farm or relevant farm asset—the value for the purposes of this section of the farm or relevant farm asset is its value when the transfer is completed less the value of the transferee’s qualifying interest in it at that time.
1185B(5) For the purposes of paragraphs (1)(d) and (2)(d), a person is taken to have been actively involved with a farm during a particular period if, during that period, the person:
(a) has contributed a significant part of his or her labour to the development of the farm; or
(b) has undertaken educational studies or training in a field that, in the opinion of the Secretary, is relevant to the development or management of the farm enterprise.
1185C How to assess the value of farms etc. subject to a transfer
Value of farm affected by previous transaction
1185C(1) If:
(a) a transfer of a kind referred to in paragraph 1185B(1)(a) or (2)(a) is completed after 14 September 1997; and
(b) at any time before the transfer but after 14 September 1997, the person making the transfer entered into a transaction or transactions as a result of which:
(i) the value of the farm or farms in which the person had a qualifying interest immediately before the transfer is less than the value that that farm or those farms would have had immediately before the transfer if the person had not entered into the transaction or transactions (the unreduced farm value); or
(ii) the value of the relevant farm assets in which the person had a qualifying interest immediately before the transfer is less than the value that those relevant farm assets would have had immediately before the transfer if the person had not entered into the transaction or transactions (the unreduced assets value);
then, for the purposes of section 1185B:
(c) the value of that farm or those farms is taken to be an amount equal to the unreduced farm value; and
(d) the value of those relevant farm assets is taken to be an amount equal to the unreduced assets value.
Life interest retained in principal home on farm
1185C(2) If, when transferring by way of gift to another person his or her qualifying interest in a farm, a person retains a freehold estate, a leasehold interest or a life interest in the dwelling‑house on the farm, and the adjacent private land, that constitute the person’s principal home, then, for the purposes of section 1185B:
(a) the person is taken to have transferred the whole of his or her qualifying interest in the farm by way of gift; but
(b) when assessing the value of the farm, the value of the dwelling‑house and the adjacent private land is not to be included.
General rule
1185C(3) Subject to this section, apply section 1121A in working out the value of a farm or farms, and any relevant farm assets, for the purposes of this Division.
Note: For transfer, qualifying interest, eligible descendant, farm and relevant farm asset see subsection 17A(1).
Division 2—Modification of provisions relating to assets test
1185D Transfer of estate in farm etc. not disposal of an asset
1185D(1) If this Part applies to a person because of subsection 1185B(1), then, subject to subsections (3) and (5):
(a) the transfer by the person of his or her qualifying interest in a farm or in a relevant farm asset is taken not to be a disposal of an asset (within the meaning of section 1123); and
(b) if the person’s partner has also transferred by way of gift to an eligible descendant of the person any qualifying interest in a farm or in a relevant farm asset, that transfer is taken not to be a disposal of an asset (within the meaning of section 1123).
1185D(2) If this Part applies to a person because of subsection 1185B(2), then, subject to subsections (4) and (5), the transfer by the person of his or her qualifying interest in a farm or in a relevant farm asset is taken not to be a disposal of an asset (within the meaning of section 1123).
1185D(3) If the applicable cut‑off date in relation to the transfer referred to in paragraph (1)(a) was 1 July 2001, and:
(a) when the transfer was completed; or
(b) in the case of such a transfer that was completed before 15 September 1997—on 15 September 1997;
neither the person making the transfer nor his or her partner had reached pension age, subsection (1) only applies after one of them reaches that age.
1185D(4) If the applicable cut‑off date in relation to the transfer referred to in subsection (2) was 1 July 2001, and:
(a) when the transfer was completed; or
(b) in the case of such a transfer that was completed before 15 September 1997—on 15 September 1997;
the person making the transfer had not reached pension age, subsection (2) only applies after the person reaches that age.
Note 1: For transfer, qualifying interest, eligible descendant, farm and relevant farm asset see subsection 17A(1).
Note 2: For pension age see subsection 23(1).
1185D(5) Disregard subsections (1) and (2) when working out a rate for the purposes of Division 6 of Part 2.2A.
Note: Part 2.2A provides for the payment of a pension bonus to a person who qualifies for an age pension if the person has deferred claiming that pension for a period of at least one year and the person, or the person’s partner, has worked gainfully during that period.
Division 3—Claims for social security payment
Division 4—Requests for increase in rate of social security payment
1185F(1) This Division applies if:
(a) a person, or a person’s partner, has reached pension age; and
(b) this Part applies because of a transfer of qualifying interests by the person or the person’s partner; and
(c) the person is receiving a social security payment under this Act; and
(d) the value of the qualifying interests has been included in the value of the person’s assets, or the partner’s assets, when calculating the rate of the person’s social security payment.
If:
(a) the rate at which a social security payment is being, or has been, paid to a person is less than the rate (the increased rate) at which it would be, or would have been, paid if the value of the qualifying interests transferred by the person or the person’s partner had not been included in the value of the person’s assets, or of the partner’s assets, in calculating the rate of the person’s social security payment; and
(b) the person wants the social security payment to be paid at the increased rate;
the person must make a request to that effect.
A request under section 1185G must be made in writing and must be in accordance with a form approved by the Secretary.
1185J Determination of request
1185J(1) If:
(a) a person makes a request under section 1185G in respect of a social security payment; and
(b) the Secretary is satisfied that the rate at which the social security payment is being, or has been, paid to the person is less than the rate at which it would be, or would have been, paid if the value of the qualifying interests transferred by the person or the person’s partner had not been included in the value of the person’s assets, or the partner’s assets, when calculating the rate of the person’s social security payment;
the Secretary must determine that the request is to be granted.
1185J(2) The determination takes effect:
(a) if the transfer was completed before 15 September 1998 and the person makes the request before that day—on 15 September 1997 or the day on which the transfer was completed, whichever is later; or
(b) if the transfer was completed after 14 September 1998 but before the applicable cut‑off date and the person makes the request during the period of 3 months that starts on the day on which the transfer is completed—on the day on which the transfer was completed; or
(c) in any other case—on the day on which the request is made.
Division 5—Farmers’ income test
1185K Does a person satisfy the farmers’ income test?
How to work out whether the farmers’ income test is satisfied
1185K(1) This is how to work out whether a person who has transferred his or her qualifying interest in a farm or farms satisfies the farmers’ income test for the purposes of this Part:
Method statement
Step 1. Work out under subsection (2) the amount of the person’s ordinary income (other than ordinary income from farming) for each of the last 3 financial years before the applicable completion day (the income test years).
If the person was a member of a couple on the applicable completion day, work out also under subsection (2) the amount of his or her partner’s ordinary income (other than ordinary income from farming) for the 3 income test years.
Add up all the amounts so obtained. The result is called the person’s total non‑farm income.
Step 2. Work out under subsection (3) the amount of the person’s ordinary income from farming for each of the 3 income test years.
If the person was a member of a couple on the applicable completion day, work out also under subsection (3) the amount of his or her partner’s ordinary income from farming for the 3 income test years.
Add up all the amounts of positive income for both the person and the person’s partner and deduct from that total the amounts of negative income (if any) for both the person and the person’s partner. The result is called the person’s total farm income (which may be either positive or negative).
Step 3. Work out the person’s total income for the 3 income test years:
(a) if the person’s total farm income is a positive amount—by adding that amount to the amount of the person’s total non‑farm income; or
(b) if the person’s total farm income is a negative amount—by deducting that amount from the amount of the person’s total non‑farm income.
Step 4. Work out under subsection (4) the maximum basic rate for age pension applicable to the person. Multiply that rate by 3. The result is called the person’s maximum basic entitlement.
Step 5. If the person’s total income for the 3 income test years is less than the person’s maximum basic entitlement, the person satisfies the farmers’ income test for the purposes of this Part.
If the person’s total income for the 3 income test years equals or exceeds the person’s maximum basic entitlement, the person does not satisfy the farmers’ income test for the purposes of this Part.
Person’s ordinary income from all sources other than farming
1185K(2) For the purpose of working out a person’s ordinary income from all sources other than farming during a financial year, the following provisions have effect:
(a) the provisions of Part 3.10 other than Division 1B apply to the person and so apply as if any reference in Division 1A to a tax year were a reference to that financial year;
(b) any return on a financial asset that the person has actually received during the financial year is taken to be ordinary income of the person.
Person’s ordinary income from farming
1185K(3) For the purpose of working out a person’s ordinary income from farming during a financial year, the following provisions have effect:
(a) the provisions of Part 3.10 other than Division 1B apply to the person and so apply as if:
(i) any reference in subsection 1074(1) to a tax year were a reference to that financial year; and
(ii) subsection 1074(2) and section 1075 were omitted;
(b) any return on a financial asset that the person has actually received during the financial year and that relates to a farm or a relevant farm asset is taken to be ordinary income of the person from farming;
(c) if, at the end of the financial year, the value of all trading stock on hand that relates to a farm is less than the value of all such trading stock on hand at the beginning of that financial year—the amount of the difference is to be deducted from that part of the person’s ordinary income from farming for that financial year that is income in the form of profits;
(d) there is also to be deducted from the person’s ordinary income from farming:
(i) losses and outgoings that relate to a farm and are allowable deductions for the purposes of section 51 of the Income Tax Assessment Act 1936 or section 8‑1 of the Income Tax Assessment Act 1997, as appropriate; and
(ii) depreciation that relates to a relevant farm asset and is an allowable deduction for the purposes of subsection 54(1) of the Income Tax Assessment Act 1936 or Division 42 of the Income Tax Assessment Act 1997; and
(iia) amounts that relate to a relevant farm asset and can be deducted for the decline in value of the asset under Subdivision 40‑B of the Income Tax Assessment Act 1997; and
(iii) amounts that relate to a farm or a relevant farm asset and are allowable deductions under subsection 82AAC(1) of the Income Tax Assessment Act 1936;
(e) if a negative result is obtained after applying paragraphs (c) and (d)—the person’s ordinary income from farming for the financial year is a negative income;
(f) if paragraph (e) does not apply—the person’s ordinary income from farming for the financial year is a positive income.
Person’s maximum basic rate for age pension
1185K(4) For the purposes of Step 4 in the Method statement in subsection (1), the maximum basic rate for age pension applicable to the person is:
(a) if the person was a member of a couple at any time during the 3 years immediately before the operative day—an amount equal to twice the sum of:
(i) the amount that was, on the operative day, the maximum basic rate for a partnered person under Module B of Pension Rate Calculator A in section 1064; and
(ii) the amount that was, on the operative day, the person’s pension supplement worked out under point 1064‑BA2; or
(b) if paragraph (a) does not apply—an amount equal to the sum of:
(i) the amount that was, on the operative day, the maximum basic rate for a person who is not a member of a couple under Module B of Pension Rate Calculator A in section 1064; and
(ii) the amount that was, on the operative day, the person’s pension supplement worked out under point 1064‑BA2.
Definitions
1185K(5) In this section:
applicable completion day, in relation to a transfer, means the earlier of:
(a) the day on which the transfer was completed; and
(b) 30 June 2001.
income, in relation to a person, has the same meaning as in subsection 8(1), except that, in addition to any amount that is not income of the person because of subsection 8(4), (5), (7A) or (8), any payment to the person under:
(a) the AUSTUDY scheme; or
(b) the Veterans’ Entitlements Act; or
(c) the Farm Household Support Act 1992;
is not income of the person for the purposes of this section.
operative day means:
(a) if the transfer of the person’s qualifying interest in the farm or farms was completed before 15 September 1997—that day; or
(b) otherwise—the applicable completion day in relation to the transfer of the person’s qualifying interest in the farm or farms.
ordinary income from farming, in relation to a person who has a qualifying interest in a farm or farms, means the ordinary income of the person from the farm or farms and any relevant farm assets.
Division 6—Transitional: ex gratia payments
1185L(1) If:
(a) apart from this subsection, an amount would have become payable under this Act to a person in respect of a period; and
(b) the amount would not have become payable if Divisions 1 to 5 of this Part had not been amended by the Social Security and Veterans’ Entitlements Legislation Amendment (Retirement Assistance for Farmers) Act 2001; and
(c) the person has been paid an ex gratia payment from the Commonwealth in respect of that period;
the amount mentioned in paragraph (a) is not payable to the person.
1185L(2) If:
(a) apart from this subsection, an amount would have become payable under this Act to a person in respect of a period; and
(b) the amount exceeds the amount that would have been payable if Divisions 1 to 5 of this Part had not been amended by the Social Security and Veterans’ Entitlements Legislation Amendment (Retirement Assistance for Farmers) Act 2001; and
(c) the person has been paid an ex gratia payment from the Commonwealth in respect of that period;
the amount mentioned in paragraph (a) is reduced by the amount of the excess.
Part 3.14B—Retirement assistance for sugarcane farmers
This Part deals with the transfer of sugarcane farming interests to family members of a younger generation. The purpose of the Part is to provide that, if the conditions set out in the Part are met, the value of any such interests transferred by a qualifying sugarcane farmer, his or her partner, or an eligible former partner of a qualifying sugarcane farmer, will be disregarded in determining:
(a) whether a social security payment is payable; or
(b) at what rate a social security payment is payable.
1185N RASF commencement and closing days
1185N(1) For the purposes of this Part:
(a) the RASF commencement day is the day on which this Part commences; and
(b) the RASF closing day is (subject to any determination under subsection (2)) the day that is 3 years after the RASF commencement day.
1185N(2) The Minister may, by written determination, specify a day that is later than the day mentioned in paragraph (1)(b) as the RASF closing day.
1185N(3) A determination under subsection (2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
In this Part:
applicable cut‑off date means:
(a) in relation to a transfer, where:
(i) the transfer was not completed before the RASF closing day; and
(ii) a pre‑assessment request in relation to the transfer was lodged with the Department or the Agency within the period of 28 days immediately after the RASF closing day; and
(iii) the Department or Agency responded affirmatively to the request;
the first day after the end of the period of 13 weeks beginning on the day on which the Department or Agency responded to the request; and
(b) in relation to any other transfer—the RASF closing day.
Pre‑assessment request
1185Q(1) For the purposes of this Part, a pre‑assessment request is a written request by a person:
(a) for advice about whether this Part would apply to the person, or to the person’s partner, in the event that a proposed transfer were to take place; and
(b) that sets out sufficient information to enable the advice to be given.
1185Q(2) For the purposes of subsection (1), a written request does not include a request made by e‑mail.
Contact by telephone etc.—timing of request
1185Q(3) For the purposes of this Part, if:
(a) a person contacted the Department or the Agency:
(i) by telephone; or
(ii) by fax; or
(iii) by e‑mail; or
(iv) in person;
for advice about whether this Part would apply to the person, or to the person’s partner, in the event that a proposed transfer were to take place; and
(b) the person followed up that contact by lodging a pre‑assessment request with the Department or Agency within 21 days after the day on which the person contacted the Department or Agency;
the person is taken to have lodged the pre‑assessment request on the day on which the person contacted the Department or Agency.
Affirmative response to pre‑assessment request
1185Q(4) For the purposes of this Part, if a person lodges a pre‑assessment request, the Department or the Agency is taken to have responded affirmatively to that request if, and only if, the Secretary, or an officer of the Agency, gives the person a written notice:
(a) that contains advice to the effect that this Part would apply to the person, or to the person’s partner, in the event that the proposed transfer were to take place; and
(b) that specifies the date on which the notice was issued.
Timing of response
1185Q(5) The Department or the Agency is taken to have responded to a pre‑assessment request on the date specified in the notice as the date on which the notice was issued.
1185R Part to apply to certain transfers of estates in sugarcane farms etc.
1185R(1) Subject to subsections (3) and (4), this Part applies to a person if:
(a) at any time after the RASF commencement day but before the applicable cut‑off date, the person, being then a qualifying sugarcane farmer, transferred by way of gift to one, or more than one, eligible descendant (either solely to the eligible descendant or jointly to him or her and his or her partner):
(i) his or her eligible interest in the sugarcane farm or sugarcane farms in which he or she had such an interest; and
(ii) all the eligible interests that he or she had in relevant sugarcane farm assets; and
(b) the person, or (if the person is a member of a couple) the person or his or her partner:
(i) has reached pension age; or
(ii) will reach pension age before the RASF closing day; and
(c) the total net value (calculated in accordance with section 1185S) of the sugarcane farm or sugarcane farms, and the relevant sugarcane farm assets, in which the person had eligible interests does not exceed $500,000; and
(d) during the last 3 years before the transfer was completed, the eligible descendant or each of the eligible descendants:
(i) had been actively involved with the sugarcane farm or any of the sugarcane farms; or
(ii) would, in the opinion of the Secretary, have been so involved but for exceptional circumstances beyond his or her control; and
(e) if the person is a member of a couple—the person’s partner does not have an eligible interest in any sugarcane farm or relevant sugarcane farm asset; and
(f) the person satisfies the sugarcane farmers’ income test for the purposes of this Part.
Note 1: For eligible descendant see subsection 17A(1).
Note 2: For eligible interest, qualifying sugarcane farmer, relevant sugarcane farm asset, sugarcane farm and transfer, see subsection 17B(1).
Note 3: For pension age see subsection 23(1).
Note 4: For actively involved with a sugarcane farm see subsection (5).
Note 5: For the total net value of a sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets see section 1185S.
Note 6: For the sugarcane farmers’ income test see section 1185Y.
1185R(2) Subject to subsections (3) and (4), this Part also applies to a person if:
(a) at any time after the RASF commencement day but before the applicable cut‑off date, the person, being then an eligible former partner of a qualifying sugarcane farmer, transferred by way of gift to one, or more than one, eligible descendant of the farmer (either solely to the eligible descendant or jointly to him or her and his or her partner):
(i) his or her eligible interest in the sugarcane farm or sugarcane farms in which he or she had such an interest; and
(ii) all the eligible interests that he or she had in relevant sugarcane farm assets; and
(b) the person has reached pension age or will reach pension age before the RASF closing day; and
(c) the total net value (calculated in accordance with section 1185S) of the sugarcane farm or sugarcane farms, and the relevant sugarcane farm assets, in which the person had eligible interests does not exceed $500,000; and
(d) during the last 3 years before the transfer was completed, the eligible descendant or each of the eligible descendants:
(i) had been actively involved with the sugarcane farm or any of the sugarcane farms; or
(ii) would, in the opinion of the Secretary, have been so involved but for exceptional circumstances beyond his or her control; and
(e) the person satisfies the sugarcane farmers’ income test for the purposes of this Part.
Note 1: For eligible descendant see subsection 17A(1).
Note 2: For eligible former partner of a qualifying sugarcane farmer, eligible interest, relevant sugarcane farm asset, sugarcane farm and transfer see subsection 17B(1).
Note 3: For pension age see subsection 23(1).
Note 4: For actively involved with a sugarcane farm see subsection (5).
Note 5: For the total net value of a sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets see section 1185S.
Note 6: For the sugarcane farmers’ income test see section 1185Y.
1185R(3) This Part does not apply to the person if:
(a) immediately before the transfer, the eligible descendant, or one of the eligible descendants, referred to in paragraph (1)(a) or (2)(a) (as the case may be) had an eligible interest in:
(i) the sugarcane farm or one of the sugarcane farms referred to in subparagraph (1)(a)(i) or (2)(a)(i); or
(ii) any relevant sugarcane farm asset; and
(b) the eligible descendant had acquired the eligible interest in the farm, or in the relevant farm asset, after 29 April 2004; and
(c) the consideration, or part of the consideration, for the interest so acquired was the wages forgone by the eligible descendant while he or she was working as an employee on the farm or any of the farms.
Note 1: For eligible descendant see subsection 17A(1).
Note 2: For eligible interest, relevant sugarcane farm asset, sugarcane farm and transfer see subsection 17B(1).
1185R(4) This Part does not apply to the person (the transferor) if:
(a) the eligible interest, or any part of the eligible interest, that was transferred is an interest that the transferor had in a sugarcane farm, or sugarcane farms, or any relevant sugarcane farm asset because the value of the transferor’s assets included an amount calculated by reference to the value of the farm, or farms, or relevant farm asset (see paragraphs 17B(5)(e) and (6)(c)); and
(b) immediately after the transfer to the eligible descendant, or eligible descendants, referred to in paragraph (1)(a) or (2)(a) (as the case may be), the eligible interest, or any part of the eligible interest, transferred was held by a trust that was a concessional primary production trust in relation to the transferor.
Note 1: For eligible descendant see subsection 17A(1).
Note 2: For eligible interest, relevant sugarcane farm asset and sugarcane farm see subsection 17B(1).
Note 3: For the transfer of eligible interests that are such interests because of paragraphs 17B(5)(e) and (6)(c) see subsection 17B(12).
Note 4: For concessional primary production trust see section 1208U.
1185R(5) For the purposes of paragraphs (1)(d) and (2)(d), a person is taken to have been actively involved with a sugarcane farm during a particular period if, during that period, the person:
(a) has contributed a significant part of his or her labour to the development of the sugarcane farm; or
(b) has undertaken educational studies or training in a field that, in the opinion of the Secretary, is relevant to the development or management of the sugarcane farm enterprise.
1185S How to assess the total net value of sugarcane farms etc. subject to a transfer
Meaning of total net value
1185S(1) For the purposes of subsections 1185R(1) and (2), the total net value of a sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets, the eligible interests in which have been transferred, is to be calculated as follows:
where:
market value of sugarcane farm assets means the total of the market values of the sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets immediately before the transfer of the eligible interests.
sugarcane farm debts means the total of any amounts of money that:
(a) had been borrowed for the purposes of undertaking one or more sugarcane farm enterprises on the sugarcane farm or sugarcane farms; and
(b) had not been repaid before the transfer of the eligible interests.
Note: The total net value of a sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets is not affected by the number of persons who have interests in them.
1185S(2) Subsection (1) has effect subject to subsections (3), (4) and (5).
Value of farm reduced by value of transferee’s interest
1185S(3) If:
(a) a person transfers eligible interests that the person has in a sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets; and
(b) immediately before the transfer by the person of his or her eligible interests in the farm, or farms, and relevant farm assets, the transferee had an eligible interest in the farm, or one of those farms, or a relevant farm asset;
then, the total net value of the farm, or farms, and relevant farm assets is the amount worked out under subsection (1) reduced by the value of the transferee’s eligible interest in the farm or relevant farm asset at that time.
Value of farm affected by previous transaction
1185S(4) If:
(a) a person transfers his or her eligible interests in a sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets; and
(b) at any time after 29 April 2004 the person making the transfer entered into a transaction or transactions; and
(c) the result of the transaction or transactions was that the total net value (worked out in accordance with subsection (1)) of the farm, or farms, and relevant farm assets immediately before the transfer is less than the total net value that that farm, or those farms, and relevant farm assets would have had immediately before the transfer if the person had not entered into the transaction or transactions (the unreduced value);
then, the total net value of the farm, or farms, and relevant farm assets is taken to be an amount equal to the unreduced value.
Life interest retained in principal home on farm
1185S(5) If:
(a) a person transfers eligible interests that the person has in a farm by way of gift; and
(b) the person retains a freehold estate, a leasehold interest or a life interest in the dwelling‑house on the farm, and the adjacent private land, that constitute the person’s principal home;
then:
(c) for the purposes of subsections 1185R(1) and (2), the person is taken to have transferred the whole of his or her eligible interest in the farm by way of gift; and
(d) in assessing the market value of the farm for the purposes of subsection (1), the value of the dwelling‑house and the adjacent private land is not to be included.
Note: For eligible interest, relevant sugarcane farm asset, sugarcane farm and transfer see subsection 17B(1).
Division 2—Modification of provisions relating to assets test
1185T Transfer of estate in sugarcane farm etc. not disposal of an asset
1185T(1) If this Part applies to a person because of subsection 1185R(1), then, subject to subsections (4) and (6):
(a) the transfer by the person of his or her eligible interest in a sugarcane farm or in a relevant sugarcane farm asset is taken not to be a disposal of an asset (within the meaning of section 1123); and
(b) if the person’s partner has also transferred by way of gift to an eligible descendant of the person any eligible interest in a sugarcane farm or in a relevant sugarcane farm asset, that transfer is taken not to be a disposal of an asset (within the meaning of section 1123).
1185T(2) If this Part applies to a person because of subsection 1185R(2), then, subject to subsections (5) and (6), the transfer by the person of his or her eligible interest in a sugarcane farm or in a relevant sugarcane farm asset is taken not to be a disposal of an asset (within the meaning of section 1123).
1185T(3) To avoid doubt, subsections (1) and (2) have effect despite sections 1208L and 1208M.
1185T(4) If:
(a) the applicable cut‑off date in relation to the transfer referred to in paragraph (1)(a) was the RASF closing day; and
(b) when the transfer was completed neither the person making the transfer nor his or her partner had reached pension age;
subsection (1) only applies after one of them reaches that age.
1185T(5) If:
(a) the applicable cut‑off date in relation to the transfer referred to in subsection (2) was the RASF closing day; and
(b) when the transfer was completed the person making the transfer had not reached pension age;
subsection (2) only applies after the person reaches that age.
Note 1: For eligible descendant see subsection 17A(1).
Note 2: For eligible interest, RASF closing day, relevant sugarcane farm asset, sugarcane farm and transfer see subsection 17B(1).
Note 3: For pension age see subsection 23(1).
1185T(6) Disregard subsections (1) and (2) when working out a rate for the purposes of Division 6 of Part 2.2A.
Note: Part 2.2A provides for the payment of a pension bonus to a person who qualifies for an age pension if the person has deferred claiming that pension for a period of at least one year and the person, or the person’s partner, has worked gainfully during that period.
Division 3—Requests for increase in rate of social security payment
This Division applies if:
(a) a person, or a person’s partner, has reached pension age; and
(b) this Part applies because of a transfer of eligible interests by the person or the person’s partner; and
(c) the person is receiving a social security payment under this Act; and
(d) the value of the eligible interests has been included in the value of the person’s assets, or the partner’s assets, when calculating the rate of the person’s social security payment.
If:
(a) the rate at which a social security payment is being, or has been, paid to a person is less than the rate (the increased rate) at which it would be, or would have been, paid if the value of the eligible interests transferred by the person or the person’s partner had not been included in the value of the person’s assets, or of the partner’s assets, in calculating the rate of the person’s social security payment; and
(b) the person wants the social security payment to be paid at the increased rate;
the person must make a request to that effect.
A request under section 1185V must be made in writing and must be in accordance with a form approved by the Secretary.
1185X Determination of request
1185X(1) If:
(a) a person makes a request under section 1185V in respect of a social security payment; and
(b) the Secretary is satisfied that the rate at which the social security payment is being, or has been, paid to the person is less than the rate at which it would be, or would have been, paid if the value of the eligible interests transferred by the person or the person’s partner had not been included in the value of the person’s assets, or the partner’s assets, when calculating the rate of the person’s social security payment;
the Secretary must determine that the request is to be granted.
1185X(2) The determination takes effect:
(a) if the person makes the request during the period of 13 weeks that starts on the day on which the transfer was completed—on the day on which the transfer was completed; or
(b) in any other case—on the day on which the request is made.
Division 4—Sugarcane farmers’ income test
1185Y Does a person satisfy the sugarcane farmers’ income test?
How to work out whether the sugarcane farmers’ income test is satisfied
1185Y(1) This is how to work out whether a person who has transferred his or her eligible interest in a sugarcane farm or sugarcane farms satisfies the sugarcane farmers’ income test for the purposes of this Part:
Method statement
Step 1. Work out under subsection (2) the amount of the person’s ordinary income (other than ordinary income from farming) for each of the last 3 financial years before the applicable completion day (the income test years).
If the person was a member of a couple on the applicable completion day, work out also under subsection (2) the amount of his or her partner’s ordinary income (other than ordinary income from farming) for the 3 income test years.
Add up all the amounts so obtained. The result is called the person’s total non‑farm income.
Step 2. Work out under subsection (3) the amount of the person’s ordinary income from farming for each of the 3 income test years.
If the person was a member of a couple on the applicable completion day, work out also under subsection (3) the amount of his or her partner’s ordinary income from farming for the 3 income test years.
Add up all the amounts of positive income for both the person and the person’s partner and deduct from that total the amounts of negative income (if any) for both the person and the person’s partner. The result is called the person’s total farm income (which may be either positive or negative).
Step 3. Work out the person’s total income for the 3 income test years:
(a) if the person’s total farm income is a positive amount—by adding that amount to the amount of the person’s total non‑farm income; or
(b) if the person’s total farm income is a negative amount—by deducting that amount from the amount of the person’s total non‑farm income.
Step 4. Work out under subsection (4) the maximum basic rate for age pension applicable to the person. Multiply that rate by 3. The result is called the person’s maximum basic entitlement.
Step 5. If the person’s total income for the 3 income test years is less than the person’s maximum basic entitlement, the person satisfies the sugarcane farmers’ income test for the purposes of this Part.
If the person’s total income for the 3 income test years equals or exceeds the person’s maximum basic entitlement, the person does not satisfy the sugarcane farmers’ income test for the purposes of this Part.
Person’s ordinary income from all sources other than farming
1185Y(2) For the purpose of working out a person’s ordinary income from all sources other than farming during a financial year, the following provisions have effect:
(a) the provisions of Part 3.10 other than Division 1B apply to the person and so apply as if any reference in Division 1A to a tax year were a reference to that financial year;
(b) any return on a financial asset that the person has actually received during the financial year is taken to be ordinary income of the person.
Person’s ordinary income from farming
1185Y(3) For the purpose of working out a person’s ordinary income from farming during a financial year, the following provisions have effect:
(a) the provisions of Part 3.10 other than Division 1B apply to the person and so apply as if:
(i) any reference in subsection 1074(1) to a tax year were a reference to that financial year; and
(ii) subsection 1074(2) and section 1075 were omitted;
(b) any return on a financial asset that the person has actually received during the financial year and that relates to a farm or a relevant farm asset is taken to be ordinary income of the person from farming;
(c) if, at the end of the financial year, the value of all trading stock on hand that relates to a farm is less than the value of all such trading stock on hand at the beginning of that financial year—the amount of the difference is to be deducted from that part of the person’s ordinary income from farming for that financial year that is income in the form of profits;
(d) there is also to be deducted from the person’s ordinary income from farming:
(i) losses and outgoings that relate to a business of primary production and are allowable deductions under section 8‑1 of the Income Tax Assessment Act 1997; and
(ii) deductions for the cost of depreciating assets that are used in a business of primary production and are allowable deductions under Subdivisions 40‑A to 40‑E (inclusive), or Division 328, of the Income Tax Assessment Act 1997; and
(iii) contributions that are allowable deductions under sections 82AAC, 82AAD, 82AADA and 82AAF of the Income Tax Assessment Act 1936;
(e) if a negative result is obtained after applying paragraphs (c) and (d)—the person’s ordinary income from farming for the financial year is a negative income;
(f) if paragraph (e) does not apply—the person’s ordinary income from farming for the financial year is a positive income.
Person’s maximum basic rate for age pension
1185Y(4) For the purposes of Step 4 in the Method statement in subsection (1), the maximum basic rate for age pension applicable to the person is:
(a) if the person was a member of a couple at any time during the 3 years immediately before the applicable completion day—an amount equal to twice the sum of:
(i) the amount that was, on the applicable completion day, the maximum basic rate for a partnered person under Module B of Pension Rate Calculator A in section 1064; and
(ii) the amount that was, on the applicable completion day, the person’s pension supplement worked out under point 1064‑BA2; or
(b) if paragraph (a) does not apply—an amount equal to the sum of:
(i) the amount that was, on the applicable completion day, the maximum basic rate for a person who is not a member of a couple under Module B of Pension Rate Calculator A in section 1064; and
(ii) the amount that was, on the applicable completion day, the person’s pension supplement worked out under point 1064‑BA2.
Definitions
1185Y(5) In this section:
applicable completion day, in relation to a transfer, means the earlier of:
(a) the day on which the transfer was completed; and
(b) the RASF closing day.
income, in relation to a person, has the same meaning as in subsection 8(1), except that, in addition to any amount that is not income of the person because of subsection 8(4), (5), (7A) or (8), any payment to the person under:
(a) the Veterans’ Entitlements Act; or
(b) the Farm Household Support Act 1992;
is not income of the person for the purposes of this section.
ordinary income from farming, in relation to a person who has an eligible interest in a sugarcane farm or sugarcane farms, means the ordinary income of the person from:
(a) the sugarcane farm, or sugarcane farms, and any relevant sugarcane farm assets; and
(b) any other farm, or farms, or relevant farm assets in which the person has an interest.
Part 3.15—New Enterprise Incentive Scheme
This Part adjusts the social security pension or benefit rate of a person who is receiving or whose partner is receiving, payments under the scheme known as the New Enterprise Incentive Scheme (NEIS).
1187(1) If:
(a) an instalment of:
(ia) age pension; or
(i) disability support pension; or
(ii) wife pension; or
(iii) carer payment; or
(iv) parenting payment; or
(v) bereavement allowance; or
(va) widow B pension; or
(vi) special needs pension; or
(vii) mature age allowance under Part 2.12A; or
(viii) mature age partner allowance;
is payable to a person during a pension period; and
(b) NEIS is payable to the person during that pension period;
the rate of the payment referred to in paragraph (a) is to be reduced under this Part.
1187(1A) If:
(a) a payment of:
(ia) widow allowance; or
(ii) newstart allowance; or
(iii) sickness allowance; or
(iv) special benefit; or
(iva) partner allowance; or
(va) mature age allowance under Part 2.12B; or
(vi) rehabilitation allowance;
is payable to a person during a pension period; and
(b) NEIS is payable to the person, or in respect of the person, during that pension period;
the rate of the payment referred to in paragraph (a) is to be reduced under this Part.
1187(2) If:
(a) an instalment of:
(ia) age pension; or
(i) disability support pension; or
(ii) rehabilitation allowance; or
(iii) mature age allowance under Part 2.12A;
is payable to a person during a pension period; and
(b) NEIS or AEIS is payable to the person during that pension period; and
(c) an instalment of:
(i) wife pension in respect of the person; or
(ii) carer payment in respect of the person; or
(iii) mature age partner allowance in respect of the person;
is payable to the person’s partner during a pension period;
the rate of the partner’s payment is to be reduced under this Part.
1187(3) If:
(a) NEIS is payable to a person during a pension period; and
(b) the person is a member of a couple; and
(c) a payment of rehabilitation allowance is payable to the person’s partner during that pension period; and
(d) the amount of the partner’s payment includes an additional payment for partner for the person;
the rate of the partner’s payment referred to in paragraph (c) is to be reduced under this Part.
1188 Rate reduction under this Part
1188(1) Subject to subsection (2), if a person’s rate of payment under this Act is to be reduced under this Part because of a NEIS payment, the amount of rate reduction is to be equal to the amount of the NEIS payment.
1188(2) If:
(a) a person’s rate of payment under this Act is to be reduced under this Part because of a NEIS payment; and
(b) the person’s partner’s rate of payment under this Act is also to be reduced under this Part (see subsection 1187(2)) because of the NEIS payment;
the amount of rate reduction for both the person and the person’s partner is to be equal to 50% of the amount of the NEIS payment.
1188(3) A person’s rate of payment under this Act is not to be reduced below nil under subsection (1) or (2).
Part 3.15A—Community Development Employment Projects Scheme
1188A(1) This Part has the effect, in certain circumstances, of reducing a person’s social security entitlement in respect of a period in respect of which the person is a CDEP Scheme participant.
