Chapter 3—General provisions relating to payability and rates
Part 3.6—Benefit Rate Calculator B
1068 Rate of widow allowance, jobseeker payment (18 or over), partner allowance, and mature age allowance under Part 2.12B
(1) The rate of:
(a) jobseeker payment; or
(c) partner allowance; or
(ca) mature age allowance under Part 2.12B; or
(d) widow allowance;
is to be calculated in accordance with the Rate Calculator at the end of this section.
Note: Module A of the Rate Calculator establishes the overall rate calculation process and the remaining Modules provide for the calculation of the component amounts used in the overall rate calculation.
(2) If:
(a) a person has a relationship with another person, whether of the same sex or a different sex (other person); and
(b) the relationship between them is a de facto relationship in the Secretary’s opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A));
(c) the other person is under the age of consent applicable in the State or Territory in which the person is living;
the person’s benefit rate is not to exceed the rate at which it would be payable to the person if the other person were the person’s partner.
Note: This provision has the effect of taking into account the ordinary income and assets of the partner in applying the ordinary income test and assets test respectively.
Rate of benefit limited for certain armed services widows
(3) If:
(a) an armed services widow is receiving a pension under Part II or IV of the Veterans’ Entitlements Act at a rate determined under or by reference to subsection 30(1) of that Act; and
(b) the widow has been receiving a payment referred to in paragraph (a) continuously since before 1 November 1986; and
(c) before 1 November 1986 the widow was also receiving a social security benefit;
the rate of benefit payable to the widow is not to be increased:
(d) if, immediately before 1 November 1986, the widow was receiving a social security benefit at a rate less than $124.90 per fortnight—to a rate greater than $124.90 per fortnight; or
(e) if, immediately before 1 November 1986, the widow was receiving a social security benefit at a rate equal to or greater than $124.90 per fortnight—to a rate greater than the rate at which it was payable immediately before 1 November 1986.
Note 1: A benefit is not payable to a widow who starts to get a payment referred to in subsection (3) after 1 November 1986—see sections 408CF, 614, 660YCF and 771HI.
Note 2: For armed services widow see subsection 4(1).
Benefit Rate Calculator B
Module A—Overall rate calculation process
Method of calculating rate
1068‑A1 The rate of benefit is a daily rate. That rate is worked out by dividing the fortnightly rate calculated according to this Rate Calculator by 14.
Method statement
Step 1. Work out the person’s maximum basic rate using MODULE B below.
Step 1A. Work out the pension supplement amount (if any) using Module BA below.
Step 1B. Work out the energy supplement (if any) using Module C below.
Step 2. Work out the amount per fortnight (if any) of pharmaceutical allowance using MODULE D below.
Step 3. Work out the applicable amount per fortnight (if any) for rent assistance in accordance with paragraph 1070A(a).
Step 4. Add up the amounts obtained in Steps 1 to 4: the result is called the maximum payment rate.
Step 5. Apply the income test using MODULE G below to work out the income reduction.
Step 6. Take the income reduction away from the maximum payment rate: the result is called the provisional fortnightly payment rate.
Step 7. The rate of benefit is the amount obtained by:
(a) subtracting from the provisional fortnightly payment rate any special employment advance deduction (see Part 3.16B); and
(b) if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and
(c) except where the person is a CDEP Scheme participant in respect of the whole or a part of the period for which the rate of benefit is being worked out, adding any amount payable by way of remote area allowance (see Module J).
Note 1: If a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210.
Note 2: In some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.
Note 3: An amount of remote area allowance is to be added under paragraph (c) of step 7 only if the conditions in point 1068‑J1 are satisfied.
Module B—Maximum basic rate
Maximum basic rate
1068‑B1 The maximum basic rate of a person other than a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is worked out using Table B. Work out the person’s family situation and whether the person has a dependent child or not. The maximum basic rate is the corresponding amount in the rate column. The maximum basic rate of a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is nil (see sections 408CG, 614A, 660YCH and 771HK).
Table B—Maximum basic rates |
Column 1 | Column 2 | Column 3 Rate |
Item | Person’s family situation | Column 3A Person with dependent child | Column 3B Person without dependent child |
4A. | Not member of couple and person: (a) receives jobseeker payment or widow allowance; and (b) has not turned 60 | $326.10 | $301.50 |
4B. | Not member of couple and person: (a) receives jobseeker payment or widow allowance; and (b) has turned 60; and (c) has not been receiving one, or a combination, of social security pension, social security benefit or job search allowance or service pension, income support supplement or veteran payment for a continuous period of at least 9 months | $326.10 | $301.50 |
5. | Not member of couple and person: (a) has turned 60; and (b) has been receiving one, or a combination, of social security pension, social security benefit or job search allowance or service pension or income support supplement for a continuous period of at least 9 months | $326.10 | $326.10 |
7. | Partnered | $272.00 | $272.00 |
9. | Member of illness separated couple | $326.10 | $326.10 |
11. | Partnered (partner in gaol) | $326.10 | $326.10 |
Note 1: For member of couple, partnered, illness separated couple and partnered (partner in gaol) see section 4.
Note 2: For dependent child see section 5.
Note 5: The rates in column 3 are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).
Note 7: Some dependent children will not be taken into account in working out a person’s maximum basic rate (see point 1068‑B2).
Note 8: Some recipients of jobseeker payment have a maximum basic rate based on the maximum basic rate under the Pension PP (Single) Rate Calculator (see point 1068‑B5).
Certain children who are not young persons are to be treated as dependent children
1068‑B1A If:
(a) a person is not a member of a couple; and
(b) the person has at least one natural child, adopted child or relationship child who has turned 16 but has not turned 18; and
(c) either:
(i) a social security benefit is payable to the child; or
(ii) if the person is receiving jobseeker payment—a disability support pension is payable to the child; and
(d) the child is substantially dependent on the person;
the person’s maximum basic rate is worked out as if the person had a dependent child.
Certain children treated as dependent children if in recipient’s care for at least minimum period
1068‑B1B The maximum basic rate for a person receiving jobseeker payment is worked out as if the person had a dependent child if:
(a) either:
(i) the person is legally responsible (whether alone or jointly with another person) for the day‑to‑day care, welfare and development of a child under 16; or
(ii) under a family law order, registered parenting plan or parenting plan that is in force, a child under 16 is supposed to live or spend time with the person; and
(b) the child is in the person’s care for at least 14% of:
(i) the instalment period in relation to which the maximum basic rate is being worked out; or
(ii) if the Secretary, under point 1068‑B1C, determines another period for the person for the purposes of this subparagraph—that other period; and
(c) none of subsections 5(3), (6) and (7) prevents the child from being a dependent child of the person; and
(d) the person is not a member of a couple.
Note: For family law order, registered parenting plan and parenting plan see subsection 23(1).
1068‑B1C The Secretary may, in writing, determine a period of either 14 days or 28 days for the purposes of subparagraph 1068‑B1B(b)(ii). In making the determination, the Secretary must have regard to the guidelines (if any) determined under point 1068‑B1E.
1068‑B1D A determination made under point 1068‑B1C is not a legislative instrument.
1068‑B1E The Secretary may, by legislative instrument, determine guidelines to be complied with when making a determination under point 1068‑B1C.
Certain dependent children to be disregarded
1068‑B2 For the purposes of items 4A and 4B of Table B in point 1068‑B1, if:
(a) a person has a dependent child; and
(b) the child has turned 18; and
(c) the child is a prescribed student child;
the child is to be disregarded in working out the person’s maximum basic rate under that point.
Note: For prescribed student child see section 5.
1068‑B3 On 20 March 1994 the amounts specified in items 3, 4, 4A and 4B in column 3B of Table B in point 1068‑B1 are increased by $6.00. The increase is to be made after the indexation of the amounts on that day has occurred.
1068‑B4 The amounts in items 3, 4, 4A and 4B in columns 3A and 3B of Table B in point 1068‑B1 are to be indexed on 20 September 1993 and 20 March 1994 under section 1192 as if Part 2 of the Social Security Amendment Act (No. 2) 1993 had commenced on 1 September 1993.
Maximum basic rate for certain jobseeker payment recipients
1068‑B5 Despite point 1068‑B1, if a person:
(a) is not a member of a couple; and
(b) receives jobseeker payment; and
(c) is not required to satisfy the activity test because of a determination in relation to the person under subsection 602C(3) or (3A);
the person’s maximum basic rate is the amount worked out as follows:
where:
pension PP (Single) maximum basic amount is the sum of:
(a) the amount that would have been the person’s maximum basic rate under Module B of the Pension PP (Single) Rate Calculator if the person was receiving parenting payment; and
(b) the amount that would have been the person’s pension supplement under Module BA of the Pension PP (Single) Rate Calculator if the person was receiving parenting payment.
Note: A person’s maximum basic rate under Module B of the Pension PP (Single) Rate Calculator is indexed 6 monthly in line with increases in Male Total Average Weekly Earnings (see section 1195).
Module BA—Pension supplement
Pension supplement
1068‑BA1 A pension supplement amount is to be added to the person’s maximum basic rate if the person is residing in Australia, has reached pension age and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
1068‑BA2 The person’s pension supplement amount is:
(a) if an election by the person under subsection 1061VA(1) is in force—the amount worked out under point 1068‑BA4; and
(b) otherwise—the amount worked out under point 1068‑BA3.
Amount if no election in force
1068‑BA3 The person’s pension supplement amount is the amount worked out by:
(a) applying the applicable percentage in the following table to the combined couple rate of pension supplement; and
(b) dividing the result by 26; and
(c) if:
(i) the person is not partnered; and
(ii) the amount resulting from paragraph (b) is not a multiple of 10 cents;
rounding the amount up or down to the nearest multiple of 10 cents (rounding up if the amount is not a multiple of 10 cents but is a multiple of 5 cents).
Item | Person’s family situation | Use this % |
1 | Not member of couple | 66.33% |
2 | Partnered | 50% |
3 | Member of illness separated couple | 66.33% |
4 | Member of respite care couple | 66.33% |
5 | Partnered (partner in gaol) | 66.33% |
Note: For combined couple rate of pension supplement, see subsection 20A(1).
Amount if election in force
1068‑BA4 The person’s pension supplement amount is the amount worked out as follows:
(a) work out the amount for the person under point 1068‑BA3 as if the election were not in force;
(b) from that amount, subtract 1/26 of the person’s minimum pension supplement amount.
Module C—Energy supplement
1068‑C1 An energy supplement is to be added to the person’s (the recipient’s) maximum basic rate if the recipient is residing in Australia and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
However, this Module does not apply if quarterly energy supplement is payable to the recipient.
Note: Section 918 may affect the addition of the energy supplement.
Recipient has reached pension age
1068‑C2 If the recipient has reached pension age and is not covered by point 1068‑B5, the recipient’s energy supplement is the amount worked out using the following table:
Energy supplement |
Item | Recipient’s family situation | Amount of energy supplement |
1 | Not a member of a couple | $14.10 |
2 | Partnered | $10.60 |
3 | Member of an illness separated couple | $14.10 |
4 | Member of a respite care couple | $14.10 |
5 | Partnered (partner in gaol) | $14.10 |
Recipient has not reached pension age
1068‑C3 If the recipient has not reached pension age and is not covered by point 1068‑B5, the recipient’s energy supplement is the amount worked out using the following table:
Energy supplement |
Item | Recipient’s family situation for maximum basic rate | Amount of energy supplement |
1 | If the recipient’s maximum basic rate is worked out under column 3A of item 4A, 4B, 5, 9 or 11 of the table in point 1068‑B1 | $9.50 |
2 | If the recipient’s maximum basic rate is worked out under column 3A of item 7 of the table in point 1068‑B1 | $7.90 |
3 | If the recipient’s maximum basic rate is worked out under column 3B of item 4A or 4B of the table in point 1068‑B1 | $8.80 |
4 | If the recipient’s maximum basic rate is worked out under column 3B of item 5, 9 or 11 of the table in point 1068‑B1 | $9.50 |
5 | If the recipient’s maximum basic rate is worked out under column 3B of item 7 of the table in point 1068‑B1 | $7.90 |
Recipient covered by point 1068‑B5
1068‑C4 If the recipient is covered by point 1068‑B5, the recipient’s energy supplement is $12.00.
Module D—Pharmaceutical allowance
Qualification for pharmaceutical allowance
1068‑D1 Subject to points 1068‑D3A, 1068‑D4, 1068‑D5, 1068‑D6 and 1068‑D8, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate if:
(c) one of the following subparagraphs applies:
(ia) the person is receiving mature age allowance under Part 2.12B;
(ii) the person is receiving widow allowance, jobseeker payment or partner allowance and point 1068‑D2, 1068‑D2A, 1068‑D2B or 1068‑D3 applies to the person.
Incapacity for work—jobseeker payment
1068‑D2 This point applies to a person if the person is receiving jobseeker payment and the person is, under Subdivision BA of Division 1 of Part 2.12, exempt from the activity test.
Incapacity for work—widow allowance and partner allowance recipients
1068‑D2A This point applies to a person who is receiving widow allowance or partner allowance if the person is incapacitated for work.
Jobseeker payment recipients who have a partial capacity to work or are principal carers
1068‑D2B This point applies to a person who is receiving jobseeker payment if the person:
(a) has a partial capacity to work; or
(b) is the principal carer of at least one child and is not a member of a couple.
Note 1: For partial capacity to work see section 16B.
Note 2: For principal carer see subsections 5(15) to (24).
Long term recipients over 60
1068‑D3 This point applies to a person if the person:
(a) has turned 60; and
(b) has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph).
Note 1: For income support payment see subsection 23(1).
Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.
No pharmaceutical allowance if person receiving pension supplement
1068‑D3A Pharmaceutical allowance is not to be added to a person’s maximum basic rate if a pension supplement amount has been added to that rate.
No pharmaceutical allowance if person receiving certain supplements under other Acts
1068‑D4 Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving:
(a) veterans supplement under section 118A of the Veterans’ Entitlements Act; or
(b) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; or
(c) pharmaceutical supplement under Part 3A of the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006; or
(d) pharmaceutical supplement under Part 4 of the Treatment Benefits (Special Access) Act 2019.
No pharmaceutical allowance if partner receiving certain supplements under other Acts
1068‑D5 Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:
(a) the person is a member of a couple; and
(b) the person’s partner is receiving:
(i) veterans supplement under section 118A of the Veterans’ Entitlements Act; or
(ii) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; or
(iii) pharmaceutical supplement under Part 3A of the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006; or
(iv) pharmaceutical supplement under Part 4 of the Treatment Benefits (Special Access) Act 2019; and
(c) the person’s partner is not receiving a service pension or a veteran payment.
No pharmaceutical allowance before advance payment period ends
1068‑D6 Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:
(a) the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and
(b) the person’s advance payment period has not ended.
Note: For advance payment period see point 1068‑D7.
Advance payment period
1068‑D7 A person’s advance payment period:
(a) starts on the day on which the advance pharmaceutical allowance is paid to the person; and
(b) ends after the number of paydays worked out using the following formula have passed:
where:
amount of advance is the amount of the advance paid to the person;
pharmaceutical allowance rate is the fortnightly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the social security benefit instalment for the day on which the advance is paid if a social security benefit were payable to the person and pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.
Note: The person may have come on social security benefit after having been a pension recipient and have received an advance while a pension recipient.
No pharmaceutical allowance if annual limit reached
1068‑D8 Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:
(a) the person has received an advance pharmaceutical allowance during the current calendar year; and
(b) the total amount paid to the person for that year by way of:
(i) pharmaceutical allowance; and
(ii) advance pharmaceutical allowance;
equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.
Note 1: For the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (6).
Note 2: The annual limit is affected by:
• how long during the calendar year the person was on pension or benefit;
• the rate of pharmaceutical allowance the person attracts at various times depending on the person’s family situation.
Amount of pharmaceutical allowance
1068‑D10 The amount of pharmaceutical allowance is the amount per fortnight worked out using the following Table:
Pharmaceutical allowance amount table |
Column 1 Item | Column 2 Person’s family situation | Column 3 Amount per fortnight |
1. | Not member of couple | $5.20 |
2. | Partnered | $2.60 |
4. | Member of illness separated couple | $5.20 |
5. | Member of respite care couple | $5.20 |
6. | Partnered (partner getting service pension) | $2.60 |
7. | Partnered (partner in gaol) | $5.20 |
Note 1: For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.
Note 2: The amounts in column 3 are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1206A).
Module G—Income test
Effect of ordinary income on maximum payment rate
1068‑G1 This is how to work out the effect of a person’s ordinary income, and the ordinary income of a partner of the person, on the person’s maximum payment rate:
Method statement
Step 1. Work out the amount of the person’s ordinary income on a fortnightly basis.
Note: For the treatment of amounts received from friendly societies, see point 1068‑G4.
Step 2. If the person is a member of a couple, work out the partner income free area using point 1068‑G9.
Note: The partner income free area is the maximum amount of ordinary income the person’s partner may have without affecting the person’s benefit.
Step 3. Use paragraphs 1068‑G10(a), (b) and (c) to work out whether the person has a partner income excess.
Step 4. If the requirements of paragraphs 1068‑G10(a), (b) and (c) are not satisfied then the person’s partner income excess is nil.
Step 5. If the requirements of paragraphs 1068‑G10(a), (b) and (c) are satisfied, the person’s partner income excess is the partner’s ordinary income less the partner income free area.
Step 6. Use the person’s partner income excess to work out the person’s partner income reduction using point 1068‑G11.
Step 7. Work out whether the person’s ordinary income exceeds the person’s ordinary income free area under point 1068‑G12.
Note: A person’s ordinary income free area is the maximum amount of ordinary income the person may have without affecting the person’s benefit rate.
Step 8. If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.
Step 9. If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Step 10. Use the person’s ordinary income excess to work out the person’s ordinary income reduction using points 1068‑G14, 1068‑G15, 1068‑G16 and 1068‑G17.
Step 11. Add the person’s partner income reduction and ordinary income reduction: the result is the person’s income reduction referred to in Step 5 of point 1068‑A1.
Note 1: For ordinary income see section 8.
Note 2: See point 1068‑A1 (Steps 6 to 9) for the significance of the person’s income reduction.
Note 3: The application of the ordinary income test is affected by provisions concerning:
• the general concept of ordinary income (sections 1072 and 1073);
• business income (sections 1074 and 1075);
• income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 1B of Part 3.10);
• income from income streams not covered by Division 1B of Part 3.10 (Division 1C of Part 3.10);
• disposal of income (sections 1106 to 1111).
Ordinary income of members of certain couples
1068‑G2 Subject to point 1068‑G3, if a person is a member of a couple and the person’s partner is receiving a social security pension, a service pension, income support supplement or a veteran payment, the person’s ordinary income is taken to be one half of the sum of:
(a) the amount that would be the person’s ordinary income if he or she were not a member of a couple; and
(b) the amount that would be the ordinary income of the person’s partner if the partner were not a member of a couple.
Friendly society amounts
1068‑G4 The ordinary income of a person to whom, or to whose partner, jobseeker payment is payable and who, or whose partner, under Subdivision BA of Division 1 of Part 2.12, is not required to satisfy the activity test is not to include any amount received by the person or partner from an approved friendly society in respect of the incapacity because of which the person or partner is not required to satisfy the activity test.
Board and lodging
1068‑G6 A person’s ordinary income is not to include a payment to the person for board or lodging provided by the person to a parent, child, brother or sister of the person.
Lump sum payments arising from termination of employment
1068‑G7 Subject to points 1068‑G7AF to 1068‑G7AR (inclusive), if:
(a) a person’s employment has been terminated; and
(b) as a result the person is entitled to a lump sum payment from the person’s former employer;
the person is taken to have received the lump sum payment on the day on which the person’s employment was terminated.
Directed termination payments excluded
1068‑G7AF If:
(a) a person’s employment has been terminated; and
(b) as a result the person is entitled to a lump sum payment from the person’s former employer; and
(c) the payment, or part of the payment, is a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997;
the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of Module G of section 1068.
Certain leave payments taken to be ordinary income—employment continuing
1068‑G7AG If:
(a) a person is employed; and
(b) the person is on leave for a period; and
(c) the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of a leave period;
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates.
Certain termination payments taken to be ordinary income
1068‑G7AH If:
(a) a person’s employment has been terminated; and
(b) the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.
Exception to points 1068‑G7AG and 1068‑G7AH
1068‑G7AI Point 1068‑G7AG or 1068‑G7AH does not apply in relation to a person’s entitlement referred to in paragraph 1068‑G7AG(c) or in relation to a person’s termination payment referred to in paragraph 1068‑G7AH(b) if:
(a) the person makes a claim for jobseeker payment on or after the commencement of this point; and
(b) the person makes the claim after the death of the person’s partner on or after the commencement of this point; and
(c) if the person is a man or a woman who was not pregnant when her partner died—the person makes the claim in the period of 14 weeks starting on the day of the death of the partner; and
(d) if the person is a woman who was pregnant when her partner died—the person makes the claim:
(i) in the period of 14 weeks starting on the day of the death of the partner; or
(ii) in the period starting on the day of the death of the partner and ending when the child is born or the woman otherwise stops being pregnant;
whichever ends later; and
(e) the entitlement referred to in paragraph 1068‑G7AG(c) arose, or the termination payment referred to in paragraph 1068‑G7AH(b) was paid, in the period applicable under paragraph (c) or (d) of this point.
More than one termination payment on a day
1068‑G7AJ If:
(a) the person is covered by point 1068‑G7AH; and
(b) the person receives more than one termination payment on a day;
the income maintenance period is worked out by adding the periods to which the payments relate.
Start of income maintenance period—employment continuing
1068‑G7AK If the person is covered by point 1068‑G7AG, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.
Start of income maintenance period—employment terminated
1068‑G7AKA Subject to point 1068‑G7AKC, if the person is covered by point 1068‑G7AH, the income maintenance period starts, subject to point 1068‑G7AKB, on the day the person is paid the termination payment.
Commencement of income maintenance period where there is a second termination payment
1068‑G7AKB If a person who is covered by point 1068‑G7AH is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences the day after the end of the first period.
Start of income maintenance period where liquid assets test waiting period applies
1068‑G7AKC If a person to whom point 1068‑G7AKA applies is subject to a liquid assets test waiting period, the income maintenance period is taken to have started on the day on which the liquid assets test waiting period started.
Leave payments or termination payments in respect of periods longer than a fortnight
1068‑G7AL If:
(a) a person receives a leave payment or termination payment; and
(b) the payment is in respect of a period greater than a fortnight;
the person is taken to receive in a payment fortnight or part of a payment fortnight an amount calculated by:
(c) dividing the amount received by the number of days in the period to which the payment relates (the daily rate); and
(d) multiplying the daily rate by the number of days in the payment fortnight that are also in the period.
1068‑G7AM If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.
Note 1: For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple) and 19C(3) (person who is a member of a couple).
Note 2: For unavoidable or reasonable expenditure see subsection 19C(4).
Note 3: If an income maintenance period applies to a person, then, during that period:
(a) the payment or allowance claimed may not be payable to the person; or
(b) the amount of the payment or allowance payable to the person may be reduced.
When a person receives a leave payment or a termination payment
1068‑G7AN For the purposes of points 1068‑G7AF to 1068‑G7AM (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person:
(a) at the direction of the first person or a court; or
(b) on behalf of the first person; or
(c) for the benefit of the first person; or
(d) the first person waives or assigns the first person’s right to receive the payment.
Single payment in respect of different kinds of termination payments
1068‑G7AP If a person who is covered by point 1068‑G7AH receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068‑G7AG to 1068‑G7AN (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.
Definitions
1068‑G7AQ In points 1068‑G7AG to 1068‑G7AP (inclusive):
payment fortnight means a fortnight in respect of which a jobseeker payment is paid, or would be paid, apart from the application of an income maintenance period, to a person.
period to which the payment relates means:
(a) if the payment is a leave payment—the leave period to which the payment relates; or
(b) if the payment is a termination payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the termination) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or
(c) if the payment is a termination payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the termination payment if:
(i) the person’s employment had continued; and
(ii) the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.
redundancy payment includes a payment in lieu of notice, but does not include a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.
termination payment includes:
(a) a redundancy payment; and
(b) a leave payment relating to a person’s employment that has been terminated; and
(c) any other payment that is connected with the termination of a person’s employment.