1188A(2) This Part also provides, in certain circumstances, a supplement for a person for a period in respect of which the person is a CDEP Scheme participant.
1188B CDEP Scheme participants
1188B(1) A person is, or is taken to have been, a CDEP Scheme participant in respect of a particular day (the relevant day) on or after 20 March 1999 if:
(a) the person’s name appeared on the latest CDEP Scheme Participant Schedule, approved on or before the relevant day, and there is no certificate in force, given, after the approval of that Schedule, by an authorised officer stating that the person ceased on or before the relevant day to be a person participating in the CDEP Scheme; or
(b) the person’s name did not appear on that Schedule but a certificate is in force, given, after the approval of that Schedule, by an authorised officer stating that the person began to participate in the CDEP Scheme on or before the relevant day and there is no certificate in force, given, after the issue of the first‑mentioned certificate, by an authorised officer stating that the person ceased on or before the relevant day to participate in the CDEP Scheme.
1188B(2) Subsection (1) does not apply in relation to a person in respect of a particular day if the Secretary believes, on reasonable grounds, that, on that day:
(a) the person was no longer participating in the program constituted by the CDEP Scheme; or
(b) the person was sick or incapacitated and was not receiving sickness benefits under the CDEP Scheme.
1188B(3) In this section:
authorised officer, in relation to a certificate, means a person authorised by the Secretary of the Department whose Minister is responsible for administration of the CDEP Scheme to give such a certificate.
CDEP Scheme Participant Schedule means a schedule of the names of people participating in the CDEP Scheme that has been approved by the Secretary of the Department whose Minister is responsible for administration of the CDEP Scheme for the purposes of that Scheme.
relevant day has the meaning given by subsection (1).
Division 2—Reduction in rate of pension or allowance
1188C(1) If:
(a) an instalment of any of the following:
(i) age pension;
(ii) disability support pension;
(iii) wife pension;
(iv) carer payment;
(v) parenting payment at the rate applicable for a person who is not a member of a couple;
(vi) bereavement allowance;
(vii) widow B pension;
(ix) special needs pension;
(x) mature age allowance under Part 2.12A;
(xi) mature age partner allowance;
is payable to a person in respect of a payment period or in respect of a pension payday; and
(b) a CDEP Scheme payment is payable to the person or the person’s partner in respect of the whole or a part of that payment period or in respect of that pension payday, as the case may be;
the following provisions have effect:
(c) if a CDEP Scheme payment referred to in paragraph (b) that is payable to the person exceeds the person’s threshold:
(i) the amount of the instalment is reduced by the part of the CDEP Scheme payment that does not exceed the person’s threshold; and
(ii) the ordinary income of the person includes the part of the CDEP Scheme payment that exceeds the person’s threshold;
(d) if a CDEP Scheme payment referred to in paragraph (b) that is payable to the person does not exceed the person’s threshold:
(i) the amount of the instalment is reduced by the amount of the CDEP Scheme payment; and
(ii) the CDEP Scheme payment is not ordinary income of the person;
(e) if a CDEP Scheme payment referred to in paragraph (b) that is payable to the person’s partner exceeds the partner’s threshold:
(i) the part of the CDEP Scheme payment that does not exceed the partner’s threshold is not ordinary income of the person or of the person’s partner; and
(ii) the ordinary income of the person’s partner includes the part of the CDEP Scheme payment that exceeds the partner’s threshold;
(f) if a CDEP Scheme payment referred to in paragraph (b) that is payable to the person’s partner does not exceed the partner’s threshold, the CDEP Scheme payment is not ordinary income of the person or of the person’s partner.
1188C(2) If a person who had been receiving instalments of a pension payment, allowance or benefit referred to in paragraph (1)(a) dies, then, in calculating any bereavement payment in respect of the person, any deductions made from the amounts of the instalments under subparagraph (1)(c)(i), (d)(i) or (e)(i) are to be disregarded.
1188C(3) If:
(a) a payment of any of the following:
(i) widow allowance;
(ii) newstart allowance;
(iii) youth allowance;
(iv) parenting payment at the rate applicable for a person who is a member of a couple;
(v) partner allowance;
(vi) mature age allowance under Part 2.12B;
(vii) special benefit;
is payable to a person in respect of a payment period; and
(b) a CDEP Scheme payment is payable to the person in respect of the whole or a part of that period;
the following provisions have effect:
(c) if the CDEP Scheme payment referred to in paragraph (b) exceeds the person’s threshold, the ordinary income of the person includes the part of the CDEP Scheme payment that exceeds the person’s threshold;
(d) if the CDEP Scheme payment referred to in paragraph (b) does not exceed the person’s threshold, the CDEP Scheme payment is not ordinary income of the person;
(e) if a payment of a social security benefit referred to in paragraph (a) is payable to the person’s partner in respect of the payment period, the ordinary income of the partner includes an amount equal to the CDEP payment.
1188C(4) This section applies in respect of payment periods beginning on or after 20 March 2000.
1188C(5) In this section:
threshold:
(a) in relation to a person, means the amount referred to in column 4 of Table A in this subsection that is applicable in relation to the person having regard to the type of pension, allowance, benefit or payment referred to in column 2 of that table that would be payable to the person if the person were not a CDEP Scheme participant and the situation (if any) referred to in column 3 of that table that is applicable to the person; or
(b) in relation to the partner of a person, means:
(i) if the partner is not receiving any pension, allowance, benefit or other payment under this Act—the amount specified in item 7 of column 3B of Table B in point 1068‑B1; or
(ii) if the partner is receiving a pension, allowance, benefit or other payment under this Act—the amount that would be applicable under the appropriate item in Table A in this subsection if that table applied to the partner, having regard to the type of pension, allowance, benefit or other payment referred to in column 2 of that table that is payable to the partner and the situation (if any) referred to in column 3 of that table that is applicable to the partner.
Table A—Threshold amounts | |||
Column 1 Item | Column 2 Type of pension, allowance, benefit or payment | Column 3 Situation | Column 4 Person’s threshold |
1 | Age pension | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
2 | Age pension | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
3 | Disability support pension | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 or the amount specified in column 4B of the item of Table B in point 1066A‑B1 (including any amount required to be added by point 1066A‑C1) that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
4 | Disability support pension | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 or the amount specified in column 4B of the item in Table B in point 1066A‑B1 (including any amount required to be added by point 1066A‑C1) that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
5 | Wife pension |
| The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
6 | Carer payment | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
7 | Carer payment | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
8 | Bereavement allowance | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
9 | Bereavement allowance | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
10 | Widow B pension |
| The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
11 | Special needs pension | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
12 | Special needs pension | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
13 | Mature age allowance under Part 2.12A | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
14 | Mature age allowance under Part 2.12A | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
15 | Mature age partner allowance |
| The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
16 | Newstart allowance | Not member of a couple and is under the age of 60 | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
17 | Newstart allowance | Not member of a couple, is over the age of 60, and has been receiving for a continuous period of at least 9 months one or more of a social security pension, a social security benefit, a service pension or income support supplement | The amount specified in column 3B of item 5 of Table B in point 1068‑B1 |
18 | Newstart allowance | Not member of a couple, is over the age of 60, and has not been receiving for a continuous period of at least 9 months one or more of a social security pension, a social security benefit, a service pension or income support supplement | The amount specified in column 3B of item 4B of Table B in point 1068‑B1 |
19 | Newstart allowance | Not member of a couple and has a dependent child | The amount specified in column 3A of item 4A of Table B in point 1068‑B1 |
20 | Newstart allowance | Member of illness separated couple, whether or not the person has a dependent child | The amount specified in column 3B of item 9 of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
21 | Newstart allowance | Member of a couple whether or not the person has a dependent child | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
22 | Newstart allowance | Member of a couple but partner in gaol | The amount specified in column 3B of item 11 of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
23 | Widow allowance | Under the age of 60 | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
24 | Widow allowance | Over the age of 60 and has been receiving for a continuous period of at least 9 months one or more of a social security pension, a social security benefit, a service pension or income support supplement | The amount specified in column 3B of item 5 of Table B in point 1068‑B1 |
25 | Widow allowance | Over the age of 60 and has not been receiving for a continuous period of at least 9 months one or more of a social security pension, a social security benefit, a service pension or income support supplement | The amount specified in column 3B of item 4B of Table B in point 1068‑B1 |
26 | Special benefit | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
27 | Special benefit | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
28 | Partner allowance |
| The amount specified in column 3B of item 7 of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
29 | Mature age allowance under Part 2.12B | Not member of a couple | The amount specified in column 3B of item 5A of Table B in point 1068‑B1 |
30 | Mature age allowance under Part 2.12B | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 |
31 | Parenting payment | Not member of a couple | The amount specified in column 3B of item 4A of Table B in point 1068‑B1 |
32 | Parenting payment | Member of a couple | The amount specified in column 3B of item 7 of Table B in point 1068‑B1 or the maximum basic rate that would apply to the person if the person were not a CDEP Scheme participant, whichever is the lesser |
33 | Youth allowance | Not independent | The amount specified in column 3 of the item of Table BA in point 1067G‑B2 that would apply to the person if the person were not a CDEP Scheme participant |
34 | Youth allowance | Independent | The amount specified in column 3 of the item of Table BB in point 1067G‑B3 that would apply to the person if the person were not a CDEP Scheme participant |
Note: For CDEP Scheme payment see subsection 23(1).
1188C(6) In items 26 and 27 of Table A in subsection (5), a reference to the maximum basic rate that would apply to a person is a reference to the amount that would be the person’s maximum basic rate if the person were receiving the appropriate payment.
1188C(7) For the purpose of subsection (6), the appropriate payment is the social security payment, other than special benefit, that, in the opinion of the Secretary, is the social security payment that it is equitable to take into account for the purposes of subsection (6), having regard to the circumstances of the person concerned.
Division 3—CDEP Scheme Participant Supplement
1188D Entitlement to Supplement: people receiving pension‑type payments on or after 20 March 1999
1188D(1) This section applies in respect of:
(a) payment periods beginning on or after 20 March 1999; and
(b) pension paydays occurring on or after that date.
1188D(2) This section applies to a person in respect of a payment period (the relevant payment period) or in respect of a pension payday (the relevant pension payday) if:
(a) an instalment of any of the following:
(i) age pension;
(ii) disability support pension;
(iii) wife pension;
(iv) carer payment;
(v) parenting payment at the rate applicable for a person who is not a member of a couple;
(vi) bereavement allowance;
(vii) widow B pension;
(viii) special needs pension;
(ix) mature age allowance under Part 2.12A;
(x) mature age partner allowance;
is payable to a person in respect of the relevant payment period or the relevant pension payday; and
(b) the person meets the requirements of subsection (3) or (4).
1188D(3) The requirements of this subsection are:
(a) that the person is a CDEP Scheme participant in respect of the relevant payment period or the relevant pension payday; and
(b) that a CDEP Scheme payment is payable to the person in respect of the relevant payment period or the relevant pension payday.
1188D(4) The requirements of this subsection are:
(a) that the person is a CDEP Scheme participant in respect of the relevant payment period or the relevant pension payday; and
(b) that a CDEP Scheme payment was payable to the person:
(i) in respect of a payment period the whole or a part of which occurred within the 3 payment periods immediately before the relevant payment period; or
(ii) in respect of the 3 pension paydays immediately before the relevant pension payday.
1188D(5) If this section applies to the person in respect of the relevant payment period or the relevant pension payday, then, subject to subsection (6), a CDEP Scheme Participant Supplement of $20.80 is payable to the person in respect of that period or payday.
Note: For CDEP Scheme payment see subsection 23(1).
1188D(6) A person cannot receive more than one payment of CDEP Scheme Participant Supplement in respect of a fortnightly period.
1188E(1) This section applies in respect of:
(a) payment periods beginning on or after 20 March 1999 and not later than 19 March 2000; or
(b) pension paydays occurring on or after 20 March 1999 and not later than 19 March 2000.
1188E(2) This section applies to a person in respect of a payment period (the relevant payment period) or in respect of a pension payday (the relevant pension payday) if the person meets the requirements of subsections (3) and (4).
1188E(3) The requirements of this subsection are:
(a) that the person is a CDEP Scheme participant in respect of the relevant payment period or the relevant pension payday; and
(b) that a CDEP Scheme payment was payable to the person:
(i) in respect of a payment period the whole or a part of which occurred within the 3 payment periods immediately before the relevant payment period; or
(ii) in respect of the 3 pension paydays immediately before the relevant pension payday.
1188E(4) The requirement of this subsection is that the person satisfies the CDEP Scheme Participant Supplement income test in respect of the relevant payment period, or in respect of the payment period in which the relevant pension payday occurs, as mentioned in subsection (5) or (6), as the case requires.
1188E(5) This is how to work out whether a person who is not a member of a couple satisfies the CDEP Scheme Participant Supplement income test in respect of a payment period.
Method statement
Step 1. If Benefit Rate Calculator B does not apply to the person, assume that it applies.
Step 2. Work out the total amount of any CDEP Scheme payments payable to the person in respect of the period.
Step 3. Assume that the person’s ordinary income worked out on a fortnightly basis is increased by that total amount.
Step 4. Assume that the person’s maximum basic rate is the sum of:
(a) the amount specified in column 3B of item 4A of Table B in point 1068‑B1; and
(b) the amount specified in column 4 of item 1 of Table F in point 1068‑F15.
Step 5. Work out the person’s provisional payment rate for the period under Benefit Rate Calculator B on the assumptions referred to in Steps 3 and 4.
Step 6. The person satisfies the CDEP Scheme Participant Supplement income test in respect of the period if the person’s provisional payment rate worked out under Step 5 is greater than zero.
1188E(6) This is how to work out whether a person who is a member of a couple satisfies the CDEP Scheme Participant Supplement income test in respect of a payment period.
Method statement
Step 1. If Benefit Rate Calculator B does not apply to the person, assume that it applies.
Step 2. Work out the total amount of any CDEP Scheme payments payable to the person in respect of the period.
Step 3. Assume that the person’s ordinary income worked out on a fortnightly basis is increased by that total amount.
Step 4. Work out the total amount of any CDEP Scheme payments payable to the person’s partner in respect of the period.
Step 5. Assume that the person’s partner’s ordinary income worked out on a fortnightly basis is increased by the total amount worked out under Step 4.
Step 6. Assume that the person’s maximum basic rate is the sum of:
(a) the amount specified in column 3B of item 7 of Table B in point 1068‑B1; and
(b) the amount specified in column 4 of item 2 of Table F in point 1068‑F15.
Step 7. Work out the person’s provisional payment rate for the period under Benefit Rate Calculator B on the assumptions referred to in Steps 3, 5 and 6.
Step 8. The person satisfies the CDEP Scheme Participant Supplement income test in respect of the period if the person’s provisional payment rate worked out under Step 7 is greater than zero.
1188E(7) If this section applies to the person in respect of the relevant payment period or the relevant pension payday then, subject to subsections (8) and (9), a CDEP Scheme Participant Supplement of $20 is payable to the person in respect of that period or payday.
1188E(8) A CDEP Scheme Participant Supplement is not payable to a person under subsection (7) if:
(a) the Secretary has made a request of the person in respect of the tax file number of the person or of his or her partner; and
(b) the person has failed to satisfy the request; and
(c) the Secretary has not exempted the person from having to satisfy the request.
Note 1: CDEP Scheme participant see subsection 23(1).
Note 2: For CDEP Scheme payment see subsection 23(1).
1188E(9) A person cannot receive more than one payment of CDEP Scheme Participant Supplement in respect of a fortnightly period.
1188F Entitlement to Supplement on or after 20 March 2000: people not covered by section 1188D
1188F(1) This section applies in respect of payment periods beginning on or after 20 March 2000.
1188F(2) Subject to subsection (3), this section applies to a person:
(a) in respect of a payment period (the relevant payment period) if the person is qualified in respect of that period for any of the following:
(i) widow allowance;
(ii) newstart allowance;
(iii) youth allowance;
(iv) special benefit;
(v) parenting payment at the rate applicable for a person who is a member of a couple;
(vi) partner allowance;
(vii) mature age allowance under Part 2.12B; or
(b) in respect of a payment period (also the relevant payment period) if the person is qualified in respect of that period for any of the following:
(i) age pension;
(ii) disability support pension;
(iii) wife pension;
(iv) carer payment;
(v) parenting payment at the rate applicable for a person who is not a member of a couple;
(vi) bereavement allowance;
(vii) widow B pension;
(viii) special needs pension;
(ix) mature age allowance under Part 2.12A;
(x) mature age partner allowance;
but the pension, payment or allowance for which the person is qualified under this paragraph is not payable to the person in respect of that period.
1188F(3) This section does not apply to a person in respect of the relevant payment period unless the person meets the requirements of subsections (4), (5), (6) and (7) in respect of the relevant payment period.
1188F(4) The requirements of this subsection are:
(a) that the person is a CDEP Scheme participant in respect of the relevant payment period; and
(b) that a CDEP Scheme payment was payable to the person in respect of a payment period the whole or a part of which occurred within the 3 payment periods immediately before the relevant payment period.
1188F(5) The requirement of this subsection is that the person satisfies the CDEP Scheme Participant Supplement income test in respect of the relevant payment period as mentioned in subsection (8) or (9), as the case requires.
1188F(6) The requirement of this subsection is that the relevant payment period does not fall within:
(a) a waiting period; or
(b) a liquid assets test waiting period; or
(c) a lump sum preclusion period; or
(d) a compensation preclusion period (see Part 3.14).
1188F(7) The requirement of this subsection is that the relevant payment period occurs within a period in respect of which the relevant allowance, benefit or payment referred to in paragraph (2)(a) or the relevant pension, payment or allowance referred to in paragraph (2)(b) is not payable to the person because of the operation of a provision of this Act relating to:
(a) seasonal or intermittent workers; or
(b) the value of the assets of the person or of his or her partner.
1188F(8) This is how to work out whether a person who is not a member of a couple satisfies the CDEP Scheme Participant Supplement income test in respect of a payment period.
Method statement
Step 1. If Benefit Rate Calculator B does not apply to the person, assume that it applies.
Step 2. Work out the total amount of any CDEP Scheme payments payable to the person in respect of the period.
Step 3. Assume that the person’s ordinary income worked out on a fortnightly basis is increased by that total amount.
Step 4. Assume that the person’s maximum basic rate is the sum of:
(a) the amount specified in column 3B of item 4A of Table B in point 1068‑B1; and
(b) the amount specified in column 4 of item 1 of the table in section 1070Q.
Step 5. Work out the person’s provisional payment rate for the period under Benefit Rate Calculator B on the assumptions referred to in Steps 3 and 4.
Step 6. The person satisfies the CDEP Scheme Participant Supplement income test in respect of the period if the person’s provisional payment rate worked out under Step 5 is greater than zero.
1188F(9) This is how to work out whether a person who is a member of a couple satisfies the CDEP Scheme Participant Supplement income test in respect of a payment period.
Method statement
Step 1. If Benefit Rate Calculator B does not apply to the person, assume that it applies.
Step 2. Work out the total amount of any CDEP Scheme payments payable to the person in respect of the period.
Step 3. Assume that the person’s ordinary income worked out on a fortnightly basis is increased by that total amount.
Step 4. Work out the total amount of any CDEP Scheme payments payable to the person’s partner in respect of the period.
Step 5. Assume that the person’s partner’s ordinary income worked out on a fortnightly basis is increased by the total amount worked out under Step 4.
Step 6. Assume that the person’s maximum basic rate is the sum of:
(a) the amount specified in column 3B of item 7 of Table B in point 1068‑B1; and
(b) the amount specified in column 4 of item 2 of the table in section 1070Q.
Step 7. Work out the person’s provisional payment rate for the period under Benefit Rate Calculator B on the assumptions referred to in Steps 3, 5 and 6.
Step 8. The person satisfies the CDEP Scheme Participant Supplement income test in respect of the period if the person’s provisional payment rate worked out under Step 7 is greater than zero.
1188F(10) If this section applies to the person in respect of the relevant payment period, then, subject to subsections (11) and (12), a CDEP Scheme Participant Supplement of $20.80 is payable to the person in respect of that period.
1188F(11) A CDEP Scheme Participant Supplement is not payable to a person under subsection (10) if:
(a) the Secretary has made a request of the person in respect of the tax file number of the person or of his or her partner; and
(b) the person has failed to satisfy the request; and
(c) the Secretary has not exempted the person from having to satisfy the request.
Note 1: CDEP Scheme participant see subsection 23(1).
Note 2: For CDEP Scheme payment see subsection 23(1).
1188F(12) A person cannot receive more than one payment of CDEP Scheme Participant Supplement in respect of a fortnightly period.
1188G Notification of periods in respect of which a CDEP Scheme payment is not payable
If:
(a) section 1188F applies to a person; and
(b) a CDEP Scheme payment is payable to the person in respect of a payment period beginning on or after 20 March 2000; and
(c) a CDEP Scheme payment is not payable to the person in respect of the next following payment period;
the person must notify the Secretary, as soon as practicable after section 1188F ceases to apply to the person, that a CDEP Scheme payment is not payable to the person in respect of that following payment period.
A person who receives a CDEP Scheme Participant Supplement in respect of a payment period beginning on or after 20 March 2000 is taken, for the purposes of this Act, to be in receipt of the social security benefit or social security pension for which the person is qualified in respect of that period.
1188J CDEP Scheme participant may accumulate supplement
1188J(1) A person who is a CDEP Scheme participant, and is not in receipt of a social security pension, in respect of the whole or a part of a quarter beginning on or after 20 March 2000 may, by written notice given to the Secretary, choose to accumulate the amounts of any supplement that:
(a) became or become payable to the person in respect of that quarter, or any later quarter in respect of the whole or a part of which the person is a CDEP Scheme participant and is not in receipt of a social security pension; and
(b) have not already been paid.
1188J(2) A person who is or was a CDEP Scheme participant in respect of the whole or a part of a quarter ending before 20 March 2000 is taken to have chosen under this subsection to accumulate the amounts of any supplement that became payable to the person in respect of that quarter.
1188J(3) If a person makes a choice under subsection (1), the sum of the accumulated amounts payable to the person in respect of a quarter is to be paid on, or as soon as practicable after:
(a) unless paragraph (b) applies—the last day of the quarter or 19 March 2000, whichever is the later; or
(b) if the person ceases to be a CDEP Scheme participant before the end of the quarter—the day on which the person so ceases or 19 March 2000, whichever is the later.
1188J(4) Any accumulated amounts payable to a person to whom subsection (2) applies are to be paid at such times (not later than 19 March 2000) as the Secretary determines.
1188J(5) In this section:
quarter means a CDEP Scheme quarter.
Note 1: For CDEP Scheme participant see section 1188B.
Note 2: For CDEP Scheme quarter see subsection 23(1).
1188K(1) A person who wants to be granted a CDEP Scheme Participant Supplement must make a proper claim for the supplement.
1188K(2) To be a proper claim, a claim must be made in such manner, and within such period, as the Secretary determines.
1188L Existing CDEP Scheme participants to be treated as long‑term social security recipients
A person who, if this Part had been in force on 19 March 2000, would have been a CDEP Scheme participant in respect of that day for the purposes of this Part is taken, for the purposes of the definition of long‑term social security recipient in subsection 23(1), to have had social security recipient status continuously for the period of 52 weeks ending on that day.
A person who receives CDEP Scheme Participant Supplement:
(a) in respect of both 19 March 2000 (the first qualifying day) and the following day (the second qualifying day); or
(b) in respect of both the payment period in which the first qualifying day occurs and the payment period in which the second qualifying day occurs;
is taken, for the purposes of the definition of pensioner in subsection 4(1) of the National Health Act 1953, to have been receiving the social security benefit on the first qualifying day for a continuous period of 9 months.
Part 3.16—Indexation and adjustment of amounts
This Part provides for:
(a) the indexation, in line with CPI (Consumer Price Index) increases, of the amounts in column 2 of the CPI Indexation Table at the end of section 1191; and
(c) the adjustment of other amounts in line with the increases in the amounts indexed; and
(d) one‑off adjustments of certain amounts.
1190 Indexed and adjusted amounts [see Notes 2 and 4]
The following table sets out:
(a) each amount that is to be indexed or adjusted under this Part; and
(b) the abbreviation used in this Part for referring to that amount; and
(c) the provision or provisions in which that amount is to be found.
Indexed and adjusted amounts table | |||
Column 1 Item | Column 2 Description of amount | Column 3 Abbreviation | Column 4 Provisions in which amount specified |
| Maximum basic rates |
|
|
1. | Maximum basic rates for a social security pension (except disability support pension payable to a person who is under 21) | pension MBR | [Pension Rate Calculator A—point 1064‑B1—Table B—column 3—all amounts] |
1AA. | Pension supplement | pension supplement | [Pension Rate Calculator A—point 1064‑BA2—all amounts] [Pension Rate Calculator B—point 1065‑BA2—all amounts] [Pension Rate Calculator C—point 1066‑BA2] [Parenting Payment Rate Calculator—point 1068A‑BA2] |
1A. | Maximum basic rates for disability support pension payable to person who is under 21 and has one or more dependent children | DSP (under 21 and child) MBR | [Pension Rate Calculator D—point 1066A‑B1—Table B—column 3A—all amounts] |
1B. | Maximum basic rates for disability support pension payable to person who is under 21 and has no dependent children | DSP (under 21 and no child) MBR | [Pension Rate Calculator D—point 1066A‑B1—Table B—column 3B—all amounts] |
2. | Maximum basic rates for a social security benefit payable to a person who is over 21, is a member of a couple or has a dependent child | benefit MBR (ordinary) | [Benefit Rate Calculator B—point 1068‑B1—Table B—column 3A—all amounts] |
3. | Maximum basic rates for a social security benefit payable to a person who is under 21 and does not have a dependent child | benefit MBR (junior or intermediate) | [Benefit Rate Calculator B—point 1068‑B1—Table B—column 3B—items 1, 2, 6 and 8] |
3A. | Maximum basic rate for youth allowance | YA MBR | [Youth Allowance Rate Calculator—point 1067G‑B2—Table BA—column 3—all amounts] |
|
|
| [Youth Allowance Rate Calculator—point 1067G‑B3—Table BB—column 3—all amounts] |
|
|
| [Youth Allowance Rate Calculator—point 1067G‑B4—Table BC—column 3—all amounts] |
3B. | Maximum basic rate for austudy payment | AP MBR | [Austudy Payment Rate Calculator—point 1067L‑B2—Table BA—column 3—all amounts] |
|
|
| [Austudy Payment Rate Calculator—point 1067L‑B3] |
4 | Additional child amounts (for dependent children for calculating a person’s international agreement portability rate) | additional child amounts | Section 14A of the Social Security (International Agreements) Act 1999 |
| Youth disability supplement |
|
|
4A. | Youth disability supplement payable to a disability support pensioner who is under 21 | youth disability supplement | [Pension Rate Calculator D—point 1066A‑C1—the annual rate] |
| Child amounts |
|
|
15. | Rate of carer allowance | CA rate | [subsection 974(2)] |
16. | Rate of double orphan pension calculated under subsection 1010(1) | DOP rate | [section 1010] |
17 | Rent assistance Maximum rent assistance for social security payments | MRA | [Part 3.7—sections 1070L and 1070N to 1070R—Table—column 4—all amounts] [Part 3.7—section 1070M—Table—column 3—amount] |
18 | Rent threshold amount | RTA | [Part 3.7—sections 1070L and 1070N to 1070R—Table—formulas in column 3—all amounts deducted from fortnightly rent] [Part 3.7—section 1070M—Table—formula in column 2—amount deducted from fortnightly rent] [Part 3.7—subsection 1070T(1)—amount] |
| Income free area |
|
|
20. | Ordinary income free area for social security pension | pension free area | [Pension Rate Calculator A—point 1064‑E4—Table E‑1—column 3—all amounts] |
20A. | Income ceiling for care receiver | CP income ceiling | [Subsection 198A(1)] |
| Assets value limits |
|
|
24. | Assets value limit for social security pension (other than pension PP (single)) for homeowner who is not a member of a couple | pension “single” homeowner AVL | [Pension Rate Calculator A—point 1064‑G3—Table G‑1—column 3A—item 1] |
25. | assets value limit for social security pension (other than pension PP (single)) for non‑homeowner who is not a member of a couple | pension “single” non‑homeowner AVL | [Pension Rate Calculator A—point 1064‑G3—Table G‑1—column 3B—item 1] |
26. | assets value limit for social security pension for homeowner who is a member of a couple | pension “partnered” homeowner AVL | [Pension Rate Calculator A—point 1064‑G3—Table G‑1—column 3A—items 2 and 3] |
27. | assets value limit for social security pension for non‑homeowner who is a member of a couple | pension “partnered” non‑homeowner AVL | [Pension Rate Calculator A—point 1064‑G3—Table G‑1—column 3B—items 2 and 3] |
27A. | Assets value limit for care receiver | CP AVL | [Subsections 198D(1), (1A), (1C) and (1E)] |
27B. | Assets value hardship limits for care receiver | CP HAVL | [Subsections 198N(2), (3) and (4)—all amounts] |
28. | Assets value limit for pension PP (single) and social security benefit for homeowner who is not a member of a couple | benefit “single” homeowner AVL | [subsection 408CE(2)—Table—column 3—item 1] |
29. | Assets value limit for pension PP (single) and social security benefit for non‑homeowner who is not a member of a couple | benefit “single” non‑homeowner AVL | [subsection 408CE(2)—Table—column 3—item 2] |
30. | Assets value limit for social security benefit for homeowner who is partnered (partner getting neither pension nor benefit) | benefit “partnered” (item 2) homeowner AVL | [paragraph 547C(d)] |
31. | Assets value limit for social security benefit for non‑homeowner who is partnered (partner getting neither pension nor benefit) | benefit “partnered” (item 2) non‑homeowner AVL | [paragraph 547C(e)] |
32. | Assets value limit for social security benefit for homeowner who is partnered (partner getting pension or benefit) | benefit “partnered” (item 3) homeowner AVL | [subsection 611(2)—Table—column 3A—item 3] |
33. | Assets value limit for social security benefit for non‑homeowner who is partnered (partner getting pension or benefit) | benefit “partnered” (item 3) non‑homeowner AVL | [subsection 611(2)—Table—column 3B—item 3] |
33A. | Assets value limit for youth allowance for person who is not independent (see section 1067A) | YA (non‑ | [paragraph 547C(a)] |
34. | Assets value limit for some illness separated special residents | special illness separated special resident AVL | [paragraph 1152(5)(g)] |
| Permissible child earnings |
|
|
40. | Amount that child who is not in full‑time education and under 16 can earn from employment without ceasing to be a dependent child | permissible child earnings limit (child aged under 16 years) | [paragraph 5(3)(c)] |
40A. | Amount that a young person who has reached 16, but is under 22, years of age can earn in the current financial year without ceasing to be a dependent child | Permissible child earnings limit (child aged 16 to 21 years) | [subsection 5(1): definitions of student child young person] |
| Parental income test |
|
|
41. | Parental income free area | parental income free area | [paragraph 1067G‑F22(a)] |
| Pharmaceutical allowance |
|
|
44. | Rate of pharmaceutical allowance for a person who is receiving a social security pension and is not a member of a couple | Pension PA “single” rate | [Pension Rate Calculator A—point 1064‑C8—Table—column 3—item 1] |
45. | Rate of pharmaceutical allowance for a person who is receiving a social security benefit and is not a member of a couple | Benefit PA “single” rate | [Benefit Rate Calculator B—point 1068‑D10—Table—column 3—item 1] |
46. | Rate of pharmaceutical allowance for a person who is receiving a social security pension and has a partner | Pension PA “partnered” (item 2) rate | [Pension Rate Calculator A—point 1064‑C8—Table—column 3—item 2] |
47. | Rate of pharmaceutical allowance for a person: (a) who is receiving a social security benefit and who has a partner; or | Benefit PA “partnered” (item 2) rate | [Benefit Rate Calculator B—point 1068‑D10—Table—column 3—item 2] |
48. | Rate of pharmaceutical allowance for a person who is receiving a social security pension and is a member of an illness separated or respite care couple | Pension PA “illness separated or respite care” rate | [Pension Rate Calculator A—point 1064‑C8—Table—column 3—items 3 and 4] |
49. | Rate of pharmaceutical allowance for a person who is receiving a social security benefit and is a member of an illness separated or respite care couple | Benefit PA “illness separated or respite care” rate | [Benefit Rate Calculator B—point 1068‑D10—Table—column 3—items 4 and 5] |
49A. | Rate of pharmaceutical allowance for a person who is receiving a social security pension and has a partner who is getting a service pension | Pension PA “partnered” (item 4) rate | [Pension Rate Calculator A—point 1064‑C8—Table—column 3—item 4] |
49B. | Rate of pharmaceutical allowance for a person: (a) who is receiving a social security benefit and as a partner who is getting a service pension; or | Pension PA “partnered” (item 6) rate | [Pension Rate Calculator A—point 1064‑C8—Table—column 3—item 6] |
49C. | Rate of pharmaceutical allowance for a person: (a) who is receiving a social security pension; and (b) is a member of a couple; and (c) whose partner is in gaol | Benefit PA “partnered” (item 4) rate | [Benefit Rate Calculator A—point 1067‑D9—Table—column 3—item 5] |
49D. | Rate of pharmaceutical allowance for a person: (a) who is receiving a social security benefit and has a partner who is in gaol; or | Benefit PA “partnered” (item 7) rate | [Benefit Rate Calculator B—point 1068‑D10—Table—column 3—item 7] |
49E. | Rate of pharmaceutical allowance for a person who: (a) is receiving a youth allowance or an austudy payment; and (b) is not a member of a couple | PA (YA/AP) single | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 1—column 3] |
49F. | Rate of pharmaceutical allowance for a person who: (a) is receiving a youth allowance or an austudy payment; and (b) is partnered | PA (YA/AP) partnered | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 2—column 3] |
49G. | Rate of pharmaceutical allowance for a person who: (a) is receiving a youth allowance or an austudy payment; and (b) is a member of an illness separated couple or a respite care couple | PA (YA/AP) (item 49G) | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—items 3 and 4—column 3] |
49H. | Rate of pharmaceutical allowance for a person who: (a) is receiving a youth allowance or an austudy payment; and (b) is partnered (partner getting service pension) | PA (YA/AP) (item 49H) | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 5—column 3] |
49J. | Rate of pharmaceutical allowance for a person who: (a) is receiving a youth allowance or an austudy payment; and (b) is partnered (partner in gaol) | PA (YA/AP) (item 49J) | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 6—column 3] |
50. | Rate of telephone allowance for a person who is not a member of a couple | TA “single” rate | [section 1061S—Table—column 3—item 1] |
51. | Rate of telephone allowance for a person with a partner where the partner is getting neither pension nor benefit | TA “partnered” (item 3) rate | [section 1061S—Table—column 3—item 3] |
52. | Rate of telephone allowance for a person with a partner where the partner is getting pension or benefit but not getting telephone allowance | TA “partnered” (item 4) rate | [section 1061S—Table—column 3—item 4] |
53. | Rate of telephone allowance for a person with a partner where the partner is getting pension or benefit and getting telephone allowance | TA “partnered” (item 5) rate | [section 1061S—Table—column 3—item 5] |
54. | Rate of telephone allowance for a member of an illness separated or respite care couple | TA “partnered” (item 6) rate | [section 1061S—Table—column 3—item 6] |
55. | Rate of telephone allowance for a person with a partner where the partner is not getting telephone allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act | TA “partnered” (item 7) rate | [section 1061S—Table—column 3—item 7] |
56. | Rate of telephone allowance for a person with a partner where the partner is getting telephone allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act | TA “partnered” (item 8) rate | [section 1061S—Table—column 3—item 8] |
56A. | Rate of utilities allowance for a person who is not a member of a couple | UA “single” rate | [section 1061TB—Table—column 3—item 1] |
56B. | Rate of utilities allowance for a member of an illness separated couple | UA “partnered” (item 2) rate | [section 1061TB—Table—column 3—item 2] |
56C. | Rate of utilities allowance for a member of a respite care couple | UA “partnered” (item 3) rate | [section 1061TB—Table—column 3—item 3] |
56D. | Rate of utilities allowance for a member of a temporarily separated couple | UA “partnered” (item 4) rate | [section 1061TB—Table—column 3—item 4] |
56E. | Rate of seniors concession allowance | SCA | [section 1061UB] |
57. | mobility allowance rate | MA rate | [section 1044] |
| Deeming thresholds |
|
|
63. | Deeming threshold for a person who is not a member of a couple | Deeming threshold individual | Subsection 1081(1) |
64. | Deeming threshold for a pensioner couple | Deeming threshold pensioner couple | Subsection 1081(2) |
| Attribution threshold |
|
|
65 | Primary production attribution threshold | Primary production attribution threshold | Section 1208U |
1191(1) Subject to subsection (1A), an amount referred to in the following CPI Indexation Table below is to be indexed under this Division on each indexation day for the amount, using the reference quarter and base quarter for the amount and indexation day and rounding off to the nearest multiple of the rounding amount:
CPI Indexation Table | ||||||
Column 1 Item | Column 2 Amount | Column 3 Indexation day(s) | Column 4 Reference quarter (most recent before indexation day) | Column 5 Base quarter | Column 6 Rounding base | |
| Maximum basic rates |
|
|
|
| |
1. | pension MBR | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1979) | $2.60 | |
1A. | pension supplement | (a) 20 March (b) 20 September | (a) 20 December (b) 20 June | highest June or December quarter before reference quarter (but not earlier than June quarter 1979) | $2.60 | |
2. | benefit MBR (ordinary) | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1979) | $0.10 | |
3. | benefit MBR (junior or intermediate) | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1986) | $0.10 | |
3A. | YA MBR | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1997) | $0.10 | |
3B. | AP MBR | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1997) | $0.10 | |
| Child amounts |
|
|
|
| |
4 | additional child amounts | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1999) | $2.60 | |
9. | CA rate | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1988) | $0.10 | |
10. | DOP rate | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1988) | $0.10 | |
11 | Rent assistance MRA | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1979) | $0.20 | |
12 | RTA | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1979) | $0.20 | |
| Income free areas |
|
|
|
| |
14. | pension free area | 1 July | March | most recent March quarter before reference quarter | $52.00 | |
14A. | CP income ceiling | 1 January | June | most recent June quarter before reference quarter | not applicable—see subsection 1194(3A) | |
| Assets value limits |
|
|
|
| |
18. | pension “single” homeowner AVL | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
19. | pension “partnered” homeowner AVL | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
20. | pension “partnered” non‑ | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
20A. | CP AVL | 1 January | June | most recent June quarter before reference quarter | $250.00 | |
20B. | CP HAVL | 1 January | June | most recent June quarter before reference quarter | $250.00 | |
21. | benefit “single” homeowner AVL | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
21A | benefit “single” non‑ | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
21B | benefit “partnered” (item 2) homeowner AVL | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
21C | benefit “partnered” (item 2) non‑ | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
22. | benefit “partnered” (item 3) homeowner AVL | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
23. | benefit “partnered” (item 3) non‑ | 1 July | December | most recent December quarter before reference quarter | $250.00 | |
24. | YA (non‑ | 1 January | June | most recent June quarter before reference quarter | $250.00 | |
| Permissible child earnings |
|
|
|
| |
28. | permissible child earnings limit (child aged under 16 years) | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1986) | $0.05 | |
28A. | Permissible child earnings limit (child aged 16 to 21 years) | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 1986) | $0.05 | |
30. | parental income free area | 1 January | June | most recent June quarter before reference quarter | $50.00 | |
| Pharmaceutical allowance |
|
|
|
| |
31. | benefit PA “partnered” (item 2) rate | 1 January | September | highest September quarter before reference quarter (but not earlier than September quarter 1991) | $0.10 | |
32. | benefit PA “partnered” (item 5) rate | 1 January | September | highest September quarter before reference quarter (but not earlier than September quarter 1991) | $0.10 | |
33. | TA “single” rate | 20 September | June | most recent June quarter before reference quarter | $0.80 | |
33AA | UA “single” rate | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1991) | $0.40 | |
33AB | UA “partnered” (item 2) rate | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1991) | $0.40 | |
33AC | UA “partnered” (item 3) rate | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1991) | $0.40 | |
33AD | UA “partnered” (item 4) rate | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 1991) | $0.40 | |
33A. | PA (YA/AP) partnered (item 49F) and PA (YA/AP) (item 49H) | 1 January | September | highest September quarter before reference quarter (but not earlier than Sept quarter 1997) | $0.10 | |
33AE | SCA | (a) 1 June (b) 1 December | (a) March (b) September | highest March or September quarter before reference quarter (but not earlier than September quarter 1991) | $0.40 | |
| Mobility allowance |
|
|
|
| |
34. | MA rate | 1 January | June | highest June quarter before the reference quarter (but not earlier than June 1991 quarter) | $0.10 | |
| Deeming thresholds |
|
|
|
| |
35. | Deeming threshold individual | 1 July | March | highest March quarter before reference quarter (but not earlier than March 1994 quarter) | $200.00 | |
36. | Deeming threshold pensioner couple | 1 July | March | highest March quarter before reference quarter (but not earlier than March 1994 quarter) | $200.00 | |
| Primary production attribution threshold |
|
|
|
| |
37 | Primary production attribution threshold | 1 July | December | Most recent December quarter before reference quarter | $250.00 | |
1191(1A) The pension MBR amount (item 1 of table) and the benefit MBR (ordinary) amount (item 2 of table) are not to be indexed on 20 March 1993.