1068‑G7AR In points 1068‑G7AG to 1068‑G7AQ (inclusive):
leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include:
(a) an instalment of parental leave pay; or
(b) dad and partner pay.
Ordinary income generally taken into account when first earned, derived or received
1068‑G7A Subject to points 1068‑G7B, 1068‑G7C, 1068‑G8 and 1068‑G8A and section 1073, ordinary income is to be taken into account in the fortnight in which it is first earned, derived or received.
Claimant or recipient receives lump sum amount for remunerative work
1068‑G7B If a person whose claim for a payment or an allowance has been granted receives a lump sum amount after the claim was made that:
(a) is paid to him or her in relation to remunerative work; and
(b) is not a payment to which point 1068‑G8 applies; and
(c) is not an exempt lump sum;
the person is, for the purposes of this Module, taken to receive one fifty‑second of that amount as ordinary income during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.
Partner of claimant or recipient receives lump sum amount for remunerative work
1068‑G7C If:
(a) a person whose claim for a payment or an allowance has been granted is a member of a couple; and
(b) after the person has made the claim, the person’s partner receives a lump sum amount that:
(i) is paid to him or her in relation to remunerative work; and
(ii) is not a payment to which point 1068‑G8 applies; and
(iii) is not an exempt lump sum;
the partner is, for the purposes of this Module, taken to receive one fifty‑second of that amount as ordinary income during each week in the 12 months commencing on the day on which the partner becomes entitled to receive that amount.
Reference to payment or allowance
1068‑G7D A reference in point 1068‑G7B or 1068‑G7C to a payment or an allowance is a reference to a payment or an allowance the rate of which is calculated under this Rate Calculator.
Operation of points 1068‑G7B and 1068‑G7C
1068‑G7E Points 1068‑G7B and 1068‑G7C have effect even if the person who has made the claim:
(a) has to serve an ordinary waiting period or a liquid assets test waiting period in respect of the payment or allowance claimed; or
(b) is subject to an income maintenance period in respect of the payment or allowance claimed; or
(c) is subject to a seasonal work preclusion period;
during the period of 12 months referred to in those points.
Ordinary income received at intervals longer than one fortnight
1068‑G8 Subject to points 1068‑G7AF to 1068‑G7AR (inclusive), if:
(a) a person receives a number of ordinary income payments; and
(b) each payment is in respect of a period (in this point called the work period) that is greater than a fortnight; and
(c) there is reasonable predictability or regularity as to the timing of the payments; and
(d) there is reasonable predictability as to the quantum of the payments;
the person is taken to receive in a fortnight falling within, or overlapping with, a work period an amount calculated by:
(e) dividing the amount received by the number of days in the work period (the result is called the daily rate); and
(f) multiplying the daily rate by the number of days in the fortnight that are also within the work period.
EXAMPLE OF HOW ORDINARY INCOME RECEIVED AT INTERVALS LONGER THAN A FORTNIGHT IS ALLOCATED TO FORTNIGHTLY PERIODS
Facts: Fred receives $600 each 25 days from remunerative work. The social security benefit becomes payable to Fred such that the first 25 days of his earnings that are counted as ordinary income for the purposes of the ordinary income test are spread over 3 social security benefit payment fortnights as follows:
• 5 days of the first fortnight;
• all of the second fortnight;
• 6 days of the third fortnight.
In this example, it is assumed that Fred remains qualified for the social security benefit during the three fortnights and that nothing prevents it from being payable to him. The problem is then to work out what proportion of Fred’s earnings to allocate to each fortnight for ordinary income testing purposes.
Application: To work out the amount that Fred is taken to receive in the first fortnight first divide the total amount received for the 25 day work period ($600) by the number of days in the work period (25). This gives a daily rate. The daily rate is:
Then multiply the daily rate ($24) by the number of days in the fortnight that are also within the work period. The result is:
For the second fortnight the calculation is:
For the third fortnight the calculation is:
plus
Note that the amount of $192 added for the third fortnight comes from the given fact that Fred receives $600 each 25 days. So, for as long as there is reasonable predictability as to the timing and quantum of Fred’s ordinary income from remunerative work where receipt is at intervals longer than a fortnight, then this provision should be used to allocate that income to fortnightly periods for the purposes of the ordinary income test.
Payment of arrears of periodic compensation payments
1068‑G8A If:
(a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving jobseeker payment; and
(b) in relation to that entitlement, the person receives a payment of arrears of periodic compensation;
the person is taken to receive in a fortnight falling within, or overlapping with, the periodic payments period, an amount calculated by:
(c) dividing the amount received by the number of days in the periodic payments period (the result is called the daily rate); and
(d) multiplying the daily rate by the number of days in the fortnight that are also within the periodic payments period.
Note: For periodic payments period see section 17.
Partner income free area
1068‑G9 The partner income free area for a person is:
(a) if the person’s partner is not receiving a social security benefit and has not turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which youth allowance would not be payable to the partner if the partner were qualified for a youth allowance and were not undertaking full‑time study (see section 541B); or
(b) if the person’s partner is not receiving a social security benefit and has turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which jobseeker payment would not be payable to the partner if the partner were qualified for a jobseeker payment; or
(c) if the person’s partner is receiving a social security benefit—the amount of income of the partner (rounded up to the nearest dollar) beyond which that benefit would not be payable to the partner.
1068‑G9A For the purposes of paragraph 1068‑G9(a), disregard steps 2, 2A and 3 of the method statement in point 1067G‑A1.
1068‑G9B For the purposes of paragraph 1068‑G9(b), disregard steps 2 and 3 of the method statement in point 1068‑A1.
Partner income excess
1068‑G10 If:
(a) a person is a member of a couple; and
(b) the person’s partner is not receiving a social security pension, a service pension, income support supplement or a veteran payment; and
(c) the partner’s ordinary income exceeds the partner income free area for the partner;
then:
(d) the person has a partner income excess; and
(e) the person’s partner income excess is the amount by which the partner’s ordinary income exceeds the partner income free area.
Partner income reduction
1068‑G11 If a person has a partner income excess, the person’s partner income reduction is an amount equal to 60% of the part of the partner’s ordinary income that exceeds the partner income free area.
Example:
Facts: Susan’s partner Colin has an ordinary income of $800. Assume that the partner income free area under point 1068‑G9 is $640.
Application: Colin’s ordinary income exceeds the partner income free area. He therefore has a partner income excess under point 1068‑G10 of:
Susan’s partner income reduction under point 1068‑G11 is therefore:
Ordinary income free area
1068‑G12 A person’s ordinary income free area is $100.
Note 1: The amount specified is indexed in line with CPI increases (see sections 1190 to 1194).
Note 2: The income free area is used in the ordinary income test in relation to fortnightly income.
Ordinary income excess
1068‑G13 If a person’s ordinary income exceeds the person’s ordinary income free area:
(a) the person has an ordinary income excess; and
(b) the person’s ordinary income excess is the amount by which the person’s ordinary income exceeds the person’s ordinary income free area.
Ordinary income reduction—general
1068‑G14 Subject to point 1068‑G17, if a person has an ordinary income excess, the person’s ordinary income reduction is the sum of:
(a) the person’s lower range reduction (see point 1068‑G15); and
(b) the person’s upper range reduction (if any) (see point 1068‑G16).
Lower range reduction
1068‑G15 The person’s lower range reduction is an amount equal to 50% of the part of the person’s ordinary income excess that does not exceed $150.
Upper range reduction
1068‑G16 The person’s upper range reduction is an amount equal to 60% of the part (if any) of the person’s ordinary income excess that exceeds $150.
Ordinary income reduction for certain recipients of jobseeker payment
1068‑G17 If:
(a) a person has an ordinary income excess; and
(b) the person is receiving jobseeker payment; and
(c) the person is not a member of a couple; and
(d) the person is the principal carer of a child;
the person’s ordinary income reduction is an amount equal to 40% of the person’s ordinary income excess.
Module J—Remote area allowance
Remote area allowance—person physically in remote area
1068‑J1 An amount by way of remote area allowance is to be added to a person’s rate if:
(aa) any of the following subparagraphs applies:
(i) apart from this point, the person’s rate would be greater than nil;
(ii) apart from this point, the person’s rate would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act;
(iii) apart from this point, the person’s rate would be nil merely because an election by the person under subsection 1061VA(1) is in force;
(iv) apart from this point, the person’s rate would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and
(a) the person’s usual place of residence is situated in the remote area; and
(b) the person is physically present in the remote area.
Note 1: For remote area see subsection 14(1).
Note 2: A person may be considered to be physically present in a remote area during temporary absences—see subsection 14(2).
Rate of remote area allowance
1068‑J3 The rate of remote area allowance payable to a person is worked out using Table J. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each FTB child, and regular care child, of the person.
Table J Remote area allowance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Basic allowance | Column 4 Additional allowance for each FTB child and regular care child |
1. | Not member of couple | $18.20 | $7.30 |
2. | Partnered | $15.60 | $7.30 |
3. | Member of illness separated couple | $18.20 | $7.30 |
5. | Partnered (partner in gaol) | $18.20 | $7.30 |
Meaning of remote area allowance
1068‑J4 In Table J, remote area allowance means:
(a) an amount added to a person’s social security pension or benefit by way of remote area allowance; or
(b) a remote area allowance payable under point SCH6‑G1 of the VEA.
In remote area
1068‑J5 For the purposes of Table J in point 1068‑J3, a person is in the remote area if:
(a) the person’s usual place of residence is in the remote area; and
(b) the person is physically present in the remote area.
Special rule where partner has an FTB or regular care child but is not receiving a pension
1068‑J7 If:
(a) a person who is a member of a couple is qualified for an amount by way of additional allowance; and
(b) the person’s partner is not receiving a pension or benefit; and
(c) the person’s partner has an FTB child or a regular care child;
the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.
Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child
1068‑J8 If:
(a) a person who is a member of a couple is qualified for an amount by way of remote area allowance; and
(b) the person’s partner has an FTB child or a regular care child; and
(c) the person’s partner is not receiving additional allowance for the child;
the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.
Special rule dealing with the death of an FTB or regular care child
1068‑J9 If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.
Note: This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.
Part 3.6A—Parenting Payment Rate Calculator
1068A Rate of parenting payment—pension PP (single)
(1) If a person is not a member of a couple, the person’s rate of parenting payment is the pension PP (single) rate.
(2) The pension PP (single) rate is worked out in accordance with the rate calculator at the end of this section.
Note: For rate of a person who is a member of a couple see section 1068B.
(3) If:
(a) a person has a relationship with another person, whether of the same sex or a different sex (the other person); and
(b) the relationship between them is a de facto relationship in the Secretary’s opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A)); and
(c) either or both of them are under the age of consent applicable in the State or Territory in which they are living;
the person’s pension PP (single) rate is not to exceed the benefit PP (partnered) rate which would be payable to the person if the other person were the person’s partner.
Pension PP (Single) Rate Calculator
Module A—Overall rate calculation process
Method of calculating rate
1068A‑A1 The rate of pension PP (single) is a daily rate. That rate is worked out by dividing the annual rate calculated according to this Rate Calculator by 364 (fortnightly rates are provided for information only).
Method statement
Step 1. Work out the person’s maximum basic rate using Module B below.
Step 1A. Work out the amount of pension supplement using Module BA below.
Step 1B. Work out the energy supplement (if any) using Module BB below.
Step 2. Work out the amount per year (if any) of pharmaceutical allowance using Module C below.
Step 3. Work out the amount per year (if any) for rent assistance in accordance with paragraph 1070A(b).
Step 4. Add up the amounts obtained in Steps 1, 1A, 1B, 2 and 3: the result is called the maximum payment rate.
Step 5. Apply the ordinary income test using Module E below to work out the income reduction.
Step 6. Take the income reduction away from the maximum payment rate: the result is called the provisional annual payment rate.
Step 7. The rate of pension PP (single) is the amount obtained by:
(a) subtracting from the provisional annual payment rate any special employment advance deduction (see Part 3.16B); and
(b) if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and
(c) adding any amount payable by way of remote area allowance (see Module F).
Note 1: If a person’s rate is reduced under Step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210.
Note 2: In some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.
Note 3: An amount of remote area allowance is to be added under Step 7 only if the person’s provisional payment rate under Step 6 is greater than nil.
Module B—Maximum basic rate
Maximum basic rate
1068A‑B1 A person’s maximum basic rate is $9,042.80 per year ($347.80 per fortnight).
Note: The maximum basic rate is indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).
Module BA—Pension supplement
Pension supplement
1068A‑BA1 A pension supplement amount is to be added to the person’s maximum basic rate.
Residents of pension age who are in Australia etc.
1068A‑BA2 If the person is residing in Australia, has reached pension age and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks;
the person’s pension supplement amount is:
(c) if an election by the person under subsection 1061VA(1) is in force—the amount worked out under point 1068A‑BA4; and
(d) otherwise—the amount worked out under point 1068A‑BA3.
Residents of pension age in Australia etc.—no election in force
1068A‑BA3 The person’s pension supplement amount is the amount worked out by:
(a) working out 66.33% of the combined couple rate of pension supplement; and
(b) if the result is not a multiple of $2.60, rounding the result up or down to the nearest multiple of $2.60 (rounding up if the result is not a multiple of $2.60 but is a multiple of $1.30).
Note: For combined couple rate of pension supplement, see subsection 20A(1).
Residents of pension age in Australia etc.—election in force
1068A‑BA4 The person’s pension supplement amount is the amount worked out as follows:
(a) work out the amount for the person under point 1068A‑BA3 as if the election were not in force;
(b) from that amount, subtract the person’s minimum pension supplement amount.
Other persons
1068A‑BA5 If the person is not covered by point 1068A‑BA2, the person’s pension supplement amount is the person’s pension supplement basic amount.
Module BB—Energy supplement
1068A‑BB1 An energy supplement is to be added to the person’s (the recipient’s) maximum basic rate if the recipient is residing in Australia and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
However, this Module does not apply if quarterly energy supplement is payable to the recipient.
Note: Section 918 may affect the addition of the energy supplement.
Recipient has reached pension age
1068A‑BB2 If the recipient has reached pension age, the recipient’s energy supplement is $366.60.
Recipient has not reached pension age
1068A‑BB3 If the recipient has not reached pension age, the recipient’s energy supplement is $312.00.
Module C—Pharmaceutical allowance
Qualification for pharmaceutical allowance
1068A‑C1 Subject to points 1068A‑C1A, 1068A‑C2, 1068A‑C3 and 1068A‑C5, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate if the person is an Australian resident.
No pharmaceutical allowance if person has reached pension age
1068A‑C1A Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person has reached pension age.
No pharmaceutical allowance if person receiving certain supplements under other Acts
1068A‑C2 Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving:
(a) veterans supplement under section 118A of the Veterans’ Entitlements Act; or
(b) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; or
(c) pharmaceutical supplement under Part 3A of the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006; or
(d) pharmaceutical supplement under Part 4 of the Treatment Benefits (Special Access) Act 2019.
No pharmaceutical allowance before advance payment period ends
1068A‑C3 Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:
(a) the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and
(b) the person’s advance payment period has not ended.
Note: For advance payment period see point 1068A‑C4.
Advance payment period
1068A‑C4(1) A person’s advance payment period starts on the day on which the advance pharmaceutical allowance is paid to the person.
(2) The period ends after the number of paydays worked out using the following formula have passed:
where:
amount of advance is the amount of the advance paid to the person.
pharmaceutical allowance rate is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the person’s rate of pension PP (single) on the day on which the advance is paid if pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.
No pharmaceutical allowance if annual limit reached
1068A‑C5 Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:
(a) the person has received an advance pharmaceutical allowance during the current calendar year; and
(b) the total amount paid to the person for that year by way of:
(i) pharmaceutical allowance; and
(ii) advance pharmaceutical allowance;
equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.
Note 1: For the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (7).
Note 2: The annual limit is affected by the following:
(a) how long during the calendar year the person was on pension or benefit;
(b) the rate of pharmaceutical allowance the person attracts at various times depending on the person’s family situation.
Amount of pharmaceutical allowance
1068A‑C7 The amount of pharmaceutical allowance is $140.40 per year ($5.40 per fortnight).
Note: The annual amount is adjusted annually in line with CPI increases (see section 1206A).
Module E—Ordinary income test
Effect of income on maximum payment rate
1068A‑E1 This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:
Method statement
Step 1. Work out the amount of the person’s ordinary income on a yearly basis.
Step 2. Work out the person’s ordinary income free area (see points 1068A‑E14 to 1068A‑E18 below).
Note: A person’s ordinary income free area is the amount of ordinary income that the person can have without any deduction being made from the person’s maximum payment rate.
Step 3. Work out whether the person’s ordinary income exceeds the person’s ordinary income free area.
Step 4. If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.
Step 5. If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Step 6. Use the person’s ordinary income excess to work out the person’s reduction for ordinary income using points 1068A‑E19 and 1068A‑E20 below.
Note 1: See point 1068A‑A1 (Steps 5 and 6) for the significance of the person’s reduction for ordinary income.
Note 2: The application of the ordinary income test is affected by provisions concerning the following:
(a) the general concept of ordinary income (sections 1072 and 1073);
(b) business income (sections 1074 and 1075);
(c) income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 1B of Part 3.10);
(d) income from income streams not covered by Division 1B of Part 3.10 (Division 1C of Part 3.10);
(e) disposal of income (sections 1106 to 1111).
Directed termination payments excluded
1068A‑E2 If:
(a) a person’s employment has been terminated; and
(b) as a result the person is entitled to a lump sum payment from the person’s former employer; and
(c) the payment, or part of the payment, is a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997;
the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of this Module.
Certain leave payments taken to be ordinary income—employment continuing
1068A‑E3 If:
(a) a person is employed; and
(b) the person is on leave for a period; and
(c) the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of the leave period;
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates.
Certain termination payments taken to be ordinary income
1068A‑E4 If:
(a) a person’s employment has been terminated; and
(b) the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.
More than one termination payment on a day
1068A‑E5 If:
(a) the person is covered by point 1068A‑E4; and
(b) the person receives more than one termination payment on a day;
the income maintenance period is worked out by adding the periods to which the payments relate.
Start of income maintenance period—employment continuing
1068A‑E6 If the person is covered by point 1068A‑E3, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.
Start of income maintenance period—employment terminated
1068A‑E7 If the person is covered by point 1068A‑E4, the income maintenance period starts, subject to point 1068A‑E8, on the day the person is paid the termination payment.
Commencement of income maintenance period where there is a second termination payment
1068A‑E8 If a person who is covered by point 1068A‑E4 is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences on the day after the end of the first period.
1068A‑E9 If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.
Note 1: For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple).
Note 2: For unavoidable or reasonable expenditure see subsection 19C(4).
Note 3: If an income maintenance period applies to a person, then, during that period:
(a) the pension PP (single) claimed may not be payable to the person; or
(b) the amount of the pension PP (single) payable to the person may be reduced.
When a person receives a leave payment or a termination payment
1068A‑E10 For the purposes of points 1068A‑E2 to 1068A‑E9 (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person:
(a) at the direction of the first person or a court; or
(b) on behalf of the first person; or
(c) for the benefit of the first person; or
the first person waives or assigns the first person’s right to receive the payment.
Single payment in respect of different kinds of termination payments
1068A‑E11 If a person who is covered by point 1068A‑E4 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068A‑E3 to 1068A‑E10 (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.
Definitions
1068A‑E12 In points 1068A‑E3 to 1068A‑E12 (inclusive):
leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include:
(a) an instalment of parental leave pay; or
(b) dad and partner pay.
period to which the payment relates means:
(a) if the payment is a leave payment—the leave period to which the payment relates; or
(b) if the payment is a termination payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the termination) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or
(c) if the payment is a termination payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the termination payment if:
(i) the person’s employment had continued; and
(ii) the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.
redundancy payment includes a payment in lieu of notice, but does not include a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.
termination payment includes:
(a) a redundancy payment; and
(b) a leave payment relating to a person’s employment that has been terminated; and
(c) any other payment that is connected with the termination of a person’s employment.
Payment of arrears of periodic compensation payments
1068A‑E13 If:
(a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected payment; and
(b) in relation to that entitlement, the person receives a payment of arrears of periodic compensation;
the person is taken to receive, on each day in the periodic payments period, an amount calculated by dividing the amount received by the number of days in the periodic payments period.
Note: For compensation affected payment and periodic payments period see section 17.
How to calculate a person’s ordinary income free area
1068A‑E14 A person’s ordinary income free area is worked out using Table E. The ordinary income free area is the amount in Column 2 plus the additional amount in Column 4 for each dependent child of the person.
Table E—Ordinary income free area |
Column 1 Item | Column 2 Basic free area per year | Column 3 Basic free area per fortnight | Column 4 Additional free area per year | Column 5 Additional free area per fortnight |
1 | $2,600 | $100 | $639.60 | $24.60 |
Note 1: For dependent child see section 5 and point 1068A‑E21.
Note 2: The basic free area per year is indexed annually in line with CPI increases (see sections 1191 to 1194).
No additional free area for certain prescribed student children
1068A‑E15 No additional free area is to be added for a dependent child who:
(a) has turned 18; and
(b) is a prescribed student child;
unless the person whose rate is being calculated receives carer allowance for the child.
Reduction of additional free area for dependent children
1068A‑E16 The additional free area for a dependent child is reduced by the annual amount of any payment received by the person for or in respect of that particular child. The payments referred to in point 1068A‑E17 do not result in a reduction.
Payments that do not reduce additional free area
1068A‑E17 No reduction is to be made under point 1068A‑E16 for a payment:
(a) under this Act; or
(b) of maintenance income; or
(c) under the Veterans’ Entitlements Act; or
(d) under an Aboriginal study assistance scheme; or
(e) under the Assistance for Isolated Children Scheme.
Note: For Aboriginal study assistance scheme see subsection 23(1).
Examples of payments reducing additional free area
1068A‑E18 Examples of the kinds of payments that result in a reduction under point 1068A‑E16 are:
(a) amounts received from State authorities or registered public benevolent institutions in respect of the boarding out of the child; or
(b) amounts of superannuation or compensation paid in respect of the child; or
(c) amounts (other than amounts covered by point 1068A‑E17) paid in respect of the child under educational schemes; or
(d) foster care allowance payments made by a State welfare authority.
Ordinary income excess
1068A‑E19 A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Reduction for ordinary income
1068A‑E20 A person’s reduction for ordinary income is:
1068A‑E21 In this Module:
dependent child, in relation to a person, includes any child of the person who is under 18 and is receiving a youth allowance.
Module F—Remote area allowance
Remote area allowance
1068A‑F1 An amount by way of remote area allowance is to be added to a person’s rate if:
(a) any of the following subparagraphs applies:
(i) apart from this point, the person’s rate would be greater than nil;
(ii) apart from this point, the person’s rate would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act;
(iii) apart from this point, the person’s rate would be nil merely because an election by the person under subsection 1061VA(1) is in force;
(iv) apart from this point, the person’s rate would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and
(b) the person’s usual place of residence is situated in a remote area; and
(c) the person is physically present in the remote area.
Note: For remote area and physically present in the remote area see section 14.
Rate of remote area allowance
1068A‑F2 The rate of remote area allowance payable to a person is worked out using Table F. The rate of remote area allowance is the amount in Column 2 plus the additional corresponding amount in Column 4 for each FTB child, and each regular care child, of the person.
Table F—Remote area allowance |
Column 1 Item | Column 2 Basic allowance per year | Column 3 Basic allowance per fortnight | Column 4 Additional allowance per year | Column 5 Additional allowance per fortnight |
1 | $473.20 | $18.20 | $189.80 | $7.30 |
1068B Rate of parenting payment—PP (partnered)
(1) If a person is a member of a couple, the person’s rate of parenting payment is the benefit PP (partnered) rate.
(2) The benefit PP (partnered) rate is worked out in accordance with the rate calculator at the end of this section.
Note: For member of a couple see section 4.
Benefit PP (Partnered) Rate Calculator
Module A—Overall rate calculation process
Method of calculating rate—general
1068B‑A1 The rate of benefit PP (partnered) is a daily rate. That rate is worked out by dividing the fortnightly rate calculated according to this Rate Calculator by 14. There are 2 ways of working out the fortnightly rate:
(a) one for a person who is not a partner of a non‑independent YA recipient (see point 1068B‑A2); and
(b) one for a person who is a partner of a non‑independent YA recipient (see point 1068B‑A3).
Note: For partner of a non‑independent YA recipient see subsection 23(1).
Method of calculating rate for person who is not a partner of a non‑independent YA recipient
1068B‑A2 If a person is not the partner of a non‑independent YA recipient, the fortnightly rate of benefit PP (partnered) for the person is worked out as follows:
Method statement
Step 1. Work out the person’s maximum basic rate using Module C below.
Step 2. Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a).
Step 2A. Work out the pension supplement amount (if any) using Module DA below.
Step 2B. Work out the energy supplement (if any) using Module DB below.
Step 3. Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below.
Step 4. Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate.
Step 5. Apply the income test using Module D below to work out the person’s income reduction.
Step 6. Take the income reduction away from the maximum payment rate: the result is called the provisional payment rate.
Step 7. The rate of benefit PP (partnered) is the difference between:
(a) the provisional payment rate; and
(b) any advance payment deduction (see Part 3.16A);
plus, except where the person is a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, any amount by way of remote area allowance that, under Module G, is to be added to the person’s rate of benefit PP (partnered).
Note 1: For partner of a non‑independent YA recipient see subsection 23(1).
Note 2: If a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210 (maximum basic rate first, then rent assistance).
Method of calculating rate for partner of a non‑independent YA recipient
1068B‑A3 If a person is the partner of a non‑independent YA recipient, the fortnightly rate of benefit PP (partnered) for the person is worked out as follows:
Method statement
Step 1. Work out the person’s maximum basic rate using Module C below.
Step 2. Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a).
Step 2A. Work out the pension supplement amount (if any) using Module DA below.
Step 2B. Work out the energy supplement (if any) using Module DB below.
Step 3. Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below.
Step 4. Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate.
Step 5. Apply the income test using Module E of the Rate Calculator in section 1068A to work out the person’s income reduction.
Step 6. Take the income reduction away from the maximum payment rate: the rate is called the provisional payment rate.
Step 7. The rate of benefit is the difference between:
(a) the provisional payment rate; and
(b) any advance payment deduction (see Part 3.16A);
plus, except where the person is a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, any amount by way of remote area allowance that, under Module G, is to be added to the person’s rate of benefit PP (partnered).
Note 1: For partner of a non‑independent YA recipient see subsection 23(1).
Note 2: If a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210 (maximum basic rate first, then rent assistance).
Module C—Maximum basic rate
Maximum basic rate
1068B‑C2 If a person is not a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, the person’s maximum basic rate is worked out using Table C. Work out the person’s family situation. The maximum basic rate is the corresponding amount in Column 3.
Table C—Maximum basic rates |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate |
1 | Person not covered by item 2, 3 or 4 | $290.10 |
2 | Member of illness separated couple | $347.80 |
3 | Member of respite care couple | $347.80 |
4 | Partnered (partner in gaol) | $347.80 |
Note 1: For illness separated couple, respite care couple and partnered (partner in gaol) see section 4.
Note 2: The rates are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).
Maximum basic rate—CDEP Scheme participant
1068B‑C3 The maximum basic rate of a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is nil (see section 500W).
Module D—Income test
Effect of income on maximum payment rate
1068B‑D1 This is how to work out the effect of a person’s ordinary income, and the ordinary income of the person’s partner, on the person’s maximum payment rate:
Method statement
Step 1. Work out the amount of the person’s ordinary income on a fortnightly basis.
Note: The amount of the person’s ordinary income is affected by points 1068B‑D2 to 1068B‑D21.
Step 2. Work out the partner income free area using point 1068B‑D22.
Note: The partner income free area is the maximum amount of ordinary income the person’s partner can have without affecting the person’s rate.
Step 3. Use point 1068B‑D23 to work out the person’s partner income excess.
Step 4. Use the person’s partner income excess to work out the person’s partner income reduction using point 1068B‑D24.
Step 5. Work out whether the person’s ordinary income exceeds the person’s ordinary income free area (see point 1068B‑D27).
Note: A person’s ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person’s rate.
Step 6. If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.
Step 7. If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Step 8. Use the person’s ordinary income excess to work out the person’s ordinary income reduction using points 1068B‑D29 to 1068B‑D31.
Step 9. Add the person’s ordinary income reduction and partner income reduction: the result is the person’s income reduction referred to in step 5 of the method statement in point 1068B‑A2.
Note 1: For ordinary income see section 8.
Note 2: See point 1068B‑A2 (step 6) for the significance of the person’s income reduction.
Note 3: The application of the ordinary income test is affected by provisions concerning the following:
(a) the general concept of ordinary income (sections 1072 and 1073);
(b) business income (sections 1074 and 1075);
(c) income from financial assets (including income streams (short term) and certain income streams (long term)) (Division 1B of Part 3.10);
(d) income from income streams not covered by Division 1B of Part 3.10 (Division 1C of Part 3.10);
(e) disposal of income (sections 1106 to 1111).
Ordinary income of members of certain couples
1068B‑D2 If a person’s partner is receiving a social security pension, a service pension, income support supplement or a veteran payment, the person’s ordinary income is taken to be one half of the sum of:
(a) the amount that would be the person’s ordinary income if he or she were not a member of a couple; and
(b) the amount that would be the ordinary income of the person’s partner if the partner were not a member of a couple.
Board and lodging
1068B‑D6 A person’s ordinary income is not to include a payment to the person for board or lodging provided by the person to a parent, child, brother or sister of the person.
Lump sum payments arising from termination of employment
1068B‑D7 Subject to points 1068B‑D8 to 1068B‑D18 (inclusive), if:
(a) a person’s employment has been terminated; and
(b) as a result, the person is entitled to a lump sum payment from the person’s former employer;
the person is taken to have received the lump sum payment on the day on which the person’s employment was terminated.
Directed termination payments excluded
1068B‑D8 If:
(a) a person’s employment has been terminated; and
(b) as a result the person is entitled to a lump sum payment from the person’s former employer; and
(c) the payment, or part of the payment, is a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997;
the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of this Module.
Certain leave payments taken to be ordinary income—employment continuing
1068B‑D9 If:
(a) a person is employed; and
(b) the person is on leave for a period; and
(c) the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of the leave period;
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates.
Certain termination payments taken to be ordinary income
1068B‑D10 If:
(a) a person’s employment has been terminated; and
(b) the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);
the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.
More than one termination payment on a day
1068B‑D11 If:
(a) the person is covered by point 1068B‑D10; and
(b) the person receives more than one termination payment on a day;
the income maintenance period is worked out by adding the periods to which the payments relate.
Start of income maintenance period—employment continuing
1068B‑D12 If the person is covered by point 1068B‑D9, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.
Start of income maintenance period—employment terminated
1068B‑D13 If the person is covered by point 1068B‑D10, the income maintenance period starts, subject to point 1068B‑D14, on the day the person is paid the termination payment.
Commencement of income maintenance period where there is a second termination payment
1068B‑D14 If a person who is covered by point 1068B‑D10 is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences the day after the end of the first period.
1068B‑D15 If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.
Note 1: For in severe financial hardship see subsection 19C(3) (person who is a member of a couple).
Note 2: For unavoidable or reasonable expenditure see subsection 19C(4).
Note 3: If an income maintenance period applies to a person, then, during that period:
(a) the benefit PP (partnered) claimed may not be payable to the person; or
(b) the amount of the benefit PP (partnered) payable to the person may be reduced.
When a person receives a leave payment or a termination payment
1068B‑D16 For the purposes of points 1068B‑D8 to 1068B‑D15 (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person:
(a) at the direction of the first person or a court; or
(b) on behalf of the first person; or
(c) for the benefit of the first person; or
the first person waives or assigns the first person’s right to receive the payment.
Single payment in respect of different kinds of termination payments
1068B‑D17 If a person who is covered by point 1068B‑D10 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068B‑D9 to 1068B‑D16 (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.
Definitions
1068B‑D18 In points 1068B‑D9 to 1068B‑D18 (inclusive):
leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include:
(a) an instalment of parental leave pay; or
(b) dad and partner pay.
period to which the payment relates means:
(a) if the payment is a leave payment—the leave period to which the payment relates; or
(b) if the payment is a termination payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the termination) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or
(c) if the payment is a termination payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the termination payment if:
(i) the person’s employment had continued; and
(ii) the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.
redundancy payment includes a payment in lieu of notice, but does not include a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.
termination payment includes:
(a) a redundancy payment; and
(b) a leave payment relating to a person’s employment that has been terminated; and
(c) any other payment that is connected with the termination of a person’s employment.
Period over which ordinary income taken into account
1068B‑D19 Subject to points 1068B‑D8 to 1068B‑D18 (inclusive), a person’s ordinary income is to be taken into account over such period, not exceeding 52 weeks, as the Secretary determines.
Note: This point, in conjunction with point 1068B‑D20, enables the Secretary to determine the person’s fortnightly income amount that best represents the person’s income situation.
Fortnightly rate of ordinary income
1068B‑D20 For the purposes of this Module, the person’s ordinary income for such a period is to be reduced to a fortnightly rate rounded to the nearest cent (rounding 0.5 cents downwards).
Payment of arrears of periodic compensation payments
1068B‑D21 If:
(a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected payment; and
(b) in relation to that entitlement, the person receives a payment of arrears of periodic compensation;
the person is taken to receive, on each day in the periodic payments period, an amount calculated by dividing the amount received by the number of days in the periodic payments period.
Note: For compensation affected payment and periodic payments period see section 17.
Partner income free area
1068B‑D22 The partner income free area for a person is:
(a) if the person’s partner is not receiving a social security benefit and has not turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which youth allowance would not be payable to the partner if the partner were qualified for a youth allowance and were not undertaking full‑time study (see section 541B); or
(b) if the person’s partner is not receiving a social security benefit and has turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which jobseeker payment would not be payable to the partner if the partner were qualified for a jobseeker payment; or
(c) if the person’s partner is receiving a social security benefit—the amount of income of the partner (rounded up to the nearest dollar) beyond which that benefit would not be payable to the partner.
1068B‑D22A For the purposes of paragraph 1068B‑D22(a), disregard steps 2, 2A and 3 of the method statement in point 1067G‑A1.
1068B‑D22B For the purposes of paragraph 1068B‑D22(b), disregard steps 2 and 3 of the method statement in point 1068‑A1.
Partner income excess
1068B‑D23 If:
(b) the person’s partner is not receiving a social security pension, a service pension, income support supplement or a veteran payment; and
(c) the partner’s ordinary income exceeds the partner income free area for the partner;
the person’s partner income excess is the amount by which the partner’s ordinary income exceeds the partner income free area. Otherwise, the person’s partner income excess is nil.
Partner income reduction
1068B‑D24 If a person has a partner income excess, the person’s partner income reduction is an amount equal to 60% of the part of the partner’s ordinary income that exceeds the partner income free area.
Ordinary income free area
1068B‑D27 A person’s ordinary income free area is $100.
Note 1: The amount specified is indexed in line with CPI increases (see sections 1190 to 1194).
Note 2: The income free area is used in the ordinary income test in relation to fortnightly income.
Ordinary income excess
1068B‑D28 If a person’s ordinary income exceeds the person’s ordinary income free area:
(a) the person has an ordinary income excess; and
(b) the person’s ordinary income excess is the amount by which the person’s ordinary income exceeds the person’s ordinary income free area.
Ordinary income reduction
1068B‑D29 If a person has an ordinary income excess, the person’s ordinary income reduction is the sum of:
(a) the person’s lower range reduction (see point 1068B‑D30); and
(b) the person’s upper range reduction (if any) (see point 1068B‑D31).
Lower range reduction
1068B‑D30 The person’s lower range reduction is an amount equal to 50% of the part of the person’s ordinary income excess that does not exceed $150.
Upper range reduction
1068B‑D31 The person’s upper range reduction is an amount equal to 60% of the part (if any) of the person’s ordinary income excess that exceeds $150.
Module DA—Pension supplement
Pension supplement
1068B‑DA1 A pension supplement amount is to be added to the person’s maximum basic rate if the person is residing in Australia, has reached pension age and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
1068B‑DA2 The person’s pension supplement amount is:
(a) if an election by the person under subsection 1061VA(1) is in force—the amount worked out under point 1068B‑DA4; and
(b) otherwise—the amount worked out under point 1068B‑DA3.
Amount if no election in force
1068B‑DA3 The person’s pension supplement amount is the amount worked out by:
(a) applying the applicable percentage in the following table to the combined couple rate of pension supplement; and
(b) dividing the result by 26; and
(c) if:
(i) the person is not partnered; and
(ii) the amount resulting from paragraph (b) is not a multiple of 10 cents;
rounding the amount up or down to the nearest multiple of 10 cents (rounding up if the amount is not a multiple of 10 cents but is a multiple of 5 cents).
Item | Person’s family situation | Use this % |
1 | Partnered | 50% |
2 | Member of illness separated couple | 66.33% |
3 | Member of respite care couple | 66.33% |
4 | Partnered (partner in gaol) | 66.33% |
Note: For combined couple rate of pension supplement, see subsection 20A(1).
Amount if election in force
1068B‑DA4 The person’s pension supplement amount is the amount worked out as follows:
(a) work out the amount for the person under point 1068B‑DA3 as if the election were not in force;
(b) from that amount, subtract 1/26 of the person’s minimum pension supplement amount.
Module DB—Energy supplement
1068B‑DB1 An energy supplement is to be added to the person’s (the recipient’s) maximum basic rate if the recipient is residing in Australia and:
(a) is in Australia; or
(b) is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.
However, this Module does not apply if quarterly energy supplement is payable to the recipient.
Note: Section 918 may affect the addition of the energy supplement.
Recipient has reached pension age
1068B‑DB2 If the recipient has reached pension age, the recipient’s energy supplement is the amount worked out using the following table:
Energy supplement |
Item | Recipient’s family situation | Amount of energy supplement |
1 | Partnered | $10.60 |
2 | Member of an illness separated couple | $14.10 |
3 | Member of a respite care couple | $14.10 |
4 | Partnered (partner in gaol) | $14.10 |
Recipient has not reached pension age
1068B‑DB3 If the recipient has not reached pension age, the recipient’s energy supplement is the amount worked out using the following table:
Energy supplement |
Item | Recipient’s family situation for maximum basic rate | Amount of energy supplement |
1 | If the recipient’s maximum basic rate is worked out under item 1 of the table in point 1068B‑C2 | $7.90 |
2 | If the recipient’s maximum basic rate is worked out under item 2, 3 or 4 of the table in point 1068B‑C2 | $9.50 |
Module E—Pharmaceutical allowance
Qualification for pharmaceutical allowance
1068B‑E1 Subject to points 1068B‑E1A, 1068B‑E2, 1068B‑E3, 1068B‑E4 and 1068B‑E6, an additional amount by way of pharmaceutical allowance is to be included in a person’s maximum payment rate in points 1068B‑A2 and 1068B‑A3 if:
(b) the person is an Australian resident, or has a qualifying residence exemption for parenting payment; and
(d) one or more of the following applies:
(i) the person has turned 60, and has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph);
(ii) under section 502H, the person is covered by a participation exemption under Division 3A of Part 2.10;
(iii) the person has a partial capacity to work.
Note 1: For income support payment see subsection 23(1).
Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B.
Note 3: For Australian resident and qualifying residence exemption see section 7.
Note 4: For partial capacity to work see section 16B.
No pharmaceutical allowance if person receiving pension supplement
1068B‑E1A Pharmaceutical allowance is not to be added to a person’s maximum basic rate if a pension supplement amount has been added to that rate.
No pharmaceutical allowance if person receiving certain supplements under other Acts
1068B‑E2 Pharmaceutical allowance is not to be included in a person’s maximum basic rate if the person is receiving:
(a) veterans supplement under section 118A of the Veterans’ Entitlements Act; or
(b) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; or
(c) pharmaceutical supplement under Part 3A of the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006; or
(d) pharmaceutical supplement under Part 4 of the Treatment Benefits (Special Access) Act 2019.
No pharmaceutical allowance if partner receiving certain supplements under other Acts
1068B‑E3 Pharmaceutical allowance is not to be included in a person’s maximum basic rate if:
(a) the person is a member of a couple; and
(b) the person’s partner is receiving:
(i) veterans supplement under section 118A of the Veterans’ Entitlements Act; or
(ii) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; or
(iii) pharmaceutical supplement under Part 3A of the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006; or
(iv) pharmaceutical supplement under Part 4 of the Treatment Benefits (Special Access) Act 2019; and
(c) the person’s partner is not receiving a service pension or a veteran payment.
No pharmaceutical allowance before advance payment period ends
1068B‑E4 Pharmaceutical allowance is not to be included in a person’s provisional payment rate if:
(a) the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and
(b) the person’s advance payment period has not ended.
Note: For advance payment period see point 1068B‑E5.
Advance payment period
1068B‑E5(1) A person’s advance payment period starts on the day on which the advance pharmaceutical allowance is paid to the person.
1068B‑E5(2) The period ends after the number of paydays worked out using the following formula have passed:
where:
amount of advance is the amount of the advance paid to the person.
pharmaceutical allowance rate is the fortnightly amount of pharmaceutical allowance which would be included in the person’s maximum payment rate in working out the benefit PP (partnered) instalment for the day on which the advance is paid if parenting payment were payable to the person and pharmaceutical allowance were to be included in the person’s maximum payment rate. (The person’s maximum payment rate is the maximum payment rate at step 4 of whichever of the method statements in points 1068B‑A2 and 1068B‑A3 is applicable to the person.)
Note: The person may have commenced receiving parenting payment after having been a pension recipient and have received an advance while a pension recipient.
No pharmaceutical allowance if annual limit reached
1068B‑E6 Pharmaceutical allowance is not to be included in a person’s provisional payment rate if:
(a) the person has received an advance pharmaceutical allowance during the current calendar year; and
(b) the total amount paid to the person for that year by way of:
(i) pharmaceutical allowance; and
(ii) advance pharmaceutical allowance;
equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.
Note 1: For the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (7).
Note 2: The annual limit is affected by:
(a) how long during the calendar year the person was on pension or benefit; and
(b) whether the person’s rate of pharmaceutical allowance varies during the calendar year.
Amount of pharmaceutical allowance
1068B‑E8 The amount of pharmaceutical allowance is the amount per fortnight worked out using Table E.
Table E—Pharmaceutical allowance amounts |
Column 1 Item | Column 2 Person’s family situation | Column 3 Amount per fortnight |
1 | Person not covered by item 2, 3, 4 or 5 | $2.70 |
2 | Member of illness separated couple | $5.40 |
3 | Member of respite care couple | $5.40 |
4 | Partnered (partner getting service pension) | $2.70 |
5 | Partnered (partner in gaol) | $5.40 |
Note 1: For illness separated couple, respite care couple and partnered (partner in gaol) see section 4.
Note 2: The amounts in Column 3 are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1206A).
Module G—Remote area allowance
Remote area allowance—person physically in remote area
1068B‑G1 An amount by way of remote area allowance is to be added in step 7 of the method statements in points 1068B‑A2 and 1068B‑A3 to a person’s rate of benefit PP (partnered) if:
(b) any of the following subparagraphs applies:
(i) apart from this point, the person’s rate of benefit PP (partnered) would be greater than nil;
(ii) apart from this point, the person’s rate of benefit PP (partnered) would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act;
(iii) apart from this point, the person’s rate of benefit PP (partnered) would be nil merely because an election by the person under subsection 1061VA(1) is in force;
(iv) apart from this point, the person’s rate of benefit PP (partnered) would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and
(c) the person’s usual place of residence is in a remote area; and
(d) the person is physically present in the remote area.
Note 1: For remote area see subsection 14(1).
Note 2: A person may be considered to be physically present in a remote area during temporary absences—see subsection 14(2).
Rate of remote area allowance
1068B‑G2 The rate of remote area allowance payable to a person is worked out using Table G. Work out which family situation in the table applies to the person. The rate of remote area allowance is the corresponding amount in Column 3 plus the additional corresponding amount in Column 4 for each FTB child, and each regular care child, of the person.
Table G—Remote area allowance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Basic allowance | Column 4 Additional allowance for each FTB child and regular care child |
1 | Person not covered by item 2, 3 or 4 | $15.60 | $7.30 |
2 | Member of illness separated couple | $18.20 | $7.30 |
3 | Member of respite care couple | $18.20 | $7.30 |
4 | Partnered (partner in gaol) | $18.20 | $7.30 |
Note: For illness separated couple, respite care couple and partnered (partner in gaol) see section 4.
Meaning of remote area allowance
1068B‑G3 In point 1068B‑G2, remote area allowance means:
(a) an amount added to a person’s social security pension or benefit by way of remote area allowance; or
(b) a remote area allowance payable under point SCH6‑G1 of the VEA.
FTB or regular care child must be present in Australia
1068B‑G4 Additional allowance is not payable for an FTB child, or a regular care child, unless the child is physically present in Australia.
Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child
1068B‑G5 If:
(a) an amount of remote area allowance is to be added to the person’s rate; and
(b) the person’s partner has an FTB child or a regular care child; and
(c) the person’s partner is not receiving an additional amount of remote area allowance for the child;
the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.
Special rule dealing with the death of an FTB or regular care child
1068B‑G6 If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.
Note: This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.
Part 3.7—Rent assistance
Division 1—Operation of this Part
1070 When this Part applies
This Part applies if the rate of a person’s social security payment is to be calculated in accordance with any of the following Rate Calculators:
(a) Pension Rate Calculator A (carer payments and certain age and disability support pensions);
(c) Pension Rate Calculator D (certain disability support pensions);
(d) Youth Allowance Rate Calculator;
(da) Austudy Payment Rate Calculator;
(e) Benefit Rate Calculator B (mature age allowance under Part 2.12B, jobseeker payment and partner and widow allowance);
(f) Pension PP (Single) Rate Calculator or Benefit PP (Partnered) Rate Calculator (parenting payments).
1070A Effect of this Part
If a person to whom this Part applies qualifies for rent assistance in accordance with Division 2, to help cover the cost of rent:
(a) if paragraph (b) does not apply—the amount per fortnight worked out in accordance with Division 3 is added to the person’s maximum basic rate for the social security payment; or
(b) if the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A or D, or the Pension PP (Single) Rate Calculator—the amount per fortnight worked out in accordance with Division 3 is multiplied by 26 to calculate an amount per year and the amount per year is added to the person’s maximum basic rate for the social security payment.
Division 2—Qualification for rent assistance
1070B Qualification—general rule
A person qualifies for rent assistance if the person satisfies:
(a) the common requirements set out in section 1070C; and
(b) any specific requirement, set out in a later section of this Division, applicable to the person’s social security payment.
1070C Common requirements (about aged care residence, home ownership and rent)
The common requirements are that:
(a) the person is not an aged care resident, and is not taken to be an aged care resident for the purposes of the Rate Calculator concerned; and
(b) the person is not an ineligible homeowner; and
(c) the person pays, or is liable to pay, rent, other than Government rent, in respect of a period in respect of premises in Australia; and
(d) the person’s fortnightly rent is more than the rent threshold amount (see section 1070T).
1070D Specific requirement (carer payments and certain age and disability support pensions)
(1) If the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A and subsection (2) applies, the specific requirement applicable to the person’s social security payment is that set out in subsection (3).
(2) This subsection applies if:
(a) the following conditions are satisfied:
(i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple;
(ii) the person is entitled to be paid family tax benefit; or
(b) the following conditions are satisfied:
(i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple;
(ii) the person, or the person’s partner, is entitled to be paid family tax benefit.
(3) The specific requirement is that:
(a) in a paragraph (2)(a) case, either of the following is satisfied:
(i) the person’s maximum Part A rate of family tax benefit does not include rent assistance;
(ii) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and
(b) in a paragraph (2)(b) case, either of the following is satisfied:
(i) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;
(ii) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance and clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
(4) Subsections (1), (2) and (3) do not apply if:
(a) the person’s social security payment is disability support pension; and
(b) the person has not turned 21.
Note: The specific requirement for a person who is receiving disability support pension and has not turned 21 is in section 1070F.