Highest quarter
1191(2) A reference in the CPI Indexation Table to the highest of a group of quarters is a reference to the quarter in that group that has the highest index number.
1192(1) If an amount is to be indexed under this Division on an indexation day, this Act have effect as if the indexed amount were substituted for that amount on that day.
1192(2) This is how to work out the indexed amount for an amount that is to be indexed under this Division on an indexation day:
Method statement
Step 1. Use section 1193 to work out the indexation factor for the amount on the indexation day.
Step 2. Work out the current figure for the amount immediately before the indexation day.
Step 3. Multiply the current figure by the indexation factor: the result is the provisional indexed amount.
Step 4 . Use section 1194 to round off the provisional indexed amount: the result is the indexed amount. (The indexed amount may be increased under section 1195 in certain cases.)
Note 1: for current figure see subsection 20(1).
Note 2: On the indexation days following 19 March 2001, the indexation of amounts that were increased by 4% or 10% on 1 July 2000 may be affected by section 1206GB.
1192(3) The first indexation of the MA rate under subsection (1) is to take place on 1 January 1994.
1192(4) The first indexation of the amounts to which items 4, 7, 8, 13 and 25 of the CPI Indexation Table in subsection 1191(1) relate is to take place on 1 January 1994.
1192(4A) The first indexation of the amounts to which items 15 and 24A of the CPI Indexation Table in subsection 1191(1) relate is to take place on 1 January 1995.
1192(5) The first indexation of rent assistance under items 11 and 12 of the CPI Indexation Table in subsection 1191(1) (being those items as substituted by the Social Security Amendment (Further Simplification) Act 2004) is to take place on 20 September 2004.
1192(6) The first indexation of amounts under items 33AA, 33AB, 33AC and 33AD of the CPI Indexation Table in subsection 1191(1) is to take place on 20 September 2005.
1192(6A) The first indexation of an amount under item 33AE of the CPI Indexation Table in subsection 1191(1) is to take place on 1 June 2005.
1192(7) The first indexation of amounts under items 35 and 36 of the CPI Indexation Table in subsection 1191(1) is to take place on 1 July 1997.
1193(1) Subject to subsections (2) and (3), the indexation factor for an amount that is to be indexed under this Division on an indexation day is:
worked out to 3 decimal places.
Note: for reference quarter and base quarter see the CPI Indexation Table in section 1191.
1193(2) If an indexation factor worked out under subsection (1) would, if it were worked out to 4 decimal places, end in a number that is greater than 4, the indexation factor is to be increased by 0.001.
1193(3) If an indexation factor worked out under subsections (1) and (2) would be less than 1, the indexation factor is to be increased to 1.
1194 Rounding off indexed amounts
1194(1) If a provisional indexed amount is a multiple of the rounding base, the provisional indexed amount becomes the indexed amount.
Note 1: for provisional indexed amount see Step 3 in subsection 1192(2).
Note 2: for rounding base see the CPI Indexation Table in section 1191.
1194(2) Subject to subsections (3), (6) and (7) if a provisional indexed amount is not a multiple of the rounding base, the indexed amount is the provisional indexed amount rounded up or down to the nearest multiple of the rounding base.
1194(3) Subject to subsections (3A), (6) and (7), if a provisional indexed amount is not a multiple of the rounding base but is a multiple of half the rounding base, the indexed amount is the provisional indexed amount rounded up to the nearest multiple of the rounding base.
1194(3A) If a provisional indexed amount for CP income ceiling is not a multiple of $1.00, the indexed amount is the provisional indexed amount rounded up to the nearest multiple of $1.00.
1194(6) If a provisional indexed amount for a pharmaceutical allowance rate is not a multiple of 10 cents, the indexed amount is the provisional indexed amount rounded down to the nearest multiple of 10 cents.
1194(7) If a provisional indexed amount for a telephone allowance rate is not a multiple of 80 cents, the indexed amount is the provisional indexed amount rounded up to the nearest multiple of 80 cents.
1195(1) For the purposes of this section:
(a) a category A amount is an amount specified as set out below:
(i) point 1064‑B1—Table B—item 1, 3, 4 or 5—column 3;
(ii) point 1065‑B1—Table B—item 1, 3, 4 or 5—column 3;
(iii) point 1066‑B1—the annual rate;
(iv) point 1066A‑B1—Table B—item 1, 2, 3, 4, 7, 8, 9, 10, 11 or 12—column 3A;
(v) point 1066B‑B1—Table B—item 1, 2, 3, 4, 7, 8, 9, 10, 11 or 12—column 3A;
(vi) point 1068A‑B1—the annual rate; and
(b) a category B amount is an amount specified as set out below:
(i) point 1064‑B1—Table B—item 2—column 3;
(ii) point 1065‑B1—Table B—item 2—column 3;
(iii) point 1066A‑B1—Table B—item 5 or 6—column 3A;
(iv) point 1066B‑B1—Table B—item 5 or 6—column 3A.
1195(2) If:
(a) a category A amount or a category B amount is to be indexed under this Division on an indexation day that occurs after 19 September 1997; and
(b) 25% of the annualised MTAWE figure for whichever of the following quarters is applicable:
(i) if the indexation day is a 20 March—the most recent December quarter;
(ii) if the indexation day is a 20 September—the most recent June quarter;
exceeds the indexed amount for the category A amount;
then:
(c) the indexed amount for the category A amount is to be increased by an amount (the category A top‑up amount) equal to the excess; and
(d) if the indexed amount for the category A amount (as increased under paragraph (c)) is not a multiple of $2.60, the indexed amount (as increased under paragraph (c)) is to be further increased by rounding up to the next highest multiple of $2.60; and
(e) the indexed amount for the category B amount is to be increased by an amount equal to 83% of the category A top‑up amount; and
(f) if the indexed amount for the category B amount (as increased under paragraph (e)) is not a multiple of $2.60, the indexed amount (as increased under paragraph (e)) is to be further increased by rounding up to the next highest multiple of $2.60.
1195(3) For the purposes of this section, the annualised MTAWE figure for a quarter is 52 times the amount set out for the reference period in the quarter under the headings “Average Weekly Earnings of Employees, Australia—Males—All males—Total earnings—ORIGINAL” in a document published by the Australian Statistician entitled “Average Weekly Earnings, States and Australia”.
1195(4) If at any time (whether before or after the commencement of this section), the Australian Statistician publishes the amount referred to in subsection (3):
(a) under differently described headings (the new headings); or
(b) in a document entitled otherwise than as described in subsection (3) (the new document);
then the annualised MTAWE figure is to be calculated in accordance with subsection (3) as if the references to:
(c) “Average Weekly Earnings of Employees, Australia—Males—All males—Total earnings—ORIGINAL”; or
(d) “Average Weekly Earnings, States and Australia”;
were references to the new headings and/or the new document, as the case requires.
1195(5) For the purposes of this section, the reference period in a particular quarter is the period described by the Australian Statistician as the pay period ending on or before a specified day that is the third Friday of the middle month of that quarter.
1195(6) If at any time (whether before or after the commencement of this section), the Australian Statistician publishes an amount in substitution for a particular amount previously published by the Australian Statistician, the publication of the later amount is to be disregarded for the purposes of this section.
1195(7) In this section:
December quarter means a quarter ending on 31 December.
June quarter means a quarter ending on 30 June.
Division 4—Adjustment of other rates
1198B Adjustment of disability support pension (under 21) MBRs
This Act (and any other Act that refers to this Act) have effect as if, on 1 January each year, the amount worked out by applying the formula:
to an amount identified in column 2 of an item in the following table were substituted for the amount identified in column 3 of the item.
Adjustment of DSP (under 21) MBR table | ||
Column 1 Item | Column 2 YA MBR amount | Column 3 corresponding DSP (under 21) MBR amount |
| Youth Allowance Rate Calculator—point 1067G‑B3—Table BB | Pension Rate Calculator D—point 1066A‑B1—Table B and Pension Rate Calculator E—Point 1066B‑B1—Table B |
1 | column 3—item 6 | column 3A—items 1, 2, 3, 4 and 6 |
2 | column 3—item 7 | column 3A—item 5 |
3 | column 3—item 1 | column 3B—item 1 |
4 | column 3—item 5 | column 3B—items 2, 4, 5 and 6 |
5 | column 3—item 2 | column 3B—item 3 |
1198C Adjustment of youth disability supplement
This Act (and any other Act that refers to this Act) has effect as if, on 1 January each year, the amount worked out using the following formula was substituted for the amount of the rate of the youth disability supplement:
where:
CA rate is the current figure, as at that 1 January, for the CA rate.
Note: for current figure see subsection 20(1).
1203 Adjustment of pension “single non‑homeowner” AVL
This Act has effect as if, on 1 July each year, the amount worked out in accordance with the following formula were substituted for the pension “single” non‑homeowner AVL:
where:
“single” homeowner AVL is the current figure, as at that 1 July, for the pension “single” homeowner AVL.
“partnered” non‑homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” non‑homeowner AVL.
“partnered” homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” homeowner AVL.
1204 Adjustment of benefit AVLs
1204(1) This Act has effect as if, on 1 July each year, the amount worked out in accordance with the following formula were substituted for the benefit “single” non‑homeowner AVL:
where:
pension “single” homeowner AVL is the current figure, as at that 1 July, for the pension “single” homeowner AVL.
pension “partnered” non‑homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” non‑homeowner AVL.
pension “partnered” homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” homeowner AVL.
1204(2) This Act has effect as if, on 1 July each year, the amount worked out in accordance with the following formula were substituted for the benefit “partnered” (item 2) homeowner AVL:
where:
pension “partnered” homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” homeowner AVL.
1204(3) This Act has effect as if, on 1 July each year, the amount worked out in accordance with the following formula were substituted for the benefit “partnered” (item 2) non‑homeowner AVL:
where:
pension “partnered” non‑homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” non‑homeowner AVL.
1205 Adjustment of special illness separated special resident AVL
This Act has effect as if, on 1 July each year, the amount worked out in accordance with the following formula were substituted for each special illness separated special resident AVL:
where:
pension “partnered” homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” homeowner AVL.
pension “partnered” non‑homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” non‑homeowner AVL.
1206A Adjustment of certain pharmaceutical allowance rates
1206A(1) This Act has effect as if, on 1 January each year, there were substituted for:
(a) the pension PA “partnered” (item 2) rate; and
(b) the pension PA “partnered” (item 5) rate;
the amount worked out by using the formula:
where:
benefit PA “partnered” (item 2) rate is the current figure, as at that 1 January, for the benefit PA “partnered” (item 2) rate.
Note 1: for current figure see subsection 20(1).
Note 2: the benefit PA “partnered” (item 2) rate is indexed on each 1 January (see the CPI Indexation Table in section 1191—item 31).
1206A(2) This Act has effect as if, on 1 January each year, there were substituted for:
(a) the pension PA “single” rate; and
(b) the pension PA “illness separated or respite care” rate; and
(c) the pension PA “partnered” (item 6) rate;
the amount worked out by using the formula:
where:
benefit PA “partnered” (item 2) rate is the current figure, as at that 1 January, for the benefit PA “partnered” (item 2) rate.
Note 1: derivation of formula: take the benefit PA “partnered” (item 2) rate; multiply by 26 to convert to a yearly amount; multiply by 2 to convert from “partnered” to “single rate”.
Note 2: for current figure see subsection 20(1).
Note 3: the benefit PA “partnered” (item 2) rate is indexed on each 1 January (see the CPI Indexation Table in section 1191—item 31).
1206A(3) This Act has effect as if, on 1 January each year, there were substituted for:
(a) the benefit PA “single” rate; and
(aa) the benefit “partnered” (item 6) rate; and
(b) the benefit PA “illness separated or respite care” rate;
the amount worked out by using the formula:
where:
benefit PA “partnered” (item 2) rate is the current figure, as at that 1 January, for the benefit PA “partnered” (item 2) rate.
1206A(4) This Act has effect as if, on 1 January 1999 and on 1 January in each later year, there were substituted for the PA (YA/AP) single rate, the PA (YA/AP) (item 49G) rate and the PA (YA/AP) (item 49J) rate the amount worked out by using the formula:
where:
current PA (YA/AP) partnered rate means the current figure, as at that 1 January, for the PA (YA/AP) partnered rate.
1206B Adjustment of certain telephone allowance rates
1206B(1) This Act has effect as if, on 20 September each year, there were substituted for:
(a) the TA “partnered” (item 4) rate; and
(b) the TA “partnered” (item 6) rate; and
(c) the TA “partnered” (item 7) rate;
the amount of the current figure, as at 20 September, for the TA “single rate”.
Note 1: for TA “partnered” (item 4) rate, TA “partnered” (item 6) rate and TA “partnered” (item 7) rate see items 52, 54 and 55 of the Indexed and Adjusted Amounts Table in section 1190.
Note 2: for current figure see subsection 20(1).
Note 3: for TA “single” rate see item 50 of the Indexed and Adjusted Amounts Table in section 1190.
1206B(2) This Act has effect as if, on 20 September each year, there were substituted for:
(a) the TA “partnered” (item 3) rate; and
(b) the TA “partnered” (item 5) rate; and
(c) the TA “partnered” (item 8) rate;
the amount worked out using the following formula:
where:
TA “single” rate is the current figure, as at 20 September, for the TA “single” rate.
Note 1: for TA “partnered” (item 4) rate, TA “partnered” (item 6) rate and TA “partnered” (item 7) rate see items 52, 54 and 55 of the Indexed and Adjusted Amounts Table in section 1190.
Note 2: for TA “single” rate see item 50 of the Indexed and Adjusted Amounts Table in section 1190.
Note 3: for current figure see subsection 20(1).
Division 5—One‑off adjustments of certain amounts
1206D Rent assistance threshold for social security pensions increased on 20 March 1996
This Act has effect as if, on 20 March 1996, each indexed amount of pension rent threshold that is substituted under subsection 1192(1) for another amount on that day were in turn replaced with an amount equal to the indexed amount plus $130.00.
Note 1: For indexed amount, see section 1192.
Note 2: For pension rent threshold, see item 17A of the Table in section 1190.
1206E Rent assistance threshold for some social security payments increased on 20 March 1996
1206E(1) This section applies to the following kinds of rent threshold:
(a) benefit rent threshold;
(b) rent threshold SA (under 18);
(c) family allowance rent threshold.
Note 1: For benefit rent threshold, see item 18A of the Table in section 1190.
Note 2: For rent threshold SA (under 18), see item 18B of the Table in section 1190.
Note 3: For family allowance rent threshold, see item 19A of the Table in section 1190.
1206E(2) This Act has effect as if, on 20 March 1996, each indexed amount of rent threshold that is substituted under subsection 1192(1) for another amount on that day were in turn replaced with an amount equal to the indexed amount plus $5.00.
Note: For indexed amount, see section 1192.
1206F Rent assistance for family allowance increased on 20 March 1996
This Act has effect as if, on 20 March 1996, each indexed amount of FA RA (rent assistance) that is substituted under subsection 1192(1) for another amount on that day were in turn replaced with an amount equal to the indexed amount plus $5.00.
Note 1: For indexed amount, see section 1192.
Note 2: For FA RA and rent assistance, see item 19 of the Table in section 1190.
1206G Increased rent assistance for pensioners with service pensioner partners with children
This Act has effect as if, on 20 March 1996 after indexation, the indexed amount in each of the following provisions were increased by $65.00:
(a) column 4 of items 5 and 6 of Table D in point 1064‑D5 (maximum rate of rent assistance for pensioners with service pensioner partners who have rent increased pension and one or more dependent children);
(b) column 4 of items 6 and 7 of Table EA in point 1066A‑EA12 (maximum rate of rent assistance for pensioners with service pensioner partners who have rent increased pension and one or more dependent children);
(c) column 4 of items 6 and 7 of Table EB in point 1066A‑EB13 (maximum rate of rent assistance for pensioners with service pensioner partners who have rent increased pension and one or more dependent children).
1206GA 1 July 2000 increase in certain indexed and adjusted amounts
1206GA(1) This section applies to an amount (the base amount) that is provided for in a provision listed in column 2 of Table A.
Note: Amounts provided for in provisions listed in Table A are amounts as altered from time to time under Divisions 2 and 4 of this Part (CPI indexation and other adjustments).
1206GA(2) This Act has effect as if, on 1 July 2000, the base amount were replaced by an amount (the replacement amount) worked out by:
(a) calculating the amount (the provisional replacement amount) that is 4% greater than the base amount; and
(b) rounding off the provisional replacement amount in accordance with section 1206GD, using the rounding base for the base amount (see column 4 of Table A).
Table A: Rates | |||
Column 1 Item | Column 2 Provision providing for base amount | Column 3 Description of amount | Column 4 Rounding base for base amount |
1 | subsection 974(2) | carer allowance | 0.10 |
2 | section 1010 | double orphan pension | 0.10 |
3 | subsection 1044(1) | mobility allowance | 0.10 |
4 | subsection 1061S—table—column 3—all amounts except item 2 | telephone allowance | 0.80 |
5 | point 1064‑C8—table—column 3—all amounts | pharmaceutical allowance | 2.60 |
6 | point 1065‑C8—table—column 3—all amounts | pharmaceutical allowance | 2.60 |
7 | point 1066‑C7—annual amount | pharmaceutical allowance | 2.60 |
8 | point 1066A‑B1—table—column 3—all amounts | pension maximum basic rates | 2.60 |
9 | point 1066A‑C1—annual amount | youth disability supplement | 2.60 |
10 | point 1066A‑D8—table—column 3—all amounts | pharmaceutical allowance | 2.60 |
11 | point 1066B‑B1—table—column 3—all amounts | pension maximum basic rates | 2.60 |
12 | point 1066B‑C1—annual amount | youth disability supplement | 2.60 |
13 | point 1066B‑D8—table—column 3—all amounts | pharmaceutical allowance | 2.60 |
14 | point 1067G‑B2—table—column 3—all amounts | youth allowance maximum basic rates (people who are not independent) | 0.10 |
15 | point 1067G‑B3—table—column 3—all amounts | youth allowance maximum basic rates (people who are independent) | 0.10 |
16 | point 1067G‑B4—table—column 3—all amounts | youth allowance maximum basic rates (long term income support students) | 0.10 |
17 | point 1067G‑C3—table—column 3—all amounts | pharmaceutical allowance | 0.10 |
18 | point 1067L‑B2—table—column 3—all amounts | austudy payment maximum basic rate (person not long term income support student) | 0.10 |
19 | point 1067L‑B3 | austudy payment maximum basic rate (long term income support student) | 0.10 |
20 | point 1067L‑C3—table—column 3—all amounts | pharmaceutical allowance | 0.10 |
21 | point 1068‑B1—table—column 3—all amounts | benefit maximum basic rates | 0.10 |
22 | point 1068‑D10—table—column 3—all amounts | pharmaceutical allowance | 0.10 |
23 | point 1068A‑C7—annual amount | pharmaceutical allowance | 2.60 |
24 | point 1068B‑B6 | parenting payment maximum basic component | 0.10 |
25 | point 1068B‑C2—table—column 3—all amounts | parenting payment maximum basic rate | 0.10 |
26 | point 1068B‑E8—table—column 3—all amounts | pharmaceutical allowance | 0.10 |
1206GAA 1 July 2000 increase in rent assistance amounts
1206GAA(1) This section applies to an amount (the base amount) of rent assistance that is provided for in a provision listed in column 2 of Table A.
Note: Amounts provided for in provisions listed in Table A are amounts as altered from time to time under Division 2 of this Part (CPI indexation).
1206GAA(2) This Act has effect as if, on 1 July 2000, the base amount were replaced by an amount (the replacement amount) worked out by:
(a) calculating the amount (the provisional replacement amount) that is 10% greater than the base amount; and
(b) rounding off the provisional replacement amount in accordance with section 1206GD, using the rounding base for the base amount (see column 3 of Table A).
Table A: Rates |
|
|
Column 1 Item | Column 2 Provision providing for base amount | Column 3 Rounding base for base amount |
1 | point 1064‑D5—table—column 4—all amounts | 5.20 |
2 | point 1066‑D4—table—column 2 | 5.20 |
3 | point 1066A‑EA12—table—column 4—all amounts | 5.20 |
4 | point 1066A‑EB13—table—column 4—all amounts | 5.20 |
5 | point 1067G‑D6—table—column 4—all amounts | 0.20 |
6 | point 1068‑F15—table—column 4—all amounts | 0.20 |
7 | point 1068A‑D3—table—column 3 | 5.20 |
8 | point 1068B‑F6—table—column 4—all amounts | 0.20 |
9 | point 1069‑E4—table—column 4—all amounts | 0.20 |
1206GB Adjustment of amounts following 1 July 2000 increase
1206GB(1) If an amount (the affected amount) is:
(a) an amount described in the table in section 1206GA or in the table in section 1206GAA that is indexed under Division 2 of this Part; or
(b) a maximum basic rate provided for in point 1064‑B1, 1065‑B1, 1066‑B1 or 1068A‑B1; or
(c) a pension supplement provided for in point 1064‑BA2, 1065‑BA2, 1066‑BA2 or 1068A‑BA2;
this section applies to modify the way the amount is indexed under Division 2 of this Part for a limited period after 19 March 2001.
Method statement
Step 1. Work out the current figure for the affected amount on 19 March 2001.
Step 2. Multiply the current figure by 0.02. The result is the provisional overall adjustment amount.
Step 3. Round off the provisional overall adjustment amount in accordance with subsections (3) to (5), using:
(a) for an affected amount described in the table in section 1206GA or in the table in section 1206GAA—the rounding base set out in that table for that amount; and
(b) for a maximum basic rate provided for in point 1064‑B1, 1065‑B1, 1066‑B1 or 1068A‑B1—the rounding base of $2.60; and
(c) for a pension supplement provided for in point 1064‑BA2, 1065‑BA2, 1066‑BA2 or 1068A‑BA2—the rounding base of $0.10.
The result is the overall adjustment amount.
Step 4. For the first indexation day for an affected amount that occurs after 19 March 2001, subtract the current figure from the indexed amount (arrived at using the method statement in subsection 1192(2)). The result (which could be zero) is the first indexation increase amount.
Step 5. Compare the overall adjustment amount with the first indexation increase amount. If the overall adjustment amount is equal to or less than the first indexation increase amount, go to step 6. If the overall adjustment amount is greater than the first indexation increase amount, go to step 9.
Step 6. Subtract the overall adjustment amount from the indexed amount referred to in step 4.
Step 7. If the indexed amount is a pension supplement, round off the result in accordance with subsections (3) to (5) (as if the amount were a provisional overall adjustment amount), using the rounding base of $2.60.
Step 8. The result obtained under step 6 or step 7 (as the case requires) is taken to be the indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) and this section has no further application in relation to the affected amount.
Note: The indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) may be increased under section 1195 in certain cases.
Step 9. The indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) is taken to be equal to the current figure worked out under step 2 of the method statement in subsection 1192(2). Go to step 10.
Note: The indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) may be increased under section 1195 in certain cases.
Step 10. For the second indexation day for the affected amount that occurs after 19 March 2001, subtract the first indexation increase amount from the overall adjustment amount. The result is the remaining adjustment amount.
Step 11. Subtract the current figure from the indexed amount (arrived at using the method statement in subsection 1192(2)). The result (which could be zero) is the second indexation increase amount.
Step 12. Compare the remaining adjustment amount with the second indexation increase amount. If the remaining adjustment amount is equal to or less than the second indexation increase amount, go to step 13. If the remaining adjustment amount is greater than the second indexation increase amount, go to step 16.
Step 13. Subtract the remaining adjustment amount from the indexed amount.
Step 14. If the indexed amount is a pension supplement, round off the result in accordance with subsections (3) to (5) (as if the amount were a provisional overall adjustment amount), using the rounding base of $2.60.
Step 15. The result obtained under step 13 or step 14 (as the case requires) is taken to be the indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) and this section has no further application in relation to the affected amount.
Note: The indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) may be increased under section 1195 in certain cases.
Step 16. The indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) is taken to be equal to the current figure worked out under step 2 of the method statement in subsection 1192(2). Go to step 17.
Note: The indexed amount for the purposes of step 4 of the method statement in subsection 1192(2) may be increased under section 1195 in certain cases.
Step 17. Repeat the method set out in steps 10 to 16 in relation to the third indexation day and to subsequent indexation days until the remaining adjustment amount is zero.
Application of section 1195 to affected amounts
1206GB(2) Section 1195 does not apply at Step 4 or Step 11 of the Method statement in this section.
Rounding of provisional overall adjustment amounts
1206GB(3) If a provisional overall adjustment amount is a multiple of the rounding base, the provisional overall adjustment amount is the overall adjustment amount.
1206GB(4) If a provisional overall adjustment amount is not a multiple of the rounding base, the overall adjustment amount is the provisional overall adjustment amount rounded up or down to the nearest multiple of the rounding base.
1206GB(5) If a provisional overall adjustment amount is not a multiple of the rounding base, but is a multiple of half the rounding base, the overall adjustment amount is the provisional overall adjustment amount rounded up to the nearest multiple of the rounding base.
1206GC 1 July 2000 increase in income and assets test free areas
1206GC(1) This section applies to an amount (the base amount) that is provided for in:
(a) a provision listed in column 2 of Table A (see subsection (4)); or
(b) a provision listed in column 2 of Table B (see subsection (5)).
Note: Amounts provided for in provisions listed in Tables A and B are amounts as altered from time to time under Division 2 of this Part (CPI indexation).
1206GC(2) This Act has effect as if, on 1 July 2000, the base amount were replaced by an amount (the replacement amount) worked out by:
(a) calculating the amount (the provisional replacement amount) that is 2.5% greater than the base amount; and
(b) rounding off the provisional replacement amount in accordance with section 1206GD, using the rounding base for the base amount (see column 4 of the relevant table).
1206GC(3) For the purposes of subsection (1), the base amount is to include any indexation that occurs on 1 July 2000 under Division 2 of this Part.
1206GC(4) The income test free area table is:
Table A: Income test free areas | |||
Column 1 Item | Column 2 Provision providing for base amount | Column 3 Description of amount | Column 4 Rounding base for base amount |
1 | subsection 198A(1) | income ceiling for care receiver | not applicable—see subsection 1206GD(4) |
2 | point 1064‑E4—table—column 3—all amounts | basic free area for pension | $52.00 |
3 | point 1066‑E4—table—column 1 | basic free area for pension | $52.00 |
4 | point 1066A‑F3—table—column 3—all amounts | basic free area for pension | $52.00 |
5 | paragraph 1067G‑F22(a) | parental income free area | $52.00 |
6 | point 1068A‑E14—table—column 2 | basic free area for parenting payment | $52.00 |
7 | subpoint 1069‑J8(1)—table—column 3—items 1 and 3 | basic free area for maintenance income test | $7.80 |
8 | subpoint 1069‑J8(1)—table—column 3—item 2 | basic free area for maintenance income test | $15.60 |
9 | subpoint 1069‑J8(1)—table—column 5—all amounts | additional free area for maintenance income test | $2.60 |
1206GC(5) The assets test free area table is:
Table B: Assets test free areas | |||
Column 1 Item | Column 2 Provision providing for base amount | Column 3 Description of amount | Column 4 Rounding base for base amount |
1 | subsections 198D(1) and (1A) | assets value limit for care receiver | $250.00 |
2 | subsections 198N(2) and (3) | assets value limit for care receiver | $250.00 |
3 | paragraph 198N(4)(a) | assets value limit for care receiver | $250.00 |
4 | subsection 408CE(2)—table—column 3—item 1 | asset value limit for widow allowance | $250.00 |
5 | subsection 500Q(2)—table—column 3—item 1 | assets value limit for parenting payment | $250.00 |
6 | paragraphs 547C(1)(a) and (b) | assets value limit for youth allowance | $250.00 |
7 | paragraph 573B(1)(a) | assets value limit for austudy payment | $250.00 |
8 | subsection 611(2)—table—column 3A—items 1 and 3 | assets value limit for newstart allowance | $250.00
|
9 | subsection 611(2)—table—column 3B—item 3 | assets value limit for newstart allowance | $250.00 |
10 | subsection 660YCJ(2)—table—column 3A—items 1 and 3 | assets value limit for mature age allowance post‑30/6/96 | $250.00
|
11 | subsection 660YCJ(2)—table—column 3B—item 3 | assets value limit for mature age allowance post‑30/6/96 | $250.00 |
12 | subsection 680(3)—table—column 3A—items 1 and 3 | assets value limit for sickness allowance | $250.00
|
13 | subsection 680(3)—table—column 3B—item 3 | assets value limit for sickness allowance | $250.00
|
14 | subsection 733(3)—table—column 3A—items 1 and 3 | assets value limit for special benefit | $250.00
|
15 | subsection 733(3)—table—column 3B—item 3 | assets value limit for special benefit | $250.00
|
16 | subsection 771HF(2) table—column 3—all amounts | assets value limit for partner allowance | $250.00 |
17 | point 1064‑G3—table—column 3—all amounts (other than column 3B—item 1) | assets value limit—pensions | $250.00 |
18 | point 1066‑G3—table—column 3—all amounts (other than column 3B—item 1) | assets value limit—pensions | $250.00 |
19 | point 1066A‑H3—table—column 3—all amounts (other than column 3B—item 1) | assets value limit—pensions | $250.00 |
20 | point 1068B‑B3—table—column 3A—item 2
| assets value limit for parenting payment | $250.00 |
21 | point 1068B‑B3—table—column 3B—item 2 | assets value limit for parenting payment | $250.00 |
Note: If an amount is provided for in a subsection or point mentioned in Table B, but the provision providing for the amount is not listed in Table B, the 2.5% increase in the amount will occur on 1 July 2000 because of automatic adjustments under Division 4 of this Part.
1206GD Rounding off provisional replacement amounts
1206GD(1) If a provisional replacement amount is a multiple of the rounding base, the provisional replacement amount is the replacement amount.
1206GD(2) If a provisional replacement amount is not a multiple of the rounding base, the replacement amount is the provisional replacement amount rounded up or down to the nearest multiple of the rounding base.
1206GD(3) If a provisional replacement amount is not a multiple of the rounding base, but is a multiple of half the rounding base, the replacement amount is the provisional replacement amount rounded up to the nearest multiple of the rounding base.
1206GD(4) If a provisional replacement amount for a base amount provided for in subsection 198A(1) is not a multiple of $1.00, the replacement amount is the provisional replacement amount rounded up to the nearest multiple of $1.00.
Part 3.16A—Advance payment deductions
1206H Advance payment deduction
1206H(1) Subject to subsection (2) and section 1206L, an advance payment deduction is to be made from the rate of a social security entitlement that is payable to a person if:
(a) the person has received an advance payment, or an instalment of an advance payment, of that social security entitlement or of another social security entitlement that was previously payable to the person; and
(b) the person has not yet repaid the whole of the advance payment or instalment; and
(c) the amount of the advance payment or instalment that has not been repaid is not a debt under subsection 1224E(1).
Note: For social security entitlement see subsection 23(1).
1206H(2) An advance payment deduction is not to be made from a person’s rate on:
(a) the payday on which the advance payment is paid; or
(b) the payday on which the first instalment of the advance payment is paid;
as the case requires.
1206H(3) In this section:
social security entitlement includes a PP (partnered).
Note: For PP (partnered) see section 18.
1206J Amount of advance payment deduction—basic calculation
Subject to sections 1206K, 1206L, 1206M and 1206N, the advance payment deduction for an advance payment of a social security entitlement is worked out by dividing the full amount of the advance payment by 13.
1206K Person may request larger advance payment deduction
1206K(1) Subject to subsection (2) and sections 1206L, 1206M and 1206N, a person’s advance payment deduction is increased to a larger amount if the person asks the Secretary in writing for the advance payment deduction to be the larger amount.
1206K(2) Subsection (1) does not apply if the Secretary is satisfied that the person would suffer severe financial hardship if the advance payment deduction were the larger amount.
1206L Reduction of advance payment deduction in cases of severe financial hardship
Reduction
1206L(1) Subject to subsection (2) and sections 1206M and 1206N, if:
(a) the person applies in writing to the Secretary for an advance payment deduction to be decreased, or to be stopped, because of severe financial hardship; and
(b) the Secretary is satisfied that:
(i) the person’s circumstances are exceptional and could not reasonably have been foreseen at the time of the person’s application for the advance payment; and
(ii) the person would suffer severe financial hardship if the advance payment deduction that would otherwise apply were to continue;
the Secretary may determine in writing that, for the period specified in the determination, the advance payment deduction is to be a lesser amount (which may be a nil amount) specified in the determination.
Review of reduction
1206L(2) At any time while the determination is in force, the Secretary may:
(a) vary the determination so as to require to be deducted from the person’s rate an advance payment deduction larger than the deduction (if any) previously applying under the determination, but smaller than the deduction applying immediately prior to the determination; or
(b) revoke the determination;
but only if the Secretary is satisfied that the person would not suffer severe financial hardship because of the variation or revocation.
Variation or revocation in writing
1206L(3) A variation or revocation of a determination must be in writing.
1206M The final advance payment deduction
Final advance payment deduction not to exceed unpaid amount
1206M(1) If an advance payment deduction that would otherwise be deducted from a person’s rate exceeds the part of the advance payment that the person has not yet repaid (by previous deductions under this Part or otherwise), the amount of that advance payment deduction equals the part that the person has not yet repaid.
Example:
Facts: Assume that, in the example at the end of section 1206J, Anne has requested that the advance payment deduction be the larger amount of $55 (see section 1206K), so that the advance payment of $450 will be repaid sooner.
Application: If $55 is deducted from Anne’s fortnightly rate of benefit, $440 will have been repaid after 8 successive fortnights, leaving $10 unpaid. Under section 1206M, the final advance payment deduction will be $10.
This section subject to section 1206N
1206M(2) This section has effect subject to section 1206N.
1206N Provisional payment rate insufficient to cover advance payment deduction
1206N(1) If the provisional payment rate referred to in the relevant Rate Calculator is less than the advance payment deduction would be apart from this subsection, the advance payment deduction is taken to be equal to the provisional payment rate.
1206N(2) If:
(a) a person’s rate of pension is the notional income/assets tested rate referred to in the Method statement in point 1065‑A1 in Pension Rate Calculator B; and
(b) the provisional payment rate worked out for the person using Pension Rate Calculator A in accordance with Step 1 of the Method statement in point 1065‑A1 in Pension Rate Calculator B is less than the advance payment deduction would be apart from this subsection;
the advance payment deduction is taken to be equal to the provisional payment rate referred to in paragraph (b).
1206N(3) If:
(a) a person’s rate of pension is the non‑income/assets tested rate referred to in the Method statement in point 1065‑A1 in Pension Rate Calculator B; and
(b) the maximum payment rate for the person worked out in Step 4 of that Method statement is less than the advance payment deduction would be apart from this subsection;
the advance payment deduction is taken to be equal to the maximum payment rate referred to in paragraph (b).
1206N(4) If:
(a) a person’s rate of pension is the notional income/assets tested rate referred to in the Method statement in point 1066B‑A1 in Pension Rate Calculator E; and
(b) the provisional payment rate worked out for the person using Pension Rate Calculator D in accordance with Step 1 of the Method statement in point 1066B‑A1 in Pension Rate Calculator E is less than the advance payment deduction would be apart from this subsection;
the advance payment deduction is taken to be equal to the provisional payment rate referred to in paragraph (b).
1206N(5) If:
(a) a person’s rate of pension is the non‑income/assets tested rate referred to in the Method statement in point 1066B‑A1 in Pension Rate Calculator E; and
(b) the maximum payment rate for the person worked out in Step 5 of that Method statement is less than the advance payment deduction would be apart from this subsection;
the advance payment deduction is taken to be equal to the maximum payment rate referred to in paragraph (b).
Amounts worked out under this Part must be rounded to the nearest cent (rounding 0.5 cents upwards).
Part 3.16B—Special employment advance deductions
1206Q Special employment advance deduction
1206Q(1) Subject to subsection (2) and section 1206T, a special employment advance deduction is to be made from the rate of a social security entitlement that is payable to a person if:
(a) the person has received a special employment advance or an instalment of a special employment advance; and
(b) the person has not yet repaid the whole of the special employment advance or instalment; and
(c) the amount of the special employment advance or instalment that has not been repaid is not a debt under section 1224EA.
Note: For social security entitlement see subsection 23(1).
1206Q(2) A special employment advance deduction may be made from a person’s rate on:
(a) if the special employment advance is paid as a lump sum—the payday next following the day on which the lump sum is paid; or
(b) if the special employment advance is paid by instalments—the payday next following the day on which the last instalment of the special employment advance is paid;
or on any later payday.
1206Q(3) In this section:
social security entitlement includes a benefit PP (partnered).
1206R Amount of special employment advance deduction—basic calculation
Subject to sections 1206S, 1206T, 1206U and 1206V, a special employment advance deduction is such amount as the Secretary determines.
1206S Person may request larger special employment advance deduction
1206S(1) Subject to subsection (2) and sections 1206T, 1206U and 1206V, a person’s special employment advance deduction is increased to a larger amount if the person asks the Secretary in writing for the special employment advance deduction to be the larger amount.
1206S(2) Subsection (1) does not apply if the Secretary is satisfied that the person would suffer severe financial hardship if the special employment advance deduction were the larger amount.
1206T Reduction of special employment advance deduction in cases of severe financial hardship
1206T(1) Subject to subsection (2) and sections 1206U and 1206V, if:
(a) a person applies in writing to the Secretary for a special employment advance deduction to be decreased, or to be stopped, because of severe financial hardship; and
(b) the Secretary is satisfied that:
(i) the person’s circumstances are exceptional and could not reasonably have been foreseen at the time of the person’s claim for the special employment advance; and
(ii) the person would suffer severe financial hardship if the special employment advance deduction that would otherwise apply were to continue;
the Secretary may determine in writing that, for the period stated in the determination, the special employment advance deduction is to be a lesser amount (which may be a nil amount) stated in the determination.
1206T(2) At any time while the determination is in force, the Secretary may:
(a) vary the determination so as to require to be deducted from the person’s rate a special employment advance deduction larger than the deduction (if any) previously applying under the determination, but smaller than the deduction applying immediately before the determination; or
(b) revoke the determination;
but only if the Secretary is satisfied that the person would not suffer severe financial hardship because of the variation or revocation.
1206T(3) A variation or revocation of a determination must be in writing.
1206U The final special employment advance deduction
1206U(1) If a special employment advance deduction that would otherwise be deducted from a person’s rate exceeds the part of the special employment advance that the person has not yet repaid (by previous deductions under this Part or otherwise), the amount of that special employment advance deduction is to be equal to the part that the person has not yet repaid.
1206U(2) This section has effect subject to section 1206V.
1206V Provisional payment rate insufficient to cover special employment advance deduction
1206V(1) If the provisional payment rate referred to in the relevant Rate Calculator is less than the special employment advance deduction would be apart from this subsection, the special employment advance deduction is taken to be equal to the provisional payment rate.
1206V(2) If:
(a) a person’s rate of pension is the notional income/assets tested rate referred to in the Method statement in point 1065‑A1 in Pension Rate Calculator B; and
(b) the provisional payment rate worked out for the person using Pension Rate Calculator A in accordance with Step 1 of the Method statement in point 1065‑A1 in Pension Rate Calculator B is less than the special employment advance deduction would be apart from this subsection;
the special employment advance deduction is taken to be equal to the provisional payment rate referred to in paragraph (b).
1206V(3) If:
(a) a person’s rate of pension is the non‑income/assets tested rate referred to in the Method statement in point 1065‑A1 in Pension Rate Calculator B; and
(b) the maximum payment rate for the person worked out in Step 4 of that Method statement is less than the special employment advance deduction would be apart from this subsection;
the special employment advance deduction is taken to be equal to the maximum payment rate referred to in paragraph (b).
1206V(4) If:
(a) a person’s rate of pension is the notional income/assets tested rate referred to in the Method statement in point 1066B‑A1 in Pension Rate Calculator E; and
(b) the provisional payment rate worked out for the person using Pension Rate Calculator D in accordance with Step 1 in the Method statement in point 1066B‑A1 in Pension Rate Calculator E is less than the special employment advance deduction would be apart from this subsection;
the special employment advance deduction is taken to be equal to the provisional payment rate referred to in paragraph (b).
1206V(5) If:
(a) a person’s rate of pension is the non‑income/assets tested rate referred to in the Method statement in point 1066B‑A1 in Pension Rate Calculator E; and
(b) the maximum payment rate for the person worked out in Step 5 of that Method statement is less than the special employment advance deduction would be apart from this subsection;
the special employment advance deduction is taken to be equal to the maximum payment rate referred to in paragraph (b).
Amounts worked out under this Part must be rounded to the nearest cent (rounding 0.5 cent upwards).
Part 3.18—Means test treatment of private companies and private trusts
The following is a simplified outline of this Part:
• This Part sets up a system for the attribution to individuals of the assets and income of private companies and private trusts (sections 1207Y and 1208E).
• Attribution starts on 1 January 2002.
• For an asset or income to be attributed to an individual:
(a) the company must be a designated private company or the trust must be a designated private trust (sections 1207N and 1207P); and
(b) the company must be a controlled private company in relation to the individual or the trust must be a controlled private trust in relation to the individual (sections 1207Q and 1207V); and
(c) the individual must be an attributable stakeholder of the company or trust (section 1207X).
• A company or trust will be a controlled private trust or a controlled private company if the individual passes a control test or a source test.
• An individual will not be an attributable stakeholder of a trust if the trust is a concessional primary production trust in relation to the individual.
• The asset deprivation rules and the income deprivation rules are modified if attribution happens.
In this Part, unless the contrary intention appears:
actively involved with a primary production enterprise has the meaning given by section 1207J.
actual transfer, in relation to property or services, means a transfer of the property or services other than a transfer that is taken to have been made because of subsection 1207H(1), (3) or (4).
adjusted net primary production income (in Division 11) has the meaning given by section 1209.
adjusted net value (in Division 11) has the meaning given by section 1208Z.
arm’s length amount, in relation to an actual transfer of property or services to a company or a trust, means the amount that the company or trust could reasonably be expected to have been required to pay to obtain the property or the services concerned from the transferor under a transaction where the parties to the transaction are dealing with each other at arm’s length in relation to the transaction.
asset attribution percentage has the meaning given by section 1207X.
associate has the meaning given by section 1207C.
attributable stakeholder has the meaning given by section 1207X.
attribution period has the meaning given by section 1208D.
business partnership means a partnership within the meaning of the Income Tax Assessment Act 1997.
child, in relation to a person, includes an adopted child, a step‑child or a foster‑child.
company has the same meaning as in the Income Tax Assessment Act 1997.
concessional primary production trust has the meaning given by section 1208U.
constituent document, in relation to a company, means:
(a) the memorandum and articles of association of the company; or
(b) any rules or other documents constituting the company or governing its activities.
control includes control as a result of, or by means of, trusts, agreements, arrangements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights.
controlled private company has the meaning given by section 1207Q.
controlled private trust has the meaning given by section 1207V.
decision‑making principles means decision‑making principles under section 1209E.
derivation period has the meaning given by section 1208C.
designated private company has the meaning given by section 1207N.
designated private trust has the meaning given by section 1207P.
director includes any person (by whatever name called) occupying the position of a director of a company.
entity means any of the following:
(a) an individual;
(b) a company;
(c) a trust;
(d) a business partnership;
(e) a corporation sole;
(f) a body politic.
group includes:
(a) one entity alone; or
(b) a number of entities, even if they are not in any way associated with each other or acting together.
income attribution percentage has the meaning given by section 1207X.
interest in a share has the meaning given by section 1207U.
majority voting interest, in relation to a company, has the meaning given by section 1207E.
primary production enterprise means a business in Australia that consists of primary production.
property includes money.
relative, in relation to a person, has the meaning given by section 1207B.
scheme means:
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; or
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether there are 2 or more parties or only one party involved.
services includes any benefit, right (including a right in relation to, and an interest in, real or personal property), privilege or facility and, without limiting the generality of the foregoing, includes a benefit, right, privilege, service or facility that is, or is to be, provided under:
(a) an arrangement for or in relation to:
(i) the performance of work (including work of a professional nature), whether with or without the provision of property; or
(ii) the provision of, or of the use of facilities for, entertainment, recreation or instruction; or
(iii) the conferring of benefits, rights or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; or
(b) a contract of insurance; or
(c) an arrangement for or in relation to the lending of money.
share includes stock.
spouse includes, in relation to a person who is a member of a couple (as defined by section 4), the other member of the couple.
subsidiary has the same meaning as in the Corporations Act 2001.
sufficiently influenced, in relation to a company, has the meaning given by section 1207D.
transfer:
(a) in relation to property—includes dispose of (whether by assignment, declaration of trust or otherwise) or provide; and
(b) in relation to services—includes allow, confer, give, grant, perform or provide.
trust means a person in the capacity of trustee or, as the case requires, a trust estate.
trustee has the same meaning as in the Income Tax Assessment Act 1997.
underlying transfer, in relation to a transfer of property or services to an entity, means:
(a) if that transfer was an actual transfer—the actual transfer; or
(b) if that transfer was taken to have been made because of subsection 1207H(1)—the actual transfer referred to in that subsection; or
(c) if that transfer was taken to have been made because of subsection 1207H(3)—the actual transfer referred to in paragraph 1207H(3)(b); or
(d) if that transfer was taken to have been made because of subsection 1207H(4)—the actual transfer referred to in paragraph 1207H(4)(c).
voting power has the meaning given by section 1207S.
1207B(1) For the purposes of this Part, a relative, in relation to a person (the first person), means any of the following:
(a) the spouse of the first person;
(b) a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, first cousin, second cousin or lineal descendant of the first person;
(c) the spouse of a person covered by paragraph (b);
(d) a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, first cousin, second cousin or lineal descendant of the spouse of the first person;
(e) the spouse of a person covered by paragraph (d);
(f) a child of a person covered by any of the preceding paragraphs.
1207B(2) For the purposes of this section, in determining who is a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, first cousin, second cousin or lineal descendant of a person, treat each of the following relationships as if they were biological child‑parent relationships:
(a) the relationship between an adopted child and his or her adoptive parent;
(b) the relationship between a step‑child and his or her step‑parent;
(c) the relationship between a foster‑child and his or her foster‑parent.
1207C(1) For the purposes of this Part, in determining:
(a) whether a trust is a designated private trust; or
(b) whether a company is a controlled private company in relation to an individual; or
(c) whether a trust is a controlled private trust in relation to an individual; or
(d) whether a trust is a concessional primary production trust in relation to an individual;
the following are associates of an individual:
(e) a relative of the individual;
(f) an entity who, in matters relating to the trust or company:
(i) acts, or is accustomed to act; or
(ii) under a contract or an arrangement or understanding (whether formal or informal), is intended or expected to act;
in accordance with the directions, instructions or wishes of:
(iii) the individual; or
(iv) the individual and another entity who is an associate of the individual because of another paragraph of this subsection;
(g) an entity that is a declared associate of the individual (see subsection (2));
(h) a business partner of the individual or a business partnership in which the individual is a business partner;
(i) if a business partner of the individual is an individual—the spouse or a child of that business partner;
(j) a trustee of a trust, where:
(i) the individual; or
(ii) another entity that is an associate of the individual because of another paragraph of this subsection;
benefits or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting under the trust, either directly or through any interposed companies, business partnerships or trusts;
(k) a company, where the company is sufficiently influenced by:
(i) the individual; or
(ii) another entity that is an associate of the individual because of another paragraph of this subsection; or
(iii) another company that is an associate of the individual because of another application of this paragraph; or
(iv) 2 or more entities covered by the preceding subparagraphs;
(l) a company, where a majority voting interest in the company is held by:
(i) the individual; or
(ii) the entities that are associates of the individual because of any of the preceding paragraphs of this subsection; or
(iii) the individual and the entities that are associates of the individual because of any of the preceding paragraphs of this subsection.
Declared associate
1207C(2) The Secretary may, by writing, determine that each entity included in a specified class of entities is taken to be a declared associate of an individual for the purposes of this section.
1207C(3) A determination under subsection (2) has effect accordingly.
1207C(4) A determination under subsection (2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1207D When a company is sufficiently influenced by an entity
For the purposes of this Part, a company is sufficiently influenced by an entity or entities if the company, or its directors:
(a) are accustomed or under an obligation (whether formal or informal); or
(b) might reasonably be expected;
to act in accordance with the directions, instructions or wishes of the entity or entities.
1207E Majority voting interest in a company
For the purposes of this Part, an entity or entities hold a majority voting interest in a company if the entity or entities are in a position to cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the company.
For the purposes of this Part, an entity is entitled to acquire anything that the entity is absolutely or contingently entitled to acquire, whether because of any constituent document of a company, the exercise of any right or option or for any other reason.
1207G Transfer of property or services
1207G(1) A reference in this Part to the transfer of property or services to a trust includes a reference to the transfer of such property or services by way of the creation of the trust.
1207G(2) For the purposes of this Part, if an entity acquires property that did not previously exist, the property is taken to have existed immediately before the acquisition and to have been transferred by the entity who created the property.
1207G(3) For the purposes of this Part, property or services are taken to have been transferred to an entity if the property or services have been applied for the benefit of, or in accordance with the directions of, the entity.
1207G(4) Without limiting the generality of subsection (3), a reference in that subsection to the application of property or services for the benefit of an entity includes a reference to the application of property or services in the discharge, in whole or in part, of a debt due by the entity.
1207H Constructive transfers of property or services to an entity
1207H(1) For the purposes of this Part, if an entity (the prime entity) causes another entity to actually transfer property or services to a third entity, the prime entity is taken to have transferred the property or services (instead of the other entity).
1207H(2) Subsection (1) does not limit the operation of subsection (3).
1207H(3) If, under a scheme:
(a) an entity (the scheme entity) actually transfers property or services to another entity; and
(b) property or services are actually transferred to a third entity at a particular time otherwise than by the scheme entity;
the Secretary may, for the purposes of this Part, treat the property or services mentioned in paragraph (b) as having been transferred by the scheme entity to the third entity (instead of by any other entity) at that time to such extent as the Secretary considers reasonable.
1207H(4) If:
(a) an individual transfers property or services to an entity (the interposed entity), being a company, a business partnership or a trust; and
(b) a winding‑up event occurs in relation to the interposed entity; and
(c) an actual transfer of property or services is made to another entity (the ultimate transferee) at a particular time as a consequence of the interposed entity being wound‑up or ceasing to exist;
the Secretary may, for the purposes of this Part, treat the property or services mentioned in paragraph (c) as having been transferred by the individual to the ultimate transferee (instead of by any other entity) at that time to such extent as the Secretary considers reasonable.
1207H(5) For the purposes of this section, each of the following events is a winding‑up event in relation to a company:
(a) the company passes a resolution for its winding‑up;
(b) an order is made for the winding‑up of the company;
(c) any similar event.
1207H(6) For the purposes of this section, a winding‑up event occurs in relation to a business partnership if the business partnership ceases to exist for the purposes of the Income Tax Assessment Act 1997.
1207H(7) For the purposes of this section, a winding‑up event occurs in relation to a trust if:
(a) the trust commences to be wound‑up; or
(b) the trust ceases to exist for the purposes of the Income Tax Assessment Act 1997.
1207J Active involvement with a primary production enterprise
For the purposes of this Part, an individual is taken to have been actively involved with a primary production enterprise if, and only if, the individual:
(a) has contributed a significant part of his or her labour to the development of the enterprise; or
(b) has undertaken educational studies or training in a field that, in the opinion of the Secretary, is relevant to the development or management of the enterprise.
1207K Power to veto decisions of a trustee
For the purposes of this Part, if the decisions of a trustee are subject to the consent of an entity, the entity is taken to be able to veto the decisions of the trustee.
1207L Extra‑territorial operation
1207L(1) This Part extends to acts, omissions, matters and things outside Australia.
1207L(2) Disregard subsection (1) in determining whether a provision of this Act (other than this Part) extends to acts, omissions, matters and things outside Australia.
1207M Application to things happening before commencement
The use of the present tense in a provision of this Part does not imply that the provision does not apply to things happening before the commencement of this Part.
Division 2—Designated private companies
1207N Designated private companies
1207N(1) For the purposes of this Part, a company is a designated private company at a particular time if:
(a) the company satisfies at least 2 of the following conditions in relation to the last financial year that ended before that time:
(i) the consolidated gross operating revenue for the financial year of the company and its subsidiaries is less than $10 million;
(ii) the value of the consolidated gross assets at the end of the financial year of the company and its subsidiaries is less than $5 million;
(iii) the company and its subsidiaries have fewer than 50 employees at the end of the financial year; or
(b) the company came into existence after the end of the last financial year that ended before that time; or
(c) the company is a declared private company (see subsection (2));
and the company is not an excluded company (see subsection (5)).
Declared private company
1207N(2) The Secretary may, by writing, determine that each company included in a specified class of companies is a declared private company for the purposes of this section.
1207N(3) A determination under subsection (2) has effect accordingly.
1207N(4) A determination under subsection (2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
Excluded companies
1207N(5) The Secretary may, by writing, declare that each company included in a specified class of companies is an excluded company for the purposes of this section.
1207N(6) A declaration under subsection (5) has effect accordingly.
1207N(7) An instrument under subsection (5) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
Definitions
1207N(8) In this section:
consolidated gross operating revenue has the same meaning as in section 45A of the Corporations Act 2001.
financial year, in relation to a company, means:
(a) a period of 12 months beginning on 1 July; or
(b) if some other period is the company’s tax year—that other period.
value of consolidated gross assets has the same meaning as in section 45A of the Corporations Act 2001.
Division 3—Designated private trusts
1207P Designated private trusts
1207P(1) For the purposes of this Part, a trust is a designated private trust unless:
(a) all of the following conditions are satisfied:
(i) the trust is a fixed trust;
(ii) the units in the trust are held by 50 or more persons;
(iii) the trust was not created, continued in existence or operated under a scheme that was entered into or carried out for the sole or dominant purpose of enabling any individual or individuals to avoid the application of this Part and/or Division 11A of Part IIIB of the Veterans’ Entitlements Act; or
(b) the trust is a complying superannuation fund (see subsection (3)); or
(c) the trust is an excluded trust (see subsection (4)).
1207P(2) For the purposes of subparagraph (1)(a)(ii), an individual and his or her associates are taken to be one person.
Complying superannuation funds
1207P(3) For the purposes of this section, a fund is a complying superannuation fund at a particular time if:
(a) that time occurs during a particular tax year of the fund; and
(b) under section 45 of the Superannuation Industry (Supervision) Act 1993, the fund is a complying superannuation fund for the purposes of Part IX of the Income Tax Assessment Act 1936 in relation to that tax year.
Excluded trusts
1207P(4) The Secretary may, by writing, declare that each trust included in a specified class of trusts is an excluded trust for the purposes of this section.
1207P(5) The declaration has effect accordingly.
1207P(6) An instrument under subsection (4) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
Definitions
1207P(7) In this section:
fixed trust means a trust where persons have fixed entitlements to all of the income and corpus of the trust.
income means income within the ordinary meaning of that expression.
unit, in relation to a trust, includes a beneficial interest, however described, in the property or income of the trust.
Division 4—Controlled private companies
1207Q Controlled private companies
1207Q(1) For the purposes of this Part, a company is a controlled private company in relation to an individual if the company is a designated private company and:
(a) the individual passes the control test set out in subsection (2); or
(b) the individual passes the source test set out in subsection (3).
Control test
1207Q(2) For the purposes of this section, an individual passes the control test in relation to a company if:
(a) the aggregate of:
(i) the direct voting interests in the company that the individual holds; and
(ii) the direct voting interests in the company held by associates of the individual;
is 50% or more; or
(b) the aggregate of:
(i) the direct control interests in the company that the individual holds; and
(ii) the direct control interests in the company held by associates of the individual;
is 15% or more; or
(c) the company is sufficiently influenced by:
(i) the individual; or
(ii) an associate of the individual; or
(iii) 2 or more entities covered by the preceding subparagraphs; or
(d) the individual (either alone or together with associates) is in a position to exercise control over the company.
Source test
1207Q(3) For the purposes of this section, an individual passes the source test in relation to a company if:
(a) the individual has transferred property or services to the company after 7.30 pm, by standard time in the Australian Capital Territory, on 9 May 2000; and
(b) the underlying transfer was made for no consideration or for a consideration less than the arm’s length amount in relation to the underlying transfer.
No double counting
1207Q(4) In calculating the aggregate referred to in paragraph (2)(a), a direct voting interest held because of subsection 1207R(2) is not to be counted under subparagraph (2)(a)(i) to the extent to which it is calculated by reference to a direct voting interest in the company that is taken into account under subparagraph (2)(a)(ii).
1207Q(5) In calculating the aggregate referred to in paragraph (2)(b), a direct control interest held because of subsection 1207T(4) is not to be counted under subparagraph (2)(b)(i) to the extent to which it is calculated by reference to a direct control interest in the company that is taken into account under subparagraph (2)(b)(ii).
1207R Direct voting interest in a company
1207R(1) An entity holds a direct voting interest in a company at a particular time equal to the percentage of the voting power in the company that the entity is in a position to control at that time.
1207R(2) If:
(a) an entity holds a direct voting interest (including a direct voting interest that is taken to be held because of one or more previous applications of this subsection) in a company (the first level company); and
(b) the first level company holds a direct voting interest in another company (the second level company);
the entity is taken to hold a direct voting interest in the second level company equal to the percentage worked out using the formula:
where:
first level percentage means the percentage of the direct voting interest held by the entity in the first level company.
second level percentage means the percentage of the direct voting interest held by the first level company in the second level company.
1207S(1) A reference in this Division to the voting power in a company is a reference to the total rights of shareholders to vote, or participate in any decision‑making, concerning any of the following:
(a) the making of distributions of capital or profits of the company to its shareholders;
(b) the constituent document of the company;
(c) any variation of the share capital of the company;
(d) any appointment of a director of the company.
1207S(2) A reference in this Division to control of the voting power in a company is a reference to control that is direct or indirect, including control that is exercisable as a result of or by means of arrangements or practices:
(a) whether or not having legal or equitable force; and
(b) whether or not based on legal or equitable rights.
1207S(3) If the percentage of total rights to vote or participate in decision‑making differs as between different types of voting or decision‑making, the highest of those percentages applies for the purposes of this section.
1207S(4) If a company:
(a) is limited both by shares and by guarantee; or
(b) does not have a share capital;
this section has effect as if the members or policy holders of the company were shareholders in the company.
1207T Direct control interest in a company
1207T(1) An entity holds a direct control interest in a company at a particular time equal to the percentage of the total paid‑up share capital of the company in which the entity holds an interest at that time.
1207T(2) An entity also holds a direct control interest in a company at a particular time equal to the percentage that the entity holds, or is entitled to acquire, at that time of the total rights to distributions of capital or profits of the company to its shareholders on winding‑up.
1207T(3) An entity also holds a direct control interest in a company at a particular time equal to the percentage that the entity holds, or is entitled to acquire, at that time of the total rights to distributions of capital or profits of the company to its shareholders, otherwise than on winding‑up.
1207T(4) If:
(a) an entity holds a particular type of direct control interest (including a direct control interest that is taken to be held because of one or more previous applications of this subsection) in a company (the first level company); and
(b) the first level company holds the same type of direct control interest in another company (the second level company);
the entity is taken to hold that type of direct control interest in the second level company equal to the percentage worked out using the formula:
where:
first level percentage means the percentage of the direct control interest held by the entity in the first level company.
second level percentage means the percentage of the direct control interest held by the first level company in the second level company.
1207U(1) This section applies for the purpose of working out the percentage of a company’s total paid‑up share capital in which an entity holds an interest.
1207U(2) Subject to this section, for the purposes of this Division, an entity holds an interest in a share if the entity has any legal or equitable interest in the share.
1207U(3) For the purposes of this Division, an entity is taken to hold an interest in a share if:
(a) the entity has entered into a contract to purchase the share; or
(b) the entity has a right (otherwise than because of having an interest under a trust) to have the share transferred to the entity or to the entity’s order (whether the right is exercisable presently or in the future and whether or not on the fulfilment of a condition); or
(c) the entity has a right to acquire the share, or an interest in the share, under an option (whether the right is exercisable presently or in the future and whether or not on the fulfilment of a condition); or
(d) the entity is otherwise entitled to acquire the share or an interest in the share; or
(e) the entity is entitled (otherwise than because of having been appointed as a proxy or representative to vote at a meeting of members of the company or of a class of its members) to exercise or control the exercise of a right attached to the share.
1207U(4) Subsection (3) does not, by implication, limit subsection (2).
1207U(5) An entity is taken to hold an interest in a share even if the entity holds the interest in the share jointly with another entity.
1207U(6) For the purpose of determining whether an entity holds an interest in a share, it is immaterial that the interest cannot be related to a particular share.
1207U(7) An interest in a share is not to be disregarded only because of:
(a) its remoteness; or
(b) the manner in which it arose; or
(c) the fact that the exercise of a right conferred by the interest is, or is capable of being made, subject to restraint or restriction.
Division 5—Controlled private trusts
1207V Controlled private trusts
1207V(1) For the purposes of this Part, a trust is a controlled private trust in relation to an individual if the trust is a designated private trust and:
(a) the individual passes the control test set out in subsection (2); or
(b) the individual passes the source test set out in subsection (3).
Control test
1207V(2) For the purposes of this section, the individual passes the control test in relation to a trust if:
(a) the individual, or an associate of the individual (other than an associate covered by paragraph 1207C(1)(j)), is the trustee, or any of the trustees, of the trust; or
(b) a group in relation to the individual was able to remove or appoint the trustee, or any of the trustees, of the trust; or
(c) a group in relation to the individual was able to vary the trust deed or to veto the decisions of the trustee; or
(d) the aggregate of:
(i) the beneficial interests in the corpus or income of the trust held by the individual (whether directly or indirectly); and
(ii) the beneficial interests in the corpus or income of the trust held by associates of the individual (whether directly or indirectly);
is 50% or more; or
(e) a group in relation to the individual had the power (by means of the exercise by the group of any power of appointment or revocation or otherwise) to obtain, with or without the consent of any other entity, the beneficial enjoyment of the corpus or income of the trust; or
(f) a group in relation to the individual was able in any manner whatsoever, whether directly or indirectly, to control the application of the corpus or income of the trust; or
(g) a group in relation to the individual was capable under a scheme of gaining the enjoyment or the control referred to in paragraph (e) or (f); or
(h) a trustee of the trust was accustomed or under an obligation (whether formally or informally) or might reasonably be expected to act in accordance with the directions, instructions or wishes of a group in relation to the individual.
Source test
1207V(3) For the purposes of this section, an individual passes the source test in relation to a trust if:
(a) the individual has transferred property or services to the trust after 7.30 pm, by standard time in the Australian Capital Territory, on 9 May 2000; and
(b) the underlying transfer was made for no consideration or for a consideration less than the arm’s length amount in relation to the underlying transfer.
Group
1207V(4) A reference in this section to a group in relation to an individual is a reference to:
(a) the individual acting alone; or
(b) an associate of the individual acting alone; or
(c) the individual and one or more associates of the individual acting together; or
(d) 2 or more associates of the individual acting together.
Income
1207V(5) In this section:
income means income within the ordinary meaning of that expression.
1207W(1) For the purposes of this Division, if an entity:
(a) has entered into a contract to purchase a beneficial interest in the corpus or income of a trust; or
(b) has a right, otherwise than by reason of holding an interest in a trust, to have such an interest transferred to the entity or to the entity’s order (whether the right is exercisable presently or in the future) and whether on the fulfilment of a condition or not; or
(c) has the right to acquire such an interest under an option (whether the right is exercisable presently or in the future) and whether on the fulfilment of a condition or not; or
(d) is otherwise entitled to acquire such an interest;
the entity is taken to hold that interest in the trust.
1207W(2) An entity is taken to hold an interest in the corpus or income of a trust even if the entity holds the interest jointly with another entity.
1207W(3) An interest in the corpus or income of a trust is not to be disregarded only because of:
(a) its remoteness; or
(b) the manner in which it arose; or
(c) the fact that the exercise of a right conferred by the interest is, or is capable of being made, subject to restraint or restriction.
1207W(4) In this section:
income means income within the ordinary meaning of that expression.