1070E Specific requirement (certain parenting payments)
If:
(a) the rate of the person’s social security payment is to be calculated in accordance with the Pension PP (Single) Rate Calculator; and
(b) the person is entitled to be paid family tax benefit;
the specific requirement applicable to the social security payment is that either of the following is satisfied:
(c) the person’s maximum Part A rate of family tax benefit does not include rent assistance;
(d) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit.
1070F Specific requirement (certain disability support pensions)
(1) If:
(a) the person’s social security payment is disability support pension; and
(b) the person has not turned 21; and
(c) the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D;
the specific requirement applicable to the social security payment is that the person comply with subsection (2) or (3).
Person who has not turned 18
(2) The person complies with this subsection if:
(a) the person has not turned 18; and
(b) one of the following applies:
(i) the person is a member of a couple and, if the person’s partner is living with the person in their home, the person’s partner is not receiving incentive allowance;
(ii) the person is in disability accommodation;
(iii) the person is independent;
(iv) the person is living away from the person’s parental home because of a medical condition of the person; and
(c) if:
(i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and
(d) if:
(i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person, or the person’s partner, is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
Person who has turned 18
(3) The person complies with this subsection if:
(a) the person has turned 18; and
(b) one of the following applies:
(i) the person is a member of a couple and, if the person’s partner is living with the person in their home, the person’s partner is not receiving incentive allowance;
(ii) the person is in disability accommodation;
(iii) the person is living away from the person’s parental home permanently or indefinitely; and
(c) if:
(i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and
(d) if:
(i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person, or the person’s partner, is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
(4) For the purposes of applying the definition of living away from the person’s parental home in subsection (3), a step‑parent or guardian is taken to be a parent.
1070G Specific requirement (youth allowance)
(1) If the rate of the person’s social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the specific requirement applicable to the social security payment is that:
(a) the person:
(i) is independent but is not an accommodated independent person; or
(ii) is not independent and is required to live away from home; and
(b) the person does not have a partner with a rent increased pension; and
(c) if:
(i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and
(d) if:
(i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person, or the person’s partner, is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
(2) In this section, accommodated independent person and required to live away from home have the same meanings as in Part 3.5.
1070H Specific requirement (austudy payment, mature age allowance under Part 2.12B, jobseeker payment, partner allowance or widow allowance)
(1) If the rate of the person’s social security payment is to be calculated in accordance with the Austudy Payment Rate Calculator or Benefit Rate Calculator B, the specific requirement applicable to the social security payment is that set out in subsection (2).
(2) The specific requirement is that:
(a) if the person:
(i) is not a member of a couple; and
(ii) is not living away from the principal home of a parent permanently or indefinitely;
the person has turned 25; and
(b) the person does not have a partner with a rent increased pension; and
(c) if:
(i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and
(d) if:
(i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person, or the person’s partner, is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
(3) For the purposes of subparagraph (2)(a)(ii), a step‑parent or guardian is taken to be a parent.
1070J Specific requirement (certain parenting payments)
If the rate of the person’s social security payment is to be calculated in accordance with the Benefit PP (Partnered) Rate Calculator, the specific requirement applicable to the social security payment is that:
(a) the person’s partner is not receiving a rent increased pension; and
(b) if:
(i) the person is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and
(c) if:
(i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and
(ii) the person, or the person’s partner, is entitled to be paid family tax benefit;
either of the following is satisfied:
(iii) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;
(iv) the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.
Division 3—Rate of rent assistance
1070K Rate depends on social security payment and family situation
A person’s rate of rent assistance depends on the person’s social security payment and the person’s family situation.
1070L Rate for carer payments and certain age and disability support pensions
(1) The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A.
(2) Using the following table, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. If the person is not a single person sharing accommodation, the person’s maximum rent assistance rate is rate B worked out using column 4 of the table. If the person is a single person sharing accommodation, the person’s maximum rent assistance rate is two‑thirds of rate B.
Rate of rent assistance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate A | Column 4 Rate B |
1 | Not a member of a couple | 
| $93.20 |
2 | Partnered and partner does not have rent increased pension | 
| $88.00 |
3 | Partnered and partner: (a) is receiving a social security pension; and (b) has rent increased pension | 
| Half the rate specified in column 4 of item 2 |
4 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) does not have a dependent child or dependent children | 
| Half the rate specified in column 4 of item 2 |
5 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) has 1 or 2 dependent children | 
| $54.80 |
6 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) has 3 or more dependent children | 
| $62.00 |
7 | Partnered—member of an illness separated couple | 
| $93.20 |
8 | Partnered—member of a respite care couple | 
| $93.20 |
9 | Partnered—member of a temporarily separated couple | 
| $88.00 |
10 | Partnered (partner in gaol) | 
| $93.20 |
(3) Subsections (1) and (2) do not apply if:
(a) the person’s social security payment is disability support pension; and
(b) the person has not turned 21.
Note: The rate of rent assistance for a person who is receiving disability support pension and has not turned 21 is worked out:
(a) under section 1070N if the person has not turned 18; and
(b) under section 1070P if the person has turned 18.
1070M Rate for certain parenting payments
(1) The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with the Pension PP (Single) Rate Calculator.
(2) Using the following table, calculate rate A for the person using the formula in column 2. This will be the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. If the person is not a single person sharing accommodation, the person’s maximum rent assistance rate is rate B worked out using column 3 of the table. If the person is a single person sharing accommodation, the person’s maximum rent assistance rate is two‑thirds of rate B.
Rate of rent assistance |
Column 1 Item | Column 2 Rate A | Column 3 Rate B |
1 | 
| $93.20 |
1070N Rate for disability support pension (person aged under 18)
(1) The person’s rate of rent assistance is worked out under this section if:
(a) the person is receiving disability support pension; and
(b) the person has not turned 18; and
(c) the rate of the person’s pension is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D.
(2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. The person’s maximum rent assistance rate is rate B worked out using column 4 of the table.
Rate of rent assistance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate A | Column 4 Rate B |
1 | Not a member of a couple and: (a) in disability accommodation; or (b) independent | 
| $93.20 |
2 | Partnered and partner does not have rent increased pension | 
| $88.00 |
3 | Partnered and partner: (a) is receiving a social security pension; and (b) has rent increased pension | 
| Half the rate specified in column 4 of item 2 |
4 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) does not have a dependent child or dependent children | 
| Half the rate specified in column 4 of item 2 |
5 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) has 1 or 2 dependent children | 
| $54.80 |
6 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) has 3 or more dependent children | 
| $62.00 |
7 | Partnered—member of an illness separated couple | 
| $93.20 |
8 | Partnered—member of a respite care couple | 
| $93.20 |
9 | Partnered—member of a temporarily separated couple | 
| $88.00 |
10 | Partnered (partner in gaol) | 
| $93.20 |
1070P Rate for disability support pension (person aged between 18 and 21)
(1) The person’s rate of rent assistance is worked out under this section if:
(a) the person is receiving disability support pension; and
(b) the person has turned 18 but has not turned 21; and
(c) the rate of the person’s pension is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D.
(2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. The person’s maximum rent assistance rate is rate B worked out using column 4 of the table.
Rate of rent assistance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate A | Column 4 Rate B |
1 | Not a member of a couple and: (a) in disability accommodation; or (b) living away from the person’s parental home permanently or indefinitely | 
| $93.20 |
2 | Partnered and partner does not have rent increased pension | 
| $88.00 |
3 | Partnered and partner: (a) is receiving a social security pension; and (b) has rent increased pension | 
| Half the rate specified in column 4 of item 2 |
4 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) does not have a dependent child or dependent children | 
| Half the rate specified in column 4 of item 2 |
5 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) has 1 or 2 dependent children | 
| $54.80 |
6 | Partnered and partner: (a) is receiving a service pension, income support supplement or a veteran payment; and (b) has rent increased pension; and (c) has 3 or more dependent children | 
| $62.00 |
7 | Partnered—member of an illness separated couple | 
| $93.20 |
8 | Partnered—member of a respite care couple | 
| $93.20 |
9 | Partnered—member of a temporarily separated couple | 
| $88.00 |
10 | Partnered (partner in gaol) | 
| $93.20 |
1070Q Rate for youth allowance, austudy payment, mature age allowance under Part 2.12B, jobseeker payment, partner allowance and widow allowance
(1) The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the Austudy Payment Rate Calculator or Benefit Rate Calculator B.
(2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. If the person is not a single person sharing accommodation, the person’s maximum rent assistance rate is rate B worked out using column 4 of the table. If the person is a single person sharing accommodation, the person’s maximum rent assistance rate is two‑thirds of rate B.
Rate of rent assistance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate A | Column 4 Rate B |
1 | Not a member of a couple | 
| $93.20 |
2 | Partnered—partner does not have rent increased benefit | 
| $88.00 |
3 | Partnered—partner has rent increased benefit | 
| Half the rate specified in column 4 of item 2 |
4 | Partnered—member of an illness separated couple | 
| $93.20 |
5 | Partnered—member of a respite care couple | 
| $93.20 |
6 | Partnered—member of a temporarily separated couple | 
| $88.00 |
7 | Partnered (partner in gaol) | 
| $93.20 |
1070R Rate for certain parenting payments
(1) The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with Benefit PP (Partnered) Rate Calculator.
(2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. The person’s maximum rent assistance rate is rate B worked out using column 4 of the table.
Rate of rent assistance |
Column 1 Item | Column 2 Person’s family situation | Column 3 Rate of rent assistance | Column 4 Maximum rate |
1 | Partnered—partner does not have rent increased benefit | 
| $88.00 |
2 | Partnered—partner has rent increased benefit | 
| Half the rate specified in column 4 of item 1 |
3 | Partnered—member of an illness separated couple | 
| $93.20 |
4 | Partnered—member of a respite care couple | 
| $93.20 |
5 | Partnered—member of a temporarily separated couple | 
| $88.00 |
6 | Partnered (partner in gaol) | 
| $93.20 |
Division 4—Certain concepts used in this Part
1070S Division has effect for purposes of Part
This Division has effect for the purposes of this Part.
1070T Rent threshold amount
(1) If the rate of a person’s social security payment is to be calculated in accordance with the Pension PP (Single) Rate Calculator, the person’s rent threshold amount is $82.80.
(2) In any other case, a person’s rent threshold amount is worked out in accordance with subsection (3).
(3) First, identify which of sections 1070L, 1070N, 1070P, 1070Q and 1070R applies to work out the rate of rent assistance for the person’s social security payment. Next, identify which family situation in the table in that section applies to the person. The person’s rent threshold amount is the amount in the formula in column 3 of the table, in relation to the family situation, that is deducted from fortnightly rent.
Example: If a person who is not a member of a couple receives an age pension, the person’s rent threshold amount is worked out as follows. First, identify section 1070L as the section applicable to an age pension. Then identify the family situation in item 1 of the table in that section as applicable to the person. Finally, the person’s rent threshold amount is $82.80, being the amount that, in the formula in column 3 of that table, is deducted from the person’s fortnightly rent. Indexation of the $82.80 has been ignored for the purposes of this example.
1070U Fortnightly rent
Fortnightly rent is the fortnightly rent paid or payable by the person whose rate of social security payment is being calculated.
1070V Rent paid by a member of certain couples
Rent paid by a member of a couple where person’s partner is living with the person in their home
(1) If a person is a member of a couple and the person’s partner is living with the person in their home, any rent that the person’s partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person.
Rent paid by a member of an illness separated, respite care couple or temporarily separated couple
(2) If a person is a member of an illness separated couple, respite care couple or temporarily separated couple, any rent that the person’s partner pays or is liable to pay in respect of the premises or lodgings occupied by the person is to be treated as paid or payable by the person.
1070W Partner with a rent increased pension
A person has a partner with a rent increased pension if:
(a) the partner is living with the person in their home; and
(b) the partner receives a social security pension, a service pension, income support supplement or a veteran payment; and
(c) the rate of the pension or supplement is increased to take account of rent paid or payable by the person.
1070X Partner with a rent increased benefit
Youth Allowance Rate Calculator
(1) If the rate of a person’s social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the person’s partner has a rent increased benefit if the partner:
(a) is living with the person in their home; and
(b) either:
(i) is receiving a social security benefit the rate of which is increased to take account of rent; or
(ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.
Note 1: See also subsections 23(4A) and (4AA).
Note 2: For designated ABSTUDY payment, see subsection (5).
Benefit Rate Calculator B
(2) If the rate of a person’s social security payment is to be calculated in accordance with Benefit Rate Calculator B, the person’s partner has a rent increased benefit if the partner:
(a) is living with the person in their home; and
(b) either:
(i) is receiving a social security benefit the rate of which is increased to take account of rent; or
(ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.
Note 1: See also subsections 23(4A) and (4AA).
Note 2: For designated ABSTUDY payment, see subsection (5).
Benefit PP (Partnered) Rate Calculator
(3) If the rate of a person’s social security payment is to be calculated in accordance with the Benefit PP (Partnered) Rate Calculator, the person’s partner has a rent increased benefit if the partner:
(a) is living with the person in their home; and
(b) either:
(i) is receiving a social security benefit the rate of which is increased to take account of rent; or
(ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.
Note 1: See also subsections 23(4A) and (4AA).
Note 2: For designated ABSTUDY payment, see subsection (5).
Austudy Payment Rate Calculator
(4) If the rate of a person’s social security payment is to be calculated in accordance with the Austudy Payment Rate Calculator, the person’s partner has a rent increased benefit if the partner:
(a) is living with the person in their home; and
(b) either:
(i) is receiving a social security benefit the rate of which is increased to take account of rent; or
(ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.
Note 1: See also subsections 23(4A) and (4AA).
Note 2: For designated ABSTUDY payment, see subsection (5).
Designated ABSTUDY payment
(5) For the purposes of this section, a designated ABSTUDY payment is a payment under the scheme known as the ABSTUDY scheme:
(a) the rate of which is increased to take account of rent; and
(b) that includes an amount identified as living allowance.
Part 3.9—Seniors Health Card Income Test Calculator
Note: Section 10A contains many of the definitions that are relevant to the provisions of this Part.
1071 Seniors Health Card Income Test Calculator
The Seniors Health Card Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the seniors health card income test for the purposes of this Act.
Seniors Health Card Income Test Calculator
Satisfying the seniors health card income test
1071‑1 This is how to work out whether a person satisfies the seniors health card income test at a particular time (the test time).
Method statement
Step 1. Work out the amount of the person’s adjusted taxable income for the reference tax year.
Step 1A. If, at the test time, the person, or the person’s partner (if any), has at least one long‑term financial asset (see point 1071‑13), work out the person’s deemed income amount under:
(a) if, at the test time, the person is not a member of a couple—point 1071‑11A; or
(b) if, at the test time, the person is a member of a couple—point 1071‑11B.
Step 1B. Work out the sum of the amounts at step 1 and step 1A (if any).
Step 2. Work out the person’s seniors health card income limit using point 1071‑12.
Step 3. Work out whether the amount at step 1B exceeds the seniors health card income limit.
Step 4. If the amount at step 1B is less than the person’s seniors health card income limit, the person satisfies the seniors health card income test.
Step 5. If the amount at step 1B is equal to or exceeds the person’s seniors health card income limit, the person does not satisfy the seniors health card income test.
Reference tax year
1071‑2(1) In the ordinary case, a person’s reference tax year is:
(a) if the person has received a notice of assessment of his or her taxable income for the tax year immediately preceding the tax year in which the test time occurred—that immediately preceding tax year; or
(b) otherwise—the tax year immediately preceding the tax year applicable under paragraph (a).
(2) However, if the person has informed the Secretary in writing that the person wishes to have his or her entitlement to a seniors health card determined by reference to his or her adjusted taxable income for the tax year in which the test time occurred (the current tax year), the person’s reference tax year is the current tax year.
Adjusted taxable income
1071‑3 For the purposes of this Part, a person’s adjusted taxable income for a particular tax year is the sum of the following amounts (income components):
(a) the person’s taxable income for that year, disregarding the person’s assessable FHSS released amount (within the meaning of the Income Tax Assessment Act 1997) for that year;
(b) the person’s fringe benefits value for that year;
(c) the person’s target foreign income for that year;
(d) the person’s total net investment loss (within the meaning of the Income Tax Assessment Act 1997) for that year;
(e) the person’s reportable superannuation contributions (within the meaning of the Income Tax Assessment Act 1997) for that year.
Note 1: For taxable income see subsection 23(1) and point 1071‑4.
Note 2: For fringe benefits value see point 1071‑6.
Note 3: For target foreign income see subsection 10A(2) and point 1071‑7.
Taxable income
1071‑4 For the purposes of this Part, a person’s taxable income for a particular tax year is:
(a) the person’s assessed taxable income for that year; or
(b) if the person does not have an assessed taxable income for that year—the person’s accepted estimate of taxable income for that year.
Assessed taxable income
1071‑5 For the purposes of this Part, a person’s assessed taxable income for a particular tax year at a particular time is the most recent of:
(a) if, at that time, the Commissioner of Taxation has made an assessment or an amended assessment of that taxable income—that taxable income according to the assessment or amended assessment; or
(b) if, at that time, a tribunal has amended an assessment or an amended assessment made by the Commissioner—that taxable income according to the amendment made by the tribunal; or
(c) if, at that time, a court has amended an assessment or an amended assessment made by the Commissioner or an amended assessment made by a tribunal—that taxable income according to the amendment made by the court.
Fringe benefits value
1071‑6 For the purposes of this Part, a person’s fringe benefits value for a particular tax year is the person’s accepted estimate of the amount by which the total of the assessable fringe benefits received or to be received by the person in the tax year exceeds $1,000.
Note: For assessable fringe benefit see subsection 10A(2) and Part 3.12A.
Target foreign income
1071‑7 For the purposes of this Part, a person’s target foreign income for a particular tax year is the person’s accepted estimate of the amount of that income for that year.
Total net investment loss
1071‑8 For the purposes of this Part, a person’s total net investment loss for a particular tax year is the person’s accepted estimate of the amount of that loss for that year.
Accepted estimate
1071‑9 For the purposes of this Part, a person’s accepted estimate of an income component for a particular tax year is that income component according to the most recent notice given by the person to the Secretary under point 1071‑10 and accepted by the Secretary for the purposes of this Part.
Notice estimating income component
1071‑10(1) A person may give the Secretary a notice, in a form approved by the Secretary, setting out the person’s estimate of an income component of the person for a tax year.
(2) The notice is to contain, or be accompanied by, such information as is required by the form to be contained in it or to accompany it, as the case may be.
(3) The Secretary is to accept a notice only if the Secretary is satisfied that the estimate is reasonable.
Adjusted taxable income of members of couples
1071‑11 If a person is a member of a couple, add the couple’s adjusted taxable incomes for the reference tax year and divide by 2 to work out the amount of the person’s adjusted taxable income for the reference tax year.
Deemed income amount
1071‑11A This is how to work out the person’s deemed income amount under this point:
Method statement
Step 1. Work out the total value of all of the person’s long‑term financial assets (see point 1071‑13) at the test time.
Step 2. Work out under section 1076 the amount of ordinary income the person would be taken to receive per year on the financial assets:
(a) on the assumption that the only financial assets of the person were the financial assets referred to in step 1; and
(b) on the assumption that the total value of the person’s financial assets were the amount at step 1.
Step 3. The result at step 2 is the person’s deemed income amount.
1071‑11B This is how to work out the person’s deemed income amount under this point:
Method statement
Step 1. Work out the total value of all of the person’s long‑term financial assets (see point 1071‑13) at the test time.
Step 2. If, at the test time, the person’s partner has reached the minimum age mentioned in section 301‑10 of the Income Tax Assessment Act 1997, work out the total value of all of the person’s partner’s long‑term financial assets (see point 1071‑13) at the test time.
Step 3. Work out under section 1077 the amount of ordinary income the couple would be taken to receive per year on the financial assets:
(a) on the assumption that section 1077 applied to the person and the person’s partner; and
(b) on the assumption that the only financial assets of the person and the person’s partner were the financial assets referred to in steps 1 and 2; and
(c) on the assumption that the total value of the couple’s financial assets were the sum of the amounts at steps 1 and 2.
Step 4. Divide the amount at step 3 by 2: the result is the person’s deemed income amount.
Seniors health card income limit
1071‑12 A person’s seniors health card income limit is worked out using the Seniors Health Card Income Limit Table. Work out which family situation in the table applies to the person. The person’s seniors health card income limit is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each dependent child of the person.
Seniors Health Card Income Limit Table |
Column 1 Item | Column 2 Person’s family situation | Column 3 Amount per year | Column 4 Additional dependent child Amount per year |
1 | Not member of couple | $50,000 | $639.60 |
2 | Partnered | $40,000 | $639.60 |
3 | Member of illness separated couple | $50,000 | $639.60 |
4 | Member of respite care couple | $50,000 | $639.60 |
5 | Partnered (partner in gaol) | $50,000 | $639.60 |
Note: The amounts in column 3 are to be indexed on 20 September 2014 and each later 20 September in line with CPI increases (see sections 1190 to 1194).
Long‑term financial asset
1071‑13 For the purposes of this Part, a long‑term financial asset is:
(a) a financial investment within the meaning of paragraph (i) of the definition of financial investment in subsection 9(1), where the asset‑tested income stream (long term) arises under a complying superannuation plan (within the meaning of the Income Tax Assessment Act 1997) that is not a constitutionally protected fund (within the meaning of that Act); or
(b) a financial investment within the meaning of paragraph (j) of the definition of financial investment in subsection 9(1).
Note: Schedule 7 to the Social Services and Other Legislation Amendment (2014 Budget Measures No. 6) Act 2014 preserves the rules in this Calculator for a certain kind of long‑term financial asset that was being provided to a person immediately before 1 January 2015 where the person held a seniors health card immediately before that day provided that, since that day, the person has held a seniors health card.
Part 3.9A—Health Care Card Income Test Calculator
1071A Health care card income test
The Health Care Card Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the health care card income test for the purposes of Division 3 of Part 2A.1.
Health Care Card Income Test Calculator
Satisfying the health care card income test: persons claiming a card
1071A‑1 This is how to work out whether a person claiming a health care card satisfies the health care card income test on the day on which the person claims the card, whether or not the person is the holder of a health care card at that time.
Method statement
Step 1. Work out the amount of the person’s ascertained income for the period of 8 weeks ending on the day on which the person lodged the claim.
Step 2. Work out the amount of the person’s allowable income for the period.
Step 3. If the person’s ascertained income for the period is less than the person’s allowable income for the period, the person satisfies the health care card income test.
Step 4. If the person’s ascertained income for the period equals or exceeds the person’s allowable income for the period, the person does not satisfy the health care card income test.
Satisfying the health care card income test: cardholders
1071A‑2 This is how to work out whether a person who holds a health care card satisfies the health care card income test at a particular time where there has been a change in circumstances.
Method statement
Step 1. Work out the amount of the person’s ascertained income for the period of 8 weeks ending on the day on which the change of circumstances occurred.
Step 2. Work out the amount of the person’s allowable income for the period.
Step 3. If the person’s ascertained income for the period is less than 125% of the person’s allowable income for that period, the person satisfies the health care card income test.
Step 4. If the person’s ascertained income for the period is 125% or more of the person’s allowable income for that period, the person does not satisfy the health care card income test.
Working out allowable income
1071A‑2A For the purposes of step 2 of the method statement in point 1071A‑1 or 1071A‑2:
(a) disregard steps 1A, 2 and 3 of the method statement in point 1068‑A1; and
(b) the amount at step 1B of the method statement in point 1068‑A1 is taken to be the amount applicable under item 5 of the table in point 1068‑C3.
Cessation of dependency
1071A‑3 For the purposes of point 1071A‑2, if a person (the first person) ceases to be a dependant of another person who is the holder of a health care card:
(a) the fact that the first person has so ceased is to be disregarded for a period of 4 weeks commencing on the day on which the first person so ceased; and
(b) if, at the end of the period, the first person has not become again a dependant of that other person, the first person is taken to have ceased to be a dependant of the other person at the expiration of that period of 4 weeks.