Division 6—Attributable stakeholders and attribution percentages
1207X Attributable stakeholder, asset attribution percentage and income attribution percentage
Company
1207X(1) For the purposes of this Part, if a company is a controlled private company in relation to an individual:
(a) the individual is an attributable stakeholder of the company unless the Secretary otherwise determines; and
(b) if the individual is an attributable stakeholder of the company—the individual’s asset attribution percentage in relation to the company is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the company—that lower percentage; and
(c) if the individual is an attributable stakeholder of the company—the individual’s income attribution percentage in relation to the company is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the company—that lower percentage.
Trust
1207X(2) For the purposes of this Part, if:
(a) a trust is a controlled private trust in relation to an individual; and
(b) the trust is not a concessional primary production trust in relation to the individual (see section 1208U);
then:
(c) the individual is an attributable stakeholder of the trust unless the Secretary otherwise determines; and
(d) if the individual is an attributable stakeholder of the trust—the individual’s asset attribution percentage in relation to the trust is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the trust—that lower percentage; and
(e) if the individual is an attributable stakeholder of the trust—the individual’s income attribution percentage in relation to the trust is:
(i) 100%; or
(ii) if the Secretary determines a lower percentage in relation to the individual and the trust—that lower percentage.
Determinations
1207X(3) A determination under this section is to be in writing.
1207X(4) A determination under this section has effect accordingly.
1207X(5) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
Division 7—Attribution of income of controlled private companies and controlled private trusts
1207Y(1) For the purposes of this Act, if:
(a) during a particular derivation period of a company or trust, the company or trust derives an amount that is ordinary income; and
(b) an individual is an attributable stakeholder of the company or a trust throughout the attribution period that relates to the derivation period of the company or trust; and
(c) the attribution period begins on or after 1 January 2002; and
(d) if that amount:
(i) had been derived by the individual instead of by the company or trust; and
(ii) in the case of income accounted for on an accrual basis as mentioned in subsection (5)—had been so derived by the individual on a cash basis;
that amount would have been ordinary income of the individual; and
(e) that amount is not excluded income (see subsection (2));
then, in addition to any other ordinary income of the individual, the individual is taken to receive, during that attribution period, ordinary income at an annual rate equal to the individual’s income attribution percentage of the amount worked out using the formula:
Excluded income
1207Y(2) The Secretary may, by writing, determine that, for the purposes of the application of subsection (1) to a specified individual and a specified company or trust, a specified amount is excluded income.
1207Y(3) A determination under subsection (2) has effect accordingly.
1207Y(4) In making a determination under subsection (2), the Secretary must comply with any relevant decision‑making principles.
Accrual v. cash accounting
1207Y(5) If the income of a company or trust is accounted for on an accrual basis for the purposes of section 6‑5 of the Income Tax Assessment Act 1997, the ordinary income of the company or trust is accounted for on an accrual basis for the purposes of this section.
1207Y(6) If the income of a company or trust is accounted for on a cash basis for the purposes of section 6‑5 of the Income Tax Assessment Act 1997, the ordinary income of the company or trust is accounted for on a cash basis for the purposes of this section.
1207Z No double counting of attributed income
1207Z(1) If:
(a) a company makes a distribution of capital or profits of the company to a particular shareholder of the company; and
(b) the shareholder is an individual; and
(c) the individual is an attributable stakeholder of the company;
the Secretary may, by writing:
(d) determine that, for the purposes of this Act, the ordinary income of the individual does not include the amount or value distributed to the individual; or
(e) determine that, for the purposes of this Act, the ordinary income of the individual does not include so much of the amount or value distributed to the individual as is specified in the determination.
1207Z(2) If:
(a) a trust:
(i) makes a distribution (whether in money or in other property) to a particular beneficiary of the trust; or
(ii) credits an amount to a particular beneficiary of the trust; and
(b) the beneficiary is an individual; and
(c) the individual is an attributable stakeholder of the trust;
the Secretary may, by writing:
(d) determine that, for the purposes of this Act, the ordinary income of the individual does not include the amount distributed or credited to the individual; or
(e) determine that, for the purposes of this Act, the ordinary income of the individual does not include so much of the amount distributed or credited to the individual as is specified in the determination.
1207Z(3) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
1207Z(4) This section is to be disregarded for the purposes of paragraph 1207Y(1)(d).
1208 Ordinary income of a company or trust
1208(1) For the purposes of this Division, the ordinary income of a company or trust is to be worked out as if:
(a) exempt lump sums were not excluded from the definition of ordinary income in subsection 8(1); and
(b) each reference in section 8 to a person included a reference to a company or trust; and
(c) the following provisions had not been enacted:
(i) subsection 8(7A);
(ii) subsection 8(8);
(iii) subsection 8(11);
(iv) Part 3.10.
1208(2) Paragraphs (1)(a) and (c) have effect subject to paragraph 1207Y(1)(d).
1208(3) A reference in this Division to the ordinary income of a company or trust is a reference to the company’s or trust’s gross ordinary income from all sources calculated without any reduction, other than a reduction under section 1208A or 1208B.
1208A Ordinary income from a business—treatment of trading stock
1208A(1) For the purposes of this Division, if:
(a) a company or trust carries on a business; and
(b) the value of all the trading stock on hand at the end of a derivation period is greater than the value of all the trading stock on hand at the beginning of that derivation period;
the company’s or trust’s ordinary income for that derivation period in the form of profits from the business is to include the amount of the difference in values.
1208A(2) For the purposes of this Division, if:
(a) a company or trust carries on a business; and
(b) the value of all the trading stock on hand at the end of a derivation period is less than the value of all the trading stock on hand at the beginning of that derivation period;
the company’s or trust’s ordinary income for that derivation period in the form of profits from the business is to be reduced by the amount of the difference in values.
1208B Permissible reductions of business and investment income
1208B(1) For the purposes of this Division, if a company or trust carries on a business or holds an investment, the company’s or trust’s ordinary income from the business or investment is to be reduced by:
(a) losses and outgoings that relate to the business or investment and are allowable deductions for the purposes of section 51 of the Income Tax Assessment Act 1936 or section 8‑1 of the Income Tax Assessment Act 1997, as appropriate; and
(b) depreciation that relates to the business or investment and is an allowable deduction for the purposes of subsection 54(1) of the Income Tax Assessment Act 1936 or Division 42 of the Income Tax Assessment Act 1997; and
(ba) amounts that relate to the business or investment and can be deducted for the decline in value of depreciating assets under Subdivision 40‑B of the Income Tax Assessment Act 1997; and
(c) amounts that relate to the business or investment and are allowable deductions under any other provision of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997.
1208B(2) However, the rule in subsection (1) does not apply to:
(a) an ineligible deduction (see subsection (3)); or
(b) an ineligible amount (see subsection (4)); or
(c) an ineligible part of a deduction (see subsection (5)).
1208B(3) The Secretary may, by writing, determine that a specified deduction is an ineligible deduction for the purposes of this section.
1208B(4) The Secretary may, by writing, determine that a specified amount is an ineligible amount for the purposes of this section.
1208B(5) The Secretary may, by writing, determine that a specified part of a specified deduction is an ineligible part of the deduction for the purposes of this section.
1208B(6) A determination under subsection (3), (4) or (5) has effect accordingly.
1208B(7) A determination under subsection (3), (4) or (5) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1208C(1) For the purposes of this Part:
(a) if a company or trust was in existence throughout a tax year of the company or trust—the tax year is a derivation period of the company or trust; and
(b) if a company or trust was in existence during a part of a tax year of the company or trust—that part of the tax year is a derivation period of the company or trust.
1208C(2) Subsection (1) has effect subject to subsection (3).
1208C(3) The Secretary may, by writing, determine that, for the purposes of the application of this Division to a specified individual and a specified company or trust, a specified period is a derivation period of the company or trust.
1208C(4) A determination under subsection (3) has effect accordingly.
1208C(5) In making a determination under subsection (3), the Secretary must comply with any relevant decision‑making principles.
1208C(6) To avoid doubt, for the purposes of the application of this Division to a particular individual and a particular company or trust, it is not necessary that the individual be an attributable stakeholder of the company or trust throughout a derivation period of the company or trust.
1208C(7) A derivation period may begin or end before the commencement of this Part.
1208D(1) The Secretary may, by writing, determine that, in the event that a specified individual is an attributable stakeholder of a specified company or trust at a specified time (the start time):
(a) a period beginning at the start time and ending at whichever is the earlier of the following times:
(i) the later time specified in the determination;
(ii) the time when the individual ceases to be an attributable stakeholder of the company or trust;
is an attribution period for the purposes of the application of this Part to the individual and the company or trust; and
(b) that attribution period relates to a specified derivation period of the company or trust.
1208D(2) A determination under subsection (1) has effect accordingly.
1208D(3) The Secretary must ensure that, if an individual is an attributable stakeholder of a company or of a trust at a particular time on or after 1 January 2002, that time is included in an attribution period.
1208D(4) An attribution period may, but is not required to, overlap (in whole or in part) the derivation period to which it relates.
1208D(5) An attribution period does not have to be of the same length as the derivation period to which it relates.
1208D(6) Attribution periods do not have to be of the same length.
1208D(7) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
Division 8—Attribution of assets of controlled private companies and controlled private trusts
1208E(1) For the purposes of this Act, if:
(a) an individual is an attributable stakeholder of a company or trust at a particular time on or after 1 January 2002; and
(b) at that time, the company or trust owns a particular asset (whether alone or jointly or in common with another entity or entities); and
(c) if, at that time, that asset had been owned by the individual instead of by the company or trust, the value of the asset would not be required to be disregarded by any express provision of this Act; and
(d) at that time, the asset is not an excluded asset (see subsection (2));
there is to be included in the value of the individual’s assets an amount equal to the individual’s asset attribution percentage of the value of the asset referred to in paragraph (b).
Excluded assets
1208E(2) The Secretary may, by writing, determine that, for the purposes of the application of subsection (1) to a specified individual and a particular company or trust, a specified asset is an excluded asset.
1208E(3) A determination under subsection (2) has effect accordingly.
1208E(4) In making a determination under subsection (2), the Secretary must comply with any relevant decision‑making principles.
1208F When attributed asset is unrealisable
1208F(1) For the purposes of this Act, if:
(a) an individual is an attributable stakeholder of a company or trust at a particular time on or after 1 January 2002; and
(b) at that time, the company or trust owns a particular asset (whether alone or jointly or in common with another entity or entities); and
(c) under section 1208E, there is included in the value of the individual’s assets an amount equal to the individual’s asset attribution percentage of the value of the asset held by the company or trust;
the amount referred to in paragraph (c) is taken not to be an unrealisable asset of the individual unless the asset referred to in paragraph (b) is an unrealisable asset of the company or trust.
1208F(2) For the purposes of this section, in determining whether an asset is an unrealisable asset of a company or trust, ignore any limitation or restriction:
(a) in the constituent document of the company or the trust deed of the trust, as the case requires; or
(b) under a scheme that was entered into or carried out for the sole or dominant purpose of enabling any individual or individuals to avoid the application of this section and/or section 52ZZS of the Veterans’ Entitlements Act.
1208F(3) For the purposes of this section, in determining whether an asset is an unrealisable asset of a company or trust, subsections 11(12) and (13) have effect as if each reference in those subsections to a person included a reference to a company or trust.
1208G Effect of charge or encumbrance on value of assets
Charge or encumbrance relating to a single asset
1208G(1) For the purposes of the application of this Division (other than this section) to a particular individual and a particular company or trust, if:
(a) there is a charge or encumbrance over a particular asset of the company or trust; and
(b) the charge or encumbrance relates exclusively to that asset;
the value of the asset is to be reduced by the value of the charge or encumbrance.
1208G(2) Subsection (1) does not apply to a charge or encumbrance over an asset of a company or trust to the extent that:
(a) the charge or encumbrance is a collateral security; or
(b) the charge or encumbrance was given for the benefit of an entity other than the company or trust; or
(c) the value of the charge or encumbrance is excluded under subsection (6).
Charge or encumbrance relating to 2 or more assets
1208G(3) For the purposes of the application of this Division (other than this section) to a particular individual and a particular company or trust, if:
(a) there is a charge or encumbrance over a particular asset (the first asset) of the company or trust; and
(b) the charge or encumbrance relates to the first asset and one or more other assets of the company or trust;
the value of the first asset is to be reduced by the amount worked out using the formula:
1208G(4) Subsection (3) does not apply to a charge or encumbrance over an asset of the company or trust to the extent that:
(a) the charge or encumbrance was given for the benefit of an entity other than the company or trust; or
(b) the value of the charge or encumbrance is excluded under subsection (6).
1208G(5) If (apart from this section), under section 1208E, there is included in the value of the individual’s assets an amount equal to the individual’s asset attribution percentage of the value of an asset held by the company or trust, the asset held by the company or trust is an attributable asset for the purposes of subsection (3).
Exclusion
1208G(6) The Secretary may, by writing, determine that, for the purposes of the application of this section to a specified individual and a specified company or trust, the whole or a specified part of a specified charge or encumbrance over one or more of the assets of the company or trust is excluded for the purposes of paragraphs (2)(c) and (4)(b).
1208G(7) A determination under subsection (6) has effect accordingly.
1208G(8) In making a determination under subsection (6), the Secretary must comply with any relevant decision‑making principles.
1208H Effect of unsecured loan on value of assets
1208H(1) For the purposes of the application of this Division to a particular individual and a particular company or trust, if:
(a) the company or trust is the borrower under a loan; and
(b) the loan is not secured by a charge or encumbrance over one or more of the assets of the company or trust;
the Secretary may, by writing, determine that the value of a specified asset of the company or trust is to be reduced by the whole, or a specified part, of the amount of the loan.
1208H(2) A determination under subsection (1) has effect accordingly.
1208H(3) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles.
1208J Value of company’s or trust’s assets etc.
1208J(1) For the purposes of this Division, the value of a company’s or trust’s assets, or of a charge or encumbrance on such assets, is to be worked out as if:
(a) each reference in section 11 to a person included a reference to a company or trust; and
(b) Division 1 of Part 3.12 (other than section 1122) had not been enacted.
1208J(2) Paragraph (1)(b) has effect subject to paragraph 1208E(1)(c).
Division 9—Modification of asset deprivation rules
1208K Individual disposes of asset to company or trust
1208K(1) If:
(a) an individual transfers property to a company or trust on or after 1 January 2002; and
(b) either:
(i) as a result of the transfer, the individual became an attributable stakeholder of the company or trust; or
(ii) at the time of the transfer, the individual was an attributable stakeholder of the company or trust; and
(c) the transfer amounts to a disposal by the individual of an asset of the individual;
the Secretary may, by writing, determine that Division 2 of Part 3.12 and sections 93U, 93UA and 198F to 198MA (inclusive) apply to that disposal as if:
(d) the amount of the disposition were nil; or
(e) the amount of the disposition were reduced by the amount specified in the determination.
1208K(2) In making a decision under this section, the Secretary must comply with any relevant decision‑making principles.
1208L Disposal of asset by company or trust
1208L(1) If:
(a) an individual is an attributable stakeholder of a company or trust; and
(b) the company or trust disposes of an asset of the company or trust;
Division 2 of Part 3.12 and sections 93U, 93UA and 198F to 198MA (inclusive) apply, and are taken to have applied, as if:
(c) the individual had disposed of an asset of the individual; and
(d) the amount of the disposition referred to in paragraph (c) were equal to the individual’s asset attribution percentage of the amount of the disposition referred to in paragraph (b).
1208L(2) Subsection (1) has effect subject to subsection (3).
Secretarial determinations
1208L(3) The Secretary may, by writing:
(a) determine that the disposal of a specified asset is exempt from subsection (1); or
(b) determine that subsection (1) has effect, in relation to the disposal of a specified asset, as if the reference in paragraph (1)(d) to the individual’s asset attribution percentage were a reference to such lower percentage as is specified in the determination.
1208L(4) A determination under subsection (3) has effect accordingly.
1208L(5) In making a determination under subsection (3), the Secretary must comply with any relevant decision‑making principles.
General disposal
1208L(6) For the purposes of subsection (1), a company or trust disposes of assets of the company or trust if:
(a) on or after 1 January 2002, the company or trust, or an attributable stakeholder of the company or trust, engages in a course of conduct that directly or indirectly:
(i) destroys all or some of the company’s or trust’s assets; or
(ii) disposes of all or some of the company’s or trust’s assets; or
(iii) diminishes the value of all or some of the company’s or trust’s assets; and
(b) one of the following subparagraphs is satisfied:
(i) the company or trust receives no consideration in money or money’s worth for the destruction, disposal or diminution;
(ii) the company or trust receives inadequate consideration in money or money’s worth for the destruction, disposal or diminution;
(iii) the Secretary is satisfied that the purpose, or the dominant purpose, of the company, trust or stakeholder in engaging in that course of conduct was to obtain a social security advantage for an attributable stakeholder of the company or trust (who may be the first‑mentioned stakeholder) or for a relative of an attributable stakeholder of the company or trust; and
(c) in the case of a company—the disposal is not by way of making a distribution of capital or profits of the company to a shareholder of the company; and
(d) in the case of a trust—the disposal is not by way of:
(i) making a distribution (whether in money or in other property) to a beneficiary of the trust; or
(ii) crediting an amount to a beneficiary of the trust.
1208L(7) If a company or trust disposes of assets as mentioned in subsection (6), the amount of the disposition is:
(a) if the company or trust receives no consideration for the destruction, disposal or diminution—an amount equal to:
(i) the value of the assets that are destroyed; or
(ii) the value of the assets that are disposed of; or
(iii) the amount of the diminution in the value of the assets whose value is diminished; or
(b) if the company or trust receives consideration for the destruction, disposal or diminution—an amount equal to:
(i) the value of the assets that are destroyed; or
(ii) the value of the assets that are disposed of; or
(iii) the amount of the diminution in the value of the assets whose value is diminished;
less the amount of the consideration received by the company or trust in respect of the destruction, disposal or diminution.
Disposal by way of distribution
1208L(8) For the purposes of subsection (1), if a company makes a distribution of capital or profits of the company to a shareholder of the company on or after 1 July 2000:
(a) the company is taken to have disposed of an asset of the company; and
(b) the amount of the disposition is equal to the amount or value distributed to the shareholder.
1208L(9) For the purposes of subsection (1), if a trust:
(a) makes a distribution (whether in money or in other property) to a beneficiary of the trust on or after 1 July 2000; or
(b) credits an amount to a beneficiary of the trust on or after 1 July 2000;
then:
(c) the trust is taken to have disposed of an asset of the trust; and
(d) the amount of the disposition is equal to the amount or value distributed or credited to the beneficiary.
Obtaining a social security advantage
1208L(10) For the purposes of this section, an entity has a purpose of obtaining a social security advantage for an individual (who may be the entity) if the entity has a purpose of:
(a) enabling the individual to obtain any of the following:
(i) a social security pension;
(ii) a social security benefit;
(iii) a service pension;
(iv) income support supplement; or
(b) enabling the individual to obtain any of the following at a higher rate than would otherwise have been payable:
(i) a social security pension;
(ii) a social security benefit;
(iii) a service pension;
(iv) income support supplement; or
(c) ensuring that the individual would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.
1208M Individual ceases to be an attributable stakeholder of a company or trust
If:
(a) an individual ceases to be an attributable stakeholder of a company or trust on or after 1 January 2002; and
(b) immediately before the cessation, the company or trust owned a particular asset (whether alone or jointly or in common with another entity or entities);
Division 2 of Part 3.12 and sections 93U, 93UA and 198F to 198MA (inclusive) have effect as if:
(c) the individual had disposed of an asset of the individual; and
(d) the amount of the disposition referred to in paragraph (c) were equal to the individual’s asset attribution percentage of the value of the asset referred to in paragraph (b), worked out immediately before the cessation.
1208N(1) If:
(a) an individual has transferred property to a company or trust before 1 January 2002; and
(b) the transfer amounts to a disposal by the individual of an asset of the individual; and
(c) apart from this section:
(i) under Division 2 of Part 3.12 or sections 198F to 198MA (inclusive), as a result of the disposition, a particular amount is included in the value of the individual’s assets for the period of 5 years that starts on the day on which the disposition took place; and
(ii) that 5‑year period ends after 1 January 2002; and
(d) the individual is an attributable stakeholder of the company or trust on 1 January 2002;
the Secretary may, by writing, determine that:
(e) in a case where the individual’s asset attribution percentage is 100%—Division 2 of Part 3.12 and sections 93U, 93UA and 198F to 198MA (inclusive) have effect, in relation to the disposal of the asset referred to in paragraph (b), as if a reference in that Division or those sections to the period of 5 years that starts on the day on which the disposition took place were a reference to the period:
(i) beginning on the day on which the disposition took place; and
(ii) ending immediately before 1 January 2002; or
(f) in a case where the individual’s asset attribution percentage is less than 100%—Division 2 of Part 3.12 and sections 93U, 93UA and 198F to 198MA (inclusive) have effect on and after 1 January 2002, in relation to the disposal of the asset referred to in paragraph (b), as if the amount of the disposition were reduced by:
(i) the individual’s asset attribution percentage as at 1 January 2002; or
(ii) if a higher percentage is specified in the determination—that higher percentage.
1208N(2) A determination under subsection (1) has effect accordingly.
1208N(3) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles.
1208P(1) If:
(a) an individual has transferred property to a company or trust before 1 January 2002; and
(b) the transfer amounts to a disposal by the individual of an asset of the individual; and
(c) apart from this section:
(i) under Division 2 of Part 3.12 or sections 198F to 198MA (inclusive), as a result of the disposition, a particular amount is included in the value of the individual’s assets for the period of 5 years that starts on the day on which the disposition took place; and
(ii) that 5‑year period ends after 1 January 2002; and
(d) the individual’s spouse is an attributable stakeholder of the company or trust on 1 January 2002;
the Secretary may, by writing, determine that:
(e) in a case where the spouse’s asset attribution percentage is 100%—Division 2 of Part 3.12 and sections 93U, 93UA and 198F to 198MA (inclusive) have effect, in relation to the disposal of the asset referred to in paragraph (b), as if a reference in that Division or those sections to the period of 5 years that starts on the day on which the disposition took place were a reference to the period:
(i) beginning on the day on which the disposition took place; and
(ii) ending immediately before 1 January 2002; or
(f) in a case where the spouse’s asset attribution percentage is less than 100%—Division 2 of Part 3.12 and sections 93U, 93UA and 198F to 198MA (inclusive) have effect on and after 1 January 2002, in relation to the disposal of the asset referred to in paragraph (b), as if the amount of the disposition were reduced by the spouse’s asset attribution percentage as at 1 January 2002.
1208P(2) A determination under subsection (1) has effect accordingly.
1208P(3) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles.
Division 10—Modification of income deprivation rules
1208Q Individual disposes of ordinary income to company or trust
1208Q(1) If:
(a) an individual transfers property to a company or trust on or after 1 January 2002; and
(b) either:
(i) as a result of the transfer, the individual became an attributable stakeholder of the company or trust; or
(ii) at the time of the transfer, the individual was an attributable stakeholder of the company or trust; and
(c) the transfer amounts to a disposal by the individual of ordinary income of the individual; and
(d) if the ordinary income is income from an asset—the course of conduct that constituted the disposition of the income did not also constitute a disposition of the asset;
the Secretary may, by writing, determine that Division 3 of Part 3.10 applies, and is taken to have applied, to the disposal referred to in paragraph (c) as if:
(e) the amount of the disposition were nil; or
(f) the amount of the disposition were reduced by the amount specified in the determination.
1208Q(2) In making a decision under this section, the Secretary must comply with any relevant decision‑making principles.
1208R Disposal of income by company or trust
1208R(1) If:
(a) an individual is an attributable stakeholder of a company or trust; and
(b) the company or trust disposes of ordinary income of the company or trust; and
(c) if that income had been income of the individual instead of the company or trust, the income would have been ordinary income of the individual; and
(d) if the ordinary income is income from an asset—the course of conduct that constituted the disposition of the income did not also constitute a disposition of the asset;
Division 3 of Part 3.10 applies, and is taken to have applied, as if:
(e) the individual had disposed of ordinary income of the individual; and
(f) the amount of the disposition referred to in paragraph (e) were equal to the individual’s income attribution percentage of the amount of the disposition referred to in paragraph (b).
1208R(2) Subsection (1) has effect subject to subsection (3).
Secretarial determinations
1208R(3) The Secretary may, by writing:
(a) determine that the disposal of specified ordinary income is exempt from subsection (1); or
(b) determine that subsection (1) has effect, in relation to the disposal of specified ordinary income, as if the reference in paragraph (1)(f) to the individual’s income attribution percentage were a reference to such lower percentage as is specified in the determination.
1208R(4) A determination under subsection (3) has effect accordingly.
1208R(5) In making a determination under subsection (3), the Secretary must comply with any relevant decision‑making principles.
General disposal
1208R(6) For the purposes of subsection (1), a company or trust disposes of ordinary income of the company or trust if:
(a) on or after 1 January 2002, the company or trust, or an attributable stakeholder of the company or trust, engages in a course of conduct that directly or indirectly:
(i) destroys the source of the income; or
(ii) disposes of the income or the source of the income; or
(iii) diminishes the income; and
(b) one of the following subparagraphs is satisfied:
(i) the company or trust receives no consideration in money or money’s worth for the destruction, disposal or diminution;
(ii) the company or trust receives inadequate consideration in money or money’s worth for the destruction, disposal or diminution;
(iii) the Secretary is satisfied that the purpose, or the dominant purpose, of the company, trust or stakeholder in engaging in that course of conduct was to obtain a social security advantage for an attributable stakeholder of the company or trust (who may be the first‑mentioned stakeholder) or for a relative of an attributable stakeholder of the company or trust; and
(c) in the case of a company—the disposal is not by way of making a distribution of capital or profits of the company to a shareholder of the company; and
(d) in the case of a trust—the disposal is not by way of:
(i) making a distribution (whether in money or in other property) to a beneficiary of the trust; or
(ii) crediting an amount to a beneficiary of the trust.
1208R(7) If a company or trust disposes of ordinary income as mentioned in subsection (6), the amount of the disposition is:
(a) if the company or trust receives no consideration for the destruction, disposal or diminution—the annual rate of the diminution of the income because of the destruction, disposal or diminution; or
(b) if the company or trust receives consideration for the destruction, disposal or diminution—the annual rate of the diminution of the income because of the destruction, disposal or diminution less the part (if any) of the consideration that the Secretary considers to be fair and reasonable in all the circumstances of the case.
Obtaining a social security advantage
1208R(8) For the purposes of this section, an entity has a purpose of obtaining a social security advantage for an individual (who may be the entity) if the entity has a purpose of:
(a) enabling the individual to obtain any of the following:
(i) a social security pension;
(ii) a social security benefit;
(iii) a service pension;
(iv) income support supplement; or
(b) enabling the individual to obtain any of the following at a higher rate than would otherwise have been payable:
(i) a social security pension;
(ii) a social security benefit;
(iii) a service pension;
(iv) income support supplement; or
(c) ensuring that the individual would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.
Ordinary income
1208R(9) In this section:
ordinary income, in relation to a company or trust, has the same meaning as in Division 7.
1208S(1) If:
(a) an individual has transferred property to a company or trust before 1 January 2002; and
(b) the transfer amounts to a disposal by the individual of ordinary income of the individual; and
(c) apart from this section, under Division 3 of Part 3.10, as a result of the disposition referred to in paragraph (b), a particular amount is included in the individual’s ordinary income; and
(d) the individual is an attributable stakeholder of the company or trust on 1 January 2002;
the Secretary may, by writing, determine that:
(e) in a case where the individual’s income attribution percentage is 100%—Division 3 of Part 3.10 has effect on or after 1 January 2002, in relation to the disposal of the income referred to in paragraph (b), as if the amount of the disposition were nil; or
(f) in a case where the individual’s income attribution percentage is less than 100%—Division 3 of Part 3.10 has effect on and after 1 January 2002, in relation to the disposal of the income referred to in paragraph (b), as if the amount of the disposition were reduced by:
(i) the individual’s income attribution percentage as at 1 January 2002; or
(ii) if a higher percentage is specified in the determination—that higher percentage.
1208S(2) A determination under subsection (1) has effect accordingly.
1208S(3) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles.
1208T(1) If:
(a) an individual has transferred property to a company or trust before 1 January 2002; and
(b) the transfer amounts to a disposal by the individual of ordinary income of the individual; and
(c) apart from this section, under Division 3 of Part 3.10, as a result of the disposition referred to in paragraph (b), a particular amount is included in the individual’s ordinary income; and
(d) the individual’s spouse is an attributable stakeholder of the company or trust on 1 January 2002;
the Secretary may, by writing, determine that:
(e) in a case where the spouse’s income attribution percentage is 100%—Division 3 of Part 3.10 has effect on or after 1 January 2002, in relation to the disposal of the income referred to in paragraph (b), as if the amount of the disposition were nil; or
(f) in a case where the spouse’s income attribution percentage is less than 100%—Division 3 of Part 3.10 has effect on and after 1 January 2002, in relation to the disposal of the income referred to in paragraph (b), as if the amount of the disposition were reduced by the spouse’s income attribution percentage as at 1 January 2002.
1208T(2) A determination under subsection (1) has effect accordingly.
1208T(3) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles.
Division 11—Concessional primary production trusts
1208U Concessional primary production trusts
1208U(1) For the purposes of this Part, a trust is a concessional primary production trust in relation to an individual at a particular time (the test time), if:
(a) at the test time, the trust is a controlled private trust in relation to the individual; and
(b) at the test time, either:
(i) the trust carries on a primary production enterprise (the first primary production enterprise); or
(ii) the trust makes an asset available to another entity, the other entity carries on a primary production enterprise (the first primary production enterprise), and the asset is used by the other entity wholly or principally for the purposes of carrying on the first primary production enterprise; and
(c) at the test time, more than 70% of the net value of the assets of the trust (excluding the net value of the principal home of the individual if that principal home is owned by the trust) relates to assets used wholly or principally for the purposes of carrying on a primary production enterprise; and
(d) at the test time, the sum of:
(i) the total adjusted net value of assets that are owned or controlled by the individual and used wholly or principally for the purposes of carrying on a primary production enterprise; and
(ii) the total adjusted net value of assets that are owned or controlled by the individual’s spouse and used wholly or principally for the purposes of carrying on a primary production enterprise;
is less than the primary production attribution threshold (as defined by subsection (6)); and
(e) if:
(i) the individual or the individual’s spouse had adjusted net primary production income for the last tax year that ended before the test time; and
(ii) the individual or the individual’s spouse had adjusted net primary production income for the tax year that preceded the tax year first referred to in subparagraph (i); and
(iii) the individual or the individual’s spouse had adjusted net primary production income for the tax year that preceded the tax year first referred to in subparagraph (ii);
the average of the following amounts is less than the amount specified in clause 19 of Schedule 1 to the A New Tax System (Family Assistance) Act 1999 (subject to any indexation under Schedule 4 to that Act):
(iv) the total adjusted net primary production income of the individual and the individual’s spouse for the tax year referred to in subparagraph (i);
(v) the total adjusted net primary production income of the individual and the individual’s spouse for the tax year first referred to in subparagraph (ii);
(vi) the total adjusted net primary production income of the individual and the individual’s spouse for the tax year first referred to in subparagraph (iii); and
(f) if:
(i) neither the individual nor the individual’s spouse had adjusted net primary production income for the last tax year that ended before the test time; or
(ii) neither the individual nor the individual’s spouse had adjusted net primary production income for the tax year that preceded the tax year referred to in subparagraph (i); or
(iii) neither the individual nor the individual’s spouse had adjusted net primary production income for the tax year that preceded the tax year referred to in subparagraph (ii);
the Secretary, by writing, determines that this paragraph applies to the individual and the trust; and
(g) at the test time, the individual is not actively involved with the first primary production enterprise; and
(h) at the test time, an eligible descendant of the individual (as defined by section 17A) is actively involved with the first primary production enterprise; and
(i) if, at the test time, the individual is able to appoint the trustee, or any of the trustees, of the trust—there is a provision of the trust deed to the effect that that ability may only be exercised:
(i) if the trustee concerned dies, resigns or becomes subject to a legal disability; or
(ii) in accordance with a statutory law relating to the appointment of trustees; and
(j) if, at the test time, the individual is able to veto or direct the decisions of the trustee—there is a provision of the trust deed to the effect that that ability may only be exercised:
(i) in relation to the sale of land used for the purposes of carrying on the first primary production enterprise; or
(ii) in relation to the sale of fishing rights or timber rights used for the purposes of carrying on the first primary production enterprise; or
(iii) in accordance with a statutory law relating to the appointment of trustees; and
(k) at the test time, there is a provision of the trust deed to the effect that neither the individual, nor the individual’s spouse, is, or is capable of becoming, the trustee, or any of the trustees, of the trust; and
(l) at the test time, a group in relation to the individual is not able to vary a provision covered by paragraph (i), (j) or (k); and
(m) at the test time, neither the individual, nor the individual’s spouse, is able to vary the trust deed; and
(n) at the test time, neither the individual, nor the individual’s spouse:
(i) benefits or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting under the trust, either directly or through any interposed companies, business partnerships or trusts; or
(ii) receives any remuneration or other benefits from the trust otherwise than in the capacity of beneficiary of the trust.
1208U(2) For the purposes of the application of paragraphs (1)(e) and (f) to a particular tax year, a person is the individual’s spouse if, and only if:
(a) the person was the spouse of the individual at any time during the tax year; and
(b) the person is the spouse of the individual at the test time.
1208U(3) In making a determination under paragraph (1)(f), the Secretary must comply with any relevant decision‑making principles.
1208U(4) Paragraph (1)(n) does not apply to any of the following benefits:
(a) food that:
(i) is derived from the first primary production enterprise; and
(ii) is for the personal consumption of the individual or the individual’s spouse;
(b) residential accommodation for the individual or the individual’s spouse, where that accommodation is the principal home of the individual;
(c) if paragraph (b) applies—water, fuel, gas or electricity for use in that residential accommodation;
(d) any other non‑cash benefit that is minor and provided on a basis that is infrequent and irregular.
1208U(5) Subparagraph (1)(n)(ii) has effect subject to section 1208V.
1208U(6) For the purposes of this section, the primary production attribution threshold is $750,000.
1208U(7) A reference in this section to a group in relation to an individual is a reference to:
(a) the individual acting alone; or
(b) an associate of the individual acting alone; or
(c) the individual and one or more associates of the individual acting together; or
(d) 2 or more associates of the individual acting together.
1208V(1) For the purposes of this section, if:
(a) an individual ceases to be an attributable stakeholder of a trust on or after 1 January 2002; and
(b) immediately after the cessation, the trust was a concessional primary production trust in relation to the individual; and
(c) under section 1208M, as a result of the cessation, Division 2 of Part 3.12 and sections 198F to 198MA (inclusive) have effect as if the individual had disposed of an asset of the individual; and
(d) under Division 2 of Part 3.12 or sections 198F to 198MA (inclusive), as a result of the disposition, a particular amount is included in the value of the individual’s assets for the period of 5 years that starts on the day on which the disposition took place;
then:
(e) the period referred to in paragraph (d) is the asset deprivation period in relation to the individual and the trust; and
(f) throughout the asset deprivation period, the trust is a special primary production trust in relation to the individual; and
(g) each one of the 5 years that constitutes the asset deprivation period is an asset deprivation year in relation to the individual and the trust.
1208V(2) If:
(a) a trust (the first trust) is a special primary production trust in relation to an individual; and
(b) the individual and/or the individual’s spouse received one or more benefits (the first benefits) from the trust during a period that is an asset deprivation year (the first asset deprivation year) in relation to the individual and the trust;
subparagraph 1208U(1)(n)(ii) does not apply to the first benefits, so long as the sum of the following amounts is less than the amount specified in clause 19 of Schedule 1 to the A New Tax System (Family Assistance) Act 1999 (subject to any indexation under Schedule 4 to that Act):
(c) the total of the amount or value of the first benefits;
(d) if:
(i) another trust is a special primary production trust in relation to the individual; and
(ii) the asset deprivation period in relation to the individual and that other trust overlaps, in whole or in part, the first asset deprivation year; and
(iii) the individual and/or the individual’s spouse received one or more benefits (the second benefits) from that other trust during the period of the overlap;
the total of the amount or value of the second benefits;
(e) if:
(i) another trust is a special primary production trust in relation to the individual’s spouse; and
(ii) the asset deprivation period in relation to the individual’s spouse and that other trust overlaps, in whole or in part, the first asset deprivation year; and
(iii) the individual’s spouse and/or the individual received one or more benefits (the third benefits) from that other trust during the period of the overlap;
the total of the amount or value of the third benefits.
1208V(3) Subsection (2) does not apply to any of the following benefits:
(a) food that:
(i) is derived from the first primary production enterprise referred to in section 1208U; and
(ii) is for the personal consumption of the individual or the individual’s spouse;
(b) residential accommodation for the individual or the individual’s spouse, where that accommodation is the principal home of the individual;
(c) if paragraph (b) applies—water, fuel, gas or electricity for use in that residential accommodation;
(d) any other non‑cash benefit that is minor and provided on a basis that is infrequent and irregular.
1208V(4) In this section:
benefit, in relation to a trust, means any remuneration or other benefit received from the trust otherwise than in the capacity of beneficiary of the trust.
1208W(1) For the purposes of this Division, the net value of an asset is the value of the asset, without any reduction other than a reduction under subsection (2).
1208W(2) The Secretary may, by writing, determine that the value of a specified asset is to be reduced by the whole or a specified part of a specified liability.
1208W(3) A determination under this section has effect accordingly.
1208W(4) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
1208X Value of entity’s assets
For the purposes of this Division, the value of an entity’s assets is to be worked out as if:
(a) each reference in section 11 to a person included a reference to an entity; and
(b) Division 1 of Part 3.12 (other than section 1122) had not been enacted.
1208Y When asset is controlled by an individual
1208Y(1) For the purposes of this Division, an asset is controlled by an individual if, and only if:
(a) all of the following conditions are satisfied:
(i) the asset is owned by a company;
(ii) the company is a controlled private company in relation to the individual;
(iii) no determination is in force under subsection (2) in relation to the asset and the individual; or
(b) all of the following conditions are satisfied:
(i) the asset is owned by a trust;
(ii) the trust is a controlled private trust in relation to the individual;
(iii) no determination is in force under subsection (2) in relation to the asset and the individual; or
(c) both:
(i) the asset is owned by a business partnership; and
(ii) the individual is a partner in the partnership.
1208Y(2) If the asset is owned by a company or trust, the Secretary may, by writing, determine that, for the purposes of this Division, the asset is taken not to be controlled by the individual.
1208Y(3) In making a determination under subsection (2), the Secretary must comply with any relevant decision‑making principles.
1208Z Adjusted net value of asset
1208Z(1) For the purposes of this Division, the adjusted net value of an asset owned by an individual is 100% of the net value of the asset.
1208Z(2) For the purposes of this Division, the adjusted net value of an asset controlled by an individual is:
(a) if the entity that owns the asset is a company and the company is a controlled private company in relation to the individual:
(i) 100% of the net value of the asset; or
(ii) if the Secretary, by writing, determines a lower percentage in relation to the individual and the asset—that lower percentage of the net value of the asset; or
(b) if the entity that owns the asset is a trust and the trust is a controlled private trust in relation to the individual:
(i) 100% of the net value of the asset; or
(ii) if the Secretary, by writing, determines a lower percentage in relation to the individual and the asset—that lower percentage of the net value of the asset; or
(c) if the entity that owns the asset is a business partnership—the individual’s share of the net value of the asset.
1208Z(3) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
1209 Adjusted net primary production income
1209(1) For the purposes of this Division, the adjusted net primary production income of an individual for a particular tax year is the sum of:
(a) if the individual carried on a primary production enterprise throughout that tax year—100% of the net income of that primary production enterprise for that tax year; and
(b) if a company carried on a primary production enterprise throughout that tax year and the company was a controlled private company in relation to the individual throughout that tax year:
(i) 100% of the net income of that primary production enterprise for that tax year; or
(ii) if the Secretary, by writing, determines a lower percentage in relation to the individual and the enterprise—that lower percentage of the net income of that primary production enterprise for that tax year; and
(c) if a trust carried on a primary production enterprise throughout that tax year and the trust was a controlled private trust in relation to the individual throughout that tax year:
(i) 100% of the net income of that primary production enterprise for that tax year; or
(ii) if the Secretary, by writing, determines a lower percentage in relation to the individual and the enterprise—that lower percentage of the net income of that primary production enterprise for that tax year; and
(d) if:
(i) a business partnership carried on a primary production enterprise throughout that tax year; and
(ii) the individual was a partner in the partnership throughout that tax year;
the individual’s share of the net income of that primary production enterprise for that tax year.
1209(2) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
1209A Net income of a primary production enterprise
1209A(1) For the purposes of this Division, if an entity carries on a primary production enterprise during a tax year of the entity, the net income of that primary production enterprise for that tax year is the entity’s gross ordinary income from the carrying on of that enterprise calculated without any reduction, other than a reduction under section 1209B or 1209C.
1209A(2) For the purposes of this Division, the net income of a primary production enterprise is to be worked out as if:
(a) exempt lump sums were not excluded from the definition of ordinary income in subsection 8(1); and
(b) each reference in section 8 to a person included a reference to an entity; and
(c) the following provisions had not been enacted:
(i) subsection 8(7A);
(ii) subsection 8(8);
(iii) subsection 8(11);
(iv) Part 3.10.
1209B Net income from a primary production enterprise—treatment of trading stock
1209B(1) For the purposes of this Division, if:
(a) an entity carries on a primary production enterprise; and
(b) the value of all the trading stock on hand at the end of a tax year is greater than the value of all the trading stock on hand at the beginning of that tax year;
the entity’s income for that tax year in the form of profits from the enterprise is to include the amount of the difference in values.
1209B(2) For the purposes of this Division, if:
(a) an entity carries on a primary production enterprise; and
(b) the value of all the trading stock on hand at the end of a tax year is less than the value of all the trading stock on hand at the beginning of that tax year;
the entity’s income for that tax year in the form of profits from the enterprise is to be reduced by the amount of the difference in values.
1209C Permissible reductions of income from carrying on a primary production enterprise
1209C(1) For the purposes of this Division, if an entity carries on a primary production enterprise, the entity’s income from the primary production enterprise is to be reduced by:
(a) losses and outgoings that relate to the primary production enterprise and are allowable deductions for the purposes of section 51 of the Income Tax Assessment Act 1936 or section 8‑1 of the Income Tax Assessment Act 1997, as appropriate; and
(b) depreciation that relates to the primary production enterprise and is an allowable deduction for the purposes of subsection 54(1) of the Income Tax Assessment Act 1936 or Division 42 of the Income Tax Assessment Act 1997; and
(ba) amounts that relate to the primary production enterprise and can be deducted for the decline in value of depreciating assets under Subdivision 40‑B of the Income Tax Assessment Act 1997; and
(c) amounts that relate to the primary production enterprise and are allowable deductions under any other provision of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997.
1209C(2) However, the rule in subsection (1) does not apply to:
(a) an ineligible deduction (see subsection (3)); or
(b) an ineligible amount (see subsection (4)); or
(c) an ineligible part of a deduction (see subsection (5)).
1209C(3) The Secretary may, by writing, determine a specified deduction is an ineligible deduction for the purposes of this section.
1209C(4) The Secretary may, by writing, determine that a specified amount is an ineligible amount for the purposes of this section.
1209C(5) The Secretary may, by writing, determine that a specified part of a specified deduction is an ineligible part of the deduction for the purposes of this section.
1209C(6) A determination under subsection (3), (4) or (5) has effect accordingly.
1209C(7) A determination under subsection (3), (4) or (5) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1209D(1) If:
(a) one or more entities enter into, commence to carry out, or carry out, a scheme; and
(b) it would be concluded that the entity, or any of the entities, who entered into, commenced to carry out, or carried out, the scheme did so for the sole or dominant purpose of obtaining a social security advantage for an individual (who may be the entity or one of the entities);
the Secretary may, by writing, make any or all of the following determinations:
(c) a determination that this Part has, and is taken always to have had, effect as if the individual were an attributable stakeholder of a specified company or trust at a specified time or during a specified period;
(d) a determination that this Part has, and is taken always to have had, effect as if a specified asset were owned by a specified company or trust at a specified time or during a specified period;
(e) a determination that this Part has, and is taken always to have had, effect as if specified income had been derived by a specified company or trust at a specified time or during a specified period.
1209D(2) A determination under subsection (1) has effect accordingly.
Obtaining a social security advantage
1209D(3) For the purposes of this section, an entity has a purpose of obtaining a social security advantage for an individual (who may be the entity) if the entity has a purpose of:
(a) enabling the individual to obtain any of the following:
(i) a social security pension;
(ii) a social security benefit;
(iii) a service pension;
(iv) income support supplement; or
(b) enabling the individual to obtain any of the following at a higher rate than would otherwise have been payable:
(i) a social security pension;
(ii) a social security benefit;
(iii) a service pension;
(iv) income support supplement; or
(c) ensuring that the individual would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.
Division 13—Decision‑making principles
1209E Decision‑making principles
1209E(1) The Secretary may, by writing, formulate principles (decision‑making principles) to be complied with by him or her in making decisions under:
(a) section 1207X; or
(b) subsection 1207Y(2); or
(c) section 1207Z, 1208C or 1208D; or
(d) subsection 1208E(2); or
(e) subsection 1208G(6) or 1208H(1); or
(f) section 1208K; or
(g) subsection 1208L(3), 1208N(1) or 1208P(1); or
(h) section 1208Q; or
(i) subsection 1208R(3), 1208S(1) or 1208T(1); or
(j) paragraph 1208U(1)(f); or
(k) section 1208W; or
(l) subsection 1208Y(2); or
(m) section 1208Z or 1209.
1209E(2) Decision‑making principles are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.
Division 14—Information management
For the purposes of this Division, the transitional period is the period:
(a) beginning on the commencement of this Part; and
(b) ending immediately before 1 January 2002.
1209G Information‑gathering powers
In determining the scope of the power conferred on the Secretary during the transitional period by section 192 of the Social Security (Administration) Act 1999 to require the giving of information, or the production of a document, it is to be assumed that:
(a) section 1207 (simplified outline) had effect as if the reference in that section to 1 January 2002 were a reference to the first day of the transitional period; and
(b) section 1207Y (attribution of income) had effect, in relation to a particular individual and a particular company or trust, as if:
(i) a tax year of the company or trust, being a tax year specified in the notice imposing the requirement, were a derivation period of the company or trust; and
(ii) a period specified in the notice imposing the requirement were an attribution period of the company or trust, and that attribution period related to a specified derivation period of the company or trust; and
(iii) the reference in paragraph 1207Y(1)(c) to 1 January 2002 were a reference to the first day of the transitional period; and
(iv) sections 1208C and 1208D had not been enacted; and
(c) section 1208E (attribution of assets) had effect as if the reference in paragraph 1208E(1)(a) to 1 January 2002 were a reference to the first day of the transitional period.
1209H Secretary may obtain tax information
1209H(1) If the Secretary has reason to believe that the Commissioner of Taxation has information (other than a tax file number) that may be relevant to the operation of this Part, the Secretary may, by written notice given to the Commissioner of Taxation, require the Commissioner of Taxation to give to the Secretary any such information.
1209H(2) If the Secretary has reason to believe that the relationship (whether direct or indirect) between:
(a) a particular trust; and
(b) a particular individual or an associate of a particular individual;
may be relevant to the operation of this Part, the Secretary may, by written notice given to the Commissioner of Taxation, require the Commissioner of Taxation to give to the Secretary the tax file number of the trust.
1209H(3) The Commissioner of Taxation must comply with a requirement under subsection (1) or (2).
1209H(4) Subsections (1) and (2) do not, by implication, limit a power conferred by:
(a) paragraph 16(4)(e) or (eb) of the Income Tax Assessment Act 1936; or
(b) section 192 or 195 of the Social Security (Administration) Act 1999.
1209H(5) A tax file number provided to the Secretary under subsection (2) may only be used for the following purposes:
(a) to detect cases in which amounts of social security payments have been paid when they should not have been paid;
(b) to verify, in respect of persons who have made claims for social security payments, the qualification of those persons for those payments;
(c) to establish whether the rates at which social security payments are being, or have been, paid are, or were, correct.
1209H(6) In determining the scope of a power conferred during the transitional period by subsection (1), (2) or (5), it is to be assumed that:
(a) section 1207 (simplified outline) had effect as if the reference in that section to 1 January 2002 were a reference to the first day of the transitional period; and
(b) section 1207Y (attribution of income) had effect, in relation to a particular individual and a particular company or trust, as if:
(i) a tax year of the company or trust, being a tax year specified in a written notice given to the Commissioner of Taxation by the Secretary, were a derivation period of the company or trust; and
(ii) a period specified in a written notice given to the Commissioner of Taxation by the Secretary were an attribution period of the company or trust, and that attribution period related to a specified derivation period of the company or trust; and
(iii) the reference in paragraph 1207Y(1)(c) to 1 January 2002 were a reference to the first day of the transitional period; and
(iv) sections 1208C and 1208D had not been enacted; and
(c) section 1208E (attribution of assets) had effect as if the reference in paragraph 1208E(1)(a) to 1 January 2002 were a reference to the first day of the transitional period.
1209J Disclosure of tax information
In determining the scope of the power conferred on a person (the tax official) during the transitional period by paragraph 16(4)(e) or (eb) of the Income Tax Assessment Act 1936 to communicate information for the purpose of the administration of any law of the Commonwealth relating to pensions, allowances or benefits, it is to be assumed that:
(a) section 1207 (simplified outline) had effect as if the reference in that section to 1 January 2002 were a reference to the first day of the transitional period; and
(b) section 1207Y (attribution of income) had effect, in relation to a particular individual and a particular company or trust, as if:
(i) a tax year of the company or trust, being a tax year specified in a written notice given to the tax official by the Secretary, were a derivation period of the company or trust; and
(ii) a period specified in a written notice given to the tax official by the Secretary were an attribution period of the company or trust, and that attribution period related to a specified derivation period of the company or trust; and
(iii) the reference in paragraph 1207Y(1)(c) to 1 January 2002 were a reference to the first day of the transitional period; and
(iv) sections 1208C and 1208D had not been enacted; and
(c) section 1208E (attribution of assets) had effect as if the reference in paragraph 1208E(1)(a) to 1 January 2002 were a reference to the first day of the transitional period.
1209K Disclosure of tax file number information
In determining the scope of paragraph 202(hb) of the Income Tax Assessment Act 1936, and sections 8WA and 8WB of the Taxation Administration Act 1953, during the transitional period, it is to be assumed that:
(a) section 1207 (simplified outline) had effect as if the reference in that section to 1 January 2002 were a reference to the first day of the transitional period; and
(b) section 1207Y (attribution of income) had effect, in relation to a particular individual and a particular company or trust, as if:
(i) a tax year of the company or trust, being a tax year specified in a written notice given to the Commissioner of Taxation by the Secretary, were a derivation period of the company or trust; and
(ii) a period specified in a written notice given to the Commissioner of Taxation by the Secretary were an attribution period of the company or trust, and that attribution period related to a specified derivation period of the company or trust; and
(iii) the reference in paragraph 1207Y(1)(c) to 1 January 2002 were a reference to the first day of the transitional period; and
(iv) sections 1208C and 1208D had not been enacted; and
(c) section 1208E (attribution of assets) had effect as if the reference in paragraph 1208E(1)(a) to 1 January 2002 were a reference to the first day of the transitional period.
1210(1) If:
(a) the rate of a social security pension or benefit applicable to a person is increased under the pharmaceutical allowance Module of a Rate Calculator or Part 3.7 (rent assistance); and
(b) the rate of that pension or benefit is to be reduced under:
(i) the income test Module or the assets test Module of the Rate Calculator; or
(ii) section 1168 (compensation reductions);
the reduction is to be applied:
(c) first, to the rate of the pension or benefit apart from any increase under the pharmaceutical allowance Module or Part 3.7; and
(d) then, to the amount of any increase under Part 3.7; and
(e) finally, to the amount of any increase under the pharmaceutical allowance Module.
1210(2) The following Table sets out details of the Modules relevant to subsection (1):
Table—Relevant modules table | |||
Column 1 Pension Rate Calculator | Column 2 Pharmaceutical allowance Module | Column 4 Income test Module | Column 6 Assets test Module |
Pension Rate Calculator A (section 1064) | Module C | Module E | Module G |
Pension Rate Calculator C (section 1066) | Module C | Module E | Module G |
Pension Rate Calculator D (section 1066A) | Module D | Module F | Module H |
Youth Allowance Rate Calculator (section 1067G) | Module C | Module H | Not applicable |
Austudy Payment Rate Calculator (section 1067L) | Module C | Module D | Not applicable |
Benefit Rate Calculator B (section 1068) | Module D | Module G | Not applicable |
Pension PP (Single) Rate Calculator (section 1068A) | Module C | Module E | not applicable |
Benefit PP (partnered) Rate Calculator (section 1068B) | Module E | Module D | not applicable |
1210A Effect of nil rate of pension etc.
1210A(1) If, in relation to a day:
(a) a person is qualified for a social security pension or benefit; and
(b) the pension or benefit rate in relation to that day would be nil;
then, for the purposes of Part 2A.1, the person is not to be taken to be receiving the pension or benefit on that day.
1210A(2) The circumstance that a person is qualified for a social security pension or benefit in relation to a day is not to be taken into account for the purpose of determining the qualification of the person for a concession card if the pension or benefit is not payable to the person in relation to that day.
Chapter 4—International agreements and portability
1211 Social Security (International Agreements) Act overrides Part
If the Social Security (International Agreements) Act 1999 applies to the payment of a social security payment to a person, this Part does not apply to the payment to the person.
1212 Meaning of terms used in this Part
In this Part:
allegation authority means:
(a) the Greek Australian Workers’ Welfare Association of NSW; or
(b) the Commission of Enquiry established by Letters Patent of 9 February 1984 and 16 August 1984 to investigate matters known as the Greek conspiracy.
claim, in relation to a social security payment, includes a claim that is taken to have been made under a provision of the Social Security (Administration) Act 1999.
eligible medical treatment, in relation to a person, means medical treatment of a kind that is not available to the person in Australia.
entitled person means:
(a) a woman who has at any time been an Australian resident for a period of, or for periods totalling, at least 10 years; or
(b) a woman in receipt of a widow B pension because she was legally married and her husband died; or
(c) a woman who was, or is the partner of a man who was, the subject of a recommendation by an allegation authority that resulted in payment of an amount of compensation by the Commonwealth to her or her partner.
Note: This definition is only relevant in relation to wife pension and widow B pension.
Reserve service means attending a training camp as a member of any of the following:
(a) the Naval Reserve; or
(b) the Army Reserve; or
(c) the Air Force Reserve.
1212A Meaning of acute family crisis
For the purposes of this Part, a person’s absence is for the purpose of attending to an acute family crisis at a particular time if the Secretary is satisfied that the absence is, at that time:
(a) for the purpose of visiting a family member who is critically ill; or
(b) for the purpose of visiting a family member who is hospitalised with a serious illness; or
(c) for a purpose relating to the death of a family member; or
(d) for a purpose relating to a life‑threatening situation (other than an illness referred to in paragraph (a) or (b)) that:
(i) is facing a family member; and
(ii) is beyond the control of the family member.
1212B Meaning of humanitarian purpose
For the purposes of this Part, a person’s absence is for a humanitarian purpose at a particular time if the Secretary is satisfied that the absence is, at that time:
(a) for the purpose of involvement in custody proceedings, criminal proceedings (other than criminal proceedings in respect of a crime alleged to have been committed by the person) or other legal proceedings; or
(b) for purposes relating to the adoption of a child by the person; or
(c) for a purpose specified in the regulations for the purposes of this paragraph.
1212C Meaning of temporary absence
For the purposes of this Part, a person’s absence from Australia is temporary if, throughout the absence, the person does not cease to reside in Australia (within the meaning of subsection 7(3)).
1212D Part does not affect need for qualification
For the avoidance of doubt, nothing in this Part confers a right on a person to continue to be paid a social security payment if the person is not qualified for the payment (even if the person’s failure to qualify is related to the absence).
Division 2—Portability of social security payments
Subdivision A—Basic portability provisions
1213 Persons to whom Division applies
This Division applies to a person during a period (the period of absence) throughout which the person is continuously absent from Australia, if:
(a) immediately before the period of absence commenced, the person was receiving a social security payment (the payment) mentioned in column 2 of the table at the end of section 1217; or
(b) during the period of absence, the person’s claim for such a payment is granted under the Social Security (Administration) Act 1999.
1214 Some payments generally portable with no time limit
1214(1) If the person’s maximum portability period for the payment is an unlimited period, the person’s right to continue to be paid the payment throughout the period of absence is not affected merely by the absence.
Note 1: Section 1217 defines the person’s maximum portability period for the payment.
Note 2: However, the person’s rate of payment may be affected after 26 weeks—see Division 3.
1214(2) This section is subject to section 1220.
1215 Some payments generally portable with time limit
1215(1) If the person’s maximum portability period for the payment is not an unlimited period, the following rules apply:
(a) throughout the person’s portability period for the payment, the person’s right to continue to be paid the payment is not affected merely by the absence;
(b) throughout so much (if any) of the period of absence as occurs after the end of the person’s portability period for the payment, the payment is not payable to the person.
Note: Section 1217 defines the person’s maximum portability period and portability period for the payment.
1215(2) This section is subject to Subdivision B of this Division (which contains exceptions) and section 1220.
During the period of absence, remote area allowance, rent assistance, incentive allowance and pharmaceutical allowance are not to be added to the person’s rate under Chapter 3 after whichever of the following times applies:
(a) if the person’s maximum portability period for the payment is an unlimited period—26 weeks after the period of absence commenced;
(b) otherwise—the end of the person’s portability period for the payment.
1217 Meaning of maximum portability period, allowable absence and portability period
Meaning of maximum portability period
1217(1) The person’s maximum portability period for the payment is the period referred to in column 5 of the table at the end of this section (the table) that is applicable to:
(a) the payment (as specified in column 2 of the table); and
(b) the class of persons to which the person belongs (as specified in column 3 of the table).
Meaning of allowable absence
1217(2) The person’s absence is an allowable absence in relation to the payment at a particular time if, at that time:
(a) it is an absence specified in column 4 of the item in the table at the end of this section that is applicable to the payment and the person; and
(b) except where an unlimited absence is specified in column 5 of the item or a provision of Subdivision B of Division 2 of Part 4.2 applies, the absence does not exceed the period specified in column 5 of that item.
Meaning of portability period if unlimited maximum portability period
1217(3) If the person’s maximum portability period for the payment is an unlimited period, the person’s portability period for the payment, in relation to the period of absence, is an unlimited period beginning at the commencement of the period of absence.
Meaning of portability period if maximum portability period limited
1217(4) If the person’s maximum portability period for the payment is a period of weeks, the person’s portability period for the payment, in relation to the period of absence, is the period:
(a) beginning at the commencement of the period of absence; and
(b) ending at the earlier of the following times:
(i) the first time during the period of absence at which the absence is not an allowable absence in relation to the payment;
(ii) the end of the period of weeks that is the person’s maximum portability period for the payment.
Note: People will be required (under the Social Security (Administration) Act 1999) to notify changes in circumstance.
Portability of social security payments | ||||
Column 1 | Column 2 | Column 3 | Column 4 | Column 5 |
Item | Payment | Person | Absence | Maximum portability period |
1 | Age pension | All persons | Any absence | Unlimited period |
3 | Disability support pension | All persons | Any absence | 13 weeks (but see also section 1218AA) |
4 | Wife pension | Entitled person | Any absence | Unlimited period |
5 | Wife pension | Person other than entitled person | Any absence | 13 weeks |
6 | Carer payment | All persons | Any temporary absence | 13 weeks |
7 | Bereavement allowance | All persons | Any absence | Unlimited period |
8 | Widow B pension | Entitled person | Any absence | Unlimited period |
9 | Widow B pension | Person other than entitled person | Any absence | 13 weeks |
10 | Widow allowance | All persons | Any temporary absence | 13 weeks |
11 | Parenting payment | All persons | Any temporary absence | 13 weeks |
12 | Youth allowance | Person other than person undertaking full‑time study | A temporary absence for any of the following purposes: (a) to seek eligible medical treatment; (b) to attend to an acute family crisis; (c) for a humanitarian purpose. | 13 weeks |
13 | Youth allowance | Person undertaking full‑time study | Any temporary absence | 13 weeks (but see also section 1218) |
14 | Austudy payment | All persons | Any temporary absence | 13 weeks (but see also section 1218) |
15 | Newstart allowance | All persons | A temporary absence for any of the following purposes: (a) to seek eligible medical treatment; (b) to attend to an acute family crisis; (c) for a humanitarian purpose. | 13 weeks |
15A | Newstart allowance | Persons of at least 50 years of age who are subject to a Newstart Activity Agreement other than an agreement requiring the person to undertake an activity referred to in paragraph 606(1)(a) | Any temporary absence | 13 weeks |
16 | Mature age allowance and mature age partner allowance under Part 2.12A | All persons | Any temporary absence | 13 weeks |
17 | Mature age allowance under Part 2.12B | All persons | Any temporary absence | 13 weeks |
18 | Sickness allowance | All persons | A temporary absence for any of the following purposes: (a) to seek eligible medical treatment; (b) to attend to an acute family crisis; (c) for a humanitarian purpose. | 13 weeks |
19 | Special benefit | All persons | A temporary absence for any of the following purposes: (a) to seek eligible medical treatment; (b) to attend to an acute family crisis; (c) for a humanitarian purpose. | 13 weeks |
20 | Partner allowance | All persons | Any temporary absence | 13 weeks |
21 | Carer allowance | All persons | Any temporary absence | 13 weeks |
22 | Mobility allowance | All persons | Any temporary absence | 13 weeks |
23 | Telephone allowance | All persons | Any temporary absence | 13 weeks |
Subdivision B—Exceptions to Subdivision A rules
1218AA Extended portability period for disability support pension
1218AA(1) The Secretary may determine that a particular person’s maximum portability period for disability support pension is an unlimited period, if all of the following circumstances (the qualifying circumstances) exist:
(a) the person is severely disabled (see subsection 23(4B)); and
(b) the person is receiving disability support pension; and
(c) the person is terminally ill; and
(d) the person’s absence from Australia is or will be permanent; and
(e) the purpose of the person’s absence is:
(i) to be with or near a family member of the person (see subsection 23(14)); or
(ii) to return to the person’s country of origin.
1218AA(2) The Secretary may revoke the determination if any of the qualifying circumstances ceases to exist.
1218AA(3) If the Secretary revokes the determination, this Part has effect after the first time at which one of the qualifying circumstances does not exist as if the person’s maximum portability period for the pension were 13 weeks starting at that time.
1218 Exception—full‑time students outside Australia for purposes of Australian course
1218(1) This section applies if, immediately before the period of absence commenced:
(a) the person was undertaking full‑time study as part of a course of education at an educational institution; and
(b) the person was receiving youth allowance or austudy payment.
1218(2) The person’s right to continue to be paid youth allowance or austudy payment is not affected merely by the person’s absence throughout so much of the period of absence as is for the purpose of undertaking studies that form part of the course of education.
1218(3) If the person returns to Australia for a period of 13 weeks or less, the return is taken not affect the continuity of the period of absence.
1218A Exception—Reserve service
1218A(1) This section applies if, immediately before the period of absence commenced, the person was receiving parenting payment, youth allowance, austudy payment, newstart allowance, mature age allowance or mature age partner allowance.
1218A(2) The person’s right to continue to be paid the payment is not affected merely by the person’s absence throughout so much of the period of absence as is for the purpose of undertaking Reserve service.
1218B Exception—waiting period in Australia before parenting payment is portable
If:
(a) immediately before the period of absence commenced, the person was receiving parenting payment; and
(b) at a time not more than 13 weeks before the period of absence commenced, parenting payment had ceased to be payable to the person because:
(i) the person’s portability period for parenting payment in relation to another period of absence ended; or
(ii) another absence had ceased to be an allowable absence for parenting payment;
parenting payment is not payable to the person during the period of absence.
1218C Extension of person’s portability period—general
1218C(1) The Secretary may extend the person’s portability period for the payment if the Secretary is satisfied that the person is unable to return to Australia because of any of the following events:
(a) a serious accident involving the person or a family member of the person;
(b) a serious illness of the person or a family member of the person;
(c) the hospitalisation of the person or a family member of the person;
(d) the death of a family member of the person;
(e) the person’s involvement in custody proceedings in the country in which the person is located;
(f) a legal requirement for the person to remain outside Australia in connection with criminal proceedings (other than criminal proceedings in respect of a crime alleged to have been committed by the person);
(g) robbery or serious crime committed against the person or a family member of the person;
(h) a natural disaster in the country in which the person is located;
(i) political or social unrest in the country in which the person is located;
(j) industrial action in the country in which the person is located;
(k) a war in the country in which the person is located.
1218C(2) The Secretary must not extend the person’s portability period under subsection (1) unless:
(a) the event occurred or began during the period of absence; and
(b) if the event is political or social unrest, industrial action or war—the person is not willingly involved in, or willingly participating in the event.
1218C(3) If the Secretary extends a person’s portability period under subsection (1), the person’s portability period for the payment, for the purposes of this Part, is the extended period.
1218D Extension of person’s portability period—life‑saving medical treatment overseas
1218D(1) The Secretary may extend the person’s portability period for the payment if the Secretary is satisfied that, under the Medical Treatment Overseas Program administered by the Minister who administers the National Health Act 1953, financial assistance is payable in respect of the person’s absence from Australia.
1218D(2) If the Secretary extends a person’s portability period under subsection (1), the person’s portability period for the payment, for the purposes of this Part, is the extended period.
1220 No portability where claim based on short residence
1220(1) If:
(a) a person is an Australian resident; and
(b) the person ceases to be an Australian resident; and
(c) the person again becomes an Australian resident; and
(d) within the period of 2 years after the person again becomes an Australian resident, the person is granted, or is transferred to:
(i) an age pension; or
(ii) a disability support pension; or
(iii) a bereavement allowance; and
(e) after the pension or allowance is granted, or the person is transferred to the pension or allowance, as the case may be, but before the end of that period of 2 years, the person leaves Australia; and
(f) financial assistance is not payable in respect of the person’s absence from Australia under the Medical Treatment Overseas Program administered by the Minister who administers the National Health Act 1953;
a pension or allowance based on that claim is not payable to the person during any period during which the person is outside Australia.
1220(2) If:
(a) a person resides in an area that is, at the time of residence, an external Territory; and
(b) the person has never before resided in Australia; and
(c) the person then arrives in Australia; and
(d) within the period of 2 years after the person arrives in Australia, the person is granted, or is transferred to:
(i) an age pension; or
(ii) a disability support pension; or
(iii) a bereavement allowance; and
(e) after the pension or allowance is granted, or the person is transferred to the pension or allowance, as the case may be, but before the end of that period of 2 years, the person leaves Australia; and
(f) financial assistance is not payable in respect of the person’s absence from Australia under the Medical Treatment Overseas Program administered by the Minister who administers the National Health Act 1953;
a pension or allowance based on that claim is not payable to the person during any period during which the person is outside Australia.
1220(4) For the purposes of the application of this section in relation to a particular social security payment, a person who has a qualifying residence exemption for that payment is taken:
(a) to be an Australian resident; or
(b) to reside in an area that is, at the time of residence, an external Territory;
as the context requires.
Division 3—Rate of portable pensions
1220A Proportionality—age pension rate
A person’s rate of age pension is to be calculated using the Pension Portability Rate Calculator at the end of section 1221 if:
(a) the person has been continuously absent from Australia, throughout a period (the period of absence) of more than 26 weeks; and
(b) either:
(i) immediately before the period of absence commenced, the person was receiving the age pension; or
(ii) during the period of absence, the person’s claim for the age pension is granted under the Social Security (Administration) Act 1999.
1220B Proportionality—disability support pension rate for a severely disabled person
1220B(1) The rate of disability support pension for a severely disabled person for whom an unlimited maximum portability period for the pension has been determined under section 1218AA is to be calculated using the Pension Portability Rate Calculator at the end of section 1221 if:
(a) the person has been continuously absent from Australia, throughout a period (the period of absence) of more than 26 weeks; and
(b) either:
(i) immediately before the period of absence commenced, the person was receiving the disability support pension; or
(ii) during the period of absence, the person’s claim for the disability support pension is granted under the Social Security (Administration) Act 1999.
1220B(2) Subsection (1) does not apply to a person if the person became qualified to receive the disability support pension because the person became unable to work or permanently blind while the person was an Australian resident.
1221 Proportionality—wife pension and widow B pension rate for entitled persons
1221(1) An entitled person’s rate of wife pension or widow B pension is to be calculated using the Pension Portability Rate Calculator at the end of this section if:
(a) the person has been continuously absent from Australia, throughout a period (the period of absence) of more than 26 weeks; and
(b) immediately before the period of absence commenced, the person was receiving the wife pension or widow B pension.
1221(2) Subsection (1) does not apply to a person if:
(a) the person became qualified to receive the pension because of the death of the person’s partner; and
(b) immediately before the death of the partner, the partner was an Australian resident.
Pension Portability Rate Calculator
Module A—Overall rate calculation process
Overall rate calculation process
1221‑A1 This is how to calculate a person’s portability rate:
Method statement
Step 1. Work out the period of the person’s Australian working life residence using Module B: the result is called the residence period.
Step 2. Use the person’s residence period to work out the person’s residence factor using Module C below.
Step 3. Work out the rate that would be the person’s pension or allowance rate if this Rate Calculator did not apply to the person: the result is called the person’s notional domestic rate.
Step 4. Multiply the person’s notional domestic rate by the person’s residence factor: the result is the person’s portability rate.
Limit in portability rate
1221‑A2 If a person’s portability rate as calculated under point 1221‑A1 would exceed the rate (the notional rate) that would be the person’s notional domestic rate under that point if the person had a residence factor of 1, the person’s portability rate is the rate that equals the notional rate.
Module B—Australian working life residence
Working life
1221‑B1 For the purposes of this Module, a person’s working life is the period beginning when the person turns 16 and ending when the person reaches pension age.
Note: For pension age see subsections 23(5A), (5B), (5C) and (5D).
Australian working life residence (general)
1221‑B2 Subject to points 1221‑B3 and 1221‑B4, a person’s period of Australian working life residence as at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident.
Note: for the method of calculating the number of months in the period see points 1221‑B3 and 1221‑B4 below.
Calculation of number of months
1221‑B3 If a person’s period of Australian working life residence would, apart from this point, be a number of whole months, the period is to be increased by one month.