Definitions
1071A‑4 In this Part:
allowable income, in relation to any period of 8 weeks, means:
(a) in relation to a person who had a dependant or dependants on the last day of the period—the amount worked out by multiplying by 8, or such other number as is prescribed, the aggregate of:
(i) the amount of the weekly rate of income that would, on the last day of the period, be sufficient to prevent both members of a one‑income couple from receiving jobseeker payment; and
(ii) $20, or such other amount as is prescribed; and
(iii) an amount worked out by multiplying $34, or such higher amount as is prescribed, by the number of the dependants of the person on the last day of the period; or
(b) in relation to a person who had no dependants on the last day of the period—the amount worked out by multiplying by 8, or such other number as is prescribed, an amount equal to 60%, or such other percentage as is prescribed, of the aggregate of the amount worked out under subparagraph (a)(i) and the amount referred to in subparagraph (a)(ii) if paragraph (a) had applied to the person.
ascertained income, in relation to a period, means:
(a) in relation to a person who is not a member of a couple—the income of the person in respect of that period; and
(b) in relation to a person who is a member of a couple—the income of the person and his or her partner in respect of that period.
income, in relation to a person, means ordinary income and, to the extent that they are not ordinary income, includes:
(aa) payments of a social security pension or a social security benefit; and
(a) if the person is receiving a social security pension or benefit—the person’s maintenance income (if any) within the meaning of the Family Assistance Act; and
(b) payments of a pension under the Veterans’ Entitlements Act; and
(c) payments of a pension payable by a foreign country, being a pension that, in the opinion of the Secretary, is similar in character to a pension referred to in paragraph (b); and
(ca) payments of income support supplement; and
(cb) a payment under Part VIIAB (DFISA) of the Veterans’ Entitlements Act (including a payment made under regulations made under that Part); and
(d) payments under the scheme known as the New Enterprise Incentive Scheme; and
(e) payments of compensation, including compensation within the meaning of the Military Rehabilitation and Compensation Act; and
(f) instalments of parental leave pay; and
(g) dad and partner pay.
1071A‑5 If a weekly rate of income referred to in subparagraph (a)(i) of the definition of allowable income in point 1071A‑4 or an amount worked out under paragraph (b) of that definition includes an amount of cents, the amount of that weekly rate is, for the purposes of that definition, increased to the nearest whole dollar.
1071A‑6 A couple is a one‑income couple for the purposes of point 1071A‑4 if only one member of the couple is receiving income.
Part 3.10—General provisions relating to the ordinary income test
Division 1—Ordinary income concept
1072 General meaning of ordinary income
A reference in this Act to a person’s ordinary income for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.
Note 1: For ordinary income see subsection 8(1).
Note 2: For other provisions affecting the amount of a person’s ordinary income see section 1073AA (work bonus), sections 1074 and 1075 (business income), Division 1B (income from financial assets (including income streams (short term) and certain income streams (long term)) and Division 1C (income from income streams not covered by Division 1B).
1073 Certain amounts taken to be received over 12 months
(1) Subject to points 1067G‑H5 to 1067G‑H20 (inclusive), 1067L‑D5 to 1067L‑D16 (inclusive), 1068‑G7AF to 1068‑G7AR (inclusive), 1068A‑E2 to 1068A‑E12 (inclusive) and 1068B‑D7 to 1068B‑D18 (inclusive), if a person receives, whether before or after the commencement of this section, an amount that:
(a) is not income within the meaning of Division 1B or 1C of this Part; and
(b) is not:
(i) income in the form of periodic payments; or
(ii) ordinary income from remunerative work undertaken by the person; or
(iii) an exempt lump sum.
the person is, for the purposes of this Act, taken to receive one fifty‑second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.
(2) Subsection (1) applies to a person who has claimed one of the following:
(a) jobseeker payment;
(c) youth allowance;
(d) widow allowance;
(e) partner allowance;
even if the person:
(g) has to serve an ordinary waiting period or a liquid assets test waiting period in respect of the payment or allowance claimed; or
(h) is subject to an income maintenance period in respect of the payment or allowance claimed; or
(i) is subject to a seasonal work preclusion period;
during the period of 12 months referred to in subsection (1).
Division 1AAA—Work bonus
1073AA Work bonus
(1) This section applies to a person if:
(a) the person’s rate of social security pension is calculated in accordance with Pension Rate Calculator A at the end of section 1064; and
(b) the person has reached pension age.
Note: For pension age see subsections 23(5A), (5B), (5C) and (5D).
Work bonus income greater than or equal to income concession amount
(2) If the person’s work bonus income for an instalment period is greater than or equal to the income concession amount for that period, then, for the purposes of Module E of that Rate Calculator, the amount of the person’s work bonus income for that period is reduced by an amount equal to the income concession amount.
Note: For work bonus income, see subsection (4BA).
Example 1: David earns $2,300 of work bonus income in an instalment period of 14 days. David’s rate of social security pension for that period is greater than nil.
David’s work bonus income for that period is reduced by $300, leaving David $2,000 of work bonus income for that period.
Example 2: Amy earns $1,000 of work bonus income in an instalment period of 14 days. Amy’s rate of social security pension for that period is greater than nil.
Amy’s work bonus income for that period is reduced by $300, leaving Amy $700 of work bonus income for that period.
(3) If the person’s unused concession balance (see section 1073AB) is greater than or equal to the amount (the current amount) of the person’s work bonus income that remains after applying subsection (2) of this section in relation to an instalment period:
(a) for the purposes of Module E of that Rate Calculator, the person’s work bonus income for that period is further reduced to nil; and
(b) if the person’s rate of social security pension for that period is greater than nil—the person’s unused concession balance is reduced by an amount equal to the current amount.
Example 1: To continue example 1 in subsection (2), assume David’s unused concession balance is $2,000. The current amount is $2,000.
David’s work bonus income for that period is further reduced to nil.
David’s unused concession balance is now nil.
Example 2: To continue example 2 in subsection (2), assume Amy’s unused concession balance is $1,600. The current amount is $700.
Amy’s work bonus income for that period is further reduced to nil.
Amy’s unused concession balance is now $900.
(4) If the person’s unused concession balance (see section 1073AB) is greater than nil but less than the amount of the person’s work bonus income that remains after applying subsection (2) of this section in relation to an instalment period:
(a) for the purposes of Module E of that Rate Calculator, the person’s work bonus income for that period is further reduced by an amount equal to that unused concession balance; and
(b) if the person’s rate of social security pension for that period is greater than nil—the person’s unused concession balance is reduced to nil.
Example: Bill earns $1,300 of work bonus income in an instalment period of 14 days. Bill’s rate of social security pension for that period is greater than nil.
Under subsection (2), Bill’s work bonus income for that period is reduced by $300, leaving Bill $1,000 of work bonus income for that period.
Assume Bill’s unused concession balance is $800.
Under subsection (4), Bill’s work bonus income for that period is further reduced by $800 leaving Bill $200 of work bonus income for that period.
Bill’s unused concession balance is now nil.
Work bonus income less than income concession amount
(4A) If the person has work bonus income for an instalment period but that income is less than the income concession amount for that period:
(a) for the purposes of Module E of that Rate Calculator, the person’s work bonus income for that period is reduced to nil; and
(b) if the person’s rate of social security pension for that period is greater than nil—the person’s unused concession balance (see section 1073AB) is increased, subject to subsection 1073AB(2), by an amount equal to the difference between that income concession amount and that work bonus income (before it was reduced).
Note: For work bonus income, see subsection (4BA).
Example: Emma earns $100 of work bonus income in an instalment period of 14 days. Emma’s rate of social security pension for that period is greater than nil.
Emma’s work bonus income for that period is reduced to nil.
Emma’s unused concession balance is increased by $200.
No work bonus income
(4B) If:
(a) the person has no work bonus income for an instalment period; and
(b) the person’s rate of social security pension for that period is greater than nil;
the person’s unused concession balance (see section 1073AB) is increased, subject to subsection 1073AB(2), by an amount equal to the income concession amount for that period.
Note: For work bonus income, see subsection (4BA).
Definitions
(4BA) For the purposes of this section, a person’s work bonus income for an instalment period is the sum of the following:
(a) the person’s employment income for that period;
(b) the sum of the person’s gainful work income for each day in that period.
Note: For employment income, see section 8.
(4BB) For the purposes of this section, a person’s gainful work income for a day in an instalment period is the amount worked out using the following formula:
where:
annual amount means the annual amount of ordinary income of the person that is earned, derived or received by the person from gainful work (within the meaning of section 1073AAA) undertaken by the person, being the annual amount as last determined by the Secretary.
(4BC) The amount at paragraph (4BA)(b) is to be rounded to the nearest cent (rounding 0.5 cents downwards).
(4C) The income concession amount is:
(a) for an instalment period of 14 days—$300; and
(b) for an instalment period of less than 14 days—the amount worked out using the following formula:
Interpretation
(5) For the purposes of this section, a person’s employment income for an instalment period includes an amount that is taken to have been earned, derived or received over that period because of subsection 1073A(1).
(5A) If a person has gainful work income for an instalment period, the rate of the person’s gainful work income on a yearly basis for each day in that period may be worked out using the following formula:
Note: This subsection will be relevant to working out the person’s rate of social security pension in accordance with Pension Rate Calculator A at the end of section 1064 or Pension Rate Calculator C at the end of section 1066.
(5B) An amount worked out under subsection (5A) is to be rounded to the nearest cent (rounding 0.5 cents downwards).
(6) If the person is a member of a couple, apply this section in relation to the person, and to the person’s partner, before applying point 1064‑E2.
(7) In working out a person’s employment income for the purposes of this section, disregard subsection 8(1B).
(8) If:
(a) the person is a member of a couple; and
(b) the person’s partner’s work bonus income (within the meaning of section 46AA of the Veterans’ Entitlements Act 1986) is reduced by one or more amounts (each of which is a reduction amount) under section 46AA of that Act;
then, in applying point 1064‑E2, the ordinary income of the person’s partner is to be reduced by an amount equal to the total of the reduction amounts.
1073AAA Meaning of gainful work
General rule
(1) For the purposes of this Division, gainful work is work for financial gain or reward (other than as an employee), where:
(a) the work involves personal exertion on the part of the person concerned; and
(b) the work is carried on within or outside Australia.
Disregard managing or administering family financial investments and real property
(2) Work undertaken by a person is taken not to be gainful work for the purposes of this Division to the extent to which the work consists of the management or administration of any financial investment, or any real property, in which any of the following has a legal or equitable interest:
(a) a member of the person’s family group;
(b) a company that is a family company in relation to the person;
(c) the trustee or trustees of a trust that is a family trust in relation to the person.
Note: For financial investment, see section 9.
Disregard domestic duties
(3) Work undertaken by a person is taken not to be gainful work for the purposes of this Division if the work consists of carrying out:
(a) domestic tasks; or
(b) household maintenance tasks; or
(c) gardening tasks; or
(d) similar tasks;
in relation to:
(e) the person’s place of residence; or
(f) if the person has 2 or more places of residence—any of those places of residence.
Definitions
(4) For the purposes of this section, a place of residence includes:
(a) if the place is a dwelling‑house—any land or building that is adjacent to the dwelling‑house and that is used primarily for private or domestic purposes in association with that dwelling‑house; or
(b) if the place is a flat or home unit—a garage or storeroom that is used for private or domestic purposes in association with the flat or home unit.
(5) In this section:
family company, in relation to a person, means a company where:
(a) the company is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of any or all of the members of the person’s family group; or
(b) any or all of the members of the person’s family group are in a position to cast, or control the casting of, more than 50% of the maximum number of votes that may be cast at a general meeting of the company; or
(c) both:
(i) the company has one or more shareholders; and
(ii) each shareholder is a member of the person’s family group.
family group, in relation to a person, means the group consisting of the person and the family members of the person. If the person has no family members, the person is taken to be a family group in the person’s own right.
Note: For family member, see subsection 23(1).
family trust, in relation to a person, means a trust where a member of the person’s family group benefits, or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the trust.
1073AB Unused concession balance
Initial unused concession balance of nil
(1) A person has an unused concession balance of nil on the first day that is after 30 June 2011 and is a day on which section 1073AA applies to the person.
Maximum unused concession balance
(2) If, apart from this subsection, the person’s unused concession balance would exceed $7,800, that balance is instead taken to be $7,800.
Example: John has an unused concession balance of $7,700. John earns $100 of work bonus income in an instalment period of 14 days.
Instead of John’s unused concession balance increasing to $7,900 under subsection 1073AA(4A), John’s unused concession balance increases to $7,800.
Effect of ceasing to receive social security pension
(3) If the person ceases to receive the social security pension referred to in paragraph 1073AA(1)(a), the person retains the person’s unused concession balance immediately before that cessation.
Note: If section 1073AA applies to the person again, the person’s unused concession balance will be that retained balance.
Division 1AA—Employment income attribution rules
1073A Employment income attribution over a period for social security pensioners
(1) Employment income:
(a) that is a lump sum amount either:
(i) in respect of a period greater than a fortnight; or
(ii) resulting from remunerative work although not in respect of any particular period; and
(b) that is earned, derived or received, or is taken to have been earned, derived or received, by a person:
(i) who is receiving a social security pension; and
(ii) whose rate of payment of that pension is worked out with regard to the income test module of a rate calculator in this Chapter;
is to be taken to have been earned, derived or received over such period, not exceeding 52 weeks, as the Secretary determines.
(2) The person’s employment income for the period determined by the Secretary is to be reduced to a fortnightly rate rounded to the nearest cent (rounding 0.5 cents downwards).
1073B Daily attribution of employment income
(1) If:
(a) a person is receiving a social security pension or a social security benefit; and
(b) the person’s rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and
(d) the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;
the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period.
(2) If a person has reached pension age and is receiving a social security benefit, subsection (1) does not apply to the person, to the extent that it relates to that benefit.
Note 1: Subsection (1) applies to a person who has not reached pension age and is receiving a social security benefit.
Note 2: For pension age see subsections 23(5A), (5B), (5C) and (5D).
1073C Fortnightly or yearly expression of attributed employment income
If, in accordance with the operation of section 1073B, a person is taken to earn, derive or receive a particular amount of employment income on each day in an instalment period:
(a) the rate of the person’s employment income on a fortnightly basis for that day may be worked out by multiplying that amount by 14; and
(b) the rate of the person’s employment income on a yearly basis for that day may be worked out by multiplying that amount by 364.
Division 1AB—Working credit accrual and depletion rules and their consequences
1073D To whom do working credit accrual and depletion rules apply?
The rules in this Division apply to a person (a working credit participant):
(a) who is receiving a social security pension or a social security benefit; and
(b) whose rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and
(c) who has not reached pension age; and
(d) to whom the student income bank does not apply.
1073E Opening balance
Basic opening balance rule
(1) Subject to this section, each working credit participant has, on becoming a working credit participant, a working credit opening balance of nil.
Opening balance following cancellation of social security pension or benefit
(2) If:
(a) a person ceases to be a working credit participant or a person to whom the student income bank applies because of a determination to cancel, or an automatic cancellation of, the person’s social security pension or social security benefit; and
(b) the person had a working credit balance or a student income bank balance greater than nil immediately before the date of effect of the determination or cancellation; and
(c) the person makes, or is taken to have made, a new claim for a social security pension or social security benefit; and
(d) the Secretary determines that the new claim is to be granted with effect from a day within 12 months after the date of effect mentioned in paragraph (b); and
(e) the person becomes a working credit participant on a day (the participation day), being either the day with effect from which the new claim is granted or a day following that day;
the working credit balance mentioned in paragraph (b), or the student income bank balance mentioned in that paragraph to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.
Opening balance following suspension of social security pension or benefit
(3) If:
(a) a person ceases to be a working credit participant because of a determination to suspend the person’s social security pension or social security benefit; and
(b) the person had a working credit balance greater than nil immediately before the date of effect of the determination; and
(c) within 12 months after the date of effect of the determination, the payment of the person’s pension or benefit is resumed; and
(d) the person becomes a working credit participant on the day with effect from which the person’s pension or benefit is resumed;
the working credit balance mentioned in paragraph (b) becomes the opening balance of the working credit applicable to the person on the day mentioned in paragraph (d).
Opening balance following suspension and subsequent cancellation of social security pension or benefit
(4) If:
(a) a person ceases to be a working credit participant or a person to whom the student income bank applies because of a determination to suspend the person’s social security pension or social security benefit; and
(b) while the person’s pension or benefit is suspended there is a determination to cancel the person’s pension or benefit; and
(c) the person had a working credit balance or a student income bank balance greater than nil immediately before the date of effect of the suspension determination; and
(d) the person makes, or is taken to have made, a new claim for a social security pension or social security benefit; and
(e) the Secretary determines that the new claim is to be granted with effect from a day within 12 months after the date of effect mentioned in paragraph (c); and
(f) the person becomes a working credit participant on a day (the participation day), being either the day with effect from which the new claim is granted or a day following that day;
the working credit balance mentioned in paragraph (c), or the student income bank balance mentioned in that paragraph to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.
Opening balance following cessation of full‑time study by youth allowance recipient
(5) If:
(a) a person is receiving youth allowance and is undertaking full‑time study; and
(b) the person ceases to undertake full‑time study; and
(c) either because of a determination made as a result of that cessation or, if no determination is necessary, because of the cessation itself, the person, on a day (the participation day):
(i) ceases to be a person to whom the student income bank set out in Module J of the Youth Allowance Rate Calculator applies; and
(ii) becomes a working credit participant; and
(d) the person had a student income bank balance greater than nil immediately before the participation day;
the student income bank balance mentioned in paragraph (d), to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.
Opening balance following cessation as a new apprentice by youth allowance recipient
(5A) If:
(a) a person is receiving youth allowance and is a new apprentice; and
(b) the person ceases to be a new apprentice; and
(c) either because of a determination made as a result of that cessation or, if no determination is necessary, because of the cessation itself, the person, on a day (the participation day):
(i) ceases to be a person to whom the student income bank set out in Module J of the Youth Allowance Rate Calculator applies; and
(ii) becomes a working credit participant; and
(d) the person had a student income bank balance greater than nil immediately before the participation day;
the student income bank balance mentioned in paragraph (d), to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.
Opening balance following cessation of ABSTUDY payment
(6) If:
(a) a person to whom the income bank under the ABSTUDY scheme applies stops being such a person; and
(b) the person becomes a working credit participant on a day (the participation day) within 12 months after so stopping; and
(c) immediately before so stopping, the person had a credit balance greater than nil under the scheme;
the credit balance, to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.
Threshold amount
(7) In this section:
threshold amount means:
(a) if, on the participation day, the person is receiving youth allowance, the person is not undertaking full‑time study and the person is not a new apprentice—$3,500; or
(b) in any other case—$1,000.
1073F Working out accruals and depletions of working credit for social security beneficiaries
This section determines, in respect of each working credit participant who is receiving a social security benefit, whether, for each day in an instalment period:
(a) there is an accrual to the participant’s working credit balance; or
(b) the participant’s working credit balance is unaffected; or
(c) the participant’s working credit balance is depleted;
and, if there is an accrual to, or a depletion from, the participant’s working credit balance, the amount of that accrual or depletion.
Method statement
Step 1. Work out the amount of the participant’s employment income earned, derived or received on the day. This could be a nil amount or it could be an amount that is taken, under section 1073B, to have been earned, derived or received on the day.
Step 2. Multiply the amount determined under step 1 by 14. This is the participant’s rate of employment income on a fortnightly basis for the day.
Step 3. Add to the participant’s rate of employment income on a fortnightly basis for the day the participant’s rate of any other ordinary income on a fortnightly basis for the day. This is the participant’s rate of total ordinary income on a fortnightly basis for the day.
Step 4. If the participant’s rate of total ordinary income on a fortnightly basis for the day is less than $48, there is an accrual to the participant’s working credit balance for the day of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is:
(a) if the participant became a working credit participant on a day under subsection 1073E(2), (3), (4), (5), (5A) or (6) and on that day the participant was receiving youth allowance, the participant was not undertaking full‑time study and the participant was not a new apprentice—$3,500; or
(b) in any other case—$1,000.
Step 5. If the participant’s rate of total ordinary income on a fortnightly basis for the day is at least $48 but does not exceed the ordinary income free area applicable to the participant for the day under the income test module of the appropriate rate calculator, the participant’s working credit balance for the day is neither increased nor reduced.
Step 6. If the participant’s rate of total ordinary income on a fortnightly basis for the day is at least $48 and exceeds the participant’s applicable ordinary income free area for the day, the participant’s working credit balance, if it is greater than nil on the day, is depleted on that day by the least of:
(a) the amount of employment income determined under step 1; or
(b) one fourteenth of the amount by which the participant’s rate of total ordinary income on a fortnightly basis exceeds the participant’s applicable ordinary income free area; or
(c) the participant’s available working credit balance.
1073G Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary
If, under section 1073F, the working credit balance of a working credit participant is depleted on a particular day, the participant’s rate of ordinary income on a fortnightly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 6 of the method statement, multiplied by 14.
1073H Working out accruals and depletions of working credit for social security pensioners
This section determines, in respect of each working credit participant who is receiving a social security pension, whether, for each day in an instalment period:
(a) there is an accrual to the participant’s working credit balance; or
(b) the participant’s working credit balance is unaffected; or
(c) the participant’s working credit balance is depleted;
and, if there is an accrual to, or a depletion from, the participant’s working credit balance, the amount of that accrual or depletion.
Method statement
Step 1. Work out the amount of the participant’s employment income earned, derived or received on the day. This could be a nil amount or it could be an amount that is taken, under section 1073B, to have been earned, derived or received on the day.
Step 2. Multiply the amount determined under step 1 by 364. This is the participant’s rate of employment income on a yearly basis for the day.
Step 3. Add to the participant’s rate of employment income on a yearly basis for the day the participant’s rate of any other ordinary income on a yearly basis for the day. This is the participant’s rate of total ordinary income on a yearly basis for the day.
Step 4. Divide the participant’s rate of total ordinary income on a yearly basis for the day by 26. This is the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day.
Step 5. Divide the yearly ordinary income free area applicable to the participant for the day under the ordinary income test module of the appropriate rate calculator by 26. This is the participant’s applicable ordinary income free area, expressed on a fortnightly basis, for the day.
Step 6. If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is less than $48, there is an accrual to the participant’s working credit balance, for the day, of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is $1,000.
Step 7. If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 but does not exceed the participant’s applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant’s working credit balance for the day is neither increased nor reduced.
Step 8. If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 and exceeds the participant’s applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant’s working credit balance, if it is greater than nil on the day, is depleted on that day by the least of:
(a) the amount of employment income determined under step 1; or
(b) one fourteenth of the amount by which the participant’s rate of total ordinary income, expressed on a fortnightly basis, exceeds the participant’s applicable ordinary income free area, expressed on that basis; or
(c) the participant’s available working credit balance.
1073I Working out the effect of a working credit depletion on the yearly rate of ordinary income for a social security pensioner
If, under section 1073H, the working credit balance of a working credit participant is depleted on a particular day, the participant’s rate of ordinary income on a yearly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 8 of the method statement, multiplied by 364.
1073J Working credit balance prevents loss of qualification in certain cases
If:
(a) a person receiving disability support pension, carer payment, youth allowance or jobseeker payment is a working credit participant; and
(b) either:
(i) the participant commences to earn, derive or receive, or to be taken to earn, derive or receive, employment income; or
(ii) there is an increase in the employment income that is earned, derived or received, or taken to be earned, derived or received, by the participant; and
(c) the participant has a working credit balance greater than nil at the start of the instalment period of the participant in which the commencement or increase occurs; and
(d) but for the commencement or increase, the participant would have continued to be qualified for the payment mentioned in paragraph (a) until the earlier of:
(i) a day determined under Division 8 or 9 of Part 3 of the Administration Act; or
(ii) the day on which the participant’s working credit balance is reduced to nil;
the participant is to be treated as if he or she had continued to be so qualified until the earlier of the days determined as referred to in subparagraphs (d)(i) and (ii).
Division 1A—Business income
1074 Ordinary income from a business—treatment of trading stock
(1) If:
(a) a person carries on a business; 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 person’s ordinary income for that tax year in the form of profits from the business is to include the amount of the difference in values.
(2) If:
(a) a person carries on a business; 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 person’s ordinary income for that tax year in the form of profits from the business is to be reduced by the amount of the difference in values.