1221‑B4 If a person’s period of Australian working life residence would, apart from this point, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month.
Residence factor (period of Australian working life residence 25 years or more)
1221‑C1 If a person’s period of Australian working life residence is 300 months (25 years) or more, the person’s residence factor is 1.
Note: if a person’s residence factor is 1, the person’s pension will be payable outside Australia at the full domestic rate.
Residence factor (period of Australian working life residence under 25 years)
1221‑C2 If a person’s period of Australian working life residence is less than 300 months (25 years), the person’s residence factor is:
Chapter 5—Overpayments and debt recovery
1222 General effect of Chapter
1222(1) This Chapter provides the methods for recovery by the Commonwealth of:
(a) debts owed to the Commonwealth under Part 5.2; and
(b) debts owed to the Commonwealth under section 1135; and
(c) overpayments under certain other Acts or schemes; and
(ca) debts incurred under other Acts for failing to repay part or all of overpayments referred to in paragraph (c); and
(d) debts under subsection 11(6) of the Data‑matching Program (Assistance and Tax) Act 1990.
1222(2) The methods of recovery available for the various types of debt are set out in the following table:
Recovery methods table | |||
Column 1 Item | Column 2 Debt | Column 3 Means | Column 4 Provision |
1 | 1135 | deductions | 1231, 1234A |
2 | 1223 | deductions | 1231, 1234A |
3 | 1223AA | deductions | 1231, 1234A |
4 | 1223AB | deductions | 1231, 1234A |
5 | 1224AA | deductions | 1231, 1234A |
6 | 1224AB | deductions | 1231, 1234A |
7 | 1224B | deductions | 1231, 1234A |
8 | 1224C | deductions | 1231, 1234A |
9 | 1224D | deductions | 1231, 1234A |
10 | 1224E | deductions | 1231, 1234A |
11 | 1225 | deductions | 1231, 1234A |
12 | 1226 | legal proceedings | 1232 |
13 | 1226A | deductions | 1231, 1234A |
14 | 1227 | enforcement of security | 1230C |
15 | 1227B | deductions | 1231, 1234A |
15A | 1228A (comparable foreign payment debts) | deductions | 1231, 1234A |
16 | 1229A | deductions | 1231, 1234A |
17 | 1229B | deductions | 1231, 1234A |
18 | 1230 | legal proceedings | 1232 |
19 | 1230A | legal proceedings | 1232 |
1222(3) If a person:
(a) has received an overpayment under certain other Acts or schemes; or
(b) has incurred a debt under another Act (whether before or after the commencement of this paragraph) for failing to repay part or all of such an overpayment;
the amount of the overpayment or debt may be recoverable by means of deductions from the person’s social security payment.
Note: for deductions see section 1231.
Part 5.2—Amounts recoverable under this Act
1222A Debts due to the Commonwealth
If an amount has been paid by way of social security payment, or by way of fares allowance under the Social Security (Fares Allowance) Rules 1998, the amount is a debt due to the Commonwealth if, and only if:
(a) a provision of this Act, the 1947 Act, the Social Security (Fares Allowance) Rules 1998 or the Data‑matching Program (Assistance and Tax) Act 1990 expressly provided that it was or expressly provides that it is, as the case may be; or; or
(b) the amount:
(i) should not have been paid; and
(ii) was paid before 1 January 1991; and
(iii) was not an amount to which subsection 245B(2) of the 1947 Act applied.
1223 Debts arising from lack of qualification, overpayment etc.
[see Note 6]
1223(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
1223(1AA) If a social security payment is made to, or as directed or authorised by, the person who is entitled to obtain the benefit of the payment, subsection (1) does not apply to any other person who afterwards obtains the benefit of the payment unless the other person obtained the benefit because of a mistake made by the first person in connection with the giving of the direction or authorisation.
1223(1AB) Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:
(a) the payment was made to the person by mistake as a result of a computer error or an administrative error;
(b) the person for whose benefit the payment was intended to be made was not qualified to receive the payment;
(c) the payment was not payable;
(d) the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation;
(e) the payment was made in purported compliance with a direction or authority given by the person who was entitled to obtain the benefit of the payment but the direction or authority had been revoked or withdrawn before the payment was made;
(f) the payment was intended to be made for the benefit of someone else who died before the payment was made.
1223(1AC) If a social security payment was made by mistake as a result of a computer error or an administrative error, subsection (1) applies:
(a) whether or not the payment was made under a determination that had effect at the time when the payment was made; and
(b) whether or not a determination in relation to the payment could be made after that time with effect from and including that time.
1223(1AD) Subsection (1AC) does not apply if the social security payment was made when it should not have been made because of the occurrence of an event or a change in circumstances where the event or change had not been notified to the Secretary but no valid requirement for notification had been made under the social security law.
1223(1AE) If subsection (1AC) applies in respect of a social security payment:
(a) Divisions 8, 9 and 10 of Part 3 of the Social Security (Administration) Act 1999 are to be disregarded; and
(b) any determination made under section 79 or 80 of that Act to correct the error in the payment takes effect from the date stated in the determination; and
(c) the date so stated may be a date earlier than the date on which the determination is made.
1223(1AA)Except in the circumstances referred to in subsection (1AB), subsection (1) does not apply to a payment made under subsection 47(2) or 51(2) of the Administration Act.
1223(1AB) Subsection (1) applies to a payment made to a person under subsection 47(2) or 51(2) of the Administration Act if the person is released from gaol or psychiatric confinement on a day after the day that is the person’s expected release day for the purposes of section 35 of the Administration Act.
Some carer payment overpayments are not debts
1223(1B) If:
(a) an amount has been paid to a person (the carer) by way of carer payment because the carer was providing care for a care receiver or care receivers (as defined in subsection 197(1)); and
(b) the amount was paid on the basis that the carer was qualified for carer payment when the carer was not qualified:
(i) because an estimate of the income of the care receiver or any of the care receivers was an underestimate; or
(ii) because an assessment or amended assessment of the income of the care receiver or any of the care receivers had been amended as described in paragraph 198B(2)(b), (c) or (d); or
(iii) because of the occurrence, or the likelihood of the occurrence, of an event in respect of which the Department had not been informed in accordance with a requirement in a notice under subsection 222(1A);
the amount is not a debt due to the Commonwealth.
Some carer payment overpayments are debts if carer knew about care receiver’s affairs
1223(1C) Despite subsection (1B), an amount described in subsection (1B) is a debt due to the Commonwealth if it was reasonable for the carer to know that:
(a) the estimate of the income was incorrect; or
(b) the assessment or amended assessment had been amended; or
(c) the Department should have been informed in respect of the event in accordance with the requirement in the notice;
as the case requires.
Amount calculated using non‑income/assets tested add‑on amount—no add‑on amount payable
1223(7) If:
(a) an amount has been paid to a person by way of social security payment; and
(b) when the amount was calculated;
(i) an amount of remote area allowance was added to the rate of the person’s social security payment when no such amount should have been added; or
(ia) the rate of the person’s social security benefit payment was increased by an amount of language, literacy and numeracy supplement when that rate should not have been so increased; or
(ii) if the person was receiving a job search allowance—the rate of the person’s job search allowance was increased by an amount of job search training supplement when that rate should not have been so increased; or
(iii) if the person was receiving a newstart allowance—the rate of the person’s newstart allowance was increased by an amount of newstart training supplement when that rate should not have been so increased; or
(iv) if the person was receiving parenting payment, youth allowance or newstart allowance—the rate of the person’s parenting payment, youth allowance or new start allowance was increased by an approved program of work supplement when that rate should not have been so increased;
each of the following amounts is a debt due to the Commonwealth:
(c) the amount of remote area allowance;
(ca) the amount of language, literacy and numeracy supplement;
(e) the amount of newstart training supplement;
(f) the amount of approved program of work supplement.
Amount calculated using incorrect non‑income/assets tested add‑on amount—add‑on amount payable
1223(8) If:
(a) an amount (the received amount) has been paid to a person by way of social security payment; and
(b) when the received amount was calculated:
(i) an amount of remote area allowance was added to the rate of the person’s social security payment that was greater than the amount that should have been added; or
(ii) if the person was receiving a job search allowance—the rate of the person’s job search allowance was increased by an amount of job search training supplement that was greater than the amount by which it should have been so increased; or
(iii) if the person was receiving a newstart allowance—the rate of the person’s newstart allowance was increased by an amount of newstart training allowance that was greater than the amount by which it should have been so increased;
the difference between the received amount and the amount of social security payment that would have been paid to the person if the amount had been calculated by using the correct amount of remote area allowance, job search training supplement or newstart training supplement (as the case may be) is a debt due to the Commonwealth.
1223(9) In this section, unless the contrary intention appears, a reference to a social security payment includes a reference to a part of a social security payment.
1223A(1) If:
(a) a person is provided with an asset‑test exempt income stream for a period beginning on the first day in respect of which an income stream payment was made to the person and ending on the last day in respect of which an income stream payment was made to the person; and
(b) during the whole or any part of that period an amount has been paid to the person by way of an income support payment; and
(c) the whole or any part of the income stream is commuted contrary to the contract or governing rules under which the income stream was provided on the commencement day of the income stream; and
(d) the amount that has been paid to the person by way of a social security income support payment for that period is more than the amount that would have been payable to the person for that period had the income stream not been an asset‑test exempt income stream for the purposes of this Act for that period;
an amount worked out under subsection (2) is a debt due to the Commonwealth.
1223A(2) The amount for the purposes of subsection (1) is an amount equal to the difference between the amount that has been paid to the person by way of a social security income support payment during the period worked out under subsection (3) and the amount that would have been paid to the person by way of social security income support payment had the income stream not been an asset‑test exempt income stream for the purposes of this Act for that period.
1223A(3) The period for the purposes of subsection (2) is the period that:
(a) began on:
(i) the day 5 years before the income stream was commuted; or
(ii) the commencement day of the income stream; or
(iii) 20 September 2001;
whichever is the latest; and
(b) ended when the income stream was commuted.
1223A(4) For the purpose of working out the asset value of the income stream had the income stream not been an asset‑test exempt income stream for the period referred to in subsection (2), it is to be assumed that the income stream was asset tested from the commencement day and the asset value of the income stream is depleted in accordance with the formula specified in subsection 1119(4).
1223A(5) This section does not apply to an income stream in relation to which a determination under subsection 9A(5), 9B(4) or 9BA(11) is in force.
1223A(6) Subject to subsection (7), if:
(a) an asset‑test exempt income stream (the old income stream) is commuted, in whole or in part; and
(b) part, but not the whole, of the payment resulting from the commutation of the old income stream (the commutation payment) is transferred directly to the purchase of another asset‑test exempt income stream (the new income stream);
the following paragraphs have effect for the purposes of this section:
(c) the new income stream is taken to have the same commencement day as:
(i) the old income stream; or
(ii) if the old income stream was one of a succession of asset‑test exempt income streams—the first income stream in that succession;
(d) if the old income stream was not one of a succession of asset‑test exempt income streams, income stream payments made under the old income stream are taken to have been made under the new income stream;
(e) if the old income stream was one of a succession of asset‑test exempt income streams, income stream payments made under any of the income streams in that succession are taken to have been, at the time when they were made, payments under the new income stream.
1223A(7) Subsection (6) does not apply if the amount used in the purchase of the new income stream represents the whole of the commutation payment remaining after the use of part of the commutation payment in the payment of:
(a) a hardship amount; or
(b) superannuation contributions surcharge that the person is liable to pay in his or her capacity as purchaser of the old income stream.
1223A(8) Subject to subsection (9), if:
(a) the whole of an asset‑test exempt income stream is commuted; and
(b) no part of the payment resulting from the commutation of the income stream is transferred directly to the purchase of another asset‑test exempt income stream; and
(c) the commuted income stream was one of a succession of asset‑test exempt income streams;
the following paragraphs have effect for the purposes of this section:
(d) the commuted income stream is taken to have had the same commencement day as the first income stream in that succession;
(e) income stream payments made under any of the income streams in that succession (other than the commuted income stream) are taken to have been, at the time when they were made, payments under the commuted income stream.
1223A(9) Subsection (8) does not apply if the whole of the payment resulting from the commutation of the income stream referred to in paragraph (8)(a) is used in the payment of:
(a) a hardship amount; or
(b) superannuation contributions surcharge that the person is liable to pay in his or her capacity as purchaser of that income stream.
1223A(10) For the purposes of this section:
(a) 2 or more asset‑test exempt income streams constitute a succession of asset‑test exempt income streams if each income stream (other than the first of those income streams to be provided) has been funded by means of the payment, or part of the payment, resulting from the commutation of another of those income streams; and
(b) an income stream is the first income stream in a succession of income streams if it is the first of those income streams to be provided.
1223A(11) In this section:
hardship amount has the same meaning as in section 9A.
1223AA Debts arising from prepayments and certain other payments
1223AA(1) If:
(a) a person has received a prepayment of a social security benefit (other than partner allowance) for a period; and
(b) the person fails to provide a statement under section 67 of the Administration Act in respect of the period;
the amount of the prepayment is a debt due to the Commonwealth.
Note 4: If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
1223AA(1AA) If:
(a) a person has received a prepayment of partner allowance in respect of a period; and
(b) the person or the person’s partner fails to provide a statement under section 67 of the Administration Act in respect of the period;
the amount of the prepayment is a debt due to the Commonwealth.
1223AA(1A) If the Secretary is satisfied that, in the special circumstances of the case, it is appropriate to do so, the Secretary may determine in writing that subsection (1) or (1AA) does not apply to the prepayment.
1223AA(1B) If:
(a) a person has received a prepayment of a social security benefit for a period; and
(b) the amount of prepayment is more than the amount (if any) (the correct amount) of social security benefit that was payable to the person for the period; and
(c) subsection (1) or (1AA) does not apply to the prepayment;
the difference between the prepayment and the correct amount is a debt due to the Commonwealth.
1223AA(1BA) If:
(a) a person has, whether before or after the commencement of this subsection, received a payment (the received amount) of a social security benefit (other than parenting allowance) in respect of a period; and
(b) the received amount was calculated having regard to estimated income or anticipated changes of circumstances set out in a statement made in response to a notice under section 67, 68 or 69 of the Administration Act in respect of the period; and
(c) the person’s actual income or the circumstances that actually occur are different from those estimated or anticipated; and
(d) the received amount is more than the amount (if any) of the social security benefit (the correct amount) that would have been paid to the person in respect of the period if the income or circumstances set out in the statement had been the person’s actual income or the circumstances that actually occurred;
the difference between the received amount and the correct amount is a debt due to the Commonwealth.
Note: For recipient statement notice see subsection 23(1).
1223AA(1C) If:
(a) a payment has been made to a person under subsection 47(2) of the Administration Act; and
(b) immediately after the release of the person from gaol or psychiatric confinement:
(i) the person was not qualified for a crisis payment; or
(ii) although the person was qualified for a crisis payment, the payment was not payable to the person;
the amount of the payment is a debt due to the Commonwealth.
1223AA(1D) If:
(a) a payment has been made to a person under subsection 51(2) of the Administration Act; and
(b) immediately after the release of the person from gaol or psychiatric confinement:
(i) the person was not qualified for the social security pension or benefit claimed; or
(ii) although the person was qualified for the pension or benefit, the pension or benefit was not payable to the person;
the amount of the payment is a debt due to the Commonwealth.
1223AA(2) In this section:
prepayment means:
(a) a payment under section 408GG, 652, 660YGG, 722, 755 or 771KL of this Act as in force immediately before 20 March 2000; or
(b) a payment made in accordance with section 57 of the Administration Act.
1223AB Debts arising from AAT stay orders
If:
(a) a person applies to the Administrative Appeals Tribunal for review of a decision; and
(b) the Administrative Appeals Tribunal makes an order under subsection 41(2) of the Administrative Appeals Tribunal Act 1975; and
(c) as a result of the order, the amount that has in fact been paid to the person by way of social security payment is greater than the amount that was payable to the person;
the difference between the amount that was in fact paid to the person and the amount that was payable to the person is a debt due to the Commonwealth.
Note 1: Subsection 43(6) of the Administrative Appeals Tribunal Act 1975 provides that the AAT’s decision on the review will generally take effect from the day on which the SSAT’s decision had effect. Since this is the case, the amount payable to the person during the stay period is the amount finally determined by the AAT as being payable and not the amount that was paid in accordance with the terms of the stay order.
1223ABAA Debts arising in respect of one‑off payments to older Australians
1223ABAA(1) This section applies in relation to an individual who has been paid a 2006 one‑off payment to older Australians (the relevant payment) under Part 2.2C.
1223ABAA(2) If the individual qualified for the relevant payment because of subsection 93Y(2), a relevant determination is a determination made under Part 3 of the Administration Act because of which the individual was receiving the payment referred to in paragraph 93Y(2)(b).
1223ABAA(3) If the individual qualified for the relevant payment because of subsection 93Y(3) and because of holding or having held a seniors health card, a relevant determination is a determination made under Part 3 of the Administration Act because of which the person was granted the seniors health card.
1223ABAA(4) If the individual qualified for the relevant payment because of subsection 93Y(4), a relevant determination is a determination made under Part 3 of the Administration Act because of which the individual was receiving the allowance referred to in paragraph 93Y(4)(a).
1223ABAA(5) If:
(a) after the relevant payment was made to the individual, a relevant determination in relation to the individual, at least so far as it relates to 9 May 2006 or to a period that includes that day, is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(b) the decision to change, revoke, set aside or supersede the relevant determination is or was made for the reason, or for reasons including the reason, that the individual knowingly made a false or misleading statement, or knowingly provided false information; and
(c) had the change, revocation, setting aside or superseding occurred on or before 9 May 2006, the relevant payment would not have been made;
the amount of the relevant payment is a debt due to the Commonwealth by the individual.
1223ABAA(6) If:
(a) an individual qualified for the relevant payment because of subsection 93Y(3) and because of having claimed a seniors health card; and
(b) the individual knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and
(c) but for that statement or information, the relevant payment would not have been paid to the individual;
the amount of the relevant payment is a debt due to the Commonwealth by the individual.
1223ABAA(7) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to payments to which this section applies.
1223ABA Debts arising in respect of one‑off payments to carers
1223ABA(1) This section applies in relation to an individual (the recipient) who has been paid a payment (the relevant payment) of:
(a) one‑off payment to carers (carer payment related); or
(b) one‑off payment to carers (carer allowance related); or
(c) 2005 one‑off payment to carers (carer payment related); or
(d) 2005 one‑off payment to carers (carer service pension related); or
(e) 2005 one‑off payment to carers (carer allowance related); or
(f) 2006 one‑off payment to carers (carer payment related); or
(g) 2006 one‑off payment to carers (wife pension related); or
(h) 2006 one‑off payment to carers (partner service pension related); or
(i) 2006 one‑off payment to carers (carer service pension related); or
(j) 2006 one‑off payment to carers (carer allowance related).
What determinations are relevant?
1223ABA(2) If the relevant payment is a payment of one‑off payment to carers (carer payment related), a relevant determination is a determination made under Part 3 of the Social Security (Administration) Act 1999 because of which the instalment referred to in section 247 was paid.
1223ABA(3) If the relevant payment is a payment of one‑off payment to carers (carer allowance related), a relevant determination is a determination made under Part 3 of the Social Security (Administration) Act 1999 because of which the, or an, instalment that satisfied paragraphs 992N(1)(a) and (b) was paid.
1223ABA(3A) If the relevant payment is a payment of 2005 one‑off payment to carers (carer payment related), a relevant determination is a determination made under Part 3 of the Social Security (Administration) Act 1999 because of which the instalment referred to in section 249 of this Act was paid.
1223ABA(3B) If the relevant payment is a payment of 2005 one‑off payment to carers (carer service pension related), a relevant determination is a determination made under the Veterans’ Entitlements Act 1986 because of which the instalment referred to in section 251 of this Act was paid.
1223ABA(3C) If the relevant payment is a payment of 2005 one‑off payment to carers (carer allowance related), a relevant determination is a determination made under Part 3 of the Social Security (Administration) Act 1999 because of which the, or an, instalment that satisfied paragraphs 992Q(1)(a) and (b) of this Act was paid.
1223ABA(3CA) If the relevant payment is a payment of 2006 one‑off payment to carers (carer payment related), a relevant determination is a determination made under Part 3 of the Administration Act because of which the instalment of carer payment referred to in section 253 of this Act was paid.
1223ABA(3CB) If the relevant payment is a payment of 2006 one‑off payment to carers (wife pension related), a relevant determination is:
(a) a determination made under Part 3 of the Administration Act because of which the instalment of wife pension referred to in section 255 of this Act was paid; or
(b) a determination made under Part 3 of the Administration Act because of which the, or an, instalment of carer allowance referred to in section 255 of this Act was paid.
1223ABA(3CC) If the relevant payment is a payment of 2006 one‑off payment to carers (partner service pension related), a relevant determination is:
(a) a determination made under the Veterans’ Entitlements Act because of which the instalment of partner service pension referred to in section 257 of this Act was paid; or
(b) a determination made under Part 3 of the Administration Act because of which the, or an, instalment of carer allowance referred to in section 257 of this Act was paid.
1223ABA(3CD) If the relevant payment is a payment of 2006 one‑off payment to carers (carer service pension related), a relevant determination is a determination made under the Veterans’ Entitlements Act because of which the instalment of carer service pension referred to in section 259 of this Act was paid.
1223ABA(3CE) If the relevant payment is a payment of 2006 one‑off payment to carers (carer allowance related), a relevant determination is a determination made under Part 3 of the Administration Act because of which the, or an, instalment of carer allowance referred to in section 992T of this Act was paid.
What is the relevant date?
1223ABA(3D) The relevant date is:
(a) 11 May 2004, if the relevant payment is a payment of:
(i) one‑off payment to carers (carer payment related); or
(ii) one‑off payment to carers (carer allowance related); or
(b) 10 May 2005, if the relevant payment is a payment of:
(i) 2005 one‑off payment to carers (carer payment related); or
(ii) 2005 one‑off payment to carers (carer service pension related); or
(iii) 2005 one‑off payment to carers (carer allowance related); or
(c) 9 May 2006, if the relevant payment is a payment of:
(i) 2006 one‑off payment to carers (carer payment related); or
(ii) 2006 one‑off payment to carers (wife pension related); or
(iii) 2006 one‑off payment to carers (partner service pension related); or
(iv) 2006 one‑off payment to carers (carer service pension related); or
(v) 2006 one‑off payment to carers (carer allowance related).
Situation in which whole amount is a debt
1223ABA(4) If:
(a) after the relevant payment was made to the recipient, a relevant determination in relation to the recipient, at least so far as it relates to the relevant date or a period that includes the relevant date, is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(b) the decision to change, revoke, set aside or supersede the relevant determination is or was made for the reason, or for reasons including the reason, that the recipient knowingly made a false or misleading statement, or knowingly provided false information; and
(c) had the change, revocation, setting aside or superseding occurred on or before the relevant date, the relevant payment would not have been made;
the amount of the relevant payment is a debt due to the Commonwealth by the recipient.
Situation in which part of amount is a debt
1223ABA(5) If:
(a) after the relevant payment was made to the recipient, a relevant determination in relation to the recipient, at least so far as it relates to the relevant date or a period that includes the relevant date, is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(b) the decision to change, revoke, set aside or supersede the relevant determination is or was made for the reason, or for reasons including the reason, that the recipient knowingly made a false or misleading statement, or knowingly provided false information; and
(c) had the change, revocation, setting aside or superseding occurred on or before the relevant date, the amount of the relevant payment would have been reduced;
the amount by which the relevant payment would have been reduced is a debt due to the Commonwealth by the recipient.
Other provisions under which debts arise generally do not apply in relation to one‑off payment to carers
1223ABA(6) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to payments to which this section applies.
1224AA Person other than payee obtaining payment of a cheque
1224AA(1) If:
(a) either:
(i) an amount of a social security payment or an amount of fares allowance is paid by cheque; or
(ii) a pension bonus is paid by cheque; and
(b) a person other than the payee obtains possession of the cheque from the payee; and
(c) the cheque is not endorsed by the payee to the person; and
(d) the person obtains value for the cheque;
the amount of the cheque is a debt due by the person to the Commonwealth.
1224AB Joint and several liability for persons involved in contravention of Act
If:
(a) a person is liable to pay a debt because the person contravened a provision of this Act as in force immediately before 20 March 2000, or a provision of the social security law; and
(b) another person is convicted of an offence under section 11.2, 11.4 or 11.5 of the Criminal Code in relation to the contravention;
the persons referred to in paragraphs (a) and (b) are jointly and severally liable to pay the debt.
1224B Education entry payment debt
1224B(1) If:
(a) an education entry payment is made to a person; and
(b) the person does not pay the enrolment fees for the course in relation to which the education entry payment was made in the calendar year in respect of which the education entry payment was made;
the amount of the education entry payment so made is a debt due to the Commonwealth.
Note 4: If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
1224B(2) Subsection (1) does not apply to a person who is not required to pay the enrolment fees mentioned in paragraph (1)(b).
1224C Data‑matching Program (Assistance and Tax) Acts debts
1224C(1) If:
(a) an amount has been paid to a person by way of a social security payment; and
(b) the amount is a debt due to the Commonwealth under subsection 11(6) of the Data‑matching Program (Assistance and Tax) Act 1990;
the amount so paid is recoverable by the Commonwealth.
Note 4: If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
1224D Mobility allowance advance debts
1224D(1) If:
(a) a person (the recipient) has received mobility allowance advance; and
(b) the advance was paid because the recipient or another person:
(i) made a false statement or a false representation; or
(ii) failed or omitted to comply with a provision of the social security law or this Act as in force immediately before 20 March 2000; and
(c) the Secretary determines that the recipient’s qualification for mobility allowance ceased on a particular day during the recipient’s advance payment period;
the amount worked out under subsection (2) is a debt due to the Commonwealth.
Note 1: for advance payment period see paragraph 1047A(2)(b).
Note 5: If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
1224D(2) For the purposes of subsection (1), the amount of the recipient’s debt is:
where:
amount of advance means the amount of mobility allowance advance paid to the recipient under section 1045.
number of paydays means the number of whole paydays in the period that starts on the day determined by the Secretary under paragraph (1)(c) and ends at the end of the recipient’s advance payment period.
1224E Debts arising from advance payments of social security entitlements
1224E(1) If:
(a) a person has received an advance payment of a social security entitlement (the first entitlement) or an instalment of such an advance payment; and
(b) the first entitlement ceases to be payable to the person; and
(c) when the first entitlement ceases to be payable, the person has not repaid the whole of the advance payment or instalment; and
(d) the person does not receive another social security entitlement or benefit PP (partnered) immediately after the first entitlement ceases to be payable;
the amount that has not been repaid is a debt due to the Commonwealth.
Note: For social security entitlement see subsection 23(1).
If:
(a) a person has received a special employment advance of a special employment advance qualifying entitlement (the first entitlement) or an instalment of such an advance; and
(b) the first entitlement ceases to be payable to the person; and
(c) when the first entitlement ceases to be payable, the person has not repaid the whole of the advance or instalment; and
(d) the person does not receive another special employment advance qualifying entitlement or benefit PP (partnered) immediately after the first entitlement ceases to be payable;
the amount that has not been repaid is a debt due to the Commonwealth.
1227 Assurance of support debt
1227(1) If a person is liable to pay an assurance of support debt, the debt is a debt due to the Commonwealth.
1227(2) In this Chapter:
assurance of support debt means:
(a) a debt due and payable by a person to the Commonwealth, or a liability of a person to the Commonwealth, because of the operation of:
(i) subregulation 165(1) of the Migration (1989) Regulations as in force on or before 19 December 1991; or
(ii) regulation 164C of the Migration (1989) Regulations as in force after 19 December 1991 and before 1 February 1993; or
(iii) Part 5 of the Migration (1993) Regulations as in force on or after 1 February 1993; or
(iv) Division 2.7 of the Migration Regulations 1994 as in force on or after 1 September 1994;
in respect of the payment to another person of a social security payment of a kind mentioned in subregulation 2.38(1) of the Migration Regulations 1994; or
(b) a liability of a person to the Commonwealth because of the operation of section 1061ZZGG.
1227A(1) A debt that is recoverable under section 56 of the Farm Household Support Act 1992 in respect of an amount of exceptional circumstances relief payment or farm help income support is also a debt that is due to, and recoverable by, the Commonwealth under this Act.
1227A(1A) A debt that is recoverable under section 56 of the Farm Household Support Act 1992 in respect of an amount of re‑establishment grant is also a debt that is due to, and recoverable by, the Commonwealth under this Act.
1227A(2) A debt in respect of an amount of exceptional circumstances relief payment or farm help income support may be recovered by the Commonwealth by means of:
(a) if the person liable to pay the debt is receiving exceptional circumstances relief payment or farm help income support under the Farm Household Support Act 1992—deductions from that payment or support; or
(b) if the person liable to pay the debt is receiving a social security payment—deductions from that person’s social security payment; or
(c) if section 1234A applies to another person who is receiving a social security payment—deductions from that other person’s social security payment; or
(d) legal proceedings; or
(e) garnishee notice.
Note 1: For deductions see sections 1231, 1231A and 1234A.
Note 2: For legal proceedings see section 1232.
Note 3: For garnishee notice see section 1233.
Note 4: If the person does not pay the debt within 3 months after receiving a notice of the amount of the debt, the amount of the debt will increase under section 1229.
1227A(3) A debt in respect of an amount of re‑establishment grant may be recovered by the Commonwealth by any of the means referred to in paragraphs (2)(b) to (e).
1227B Debts arising under Part 8 of the Student Assistance Act 1973 as in force before 1 July 1998
If an amount that was a debt due to the Commonwealth under Part 8 of the Student Assistance Act 1973 (as in force immediately before 1 July 1998) remained still due immediately before that day, that amount is a debt that is due to the Commonwealth under this Act.
1228 Overpayments arising under other Acts and schemes
1228(1) If:
(a) an amount has been paid to a person by way of a payment or payments to which subsection (2) applies; and
(b) the amount should not have been paid; and
(c) the person to whom the amount was paid is receiving a social security payment under; and
(d) the person is qualified for the social security payment under this Act and the social security payment is payable to the person;
the amount is an overpayment that is recoverable by the Commonwealth by means of deductions.
Note: for deductions see section 1231.
1228(2) This subsection applies to:
(a) a payment of pension or allowance under the Veterans’ Entitlements Act; or
(aa) a payment of family assistance within the meaning of the
A New Tax System (Family Assistance) Act 1999; or
(ab) a payment of compensation (within the meaning of the Military Rehabilitation and Compensation Act) under that Act; or
(b) a payment of pension or allowance under the Seamen’s War Pensions and Allowances Act 1940; or
(c) a payment under:
(i) the AUSTUDY Scheme, being the scheme under Part 2 of the Student Assistance Act 1973 as previously in force; or
(ii) the ABSTUDY Schooling Scheme; or
(iii) the ABSTUDY Tertiary Scheme (to the extent that it applies to full‑time students); or
(iv) the Assistance for Isolated Children Scheme; or
(v) the Veterans’ Children Education Scheme; or
(vi) the Post‑Graduate Awards Scheme; or
(vii) the Adult Migrant Education Program Living Allowance; or
(viii) the Maintenance Allowance for Refugees; or
(ix) the English as a Second Language Allowance (to the extent that it applies to full‑time students); or
(d) if the amount was paid to the person on or after 12 August 1988—a program included in the programs known as Labour Market Programs.
Note: Labour Market Programs are administered by the Department of Education, Employment and Training and provide income support for people undertaking various kinds of vocational training.
1228(2A) A debt referred to in paragraph (b) of the definition of student assistance overpayment in subsection 3(1) of the Student Assistance Act 1973 is an overpayment that is recoverable by the Commonwealth by means of deductions.
1228(2B) A debt referred to in section 79 of the Child Support (Registration and Collection) Act 1988 is an overpayment that is recoverable by the Commonwealth by means of deductions.
1228A Comparable foreign payment debt recovery
1228A(1) This section applies if:
(a) an amount (the social security amount) was paid to a person by way of a social security payment in respect of a particular period; and
(b) another amount (the lump sum) was paid as a lump sum:
(i) to the person; or
(ii) to the person’s partner, if the person is a member of a couple;
by way of a payment of arrears of a comparable foreign payment in respect of that period; and
(c) assuming that the lump sum had been paid by way of periodical payments of the comparable foreign payment in respect of the period, the social security amount would have been reduced.
1228A(2) The amount by which the social security amount would have been reduced is a debt due to the Commonwealth.
1228A(3) Section 1073 does not apply to the person in respect of the lump sum.
1229 Notices in respect of debt
1229(1) If a debt by a person to the Commonwealth under the social security law has not been wholly paid, the Secretary must give the person a notice specifying:
(a) the date on which it was issued (the date of the notice); and
(b) the reason the debt was incurred, including a brief explanation of the circumstances that led to the debt being incurred; and
(c) the period to which the debt relates; and
(d) the outstanding amount of the debt at the date of the notice; and
(e) the day on which the outstanding amount is due and payable; and
(f) that a range of options is available for repayment of the debt; and
(g) the contact details for inquiries concerning the debt.
1229(2) The outstanding amount of the debt is due and payable on the 28th day after the date of the notice.
1229(3) If the debt has not been wholly paid and:
(a) the person has failed to enter into an arrangement under section 1234 to pay the outstanding amount of the debt; or
(b) the person has entered into an arrangement under that section but has failed to make a payment in accordance with the arrangement or, if the arrangement has been amended, in accordance with the arrangement as amended;
the Secretary may give to the person a further notice specifying:
(c) the date on which it was issued (the date of the further notice); and
(d) the matters mentioned in paragraphs (1)(b) to (g); and
(e) the effect of sections 1229A and 1229AB; and
(f) how the interest under section 1229A is to be calculated.
1229(4) A notice given under subsection (1) may also specify the matters mentioned in paragraphs (3)(e) and (f) and, if it does so, it is taken also to be a further notice given under subsection (3).
1229A(1) This section applies to a person:
(a) who receives a further notice given under subsection 1229(3); and
(b) who:
(i) is not receiving a social security payment; and
(ii) is not receiving a payment of pension or allowance under the Veterans’ Entitlements Act; and
(iii) is not receiving, and has not received, a payment of compensation (within the meaning of the Military Rehabilitation and Compensation Act) under that Act.
1229A(2) If:
(a) the person has not entered into an arrangement, on or before the final payment day, to pay the outstanding amount of the debt; and
(b) the Secretary has notified the person in writing that the person will be required to pay interest under this subsection;
the person is liable to pay interest:
(c) from and including the first day after the final payment day until the debt is wholly paid; and
(d) at the penalty interest rate;
on the outstanding amount from time to time.
1229A(2A) Under this section, a person is not liable to pay interest on a debt, or the proportion of a debt, that was incurred because of an administrative error made by the Commonwealth or an agent of the Commonwealth.
1229A(3) If:
(a) the person has entered into an arrangement to pay the outstanding amount of the debt; and
(b) the person has failed to make a particular payment in accordance with the arrangement; and
(c) the Secretary has notified the person in writing that the person will be required to pay interest under this subsection;
the person is liable to pay interest:
(d) if the failure occurs on or before the final payment day—from and including the first day after the final payment day until the debt is wholly paid; or
(e) if the failure occurs after the final payment day—from and including the day after the day in respect of which the last payment in respect of the debt was made until the debt is wholly paid;
at the penalty interest rate, on the outstanding amount from time to time.