1075 Permissible reductions of business income
(1) Subject to subsection (2), if a person carries on a business, the person’s ordinary income from the business is to be reduced by:
(a) losses and outgoings that relate to the business and are allowable deductions for the purposes of section 8‑1 of the Income Tax Assessment Act 1997; and
(b) amounts that relate to the business and can be deducted in respect of plant (within the meaning of the Income Tax Assessment Act 1997) under Division 40 of that Act; and
(c) amounts that relate to the business and are allowable deductions under section 290‑60 of the Income Tax Assessment Act 1997.
(2) If, under Division 1B, a person is taken to receive ordinary income on a financial investment, that ordinary income is not to be reduced by the amount of any expenses incurred by the person because of that investment.
Note: For financial investment see subsection 9(1).
(3) If a person’s ordinary income for a period includes rental income from a property that is not business income, the person’s ordinary income from that property is to be reduced by losses and outgoings that relate to the property and are allowable deductions for the purposes of section 8‑1 of the Income Tax Assessment Act 1997 for that period.
(4) If the amount of the allowable deductions relating to a property for a period under section 8‑1 of the Income Tax Assessment Act 1997 exceeds the amount of the rental income from the property for that period, the amount of the ordinary income from the property for that period is taken to be nil.
Division 1B—Income from financial assets (including income streams (short term) and certain income streams (long term))
1076 Deemed income from financial assets—persons other than members of couples
(1) This section applies to a person who is not a member of a couple.
(2) A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.
(3) If the total value of the person’s financial assets is equal to or less than the person’s deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.
(3A) If the total value of the person’s financial assets exceeds the person’s deeming threshold, the ordinary income that the person is taken to receive is worked out as follows:
Method statement
Step 1. Multiply the person’s deeming threshold by the below threshold rate.
Note 1: For deeming threshold see subsection 1081(1).
Note 2: For below threshold rate see subsection 1082(1).
Step 2. Subtract the deeming threshold from the total value of the person’s financial assets.
Note: For deeming threshold see subsection 1081(1).
Step 3. Multiply the remainder worked out at Step 2 by the above threshold rate.
Note: For above threshold rate see subsection 1082(2).
Step 4. The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the person is taken to receive per year on the financial assets.
(4) The person is taken, for the purposes of this Act, to receive one fifty‑second of the amount calculated under subsection (3) or (3A) as ordinary income of the person during each week.
1077 Deemed income from financial assets—members of pensioner couples
(1) This section applies to the members of a pensioner couple.
(2) If one or both of the members of a couple have financial assets, the members of the couple are taken, for the purposes of this Act, to receive together ordinary income on those assets in accordance with this section.
(3) If the total value of the couple’s financial assets is equal to or less than the couple’s deeming threshold, the ordinary income the couple is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.
(3A) If the total value of the couple’s financial assets exceeds the couple’s deeming threshold, the ordinary income that the couple is taken to receive is worked out as follows:
Method statement
Step 1. Multiply the couple’s deeming threshold by the below threshold rate.
Note 1: For deeming threshold see subsection 1081(2).
Note 2: For below threshold rate see subsection 1082(1).
Step 2. Subtract the deeming threshold from the total value of the couple’s financial assets.
Note: For deeming threshold see subsection 1081(2).
Step 3. Multiply the remainder worked out at Step 2 by the above threshold rate.
Note: For above threshold rate see subsection 1082(2).
Step 4. The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the couple is taken to receive per year on the financial assets.
(4) Each member of the couple is taken, for the purposes of this Act, to receive, as ordinary income during each week, an amount worked out under the following formula:
1078 Deemed income from financial assets—members of non‑pensioner couples
(1) This section applies to a person who is a member of a couple, other than a pensioner couple.
(2) A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.
(3) If the total value of the person’s financial assets is equal to or less than the person’s deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.
(3A) If the total value of the person’s financial assets exceeds the person’s deeming threshold, the ordinary income that the person is taken to receive is worked out as follows:
Method statement
Step 1. Multiply the person’s deeming threshold by the below threshold rate.
Note 1: For deeming threshold see subsection 1081(3).
Note 2: For below threshold rate see subsection 1082(1).
Step 2. Subtract the deeming threshold from the total value of the person’s financial assets.
Note: For deeming threshold see subsection 1081(3).
Step 3. Multiply the remainder worked out at Step 2 by the above threshold rate.
Note: For above threshold rate see subsection 1082(2).
Step 4. The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the person is taken to receive per year on the financial assets.
(4) The person is taken, for the purposes of this Act, to receive one fifty‑second of the amount calculated under subsection (3) or (3A) as ordinary income of the person during each week.
1081 Deeming threshold
(1) The deeming threshold for a person who is not a member of a couple is $30,000.
(2) The deeming threshold for a pensioner couple is $50,000.
(3) The deeming threshold for a member of a couple, other than a pensioner couple, is an amount equal to one‑half of the amount fixed by subsection (2).
Note: The amounts fixed by subsections (1) and (2) are indexed every 1 July. See sections 1190–1192.
1082 Below threshold rate, above threshold rate
(1) For the purposes of this Division, the below threshold rate is the rate determined, by legislative instrument, by the Minister to be the below threshold rate for the purposes of this Division.
(2) For the purposes of this Division, the above threshold rate is the rate determined, by legislative instrument, by the Minister to be the above threshold rate for the purposes of this Division.
(3) A rate determined under this section must be in the form of a specified percentage.
1083 Actual return on financial assets not treated as ordinary income
(1) Subject to subsection (2), any return on a financial asset that a person actually earns, derives or receives is taken, for the purposes of this Act, not to be ordinary income of the person.
(2) If, because of:
(a) a determination under subsection 1084(1); or
(b) the operation of subsection 1084(2);
a financial investment is not to be regarded as a financial asset for the purposes of section 1076, 1077 or 1078, subsection (1) does not apply to any return on the investment that the person actually earns, derives or receives.
1084 Certain money and financial investments not taken into account
(1) The Minister may determine that:
(a) specified financial investments; or
(b) a specified class of financial investments;
are not to be regarded as financial assets for the purposes of section 1076, 1077 or 1078.
(2) If a financial investment is an unrealisable asset for the purposes of section 1129, 1130B or 1131, the financial asset is not to be regarded as a financial asset for the purposes of section 1076, 1077 or 1078.
(3) A determination under subsection (1):
(a) must be in writing; and
(b) takes effect on the day on which it is made or on such other day (whether earlier or later) as is specified in the determination.
1084A Valuation and revaluation of certain financial investments
The total value of a person’s listed securities and managed investments (being listed securities and managed investments that fluctuate depending on the market) (the relevant investments) is determined in accordance with the following:
(a) an initial total valuation is to be given to the relevant investments on 1 July 1996, or when a new claim is determined, by the method set out in departmental guidelines;
(b) that total valuation continues in effect until the relevant investments are revalued by the method set out in departmental guidelines, and that revaluation must occur:
(i) on 20 March in each calendar year after 1996; and
(ii) on 20 September in each calendar year after 1996; and
(iii) when the person requests a revaluation of one or more of the person’s listed securities and managed investments; and
(iv) following an event that affects the relevant investments and is the subject of a notice given under section 68 of the Administration Act.
Division 1C—Income from income streams not covered by Division 1B
Subdivision B—Income streams that are not family law affected income streams
1097A Scope of Subdivision
(1) This Subdivision applies to income streams that are not family law affected income streams.
(2) However, this Subdivision does not apply to:
(a) an asset‑tested income stream (long term) that is an account‑based pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or
(b) an asset‑tested income stream (long term) that is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the requirements determined in an instrument under subsection 9(1EA) of this Act.
Note 1: For treatment of an income stream mentioned in subsection (2), see Division 1B.
Note 2: Part 2 of Schedule 11 to the Social Services and Other Legislation Amendment Act 2014 preserves the rules in this Subdivision for a certain kind of income stream that was being provided to a person immediately before 1 January 2015 where the person was receiving an income support payment immediately before that day provided that, since that day, that income stream has been provided to the person and the person has been continuously receiving an income support payment.
1098 Income from asset‑test exempt income stream
(1) For the purpose of working out the annual rate of ordinary income of a person from an asset‑test exempt income stream to which this Subdivision applies, the person is taken to receive from that income stream each year the amount worked out under section 1099 or 1099A.
Note: For asset‑test exempt income stream see sections 9A, 9B and 9BA.
(2) Sections 1099 and 1099A do not apply if:
(a) the income stream is covered by subsection 9BA(1); or
(b) on the income stream’s commencement day, there was a reasonable likelihood that the income stream would have been covered by subsection 9BA(1), but the income stream is no longer covered by that subsection.
Note: See section 1099AA.
1099 Income—income stream not a defined benefit income stream
If the asset‑test exempt income stream to which this Subdivision applies is not a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:
where:
annual payment means the amount payable to the person for the year under the income stream.
purchase price has the meaning given by subsection 9(1).
relevant number has the meaning given by subsection 9(1).
Example: Mark is 65 years old and single. He purchases an annuity for $100,000 with a term based on life expectancy (i.e. 15.41 years, which he chooses to round up to 16 years). The annuity has all the revised characteristics listed in the legislation. His annual payment from the annuity totals $9,895. Mark’s assessable income from this income stream is:
1099A Income—income stream is a defined benefit income stream
(1) Subject to subsection (2), if the asset‑test exempt income stream to which this Subdivision applies is a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:
where:
annual payment means the amount payable to the person for the year under the income stream.
deductible amount has the meaning given by subsection 9(1).
Cap on deductible amount
(2) If:
(a) the defined benefit income stream is not a military defined benefit income stream; and
(b) apart from this subsection, the deductible amount under subsection (1) in relation to the income stream for the year would exceed 10% of the amount payable to the person for the year under the income stream;
then that deductible amount is taken to be an amount equal to 10% of the amount payable to the person for the year under the income stream.
1099AA Income from market‑linked asset‑test exempt income stream
(1) If either of the following conditions is satisfied in relation to the asset‑test exempt income stream to which this Subdivision applies:
(a) the income stream is covered by subsection 9BA(1);
(b) on the income stream’s commencement day, there was a reasonable likelihood that the income stream would have been covered by subsection 9BA(1), but the income stream is no longer covered by that subsection;
the annual rate of ordinary income of a person from the income stream is worked out under whichever of subsections (2) and (3) is applicable.
Recipient makes election
(2) If:
(a) the person has elected that a particular amount is to be the payment, or the total of the payments, to be made under the income stream in respect of a period (the payment period) that:
(i) consists of the whole or a part of a particular financial year; and
(ii) begins on or after the income stream’s commencement day; and
(b) the election is in force on a particular day in the payment period;
the annual rate of ordinary income of the person from the income stream on that day is worked out using the following formula:
where:
purchase price has the meaning given by subsection 9(1).
relevant number has the meaning given by subsection 9(1).
total payments means the payment, or the total of the payments, to be made under the income stream in respect of the payment period.
Recipient does not make election
(3) If the person has not elected that a particular amount is to be the payment, or the total of the payments, to be made under the income stream in respect of a period (the payment period) that:
(a) consists of the whole or a part of a particular financial year; and
(b) begins on or after the income stream’s commencement day;
the annual rate of ordinary income of the person from the income stream on each day during the payment period is worked out using the following formula:
where:
default amount means 100% of the amount worked out for the financial year using the formula in subsection 9BA(5) (for pro‑rating, see subsection (4)).
purchase price has the meaning given by subsection 9(1).
relevant number has the meaning given by subsection 9(1).
(4) If the income stream’s commencement day is not a 1 July, the default amount (within the meaning of subsection (3)) for the financial year starting on the preceding 1 July must be reduced on a pro‑rata basis by reference to the number of days in the financial year that are on and after the commencement day.
Exception—income stream’s commencement day happens in June
(5) If:
(a) the income stream’s commencement day happens in June; and
(b) no payment is made under the income stream for the financial year in which the commencement day happens;
subsections (2), (3) and (4) do not apply in working out the annual rate of ordinary income of the person from the income stream on a day in that financial year.
1099B Income from asset‑tested income stream (long term)
(1) For the purpose of working out the annual rate of ordinary income of a person from an asset‑tested income stream (long term) to which this Subdivision applies, the person is taken to receive from that income stream each year the amount worked out under section 1099C or 1099D.
(2) Sections 1099C and 1099D do not apply to an income stream if section 1099DAA applies to the income stream.
1099C Income—asset‑tested income stream (long term) that is not a defined benefit income stream
If the asset‑tested income stream (long term) to which this Subdivision applies is not a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:
where:
annual payment means the amount payable to the person for the year under the income stream.
purchase price has the meaning given by subsection 9(1).
relevant number has the meaning given by subsection 9(1).
residual capital value has the meaning given by subsection 9(1).
Note: For treatment of asset‑tested income streams (short term) see Division 1B of Part 3.10.
Example: Sally is 65 years old and single. She purchases a 10 year annuity for $150,000, with a residual capital value of $20,000. Her total annual annuity payment is $18,337. Sally’s assessable income from her 10 year annuity is:
1099D Income—asset‑tested income stream (long term) that is a defined benefit income stream
(1) Subject to subsection (2), if the asset‑tested income stream (long term) to which this Subdivision applies is a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:
where:
annual payment means the amount payable to the person for the year under the income stream.
deductible amount has the meaning given by subsection 9(1).
Cap on deductible amount
(2) If:
(a) the defined benefit income stream is not a military defined benefit income stream; and
(b) apart from this subsection, the deductible amount under subsection (1) in relation to the income stream for the year would exceed 10% of the amount payable to the person for the year under the income stream;
then that deductible amount is taken to be an amount equal to 10% of the amount payable to the person for the year under the income stream.
1099DAA Income from certain low‑payment asset‑tested income streams
(1) If:
(a) an income stream is an asset‑tested income stream (long term) to which this Subdivision applies; and
(b) the income stream is an allocated pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; and
(c) one or more payments have been, or are to be, made under the income stream in respect of a period (the payment period) that:
(i) consists of the whole or a part of a financial year; and
(ii) begins on or after the income stream’s commencement day; and
(d) on a day in the payment period, the amount worked out using the formula in subsection (2) is less than the amount worked out using the formula in subsection (3);
the annual rate of ordinary income of a person from the income stream on that day is worked out under subsection (3).
Annual rate based on total payments
(2) For the purposes of paragraph (1)(d), the formula in this subsection is:
where:
purchase price has the meaning given by subsection 9(1).
relevant number has the meaning given by subsection 9(1).
total payments means the payment, or the total of the payments, made, or to be made, under the income stream in respect of the payment period.
Annual rate based on minimum amount
(3) For the purposes of paragraph (1)(d), the formula in this subsection is:
where:
minimum amount means the minimum amount calculated in accordance with the method determined, by legislative instrument, by the Minister for the purposes of this definition.
purchase price has the meaning given by subsection 9(1).
relevant number has the meaning given by subsection 9(1).
Exception—income stream’s commencement day happens in June
(4) If:
(a) the income stream’s commencement day happens in June; and
(b) no payment is made under the income stream for the financial year in which the commencement day happens;
subsections (2) and (3) do not apply in working out the annual rate of ordinary income of the person from the income stream on a day in that financial year.
1099DAB Income—asset‑tested income stream (lifetime)
If the income stream is an asset‑tested income stream (lifetime), the amount that the person is taken to receive from the income stream each year is worked out as follows:
where:
annual payment means the amount payable to the person for the year under the income stream.
Subdivision C—Family law affected income streams
1099DA Scope of Subdivision
(1) This Subdivision applies to family law affected income streams.
(2) However, this Subdivision does not apply to:
(a) an asset‑tested income stream (long term) that is an account‑based pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or
(b) an asset‑tested income stream (long term) that is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the requirements determined in an instrument under subsection 9(1EA) of this Act.
Note 1: For treatment of an income stream mentioned in subsection (2), see Division 1B.
Note 2: Part 2 of Schedule 11 to the Social Services and Other Legislation Amendment Act 2014 preserves the rules in this Subdivision for a certain kind of income stream that was being provided to a person immediately before 1 January 2015 where the person was receiving an income support payment immediately before that day provided that, since that day, that income stream has been provided to the person and the person has been continuously receiving an income support payment.
1099DB Income from asset‑test exempt income streams
(1) For the purpose of working out the annual rate of ordinary income of a person from an asset‑test exempt income stream to which this Subdivision applies, the person is taken to receive from that income stream each year:
(a) if the income stream is not a defined benefit income stream—the amount determined by the Secretary under this paragraph; or
(b) if the income stream is a defined benefit income stream—the amount determined by the Secretary under this paragraph.
(2) In making a determination under paragraph (1)(a) or (b), the Secretary must comply with any relevant decision‑making principles in force under section 1099DD.
1099DC Income from asset‑tested income stream (long term)
(1) For the purpose of working out the annual rate of ordinary income of a person from an asset‑tested income stream (long term) to which this Subdivision applies, the person is taken to receive from that income stream each year:
(a) if the income stream is not a defined benefit income stream—the amount determined by the Secretary under this paragraph; or
(b) if the income stream is a defined benefit income stream—the amount determined by the Secretary under this paragraph.
(2) In making a determination under paragraph (1)(a) or (b), the Secretary must comply with any relevant decision‑making principles in force under section 1099DD.
1099DCA Income from asset‑tested income stream (lifetime)
(1) For the purpose of working out the annual rate of ordinary income of a person from an asset‑tested income stream (lifetime) to which this Subdivision applies, the person is taken to receive from that income stream each year the amount determined by the Secretary under this subsection.
(2) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles in force under section 1099DD.
1099DD Decision‑making principles
The Secretary may, by legislative instrument, formulate principles (decision‑making principles) to be complied with by him or her in making decisions under:
(a) paragraph 1099DB(1)(a); or
(b) paragraph 1099DB(1)(b); or
(c) paragraph 1099DC(1)(a); or
(d) paragraph 1099DC(1)(b); or
(e) subsection 1099DCA(1).
Division 1D—Aged care accommodation bonds: certain transactions before 6 November 1997
1099E Scope of Division
(1) This Division applies to a person if:
(a) at any time from the beginning of 1 October 1997 until the end of 5 November 1997, the person became liable to pay an accommodation bond for entry to a residential care service; and
(b) either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44‑8B and Division 57A of the Aged Care (Transitional Provisions) Act 1997 been in force at the time of the entry; and
(c) the person later made an agreement (a refund agreement) with the provider of the service that the person’s liability to pay an accommodation bond for the entry was to be replaced with a liability to pay an accommodation charge for the entry, and that any payment of any of the bond was to be refunded to the person.
Note: For accommodation bond, accommodation charge and charge exempt resident, see subsection 11(1).
(2) This Division also applies to a person if the Secretary is satisfied that:
(a) on or before 5 November 1997, the person sold his or her principal home for the sole or principal purpose of raising money to pay an accommodation bond for entry to a residential care service; and
(b) either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44‑8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry.
Note: For accommodation bond, accommodation charge and charge exempt resident, see subsection 11(1).
(3) This Division also applies to the partner of a person covered by subsection (1) or (2) (even if the person so covered is now deceased).
(4) For the purposes of subsection (2), the time at which a person sells his or her home is the time when he or she comes under a legal obligation to transfer the home to the buyer.
1099F Exempt bond amount does not count as income
The person’s exempt bond amount (see section 1099H) does not count as income of the person for the purposes of this Act.
Note: Income is otherwise defined in section 8.
1099G Person’s ordinary income reduced using financial asset rules
(1) For the purposes of this section, assume that the person’s exempt bond amount (see section 1099H) were a financial asset of the person.
(2) The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (income from financial assets (including income streams (short term) and certain income streams (long term)).
(3) In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold (deeming threshold is a term used in Division 1B).
1099H Meaning of exempt bond amount
(1) The following is how to work out a person’s exempt bond amount.
(2) If the person is covered by subsection 1099E(1) (but not subsection 1099E(2)), the person’s exempt bond amount is any amount of accommodation bond payment refunded to the person under the refund agreement mentioned in that subsection.
(3) If the person is covered by subsection 1099E(2) (but not subsection 1099E(1)), the person’s exempt bond amount is the gross proceeds of the sale mentioned in that subsection, less:
(a) any costs incurred in the course of the sale; and
(b) the amount of any debt the person or the person’s partner owed immediately before the sale, so far as the debt was secured by the home at that time.
(4) If the person is covered by both subsections 1099E(1) and (2), the person’s exempt bond amount is the greater of the 2 amounts worked out under subsections (2) and (3) of this section.
(5) If the person is covered by subsection 1099E(3), the person’s exempt bond amount is equal to the exempt bond amount of the person’s partner, as worked out under subsection (2), (3) or (4) of this section.
(6) But in all of the above cases, if the person currently has a partner (who is not deceased), the person’s exempt bond amount is half of what it would otherwise be.
Division 1E—Refunds to charge exempt residents
1099J Scope of Division
(1) This Division applies to an amount (the refunded amount) that is refunded as mentioned in paragraph 56‑1(kc) or 56‑3(ic) of the Aged Care Act 1997 (as in force before 1 July 2014) to a person because the person is or was a charge exempt resident.
Note: For charge exempt resident, see subsection 11(1).
(2) This Division also applies to an amount (also called the refunded amount) that is paid to a person under paragraph 44‑8A(6)(b) of the Aged Care (Transitional Provisions) Act 1997 because the person is or was a charge exempt resident.
Note: For charge exempt resident, see subsection 11(1).
(3) To avoid doubt, this Division does not apply if the amount is paid to the person’s estate or to any other person.
1099K Refunded amount does not count as income
The refunded amount does not count as income of the person for the purposes of this Act.
Note: Income is otherwise defined in section 8.
1099L Person’s ordinary income reduced using financial asset rules
(1) For the purposes of this section, assume that the refunded amount were a financial asset of the person.
(2) The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (income from financial assets (including income streams (short term) and certain income streams (long term)).
(3) In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold (deeming threshold is a term used in Division 1B).
1099M Application of Division
This Division applies in relation to a person who is a charge exempt resident at any time, whether before or after the commencement of the Division.
Division 2—Conversion of foreign currency amounts
1100 How value of a payment received in a foreign currency is to be determined
(1) If:
(a) the rate of a payment to be made to a person under this Act is being worked out for a calculation day; and
(b) an amount received by the person in a foreign currency needs to be taken into account in working out the rate;
the value in Australian currency of the amount received is to be determined in accordance with this section.
(2) Except in the case of:
(a) amounts received in a foreign currency in respect of which the Secretary determines that it is not appropriate for this subsection to apply; or
(b) a payment, or class or kind of payments, received in a foreign currency, being a payment or a class or kind of payments in respect of which the Secretary determines that it is not appropriate for this subsection to apply;
the value in Australian currency of the amount received is to be calculated using the appropriate market exchange rate for the foreign currency on the fifth business day before the calculation day.
(3) For the purposes of subsection (2), the appropriate market exchange rate on a particular day for a foreign currency to which subsection (2) applies is:
(a) if there is an on‑demand airmail buying rate for the currency available at the Commonwealth Bank of Australia at the start of business in Sydney on that day and the Secretary determines it is appropriate to use that rate—that rate; or
(b) in any other case:
(i) if there is another rate of exchange for the currency, or there are other rates of exchange for the currency, available at the Commonwealth Bank of Australia at the start of business in Sydney on that day and the Secretary determines it is appropriate to use the other rate or one of the other rates—the rate so determined; or
(ii) otherwise—a rate of exchange for the currency available from another source at the start of business in Sydney on that day that the Secretary determines it is appropriate to use.
(4) In the case of a foreign currency or a payment in a foreign currency in respect of which the Secretary has determined that it is not appropriate for subsection (2) to apply, the value in Australian currency of the amount received is to be calculated using a rate of exchange that the Secretary determines to be appropriate.
(5) The Secretary may make written determinations for the purposes of this section.
(6) In this section:
business day means a day other than:
(a) a Saturday; or
(b) a Sunday; or
(c) a day that is a public holiday or bank holiday in Canberra or Sydney.
calculation day means the first business day for each month.
month means one of the 12 months of the calendar year.
1100A Determining value of a payment originally denominated in a foreign currency but made in Australian currency
(1) This section applies if, for the purposes of working out for a calculation day the rate of a payment to be made to a person under this Act, it is necessary to take account of a payment (the foreign payment):
(a) that the person received from a source overseas; and
(b) that was originally denominated in a foreign currency but was received by the person in Australian currency.
(2) For those purposes, the value in Australian currency of the foreign payment is taken to be the value that would have been determined under section 1100 had the person received the foreign payment in the foreign currency.
(3) Subsection (2) has effect regardless of the amount of the foreign payment actually received by the person in Australian currency.
(4) In this section:
calculation day has the same meaning as in section 1100.
Division 3—Disposal of ordinary income
1106 Disposal of ordinary income
(1) For the purposes of this Act, a person disposes of ordinary income of the person if:
(a) the person 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 person receives no consideration in money or money’s worth for the destruction, disposal or diminution;
(ii) the person receives inadequate consideration in money or money’s worth for the destruction, disposal or diminution;
(iii) the Secretary is satisfied that the person’s purpose, or the person’s dominant purpose, in engaging in that course of conduct was to obtain a social security advantage.
(2) For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of:
(a) obtaining, or enabling the person’s partner to obtain, a social security pension, a social security benefit, a youth training allowance, a service pension, income support supplement or a veteran payment; or
(b) obtaining, or enabling the person’s partner to obtain, a social security pension, a social security benefit, a youth training allowance, a service pension, income support supplement or a veteran payment at a higher rate than that which would otherwise have been payable; or
(c) ensuring that the person or the person’s partner would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.
(3) Paragraph (1)(a) does not apply if:
(a) the source of the income is a deprived asset, or
(b) the income is earned, derived or received from a transaction involving a deprived asset.
Note: For amount of disposition see section 1107.
1107 Amount of disposition
If a person disposes of ordinary income, the amount of the disposition is the amount that, in the Secretary’s opinion, is:
(a) if the person 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 person 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.
1108 Disposal of ordinary income—individuals
If a person who is not a member of a couple has disposed of ordinary income of the person, the amount of that disposition is to be included in the person’s ordinary income for the purposes of this Act.
Note 1: For disposes of ordinary income see section 1106.
Note 2: For amount of disposition see section 1107.
Note 3: For ordinary income see subsection 8(1): ordinary income includes investment income but does not include maintenance income.
1109 Disposal of ordinary income—members of couples
(1) Subject to subsections (1A), (1B), (2), (3) and (4), if a person who is a member of a couple has disposed of ordinary income of the person:
(a) 50% of the amount of the disposition is to be included in the person’s ordinary income; and
(b) 50% of the amount of the disposition is to be included in the person’s partner’s ordinary income.
Note 1: For disposes of ordinary income see section 1106.
Note 2: For amount of disposition see section 1107.
(1A) Subject to subsection (3), for the purposes of the application of this Act in relation to a person’s rate of social security benefit, if:
(a) a person who is a member of a couple has disposed of ordinary income of the person; and
(b) the amount of the disposition is not greater than the least amount that, if added to the person’s ordinary income (disregarding this section), would cause the person’s rate of benefit to be reduced to nil;
the amount of the disposition is to be included in the person’s ordinary income.
(1B) Subject to subsection (3), for the purposes of the application of this Act in relation to a person’s rate of social security benefit, if:
(a) a person who is a member of a couple has disposed of ordinary income of the person; and
(b) the amount of the disposition is greater than the least amount that, if added to the person’s ordinary income (disregarding this section), would cause the person’s rate of benefit to be reduced to nil;
then:
(c) the second of the amounts referred to in paragraph (b) is to be included in the person’s ordinary income; and
(d) the difference between the 2 amounts referred to in paragraph (b) is to be included in the person’s partner’s ordinary income.
(2) If:
(a) amounts are included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and
(b) the person and the person’s partner cease to be members of the same couple;
any amount that was included in the ordinary income of the person’s former partner because of the disposition is to be included in the person’s ordinary income.
(3) If:
(a) amounts are included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and
(b) the person dies;
no amount is to be included in the ordinary income of the person’s partner because of the disposition.
(4) If:
(a) an amount is included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and
(b) the person’s partner dies;
any amount that would, if the person’s partner had not died, be included in the ordinary income of the person’s partner because of the disposition is to be included in the person’s ordinary income.
Note: For ordinary income see subsection 8(1): ordinary income includes investment income but does not include maintenance income.
1111 Dispositions more than 5 years old to be disregarded
This Division does not apply to a disposition of ordinary income that took place:
(a) more than 5 years before the time when:
(i) the person who disposed of the ordinary income; or
(ii) if the person who disposed of the ordinary income was, at the time of disposition, a member of a couple—the person’s partner;
became qualified for a social security pension; or
(b) less than 5 years before the time referred to in paragraph (a) and before the time when the Secretary is satisfied that the person who disposed of the ordinary income could reasonably have expected that the person or the person’s partner would become qualified for such a pension.
Part 3.12—General provisions relating to the assets test
Division 1—Value of person’s assets
1118 Certain assets to be disregarded in calculating the value of a person’s assets
(1) In calculating the value of a person’s assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following:
(a) if the person is not a member of a couple—the value of any right or interest of the person in the person’s principal home that is a right or interest that gives the person reasonable security of tenure in the home;
(b) if the person is a member of a couple—the value of any right or interest of the person in one residence that is the principal home of the person, of the person’s partner or of both of them that is a right or interest that gives the person or the person’s partner reasonable security of tenure in the home;
(c) the value of any life interest of the person other than:
(i) a life interest in the principal home of the person, of the person’s partner or of both of them; or
(ii) a life interest created by the person, by the person’s partner or by both of them; or
(iii) a life interest created on the death of the person’s partner;
(d) the value of any asset‑test exempt income stream of the person, other than a partially asset‑test exempt income stream;
(da) half of the value of any partially asset‑test exempt income stream of the person;
(e) any amount that is:
(i) received by the person within the immediately preceding period of 90 days; and
(ii) is excluded from the definition of income in subsection 8(1) by subsection 8(4) or (5);
(f) the value of the person’s investment in:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iv) an ATO small superannuation account;
until the person:
(v) reaches pension age; or
(vi) starts to receive a pension or annuity out of the fund;
(g) if:
(i) the person has a granny flat interest in the person’s principal home; and
(ii) the granny flat interest gives the person reasonable security of tenure in the home; and
(iii) the person acquired or retained the granny flat interest before 22 August 1990;
the value of the granny flat interest;
(ga) if:
(i) the person has a granny flat interest in the person’s principal home; and
(ii) the person is a person to whom subsection 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2) or 1157(2) applies;
the value of the granny flat interest;
Note: A person described in subparagraph (ii) will have acquired or retained the granny flat interest on or after 22 August 1990 (see section 1145A).
(gb) if:
(i) the person is a sale leaseback resident; and
(ii) the person is a person to whom subsection 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2) or 1157(2) applies;
the value of any right or interest of the person in the sale leaseback home;
(h) the value of any contingent, remainder or reversionary interest of the person (other than an interest created by the person, by the person’s partner or by both of them);
(j) the value of any assets (other than a contingent, remainder or reversionary interest) to which the person is entitled from the estate of a deceased person but which has not been, and is not able to be, received;
(k) the value of any medal or other decoration awarded (whether to the person or another person) for valour that is owned by the person otherwise than for the purposes of investment or a hobby;
(m) the value of:
(i) any cemetery plot acquired by the person for the burial of the person or the person’s partner; and
(ii) any funeral expenses paid in advance by the person in respect of the funeral of the person or the person’s partner;
(ma) an amount invested in an exempt funeral investment and any return on the investment;
(n) if:
(i) personal property of the person is designed for use by a disabled person; and
(ii) the person, the person’s partner, a dependent child of the person or a dependent child of the person’s partner is disabled;
the value of the property;
(p) if:
(i) personal property of the person is modified so that it can be used by a disabled person; and
(ii) the person, the person’s partner, a dependent child of the person or a dependent child of the person’s partner is disabled;
the part of the value of the property that is attributable to the modifications;
(q) if the person is provided with a motor vehicle under the scheme administered by the Commonwealth known as the gift car scheme—the value of that motor vehicle;
(r) if the person has sold a residence that was the principal home of the person on terms and has purchased, also on terms, another residence that is the principal home of the person—so much of the balance due to the person in respect of the sale as will be applied by the person in respect of the purchase of the other residence;
(s) the amount of any insurance or compensation payments received by the person because of the loss of or damage to buildings, plant or personal effects within the immediately preceding 12 months or such longer period as the Secretary determines for any special reason for a particular payment;
(sa) if subsection (1AB) applies (application of insurance etc. payments to rebuilding etc.)—the amount worked out under that subsection, during the period mentioned in subsection (1AC);
(sb) if a person has received an NDIS amount—the amount worked out under subsection (1AD);
(t) the value of any native title rights and interests of the person, or of a community or group of which the person is a member;
(u) the amount of any accommodation bond balance in respect of an accommodation bond paid by the person;
(v) the amount of any refundable deposit balance in respect of a refundable deposit paid by the person.
Note 1: For granny flat interest see subsection 12A(2).
Note 2: For principal home see section 11A.
Note 3: For reasonable security of tenure see subsection 11A(10).
Note 4: For exempt funeral investment see section 19E.
Application of insurance etc. payments to rebuilding etc.
(1AA) Subsection (1AB) applies if:
(a) a person receives any insurance or compensation payments because of loss of or damage to a building (including the person’s principal home) or plant; and
(b) either:
(i) if the building or plant was lost—the person applies the whole or a part of those payments to build another building or plant to replace the building or plant that was lost; or
(ii) if the building or plant was damaged—the person applies the whole or a part of those payments to rebuild, repair or renovate the building or plant.
(1AB) For the purposes of paragraph (1)(sa), the amount that may be disregarded is:
(a) the value of the building or plant that is being built, rebuilt, repaired or renovated, to the extent that those payments are so applied; and
(b) if a building whose value is being disregarded under paragraph (a) of this subsection is to be the person’s principal home:
(i) the value of the land on which the building is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person’s principal home, the land will, under section 11A, be included in a reference to the principal home; and
(ii) the value of any other structure, on that land, that is to be the person’s principal home to the extent that the structure was built before the person began applying the payments.
(1AC) For the purposes of paragraph (1)(sa), the amount worked out under subsection (1AB) may be disregarded during the period:
(a) beginning when the payments are received; and
(b) ending at the earlier of the following times:
(i) 12 months, or such longer period as the Secretary determines for any special reason, after that time;
(ii) when the building, rebuilding, repair or renovation of the building or plant is complete.
NDIS amounts
(1AD) For the purposes of paragraph (1)(sb), the amount that may be disregarded is the value of the sum of:
(a) the NDIS amounts received by the person; and
(b) any return on those amounts that the person earns, derives or receives;
less the sum of the amounts spent by the person in accordance with an NDIS plan (whether in the person’s capacity as an NDIS participant or as a person managing the funding under an NDIS plan for an NDIS participant).
Definitions
(1A) In this section:
native title rights and interests means:
(a) native title rights and interests within the meaning of section 223 of the Native Title Act 1993;
(b) any rights and interests of a similar nature under any law of a State, a Territory or a foreign country (whether or not the rights and interests relate to land or waters outside Australia);
but, to avoid any doubt, does not include any right or interest in a lease or licence, or in a freehold estate.
partially asset‑test exempt income stream means:
(a) an asset‑test exempt income stream that:
(i) is an income stream (other than a defined benefit income stream) covered by subsection 9A(1) or (1A), 9B(1) or 9BA(1); and
(ii) has a commencement day during the period from 20 September 2004 to 19 September 2007 (both dates inclusive); and
(iii) is not covered by principles (if any) determined for the purposes of this subparagraph, by legislative instrument, by the Secretary; or
(b) an income stream that:
(i) has a commencement day happening on or after 20 September 2007; and
(ii) is covered by principles determined for the purposes of this subparagraph, by legislative instrument, by the Secretary.
Application of proceeds of sale of principal home
(1B) Subsection (2) applies if:
(a) a person sells the person’s principal home; and
(b) either:
(i) the person does not have a right or interest in a principal home; or
(ii) the person has a right or interest in a principal home that the Secretary is satisfied does not give the person reasonable security of tenure in the home; and
(c) before the end of 12 months, or any longer period determined under subsection (2B), after the sale, one or more of the following applies:
(i) the person intends to apply the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home;
(ii) the person applies the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home;
(iii) the person intends to apply the whole or a part of the proceeds of the sale to purchase another residence that is to be the person’s principal home.
(2) For the purposes of this Act (other than Division 1B of Part 3.10):
(a) if subparagraph (1B)(c)(i) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to build, rebuild, repair or renovate the other residence, until the earlier of the following times:
(i) the period mentioned in paragraph (1B)(c) ends;
(ii) the Secretary becomes satisfied that the person has ceased to have that intention; or
(b) if subparagraph (1B)(c)(ii) applies—disregard the value of the following, until the end of the period mentioned in paragraph (1B)(c), to the extent that the person applies those proceeds to build, rebuild, repair or renovate that other residence:
(i) the value of the other residence;
(ii) the value of the land on which the other residence is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person’s principal home, the land will, under section 11A, be included in a reference to the principal home;
(iii) the value of any other structure, on that land, that is to be the person’s principal home to the extent that the structure was built before the person began applying those proceeds; or
(c) if subparagraph (1B)(c)(iii) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to purchase the other residence, until the earlier of the following times:
(i) the period mentioned in paragraph (1B)(c) ends;
(ii) the Secretary becomes satisfied that the person has ceased to have that intention.
(2A) Subsection (2) does not apply to the calculation of the value of a person’s assets for the purposes of sections 198F to 198MA or 1123 to 1128 (disposal of assets).
(2B) For the purposes of subsection (1B), the Secretary may determine, in writing, a period of up to 24 months if:
(a) a person who has sold his or her principal home is making reasonable attempts to purchase, build, repair or renovate another residence; and
(b) the person has been making those attempts within a reasonable period after selling the principal home; and
(c) the person has experienced delays beyond his or her control in purchasing, building, repairing or renovating the other residence.
Value of certain personal effects of less than $10,000
(3) For the purposes of this section, if:
(a) the value of any assets of a person or, if the person is a member of a couple, of the person and the person’s partner, that consists of the contents of a principal home and of other personal effects that are used primarily within the principal home does not exceed $10,000; and
(b) the assets are used primarily for private or domestic purposes;
the value of the assets is to be taken to be $10,000 unless the person satisfies the Secretary that the value of the assets is less than $10,000.
This section subject to sections 1145A to 1157
(4) This section has effect subject to sections 1145A to 1157 (special residences).
1118A Value of superannuation investments determined by Minister to be disregarded
(1) The value of a person’s investment in a superannuation fund, an approved deposit fund or an ATO small superannuation account is to be disregarded in calculating the value of the person’s assets for the purposes of this Act (other than section 198H, 198HA, 198HB, 198J, 198JA, 198JB, 198K or 198L, subparagraph 263(1)(d)(iv), Division 1B of Part 3.10, or section 1124A, 1125, 1125A, 1126, 1133 or 1135A) if the investment is specified in a determination made under subsection (2).
(2) The Minister may specify:
(a) a specified investment in a superannuation fund, an approved deposit fund or an ATO small superannuation account; or
(b) a specified class of investments in a superannuation fund, an approved deposit fund or an ATO small superannuation account;
in a determination for the purpose of subsection (1).
(3) A determination under subsection (2) must be in writing.
(4) A determination under subsection (2) takes effect on the day on which it is made or on such other day (whether earlier or later) as is specified in the determination.
1118AA Value of assets reduced by amounts received from Mark Fitzpatrick Trust
(1) In this section:
application day, in relation to a person who was a recipient of a social security payment immediately before 28 September 1995, means the day, on or after that date, on which the person applied or applies for review of the rate of that social security payment because of the expected enactment, or the operation, of this section.
(2) Subject to subsection (3), the value of a person’s assets for the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126) is reduced by the sum of any amounts received by the person from the Mark Fitzpatrick Trust.
(3) Subsection (2) has effect, or is taken to have had effect, as the case may be:
(a) for a person who was a recipient of a social security pension immediately before 28 September 1995—on the first pension payday after the application day; or
(b) for a person who was a recipient of a social security payment other than a social security pension immediately before 28 September 1995—on the next day, after the application day, on which the person received or receives an instalment of the payment; or
(c) for a person who became or becomes a recipient of a social security payment on or after 28 September 1995—on the day on which the person received or receives the first instalment of the payment.
1118AB Value of person’s assets reduced: certain transactions to do with aged care accommodation bonds
(1) This section applies to a person if Division 1D of Part 3.10 applies to the person.
(2) For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person’s assets is reduced by the person’s exempt bond amount (as defined by section 1099H).
1118AC Value of person’s assets reduced: refunds to charge exempt residents
(1) This section applies to a person if Division 1E of Part 3.10 applies to the person.
(2) For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person’s assets is reduced by the refunded amount (as defined by section 1099J).
1119 Value of asset‑tested income streams that are not defined benefit income streams, asset‑tested income streams (lifetime) or family law affected income streams
(1) This section applies to a person’s asset‑tested income stream if it is not a defined benefit income stream, it is not an asset‑tested income stream (lifetime) and it is not a family law affected income stream.
Note: For defined benefit income streams, see section 1120. For asset‑tested income streams (lifetime), see sections 1120AA and 1120AB. For family law affected income streams, see section 1120A.
(2) The value of the income stream is, for the purposes of the assets test, worked out:
(a) if the person receives payments from the income stream 2 or more times a year—in relation to each 6 month period of the income stream’s term; and
(b) if the person receives a payment from the income stream only once a year—in relation to each 12 month period of the income stream’s term.
(3) If the income stream has an account balance, the value of the income stream, for the purposes of the assets test, is the value of the account balance at the beginning of the 6 month or 12 month period (as the case requires) referred to in subsection (2).
(4) If the income stream does not have an account balance, the value of the income stream is, for the purposes of the assets test, worked out as follows:
where:
purchase price has the meaning given by subsection 9(1).
relevant number has the meaning given by subsection 9(1).
residual capital value has the meaning given by subsection 9(1).
term elapsed is the number of years of the term that have elapsed since the commencement day of the income stream, rounded down:
(a) in the case of an income stream referred to in paragraph (2)(a)—to the nearest half‑year; and
(b) in the case of an income stream referred to in paragraph (2)(b)—to the nearest whole year.
Example: Sally is 65 years old and single. She purchases a 10 year annuity for $150,000 with a residual capital value of $20,000. Her total annual annuity payment is $18,337. Monthly payments commence on 1 January. Her assessable asset for the first six months will be:
Her assessable asset after 30 June in that year will be:
1120 Value of asset‑tested income streams that are defined benefit income streams
(1) This section applies to a person’s asset‑tested income stream if it is a defined benefit income stream and it is not a family law affected income stream.
Note: For family law affected income streams, see section 1120A.
(2) The value of the income stream is, for the purposes of the assets test, worked out in relation to each 12 month period of the income stream’s term.
(3) The value of the income stream is, for the purposes of the assets test, worked out as follows:
where:
annual payment means the amount payable to the person for the relevant 12 month period under the income stream.
pension valuation factor means the pension valuation factor that applies to the person in accordance with the determination made, by legislative instrument, by the Minister for the purposes of this section.
1120AA Value of asset‑tested income streams (lifetime) that are managed investments
(1) This section applies to a person’s asset‑tested income stream (lifetime), that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993, in relation to a day that is before the person’s assessment day (within the meaning of section 1120AB) for the income stream.
Note: For asset‑tested income stream (lifetime), see subsection 9(1).
(2) However, this section does not apply to a family law affected income stream.
Note: For family law affected income streams, see section 1120A.
Value of income stream
(3) Subject to this section, the value of the person’s income stream is, for the purposes of the assets test, the purchase amount for the income stream.
Purchase amount
(4) For the purposes of this section, the purchase amount for the income stream is:
(a) subject to paragraph (b)—if one or more amounts have been paid for the income stream, the sum of each compounded amount in relation to an amount paid for the income stream, as worked out under subsection (5), less any commuted amounts; or
(b) if the circumstances determined in an instrument under subsection (7) apply in relation to the income stream—the amount worked out in accordance with that instrument.
(5) A compounded amount in relation to an amount paid for the income stream is worked out by applying the following formula for each relevant adjustment day (from the earliest to the latest):
where:
compounded amount for the relevant adjustment day means:
(a) for the earliest relevant adjustment day—the amount that was paid for the income stream; or
(b) for each later relevant adjustment day—the result of applying the formula for the most recent earlier relevant adjustment day.
relevant above threshold rate for the relevant adjustment day means the following:
(a) if the relevant adjustment day is the relevant payment day—zero;
(b) if the relevant adjustment day is a 12‑month anniversary of the relevant payment day—the rate applicable under subsection 1082(2) for that relevant adjustment day, expressed as a decimal fraction.
relevant adjustment day means each of the following:
(a) the relevant payment day;
(b) each 12‑month anniversary of the relevant payment day.
relevant payment day means the day that the amount was paid for the income stream.
(6) If the income stream is a joint income stream, then, for the purposes of applying subsections (4) and (5) to the person and to a day covered by subsection (1), an amount paid for the income stream is taken to be that amount multiplied by the proportion of the income stream attributable to the person on that day.
(7) The Secretary may make a legislative instrument for the purposes of paragraph (4)(b).
1120AB Value of asset‑tested income streams (lifetime) that are not managed investments
(1) This section applies to a person’s asset‑tested income stream (lifetime) in relation to a day that is on or after the person’s assessment day for the income stream.
Note 1: For asset‑tested income stream (lifetime), see subsection 9(1). For assessment day, see subsections (6) and (7) of this section.
Note 2: This section applies separately in relation to each asset‑tested income stream (lifetime) of a person.
(2) However, this section does not apply to a family law affected income stream.
Note: For family law affected income streams, see section 1120A.
Value of income stream
(3) Subject to this section, the value of the person’s income stream is, for the purposes of the assets test, worked out as follows:
(a) for a day in the period beginning on the person’s assessment day for the income stream and ending at the end of the person’s threshold day for the income stream:
(b) for a day after the person’s threshold day for the income stream:
Note: For threshold day, see subsections (9) and (10). For purchase amount, see subsection (12).
(4) The Secretary may, by legislative instrument, determine one or more methods for working out the value of an asset‑tested income stream (lifetime) for persons to whom this section applies.
(5) If one or more amounts worked out in accordance with the instrument are higher than the amount under subsection (3), then the value of the person’s income stream is, for the purposes of the assets test, the highest of those amounts.
Assessment day
(6) Subject to subsection (7), for the purposes of this section, a person’s assessment day for an asset‑tested income stream (lifetime) is:
(a) if the income stream arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993—the latest of the following:
(i) the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (8);
(ii) the day the first amount was paid for the income stream;
(iii) the day the person acquired the income stream (if no amount is identifiable as having been paid for the income stream); or
(b) otherwise:
(i) if the commencement day in relation to the income stream is before the day the person reaches pension age—the commencement day in relation to the income stream; or
(ii) in any other case—the latest of the day the first amount was paid for the income stream, the day the person reaches pension age and the day the person acquired the income stream (if no amount is identifiable as having been paid for the income stream).
Note: For commencement day, see subsection 9(1).
(7) For the purposes of this section, a person’s assessment day for an asset‑tested income stream (lifetime) that reverted to the person as a reversionary beneficiary is:
(a) if the income stream reverted to the person on or after the commencement day in relation to the income stream—the day of the reversion; or
(b) if the income stream reverted to the person before the commencement day in relation to the income stream and the income stream arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993:
(i) if the commencement day in relation to the income stream is before the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (8)—the commencement day in relation to the income stream; or
(ii) in any other case—the later of the day of the reversion and the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (8); or
(c) if the income stream reverted to the person before the commencement day in relation to the income stream and the income stream does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993:
(i) if the commencement day in relation to the income stream is before the day the person reaches pension age—the commencement day in relation to the income stream; or
(ii) in any other case—the later of the day of the reversion and the day the person reaches pension age.
Note: For commencement day, see subsection 9(1).
(8) The Secretary may, by notifiable instrument, determine a kind of condition of release for the purposes of subparagraphs (6)(a)(i) and (7)(b)(i) and (ii).
Threshold day
(9) Subject to subsection (10), for the purposes of this section, a person’s threshold day for an asset‑tested income stream (lifetime) is worked out using the following method statement:
Method statement
Step 1. Work out, in relation to a man aged 65 on the person’s assessment day for the income stream, the number of expected years remaining in the man’s life, by reference to the instrument in force under subsection (11) on that assessment day, rounded down to the nearest whole number of years.