1229A(4) For the purposes of subsections (2) and (3), the final payment day is the latest of the following days:
(a) the 90th day after the day on which the outstanding amount of the debt was due and payable;
(b) the 28th day after the date of the further notice given under subsection 1229(3);
(c) if a request for review has been made within 90 days after the receipt of a notice issued under subsection 1229(1)—90 days after the day on which an authorised review officer makes a decision in respect of the request.
1229A(5) The interest payable on the outstanding amount of a debt is a debt due to the Commonwealth.
1229A(6) If:
(a) interest is payable on the debt; and
(b) an amount is paid for the purpose of paying the debt and the interest;
the amount so paid is to be applied as follows:
(c) until the debt (excluding interest) is fully paid—in satisfaction of the amount of the debt that is due when the payment is made;
(d) after the debt (excluding interest) is fully paid—in satisfaction of the interest that had become payable on the debt before the debt was fully paid.
1229A(7) In this section:
arrangement means:
(a) an arrangement entered into with the Secretary under section 1234; or
(b) if such an arrangement has been amended—the arrangement as amended.
1229AA Determination that interest not to be payable
1229AA(1) The Secretary may determine that interest is not payable, or is not payable in respect of a particular period, by a person on the outstanding amount of a debt.
1229AA(1A) The Secretary may make a determination under this section in circumstances that include (but are not limited to) the Secretary being satisfied that the person has a reasonable excuse for:
(a) failing to enter into an arrangement under section 1234 to pay the outstanding amount of the debt; or
(b) having entered an arrangement, failing to make a payment in accordance with that arrangement.
1229AA(2) The determination may relate to a period before, or to a period that includes a period before, the making of a determination.
1229AA(3) The determination may be expressed to be subject to the person complying with one or more specified conditions.
1229AA(4) If the person has been notified under subsection 1229A(2) or (3) that he or she will be required to pay interest under that subsection, the Secretary must give a written notice of the determination to the person as soon as practicable after the determination is made.
1229AA(5) Contravention of subsection (4) does not invalidate the determination.
1229AA(6) If:
(a) the determination is expressed to be subject to the person complying with one or more specified conditions; and
(b) the person contravenes a condition or conditions without reasonable excuse;
the determination ceases to have effect from and including the day on which the contravention or the earliest of the contraventions occurred.
1229AA(7) The Secretary may cancel or vary the determination by written notice given to the person.
1229AB(1) When a person first becomes liable to pay interest under section 1229A in respect of the outstanding amount of a particular debt, the person is liable to pay an administrative charge of $50 in respect of the outstanding amount of that debt.
1229AB(2) An administrative charge payable by a person is a debt due to the Commonwealth.
1229B(1) The penalty interest rate is:
(a) 20% per year; or
(b) if a lower rate is determined under subsection (2)—that lower rate.
1229B(2) The Minister may from time to time, by notice in writing, determine a rate of less than 20% per year that is to be the penalty interest rate.
1229B(3) A notice under subsection (2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
1229C Guidelines on the penalty interest provisions
1229C(1) The Minister must, not later than one month after:
(a) the day on which the Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001 receives the Royal Assent; or
(b) 1 July 2001;
whichever is the later, and thereafter from time to time, by writing, determine guidelines for the operation of the provisions of this Act dealing with penalty interest.
1229C(2) A guideline determined under subsection (1) is a disallowable instrument.
1230 Debt from failure to comply with garnishee notice
1230(1) If:
(a) a person (in this section called the garnishee debtor) is given a notice under section 1233 in respect of a debt due by another person (in this section called the original debtor) under this Act; and
(b) the garnishee debtor fails to comply with the notice to the extent that he or she is capable of complying with it;
then the amount of the debt outstanding (worked out under subsection (2)) is recoverable from the garnishee debtor by the Commonwealth by means of:
(c) legal proceedings; or
(d) garnishee notice.
Note 1: for legal proceedings see section 1232.
Note 2: for garnishee notice see section 1233.
Note 3: If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
1230(2) The amount of the debt outstanding is the amount equal to:
(a) as much of the amount required by the notice under section 1233 to be paid by the garnishee debtor as the garnishee debtor was able to pay; or
(b) as much of the debt due by the original debtor at the time when the notice was given as remains due from time to time;
whichever is the lesser.
1230(3) If the Commonwealth recovers:
(a) the whole or part of the debt due by the garnishee debtor under subsection (1); or
(b) the whole or part of the debt due by the original debtor;
then:
(c) both debts are reduced by the amount that the Commonwealth has so recovered; and
(d) the amount specified in the notice under section 1233 is to be taken to be reduced by the amount so recovered.
1230(3A) This section applies to an amount in spite of any law of a State or Territory (however expressed) under which the amount is inalienable.
1230(4) In this section, person includes:
(a) the Commonwealth; and
(b) a State; and
(c) a Territory; and
(d) any authority of the Commonwealth or of a State or Territory.
1230A Debt from failure before 1 July 1991 to comply with garnishee notice under the 1947 Act
1230A(1) If:
(a) a person (in this section called the garnishee debtor) was given a notice under section 162 of the 1947 Act in respect of a debt due by another person (in this section called the original debtor) under the 1947 Act; and
(b) the garnishee debtor failed to comply with the notice before 1 July 1991 to the extent that he or she was capable of complying with it;
then the amount of the debt outstanding (worked out under subsection (2)) is recoverable from the garnishee debtor by the Commonwealth by means of:
(c) legal proceedings; or
(d) garnishee notice.
Note 1: for legal proceedings see section 1232.
Note 2: for garnishee notice see section 1233.
Note 3: If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A).
1230A(2) The amount of the debt outstanding is the amount equal to:
(a) as much of the amount required by the notice under section 162 of the 1947 Act to be paid by the garnishee debtor as the garnishee debtor was able to pay; or
(b) as much of the debt due by the original debtor at the time when the notice was given as remains due from time to time;
whichever is the lesser.
1230A(3) If the Commonwealth recovers:
(a) the whole or a part of the debt due by the garnishee debtor under subsection (1); or
(b) the whole or a part of the debt due by the original debtor;
then:
(c) both debts are reduced by the amount that the Commonwealth has so recovered; and
(d) the amount specified in the notice under section 162 of the 1947 Act is to be taken to be reduced by the amount so recovered.
1230A(4) A reference in subsection (3) to the Commonwealth recovering the whole or a part of a debt includes a reference to the Commonwealth recovering, under the 1947 Act, the whole or a part of the debt.
1230A(5) In this section:
person includes:
(a) the Commonwealth; and
(b) a State; and
(c) a Territory; and
(d) any authority of the Commonwealth, a State or Territory.
1230B Overseas application of provisions
Sections 1184F, 1184I, 1223, 1224AA, 1224AB, 1224D, 1227, 1227A, 1227B and 1228 extend to:
(a) acts, omissions, matters and things outside Australia, whether in a foreign country or not; and
(b) all persons irrespective of nationality or citizenship.
1230C Methods of recovery of debt
1230C(1) Subject to subsection (2), a debt due to the Commonwealth under this Act is recoverable by the Commonwealth by means of one or more of the following methods:
(a) if the person who owes the debt is receiving a social security payment—deductions from that person’s social security payment;
(b) if, in respect of the debt, section 1234A applies to another person who is receiving a social security payment—deductions from that other person’s social security payment;
(c) repayment by instalments under an arrangement entered into under section 1234;
(d) legal proceedings;
(e) garnishee notice.
1230C(2) Subject to subsection (3), a debt due to the Commonwealth under this Act is recoverable by means of a method mentioned in paragraph (1)(d) or (e) only if the Commonwealth:
(a) has first sought to recover the debt by means of a method mentioned in paragraph (1)(a), (b) or (c); and
(b) can establish that the person who owes the debt:
(i) has failed to enter into a reasonable arrangement to repay the debt; or
(ii) after having entered into such an arrangement, has failed to make a particular payment in accordance with the arrangement.
1230C(3) If the Secretary determines that the recovery of the debt by means of a method mentioned in paragraph (1)(a), (b) or (c) is not appropriate having regard to the circumstances of the case, paragraph (2)(a) does not apply in respect of the recovery of the debt.
1230C(4) A debt due to the Commonwealth under section 1184G is recoverable by the Commonwealth by means of legal proceedings.
1230C(5) This section does not prevent the recovery of an assurance of support debt by the enforcement at any time of a security given in connection with the relevant assurance of support. It does not matter:
(a) whether or not the enforcement involves legal proceedings; or
(b) whether the enforcement occurs before or after seeking to recover the debt by means of another method described in this section.
1231AA Application of sections dealing with deductions
Sections 1231, 1231A and 1234A provide for debt recovery by deductions in the following situations:
(a) sections 1231 and 1231A—debt recovery from person who incurred the debt;
(b) section 1234A—debt recovery by consent from person other than debtor.
1231 Deductions from debtor’s pension, benefit or allowance
1231(1) Subject to subsection (2), each of the following:
(a) a debt under this Act as in force immediately before 20 March 2000;
(aaa) a debt under the social security law;
(aa) a debt recoverable under section 1227A;
(b) an overpayment arising under an Act or scheme referred to in subsection 1228(2); or
(ba) a debt incurred under another Act (whether before or after the commencement of this paragraph) for failing to repay part or all of an overpayment referred to in paragraph (b);
(c) a debt under subsection 11(6) of the Data‑matching Program (Assistance and Tax) Act 1990;
(d) a debt or overpayment under the 1947 Act;
may be recovered by making deductions of amounts determined under subsection (1A):
(e) from any social security payments; or
(f) from any payments of arrears of social security payments; or
(g) partly from any social security payments and partly from any payments of arrears of social security payments.
1231(1A) The Secretary is to determine the amount of a deduction that is to be made from a particular payment, and may determine an amount that would reduce the payment to nil if:
(a) the deduction is to be made from a social security payment that is pension bonus or from a payment of arrears of social security payments; or
(b) the deduction is to be made from a social security payment that is not pension bonus and the person to whom the payment would, apart from the deduction, be made has consented to the amount of the deduction being an amount that would reduce the payment to nil.
1231(1AA) However, the Secretary must not make a determination that would reduce a payment to nil if the reduction to nil would result in the person being in severe financial hardship.
1231(1B) If the person concerned elects in writing that this subsection is to apply in relation to him or her, the Secretary may decide under subsection (1A) that the amount by which each payment of the person’s social security payment is to be reduced is such amount as results in reducing the payment to nil.
1231(2) Subject to subsections (2A) to (2E), the debt or overpayment must be deducted unless:
(a) the Secretary takes action under Part 5.4 (write off and waiver) in relation to the amount; or
(b) the amount is recovered by the Commonwealth under:
(i) another provision of this Chapter; or
(ii) Part 4 of the A New Tax System (Family Assistance) (Administration) Act 1999.
1231(2A) Subject to subsections (2C), (2D) and (2E), action under this section for the recovery of a debt or overpayment is not to be commenced after the end of the period of 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.
1231(2C) If:
(a) subsection (2A) applies so that action under this section for the recovery of a debt or overpayment must be commenced within a particular period; and
(b) within that period part of the amount owing is paid;
action under this section for the recovery of the balance of the debt or overpayment may be commenced within the period of 6 years starting on the day of payment.
1231(2D) If:
(a) subsection (2A) applies so that action under this section for the recovery of a debt or overpayment must be commenced within a particular period; and
(b) within that period, the person who owes the amount acknowledges that he or she owes it;
action under this section for the recovery of the debt or overpayment may be commenced within the period of 6 years starting on the day of acknowledgment.
1231(2E) If:
(a) subsection (2A) applies so that action under this section for the recovery of a debt or overpayment must be commenced within a particular period; and
(b) within that period:
(i) action is taken under this section or section 1232 (legal proceedings) or 1233 (garnishee notice) for the recovery of the debt or overpayment; or
(ii) a review of a file relating to action for the recovery of the debt or overpayment occurs; or
(iii) other internal Departmental activity relating to action for the recovery of the debt or overpayment occurs;
action under this section for the recovery of the debt or overpayment may be commenced within the period of 6 years after the end of the activity or action referred to in paragraph (b).
1231A(1) If:
(a) a person is liable to pay a debt under section 56 of the Farm Household Support Act 1992; and
(b) the person is receiving drought relief payment under that Act;
the debt is to be deducted from that payment or support in the following way:
Method statement
Step 1. Take the amount, decided under subsection (2), by which each instalment of that payment or support is to be reduced.
Step 2. Each instalment of that payment or support is to be reduced by that amount, until the sum of those amounts is equal to the debt.
1231A(2) The Secretary is to decide in each case the amount by which each instalment of the exceptional circumstances relief payment or the farm help income support is to be reduced, and may vary the amount from time to time.
1231A(3) The debt must be deducted in accordance with this section unless:
(a) the Secretary takes action under Part 5.4 (write off and waiver) in relation to the amount; or
(b) the amount is otherwise recovered by the Commonwealth under another provision of this Chapter.
1231A(4) A claim under this section for the recovery of a debt is not to be commenced after the end of the period of 6 years starting on the day on which the debt arose.
1232(1) If a debt is recoverable by the Commonwealth by means of legal proceedings under:
(a) Part 5.2 of this Act; or
(b) the 1947 Act; or
(c) the Social Security (Fares Allowance) Rules 1998;
the debt is recoverable by the Commonwealth in a court of competent jurdisdiction.
1232(2) Subject to subsections (4), (5) and (6), legal proceedings for the recovery of the debt are not to be commenced after the end of the period of 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.
1232(4) If:
(a) subsection (2) applies so that legal proceedings for the recovery of a debt must be commenced within a particular period; and
(b) within that period part of the amount owing is paid;
legal proceedings for the recovery of the balance of the debt may be commenced within the period of 6 years starting on the day of payment.
1232(5) If:
(a) subsection (2) applies so that legal proceedings for the recovery of a debt must be commenced within a particular period; and
(b) within that period, the person who owes the amount acknowledges that he or she owes it;
legal proceedings for the recovery of the debt may be commenced within the period of 6 years starting on the day of acknowledgment.
1232(6) If:
(a) subsection (2) applies so that action under this section for the recovery of a debt must be commenced within a particular period; and
(b) within that period:
(i) action is taken under this section or section 1231 (deductions) or 1233 (garnishee notice) for the recovery of the debt; or
(ii) a review of a file relating to action for the recovery of the debt occurs; or
(iii) other internal Departmental activity relating to action for the recovery of the debt occurs;
action under this section for the recovery of the debt may be commenced within the period of 6 years after the end of the activity or action referred to in paragraph (b).
1233(1) If a debt is recoverable from a person (in this section called the debtor) by the Commonwealth under section 1227A or 1230C of this Act, under the 1947 Act or under the Social Security (Fares Allowance) Rules 1998, the Secretary may by written notice given to another person:
(a) by whom any money is due or accruing, or may become due, to the debtor; or
(b) who holds or may subsequently hold money for or on account of the debtor; or
(c) who holds or may subsequently hold money on account of some other person for payment to the debtor; or
(d) who has authority from some other person to pay money to the debtor;
require the person to whom the notice is given to pay the Commonwealth:
(e) an amount specified in the notice, not exceeding the amount of the debt or the amount of the money referred to in the preceding paragraph that is applicable; or
(f) such amount as is specified in the notice out of each payment that the person becomes liable from time to time to make to the debtor until that debt is satisfied; or
(g) such percentage as is specified in the notice of each payment that the person becomes liable from time to time to make to the debtor until that debt is satisfied.
1233(2) The time for making a payment in compliance with a notice under subsection (1) is such time as is specified in the notice, not being a time before the money concerned becomes due or is held or before the end of the period of 14 days after the notice is given.
1233(3) A person who fails to comply with a notice under subsection (1) is guilty of an offence.
Penalty: Imprisonment for 12 months.
Note 1: Subsection 4B(2) of the Crimes Act 1914 allows a court that convicts an individual of an offence to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine that a court can impose on the individual is worked out by multiplying the maximum term of imprisonment (in months) by 5, and then multiplying the resulting number by the amount of a penalty unit. The amount of a penalty unit is stated in section 4AA of that Act.
Note 1A: If a body corporate is convicted of the offence, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a maximum fine of an amount that is 5 times the maximum fine that could be imposed on an individual convicted of the same offence.
Note 2: see also section 1230 (consequence of failure to comply with notice under this section).
1233(3A) Subsection (3) applies only to the extent to which the person is capable of complying with the notice.
1233(3B) Strict liability applies to the element of an offence against subsection (3) that a notice is a notice under subsection (1).
1233(4) If the Secretary gives a notice to a person under subsection (1), the Secretary must give a copy of the notice to the debtor.
1233(5) A person who makes a payment to the Commonwealth in compliance with a notice under subsection (1) is to be taken to have made the payment under the authority of the debtor and of any other person concerned.
1233(6) If:
(a) a notice is given to a person under subsection (1) in respect of a debt due; and
(b) an amount is paid by another person in reduction or in satisfaction of the debt;
the Secretary must notify the first‑mentioned person accordingly, and the amount specified in the notice is to be taken to be reduced by the amount so paid.
1233(7) If, apart from this subsection, money is not due or repayable on demand to a person unless a condition is fulfilled, the money is to be taken, for the purposes of this section, to be due or repayable on demand, as the case may be, even though the condition has not been fulfilled.
1233(7A) Subject to subsections (7C), (7D) and (7E), action under this section for the recovery of a debt is not to be commenced after the end of the period of 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.
1233(7C) If:
(a) subsection (7A) applies so that action under this section for the recovery of a debt must be commenced within a particular period; and
(b) within that period part of the amount owing is paid;
action under this section for the recovery of the balance of the debt may be commenced within the period of 6 years starting on the day of payment.
1233(7D) If:
(a) subsection (7A) applies so that action under this section for the recovery of a debt must be commenced within a particular period; and
(b) within that period, the person who owes the amount acknowledges that he or she owes it;
action under this section for the recovery of the debt may be commmenced within the period of 6 years starting on the day of acknowledgment.
1233(7E) If:
(a) subsection (7A) applies so that action under this section for the recovery of a debt must be commenced within a particular period; and
(b) within that period:
(i) action is taken under this section or section 1231 (deductions) or 1232 (legal proceedings) for the recovery of the debt; or
(ii) a review of a file relating to action for the recovery of the debt occurs; or
(iii) other internal Departmental activity relating to action for the recovery of the debt occurs;
action under this section for the recovery of the debt may be commenced within the period of 6 years after the end of the activity or action referred to in paragraph (b).
1233(7F) This section applies to money in spite of any law of a State or Territory (however expressed) under which the amount is inalienable.
1233(8) In this section, person includes:
(a) the Commonwealth; and
(b) a State; and
(c) a Territory; and
(d) any authority of the Commonwealth or of a State or Territory.
1234 Arrangement for payment of debt
1234(1) The Secretary may, on behalf of the Commonwealth, enter into an arrangement with a person under which the person is to pay a debt, owed by the person to the Commonwealth, or the outstanding amount of such a debt, in a way set out in the arrangement.
1234(2) An arrangement entered into under subsection (1) has effect, or is taken to have had effect, on and after the day specified in the arrangement as the day on which the arrangement commences (whether that day is the day on which the arrangement is entered into or an earlier or later day).
1234(3) If an arrangement entered into under subsection (1) does not specify a day as mentioned in subsection (2), it has effect on and after the day on which it is entered into.
1234(4) The Secretary may terminate or alter an arrangement entered into under subsection (1):
(a) at the debtor’s request; or
(b) after giving 28 days’ notice to the debtor of the proposed termination or alteration; or
(c) without notice, if the Secretary is satisfied that the person has failed to disclose material information about his or her true capacity to repay the debt.
1234(5) In subsection (1):
debt means:
(a) a debt recoverable by the Commonwealth under Part 5.2; or
(b) a debt under the 1947 Act.
1234AA Recovery of amounts from financial institutions
1234AA(1) If:
(a) a social security payment or social security payments are made to a financial institution for the credit of an account kept with the institution; and
(b) the Secretary is satisfied that the payment or payments were intended to be made for the benefit of someone who was not the person or one of the persons in whose name or names the account was kept;
the Secretary may give a written notice to the institution setting out the matters mentioned in paragraphs (a) and (b) and requiring the institution to pay to the Commonwealth, within a period (being a reasonable period) stated in the notice, the lesser of the following amounts:
(c) an amount specified in the notice, being the amount, or the sum of the amounts, of the social security payment or social security payments;
(d) the amount standing to the credit of the account when the notice is received by the institution.
1234AA(2) If:
(a) a social security payment or social security payments that are intended for the benefit of a person are made to a financial institution for the credit of an account that was kept with the institution by the person or by the person and one or more other persons; and
(b) the person died before the payment or payments were made;
the Secretary may give a written notice to the institution setting out the matters mentioned in paragraphs (a) and (b) and requiring the institution to pay to the Commonwealth, within a period (being a reasonable period) stated in the notice, the lesser of the following amounts:
(c) an amount specified in the notice, being the amount, or the sum of the amounts, of the social security payment or social security payments;
(d) the amount standing to the credit of the account when the notice is received by the institution.
1234AA(2A)As soon as possible after issuing a notice under subsection (2), the Secretary must inform the deceased estate in writing of:
(a) the amount sought to be recovered from the deceased person’s account; and
(b) the reasons for the recovery action.
1234AA(3) A financial institution must comply with a notice given to it under subsection (1) or (2).
Penalty: 300 penalty units.
1234AA(4) It is a defence to a prosecution of a financial institution for failing to comply with a notice given to it under subsection (1) or (2) if the financial institution proves that it was incapable of complying with the notice.
1234AA(5) If a notice is given to a financial institution under subsection (1) (payment made to wrong account) or under subsection (2) (death of person in whose name the account was kept) in respect of a social security payment or social security payments, any amount recovered by the Commonwealth from the institution in respect of the debt reduces any debt owed to the Commonwealth by any other person in respect of the social security payment or social security payments.
1234A Deductions by consent from social security payment of person who is not a debtor
1234A(1) If:
(a) a person (in this section called the debtor) incurs a debt under this Act, the Student Assistance Act 1973 as in force before 1 July 1998, the Data‑matching Program (Assistance and Tax) Act 1990, the 1947 Act, the A New Tax System (Family Assistance) (Administration) Act 1999, the Farm Household Support Act 1992 or the Social Security (Fares Allowance) Rules 1998 or incurred a debt under Part 8 of the Student Assistance Act 1973 as in force before 1 July 1998; and
(b) another person (in this section called the consenting person) is receiving, or is about to receive, a social security payment under this Act; and
(c) for the purpose of the recovery of the debt, the consenting person consents to the deduction of an amount from the consenting person’s social security payment;
the Secretary may deduct the amount from the consenting person’s social security payment.
1234A(2) The debtor’s debt is reduced by an amount equal to the amount deducted from the consenting person’s social security payment.
1234A(3) The consenting person may revoke the consent at any time.
Part 5.4—Non‑recovery of debts
In this Part, debt means:
(a) a debt recoverable by the Commonwealth under Part 5.2; or
(b) a debt under the 1947 Act; or
(c) a debt due to the Commonwealth under a scheduled international social security agreement; or
(d) a debt under the Social Security (Fares Allowance) Rules 1998.
Note: Overpayments under section 1228 are not debts for the purposes of Part 5.2.
1236 Secretary may write off debt
1236(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c) the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) it is not cost effective for the Commonwealth to take action to recover the debt.
1236(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a) the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(aa) the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor’s estate to repay the debt.
1236(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:
(a) deductions from the debtor’s social security payment; or
(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or
(c) setting off under section 84A of that Act;
the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.
1236(2) A decision made under subsection (1) takes effect:
(a) if no day is specified in the decision—on the day on which the decision is made; or
(b) if a day is specified in the decision—on the day so specified (whether that day is before, after or on the day on which the decision is made).
1236(3) Nothing in this section prevents anything being done at any time to recover a debt that has been written off under this section.
1236A(1) Sections 1237, 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC, 1237AAD and 1237AAE apply to:
(a) debts arising on or after 1 January 1996; and
(b) the amounts of debts arising before 1 January 1996 that were outstanding at the start of that day.
1236A(2) Section 1237AB applies to all debts, whenever incurred, owed to the Commonwealth and arising under this Act or under the Social Security Act 1947.
1237 Power to waive Commonwealth’s right to recover debt
Secretary’s limited power to waive
1237(1) On behalf of the Commonwealth, the Secretary may waive the Commonwealth’s right to recover the whole or a part of a debt from a debtor only in the circumstances described in section 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD and, if the debt is an assurance of support debt, subject to section 1237AAE.
When waiver takes effect
1237(2) A waiver takes effect:
(a) on the day specified in the waiver (whether that day is before, after or on the day on which the decision to waive is made); or
(b) if the waiver does not specify when it takes effect—on the day on which the decision to waive is made.
Note: If the Secretary waives the Commonwealth’s right to recover all or part of a debt, this is a permanent bar to recovery of the debt or part of the debt—the debt or part of the debt effectively ceases to exist.
1237A Waiver of debt arising from error
Administrative error
1237A(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
1237A(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
Underestimating value of property
1237A(2) If:
(a) a debt arose because the debtor or the debtor’s partner underestimated the value of particular property of the debtor or partner; and
(b) the estimate was made in good faith; and
(c) the value of the property was not able to be easily determined when the estimate was made;
the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate.
Proportion of a debt
1237A(3) For the purposes of this section, a proportion of a debt may be 100% of the debt.
1237AA Waiver of debt relating to an offence
1237AA(1) If:
(a) a debtor has been convicted of an offence that gave rise to a proportion of a debt; and
(b) the court indicated in sentencing the debtor that it imposed a longer custodial sentence on the debtor because he or she was unable or unwilling to pay the debt;
the Secretary must waive the right to recover the proportion of the debt that arose in connection with the offence.
1237AA(2) For the purposes of this section, a proportion of a debt may be 100% of the debt.
1237AAA(1) The Secretary must waive the right to recover a debt if:
(a) the debt is, or is likely to be, less than $200; and
(b) it is not cost effective for the Commonwealth to take action to recover the debt.
1237AAA(2) Subsection (1) does not apply if the debt is at least $50 and could be recovered by deductions under section 1231 from a social security payment of the debtor.
Note: Section 1237AAE limits the circumstances in which an assurance of support debt may be waived under this section, and the amount of the debt that may be waived.
1237AAB Waiver in relation to settlements
Settlement of civil action
1237AAB(1) If the Commonwealth has agreed to settle a civil action against a debtor for recovery of a debt for less than the full amount of the debt, the Secretary must waive the right to recover the difference between the debt and the amount that is the subject of the settlement.
Settlement of proceedings before the AAT
1237AAB(2) If the Secretary has agreed to settle proceedings before the AAT relating to recovery of a debt on the basis that the debtor will pay less than the full amount of the debt, the Secretary must waive the right to recover the difference between the debt and the amount that is the subject of the settlement.
Waiver where at least 80% of debt recovered and debtor cannot pay more
1237AAB(3) If:
(a) the Commonwealth has recovered at least 80% of the original value of a debt from a debtor; and
(b) the Commonwealth and the debtor agree that the recovery is in full satisfaction for the whole of the debt; and
(c) the debtor cannot repay a greater proportion of the debt;
the Secretary must waive the remaining 20% or less of the value of the original debt.
Agreement for part‑payment in satisfaction of outstanding debt
1237AAB(4) If the Secretary and a debtor agree that the debtor’s debt will be fully satisfied if the debtor pays the Commonwealth an agreed amount less than the amount of the debt outstanding at the time of the agreement (the unpaid amount), the Secretary must waive the right to recover the difference between the unpaid amount and the agreed amount.
Limits on agreement to accept part‑payment in satisfaction of outstanding debt
1237AAB(5) The Secretary must not make an agreement described in subsection (4) unless the Secretary is satisfied that the agreed amount is at least the present value of the unpaid amount if it is repaid in instalments of amounts, and at times, determined by the Secretary.
Formula for working out present value of unpaid amount
1237AAB(6) For the purposes of subsection (5), the present value of the unpaid amount is the amount worked out in accordance with the following formula:
where:
annual repayment is the amount of the debt that the Secretary believes would be recovered under Part 5.3 in a year if subsection (4) did not apply in relation to the debt.
interest is the annual rate of interest specified by the Minister in a written notice.
repayment period is the number of years needed to repay the unpaid amount if repayments equal to the annual repayment were made each year.
Example:
Facts: Bill owed a debt of $35,000 to the Commonwealth. After repaying $5,000 (leaving an unpaid amount of $30,000), he offers to make an immediate payment of a further $20,000 in full satisfaction of the debt. The Secretary is satisfied that Bill cannot repay a larger amount of the debt than this. The Secretary believes that $1,500 of the debt would be recovered under Part 5.3 in a year, at which rate it would take 20 years to repay the debt. The Minister has specified an interest rate of 5% a year for the purposes of subsection (6).
Application: The Secretary can accept Bill’s offer and make an agreement with him as described in subsection (4), because the $20,000 is more than the present value of $30,000 repaid over 20 years at a 5% interest rate (which is
If the Secretary makes the agreement, the Secretary must waive $10,000 of the debt (the difference between the unpaid amount of $30,000 and the agreed amount of $20,000).
Notice is a disallowable instrument
1237AAB(7) A notice described in the definition of interest in subsection (6) is a disallowable instrument.
Note: Section 1237AAE limits the circumstances in which an assurance of support debt may be waived under this section, and the amount of the debt that may be waived.
1237AAC Waiver where debtor or debtor’s partner would have been entitled to an allowance
Waiver if there was an unclaimed entitlement to family payment or family allowance
1237AAC(1) If:
(a) a debt arises from overpayments made to the debtor; and
(b) the debtor or the debtor’s partner does not claim family payment or family allowance for the period when the overpayments were made; and
(c) an amount of family payment or family allowance would have been payable for the period when the overpayments were made if the debtor or the debtor’s partner had lodged a claim;
the Secretary must waive the right to recover the debt to the extent set out in subsection (2).
1237AAC(1A) If:
(a) a debt arises from overpayments to a youth allowance recipient (the debtor); and
(b) the debtor would have been an FA child of another person for the period when the overpayments were made if the debtor had not been a youth allowance recipient; and
(c) an amount of family allowance would have been payable to the other person in respect of the debtor for the period when the overpayments were made if:
(i) the debtor had been an FA child of the other person for that period; and
(ii) the other person had lodged a claim;
the Secretary must waive the debt to the extent set out in subsection (2A).
Amount of debt Secretary must waive
1237AAC(2) The Secretary must waive under subsection (1) the right to recover the amount of debt equal to the amount of family payment or family allowance that would have been payable to the debtor or the debtor’s partner in the 3‑year period ending on the day the overpayment is stopped if:
(a) the overpayments had not been made to the debtor; and
(b) the debtor or the debtor’s partner had lodged a claim for the payment.
1237AAC(2A) The Secretary must waive under subsection (1A) the right to recover the amount of debt equal to the amount of family allowance that would have been payable to the other person in the 3‑year period ending on the day on which the overpayment is stopped if:
(a) the debtor had been an FA child of the person; and
(b) the other person had lodged a claim for family allowance.
Reference to amount of family allowance is a reference to minimum rate plus guardian allowance and large family supplement
1237AAC(3) For the purposes of subsections (2) and (2A):
(a) an amount of family allowance is the minimum standard family allowance rate plus any guardian allowance that is payable plus any large family supplement that is payable; and
(b) an amount of family allowance does not include multiple birth allowance.
Waiver if there was an unclaimed entitlement to parenting allowance or parenting payment
1237AAC(4) If:
(a) a debt arises from overpayments to the debtor; and
(b) the Secretary is satisfied that the overpayments did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or false representation; or
(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and
(c) the debtor or the debtor’s partner did not claim parenting allowance or parenting payment for the period (the overpayment period) when the overpayments were made; and
(d) an amount of parenting allowance or parenting payment would have been payable for that period if the debtor or the debtor’s partner had lodged a claim;
the Secretary must waive the right to recover the debt to the extent set out in subsection (5).
Waiver of amount equal to notional entitlement to parenting allowance or parenting payment (as the case requires)
1237AAC(5) The Secretary must waive under subsection (4) the right to recover the amount of debt equal to the amount of parenting allowance or parenting payment (as the case requires) that would have been payable to the debtor or the debtor’s partner during so much of the overpayment period as was not earlier than 3 years before the day on which the overpayment is stopped if:
(a) the overpayments had not been made to the debtor; and
(b) the debtor or the debtor’s partner had lodged a claim for the allowance or payment (as the case requires).
Calculating the amount equal to notional entitlement to parenting allowance
1237AAC(6) For the purposes of working out the amount of parenting allowance or parenting payment that would have been payable to the debtor or the debtor’s partner, the rate of parenting allowance or parenting payment for the debtor or the debtor’s partner:
(a) if the Secretary is satisfied that the rate would have been greater than the maximum basic component if parenting allowance or parenting payment had been claimed—is taken to have been that greater rate; or
(b) in any other case—is taken not to have exceeded the maximum basic component of parenting allowance specified at the relevant time in the Parenting Allowance Rate Calculator or the PP (Partnered) Rate Calculator (as the case requires).
1237AAD Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.
1237AAE Extra rules for waiver of assurance of support debts
1237AAE(1) This section affects waiver under some other provisions of this Part of an assurance of support debt in connection with an assurance of support given by one or more persons (the assurers), by setting out extra rules limiting the circumstances in which waiver may occur and the extent of waiver.
1237AAE(2) The Secretary may waive under section 1237AAD the right to recover all or part of the debt only if the Secretary is satisfied that the waiver is justified on grounds other than one or more of the assurers being unaware of the effect of section 1061ZZGG, or of regulations made under the Migration Act 1958, in connection with the assurance.
1237AAE(3) If the Secretary has been given a security that meets the requirements of subsection 1061ZZGD(3) in connection with the assurance, the Secretary may waive under section 1237AAA, 1237AAB or 1237AAD the right to recover an amount of the debt that is not greater than the difference (if any) between:
(a) the debt; and
(b) the amount that can be:
(i) obtained by enforcing the security; and
(ii) applied to reduce the debt.
Note: An amount that can be obtained by enforcing the security cannot be applied to reduce the debt if it is applied to reduce another assurance of support debt connected with the assurance of support.
1237AAE(4) If 2 or more assurers are jointly and severally liable for the debt, the Secretary may waive under section 1237AAD the right to recover an amount of the debt that is not greater than the amount (which may be a nil amount) of the debt that the Secretary is satisfied cannot be recovered from any of the assurers.
1237AAE(5) If subsections (3) and (4) apply, the Secretary may waive under section 1237AAD the right to recover an amount of the debt that is not greater than the amount (if any) of the debt that may be waived taking into account both of those subsections.
1237AB Secretary may waive debts of a particular class
1237AB(1) The Secretary may, on behalf of the Commonwealth, decide to waive the Commonwealth’s right to recover debts arising under or as a result of this Act that are included in a class of debts specified by the Minister by notice published in the Gazette.
1237AB(2) A decision under subsection (1) takes effect:
(a) if no day is specified in the decision—on the day on which the decision is made; or
(b) if a day is specified in the decision—on the day so specified (whether that day is before, after or on the day on which the decision is made).
1237AB(3) A notice referred to in subsection (1):
(a) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901; and
(b) is deemed not to specify a class of debts for the purposes of that subsection before the expiration of the time within which the notice may be disallowed by each House of the Parliament.