Note: The number of expected years remaining in a 65‑year old man’s life is used no matter how old the person is and whether the person is a man or a woman.
Step 2. Increase the number of years at step 1 by 65.
Step 3. Subject to step 4, the person’s threshold day for the income stream is the later of the following days:
(a) the day before the person reaches the age in years worked out at step 2;
(b) the last day of the 5‑year period beginning on the person’s assessment day for the income stream.
Step 4. If the income stream is a joint income stream, the person’s threshold day for the income stream is the later of the following days:
(a) the day before the oldest of the persons, to whom a proportion of the income stream is attributable on the person’s assessment day for the income stream, reaches the age in years worked out at step 2;
(b) the last day of the 5‑year period beginning on the person’s assessment day for the income stream.
(10) If:
(a) an asset‑tested income stream (lifetime) reverts to a person as a reversionary beneficiary on the death of another person; and
(b) before the death of the other person, the other person’s assessment day for the income stream had occurred;
then:
(c) if, before the death of the other person, the other person’s threshold day for the income stream had not occurred—the reversionary beneficiary’s threshold day for the income stream is taken to be the day that would have been the other person’s threshold day if the other person had not died; and
(d) if, before the death of the other person, the other person’s threshold day for the income stream had occurred—the reversionary beneficiary’s threshold day for the income stream is taken to be the other person’s threshold day; and
(e) if the reversionary beneficiary’s assessment day for the income stream worked out under subsection (7) is on or after the reversionary beneficiary’s threshold day for the income stream worked out under paragraph (c) or (d) of this subsection:
(i) paragraph (3)(a) is taken not to apply to the reversionary beneficiary and the income stream; and
(ii) paragraph (3)(b) is taken to apply to the reversionary beneficiary and the income stream for a day that is on or after the reversionary beneficiary’s assessment day for the income stream.
(11) The Secretary may make a notifiable instrument for the purposes of step 1 of the method statement in subsection (9). If there are Life Tables published by the Australian Government Actuary, the Secretary must be satisfied that the instrument is consistent with the latest of those Life Tables.
Purchase amount
(12) For the purposes of this section, the purchase amount for the income stream is:
(a) subject to paragraph (b)—if one or more amounts have been paid for the income stream—the sum of:
(i) each compounded amount in relation to an amount paid for the income stream before the person’s assessment day for the income stream, as worked out under subsection (13); and
(ii) each amount paid for the income stream on or after that assessment day;
less any commuted amounts; or
(b) if the circumstances determined in an instrument under subsection (15) apply in relation to the income stream—the amount worked out in accordance with that instrument.
(13) A compounded amount in relation to an amount paid for the income stream before the person’s assessment day for the income stream is worked out by applying the following formula for each relevant adjustment day (from the earliest to the latest):
where:
compounded amount for the relevant adjustment day means:
(a) for the earliest relevant adjustment day—the amount that was paid for the income stream; or
(b) for each later relevant adjustment day—the result of applying the formula for the most recent earlier relevant adjustment day.
relevant above threshold rate for the relevant adjustment day means:
(a) if the relevant adjustment day is a 12‑month anniversary of the relevant payment day—the rate applicable under subsection 1082(2) for that relevant adjustment day, expressed as a decimal fraction; or
(b) if the relevant adjustment day is the assessment day—the amount worked out in accordance with the following formula:
relevant adjustment day means each of the following:
(a) each 12‑month anniversary of the relevant payment day that happens before the person’s assessment day;
(b) the person’s assessment day.
Note: For assessment day, see subsections (6) and (7).
relevant number of days means the number of days in the period:
(a) beginning on the day after:
(i) if the assessment day is at least 12 months after the relevant payment day—the most recent 12‑month anniversary of the relevant payment day; or
(ii) otherwise—the relevant payment day; and
(b) ending at the end of the assessment day.
relevant payment day means the day that the amount was paid for the income stream.
(14) If the income stream is a joint income stream, then, for the purposes of applying subsections (12) and (13) to the person and to a day covered by subsection (1), an amount paid for the income stream is taken to be that amount multiplied by the proportion of the income stream attributable to the person on that day.
(15) The Secretary may make a legislative instrument for the purposes of paragraph (12)(b).
1120A Value of asset‑tested FLA income streams
(1) This section applies to family law affected income streams.
(2) The value of an income stream that is not a defined benefit income stream is, for the purposes of the assets test, determined by the Secretary.
(3) The value of an income stream that is a defined benefit income stream is, for the purposes of the assets test, determined by the Secretary.
(4) In making a determination under subsection (2) or (3), the Secretary must comply with any relevant decision‑making principles in force under subsection (5).
(5) The Secretary may, by legislative instrument, formulate principles (decision‑making principles) to be complied with by him or her in making decisions under:
(a) subsection (2); or
(b) subsection (3).
1120B Value of partially asset‑test exempt income streams
(1) This section applies to income streams covered by paragraph 1118(1)(da).
(2) The value of such an income stream is, for the purposes of paragraph 1118(1)(da), worked out as follows:
(a) if the income stream is a family law affected income stream—under section 1120A;
(b) otherwise—under section 1119;
as if the income stream were an asset‑tested income stream to which that section applied.
1120C Value of superannuation reserves for superannuation funds of 4 members or less
(1) This section applies in calculating the value of a person’s investment in a superannuation fund if:
(a) the fund has 4 or fewer members; and
(b) the fund has reserves (within the meaning of section 115 of the Superannuation Industry (Supervision) Act 1993).
Note: The value of a person’s investment in a superannuation fund is only included in the value of the person’s assets after the person reaches pension age or starts to receive a pension or annuity out of the fund (see paragraph 1118(1)(f)).
(2) Despite paragraph 1118(1)(h), the value of the person’s investment in the superannuation fund includes the following amount:
(3) However, if it is not possible to work out the person’s interest in the superannuation fund, the value of the person’s investment in the fund includes the following amount:
1121 Effect of charge or encumbrance on value of assets
(1) If there is a charge or encumbrance over a particular asset of the person, the value of the asset, for the purposes of calculating the value of the person’s assets for the purposes of this Act (other than Division 1B of Part 3.10), is to be reduced by the value of that charge or encumbrance.
Note: This section does not apply to an asset to which section 1121A (primary production assets) applies.
(1A) Subsection (1) does not apply to a charge that arises under section 1138.
Note: See subsection (5) for a charge that arises under section 1138.
(2) Subsection (1) does not apply to a charge or encumbrance over an asset of a person 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 a person other than the person or the person’s partner.
(3) Subsection (1) does not apply to a charge or encumbrance over assets that are to be disregarded under section 1118.
(3A) Subsection (1) does not apply to an asset that is an asset‑tested income stream (long‑term).
(3B) Subsection (1) does not apply to an asset that is a partially asset‑test exempt income stream (within the meaning of section 1118).
(3C) Subsection (1) does not apply to an asset that is an asset‑tested income stream (lifetime).
(4) If:
(a) there is a charge or encumbrance over assets; and
(b) the charge does not arise under section 1138; and
(c) the assets consist of assets whose value is to be disregarded under section 1118 and other assets;
the amount to be deducted under subsection (1) is:
(5) If:
(a) a person is or was participating in the pension loans scheme; and
(b) either:
(i) the person’s real assets are subject to a charge under section 1138; or
(ii) if the person is a member of a couple—the couple’s real assets are subject to a charge under section 1138;
then the value of those real assets, for the purposes of calculating the value of the person’s assets for the purposes of this Act (other than Division 1B of Part 3.10), is to be reduced by the amount of the debt owed by the person under section 1135 because of that participation.
Note: If there are other charges or encumbrances over any of those real assets, there may be a further reduction under subsection (1) in the value of those assets.
(6) This section has effect subject to sections 1145A to 1157 (special residences).
1121A Effect of certain liabilities on value of assets used in primary production
(1) For the purposes of working out the value of a person’s assets under this Act, if:
(a) the person is:
(i) a primary producer; or
(ii) a family member of a primary producer; and
(b) the person has assets (including real property) that are, in the Secretary’s opinion, used for the purposes of carrying on that primary production; and
(c) the person also has liabilities that are, in the Secretary’s opinion, related to the carrying on of the primary production;
then:
(d) section 1121 does not apply in relation to the assets referred to in paragraph (b); and
(e) those assets are taken to be a single asset (in this section called the primary production asset); and
(f) the value of that single asset is worked out under subsection (2).
Note: For family member see subsection 23(1).
(2) The value of a person’s primary production asset is worked out in the following way:
Method statement
Step 1. Add together the value of the assets referred to in paragraph (1)(b): the result is called the unencumbered value.
Step 2. Add together the value of the liabilities referred to in paragraph (1)(c): the result is called the total liability.
Step 3. Take the total liability away from the unencumbered value: the result is the value of the person’s primary production asset.
(3) If the result under Step 3 of the Method statement is less than nil, the value of the primary production asset is taken to be nil.
1121B Value of life policy
(1) This section applies in relation to a person and a day (the assessment day) if:
(a) the person has reached pension age; and
(b) the person is the owner (within the meaning of subsection 10(2) of the Life Insurance Act 1995) of a life policy covered by paragraph 9(1)(a) or (b) of that Act; and
(c) the person became the owner of the policy after the person reached pension age; and
(d) the sum of each amount paid for the policy (regardless of who paid the amount) in any period of 12 months exceeds 15% of the maximum death benefit that would be payable in the event of the death of the person whose life is insured on the assessment day.
(2) The value of the life policy on the assessment day is, for the purposes of the assets test, the higher of the following:
(a) the amount that would be payable to the person covered by paragraph (1)(b) if the policy were surrendered on that day;
(b) the sum of each amount paid for the policy by the person covered by paragraph (1)(b), less any commuted amounts.
1122 Loans
If a person lends an amount after 27 October 1986, the value of the assets of the person for the purposes of this Act includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan.
Division 2—Disposal of assets
1123 Disposal of assets
(1) For the purposes of this Act, a person disposes of assets of the person if:
(a) the person engages in a course of conduct that directly or indirectly:
(i) destroys all or some of the person’s assets; or
(ii) disposes of all or some of the person’s assets; or
(iii) diminishes the value of all or some of the person’s assets; and
(b) one of the following subparagraphs is satisfied:
(i) the person receives no consideration in money or money’s worth for the destruction, disposal or diminution;
(ii) the person receives inadequate consideration in money or money’s worth for the destruction, disposal or diminution;
(iii) the Secretary is satisfied that the person’s purpose, or the dominant purpose, in engaging in that course of conduct was to obtain a social security advantage.
Note: Under Division 4 of Part 3.18A, certain transfers of assets to special disability trusts can be taken not to be disposals of the assets (but this can be subject to a limit on the aggregate value of the transfers).
(2) For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of:
(a) obtaining a social security pension, a social security benefit, a parenting allowance, a service pension, income support supplement or a veteran payment or enabling the person’s partner or someone else of whom the person is a family member to obtain such a pension, benefit, allowance, supplement or payment, or a youth training allowance; or
(b) obtaining a social security pension, a social security benefit, a parenting allowance, a service pension, income support supplement or a veteran payment, or enabling the person’s partner to obtain such a pension, benefit, allowance, supplement or payment, or a youth training allowance, at a higher rate than would have otherwise been payable; or
(c) ensuring that the person or the person’s partner would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.
(3) For the purposes of subsection (1), the value of a person’s granny flat interest is to be taken not to be consideration received by the person if the interest was acquired or retained before 22 August 1990.
Note: For granny flat interest see subsection 11(9).
(4) If, under subsection 1147(1A), the value of a granny flat interest is less than the amount paid, or agreed to be paid, for the interest, then, for the purposes of this section, so much of the amount paid, or agreed to be paid, as exceeds the value of the interest is not consideration for the interest.
Note: For granny flat interest see subsection 11(9).
1124 Amount of disposal or disposition
If a person disposes of assets, the amount of the disposal or disposition is:
(a) if the person 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 person 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 person in respect of the destruction, disposal or diminution.
Note: If subsection 1209ZA(2) applies in relation to the transfer of an asset to a special disability trust, that subsection has the effect of reducing the amount of the disposal or disposition.
1124A Disposal of assets in pre‑pension years—individuals
(1A) This section applies only to disposals of assets that took place before 1 July 2002.
(1) If:
(a) a person is not a member of a couple when the person claims a pension, benefit or payment of a kind referred to in subsection 11(10A); and
(b) the person has, during a pre‑pension year of the person, disposed of an asset of the person; and
(c) the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pre‑pension year, exceeds the disposal limit;
then, for the purposes of determining whether a pension, benefit or payment is payable to the person, there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition took place:
(d) the amount by which the sum of the amount of the first‑mentioned disposition of assets and of the amounts (if any) of other dispositions of assets previously made by the person during that pre‑pension year exceeds the disposal limit; or
(e) the amount of the first‑mentioned disposition;
whichever is the lesser amount.
Note 1: For disposes of assets see section 1123.
Note 2: For amount of disposition see section 1124.
Note 4: If a pension or benefit is payable to the person, section 1125 operates to determine the rate of payment and section 1124A ceases to apply to the person.
(3) In this section:
disposal limit means:
(a) in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991—$2,000; and
(b) in relation to assets disposed of on or after 1 March 1991—$10,000.
1125 Disposal of assets in pension years—individuals
(1) If, on or after 1 March 1986 and before 1 July 2002:
(a) a person who is not a member of a couple has, during a pension year of the person, disposed of an asset of the person; and
(b) the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit;
then, for the purposes of this Act, there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition takes place:
(c) the amount by which the sum of the amount of the first‑mentioned disposition of assets, and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit; or
(d) the amount of the first‑mentioned disposition;
whichever is the lesser amount.
Note 1: For disposes of assets see section 1123.
Note 2: For amount of disposition see section 1124.
(3) In this section:
disposal limit means:
(a) in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991—$2,000; and
(b) in relation to assets disposed of on or after 1 March 1991—$10,000.
1125A Disposal of assets in pre‑pension years—members of couples
(1A) This section applies only to disposals of assets that took place before 1 July 2002.
(1) Subject to subsections (3), (4) and (5), if:
(a) a person has disposed of an asset; and
(b) the person is a member of a couple when the person or the person’s partner claims a pension, benefit or payment of a kind referred to in subsection 11(10A) or when the person’s partner claims a youth training allowance; and
(c) the person disposed of the asset:
(i) during a pre‑pension year of the person; or
(ii) if the person has not claimed a pension, benefit or payment of a kind referred to in subsection 11(10A) but the person’s partner has claimed such a pension, benefit or payment or has claimed a youth training allowance—during a pre‑pension year of the person’s partner; and
(d) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that pre‑pension year, exceeds the disposal limit;
then, for the purposes of determining whether a pension, benefit, payment or allowance is payable to the person:
(e) there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition took place:
(i) 50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that pre‑pension year exceeds the disposal limit; or
(ii) 50% of the amount of the first‑mentioned disposition;
whichever is the lesser amount; and
(f) there is to be included in the value of the assets of the person’s partner for the period of 5 years that starts on the day on which the disposition took place:
(i) 50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that pre‑pension year exceeds the disposal limit; or
(ii) 50% of the amount of the first‑mentioned disposition;
whichever is the lesser amount.
Note 1: For disposes of assets see section 1123.
Note 2: For amount of disposition see section 1124.
Note 4: If a pension or benefit is payable to the person, section 1126 operates to determine the rate of payment and section 1125A ceases to apply to the person.
(3) If:
(a) amounts are included under subsection (1) in the value of a person’s assets who is a member of a couple and in the assets of the person’s partner because of a disposition of an asset by the person; and
(b) the person and the person’s partner cease to be members of the same couple;
any amount that was included in the value of the person’s former partner’s assets because of that disposition is to be included in the value of the person’s assets.
(4) If:
(a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and
(b) the person dies;
an amount is not to be included in the value of the assets of the person’s partner because of that disposition.
(5) If:
(a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and
(b) the partner dies;
any amount that would, if the partner had not died, be included in the value of the partner’s assets because of the disposition is to be included in the value of the person’s assets.
(6) In this section:
disposal limit means:
(a) in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991—$4,000; and
(b) in relation to assets disposed of on or after 1 March 1991—$10,000.
1126 Disposal of assets in pension years—members of couples
(1) Subject to subsections (3) and (4), if, on or after 1 March 1986 and before 1 July 2002:
(a) a person who is a member of a couple has disposed of an asset of the person:
(i) during a pension year of the person; or
(ii) if the person is not receiving a pension, benefit or payment of a kind referred to in subsection 11(10) but the person’s partner is receiving such a pension, benefit or payment or is receiving a youth training allowance—during a pension year of the person’s partner; and
(b) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that pension year, exceeds disposal limit;
then, for the purposes of this Act:
(c) there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition takes effect:
(i) 50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during the pension year exceeds disposal limit; or
(ii) 50% of the amount of the first‑mentioned disposition;
whichever is the lesser amount; and
(d) there is to be included in the value of the assets of the person’s partner for the period of 5 years that starts on the day on which the disposition takes place:
(i) 50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during the pension year exceeds disposal limit; or
(ii) 50% of the amount of the first‑mentioned disposition;
whichever is the lesser amount.
Note 1: For disposes of assets see section 1123.
Note 2: For amount of disposition see section 1124.
(3) If:
(a) amounts are included under subsection (1) in the value of a person’s assets who is a member of a couple and in the assets of the person’s partner because of a disposition of an asset by the person; and
(b) the person and the person’s partner cease to be members of the same couple;
any amount that was included in the value of the person’s former partner’s assets because of that disposition is to be included in the value of the person’s assets.
(4) If:
(a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and
(b) the person dies;
no amount is to be included in the value of the assets of the person’s partner because of that disposition.
(5) If:
(a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and
(b) the partner dies;
any amount that would, if the partner had not died, be included in the value of the partner’s assets because of the disposition is to be included in the value of the person’s assets.
(6) In this section:
disposal limit means:
(a) in relation to assets disposed on or after 1 March 1986 and before 1 March 1991—$4,000; and
(b) in relation to assets disposed of on or after 1 March 1991—$10,000.
1126AA Disposal of assets in income year—individuals
Disposals to which section applies
(1) This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposal.
Increase in value of assets
(2) If the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person during the income year in which the relevant disposal took place, exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:
(a) the amount of the relevant disposal;
(b) the amount by which the sum of the amount of the relevant disposal and the amounts (if any) of other disposals of assets previously made by the person during the income year in which the relevant disposal took place, exceeds $10,000.
Note: See also section 1126E (about modification of this Division in respect of certain assets).
Previous joint disposals
(3) If, during the income year in which the relevant disposal took place but before the time of the relevant disposal, the person was a member of a couple who jointly disposed of an asset, a reference in subsection (2) to the amounts (if any) of other disposals of assets previously made by the person during that income year includes a reference to one‑half of the amount of the joint disposal.
1126AB Disposals of assets in 5 year period—individuals
Disposal to which section applies
(1) This section also applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposal.
Increase in value of assets
(2) If:
(a) the sum of the amount of the relevant disposal and the amounts of any previous disposals of assets made during the rolling period by the person;
less
(b) the sum of any amounts included in the value of the person’s assets during the rolling period under section 1126AA, 1126AC or 1126AD or any previous application or applications of this section;
exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:
(c) an amount equal to the excess;
(d) the amount of the relevant disposal.
Note: See also section 1126E (about modification of this Division in respect of certain assets).
Previous joint disposals
(3) If, during the rolling period but before the time of the relevant disposal, the person was a member of a couple who jointly disposed of an asset, the reference in paragraph (2)(a) to the amounts of any previous disposals of assets made during the rolling period by the person includes a reference to one‑half of the amount of the joint disposal.
Rolling period
(4) For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002.
1126AC Disposal of assets in income year—members of couples
Disposals to which section applies
(1) If there is a disposal (the relevant disposal) on or after 1 July 2002 of an asset by:
(a) a person who, at the time of the relevant disposal, is a member of a couple; or
(b) the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph;
subsection (2) has effect.
Increase in value of assets
(2) Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person, the person’s partner, or the person and the person’s partner, during the income year in which the relevant disposal took place (whether before or after they became members of the couple), exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place:
(a) one‑half of the amount of the relevant disposal;
(b) one‑half of the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the person, the partner, or the person and the partner, during the income year in which the relevant disposal took place, exceeds $10,000.
Note: See also section 1126E (about modification of this Division in respect of certain assets).
Effect of ceasing to be member of couple
(3) If, after the disposal referred to in paragraph (1)(a), the person and the person’s partner cease to be members of the same couple:
(a) no amount is to be included after the cessation in the value of the assets of the former partner because of that disposal; and
(b) any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person.
Effect of death of person
(4) If, after the disposal referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person’s partner because of that disposal.
Effect of death of partner
(5) If, after the disposal referred to in paragraph (1)(a), the person’s partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposal is to be included in the value of the assets of the person.
1126AD Disposal of assets in 5 year period—members of couples
Disposals to which section applies
(1) If there is a disposal (the relevant disposal) on or after 1 July 2002 of an asset by:
(a) a person who, at the time of the relevant disposal, is a member of a couple; or
(b) the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph;
subsection (2) has effect.
Increase in value of assets
(2) Subject to this section, if:
(a) the sum of the amount of the relevant disposal and the amounts of any previous disposals of assets made during the rolling period by the person, the person’s partner or the person and the person’s partner;
less
(b) the sum of any amounts included in the value of the assets of the person or of the partner during the rolling period under section 1126AA, 1126AB or 1126AC or any previous application or applications of this section;
exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place:
(c) an amount equal to one‑half of the excess;
(d) one‑half of the amount of the relevant disposal.
Note: See also section 1126E (about modification of this Division in respect of certain assets).
Effect of ceasing to be member of couple
(3) If, after the disposal referred to in paragraph (1)(a), the person and the person’s partner cease to be members of the same couple:
(a) no amount is to be included after the cessation in the value of the assets of the former partner because of that disposal; and
(b) any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person.
Effect of death of person
(4) If, after the disposal referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person’s partner because of that disposal.
Effect of death of partner
(5) If, after the disposal referred to in paragraph (1)(a), the person’s partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposal is to be included in the value of the assets of the person.
Rolling period
(6) For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002.
1126A Disposal of assets in pre‑pension year—family members
(1A) This section applies only to disposals of assets that took place before 1 July 2002.
(1) Subject to this section, if:
(a) a person (the relevant person) has disposed of an asset; and
(b) the relevant person is a family member of another person (the other person) when the other person claims a youth allowance; and
(c) the relevant person disposed of the asset during a pre‑pension year of the other person; and
(d) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pre‑pension year, exceeds $10,000;
then, for the purpose of determining whether a youth allowance is payable to the other person, there is to be included in the value of the other person’s assets for the period of 5 years that starts on the day on which the disposition took place:
(e) the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pre‑pension year exceeds $10,000; or
(f) the amount of the first‑mentioned disposition;
whichever is the lesser amount.
Note 1: For disposes of assets see section 1123.
Note 2: For amount of disposition see section 1124.
(2) If:
(a) amounts are included under subsection (1) in the value of the other person’s assets because of a disposition of an asset by the relevant person; and
(b) the relevant person ceases to be a family member of the other person;
any amount that was included in the value of the other person’s assets because of the disposition ceases to be included in the value of those assets.
(3) If:
(a) an amount is included under subsection (1) in the value of the assets of the other person because of a disposition of an asset by the relevant person; and
(b) the relevant person dies;
any amount that was included in the value of those assets because of the disposition ceases to be included in the value of those assets.
1126B Disposal of assets in pension year—family members
(1A) This section applies only to disposals of assets that took place before 1 July 2002.
(1) Subject to this section, if:
(a) a person (the relevant person) has disposed of an asset during a pension year of another person (the other person) of whom the relevant person is a family member; and
(b) the other person is receiving youth allowance; and
(c) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pension year, exceeds $10,000;
then, for the purposes of this Act, there is to be included in the value of the other person’s assets for the period of 5 years that starts on the day on which the disposition took place:
(d) the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during the pension year exceeds $10,000; or
(e) the amount of the first‑mentioned disposition;
whichever is the lesser amount.
Note 1: For disposes of assets see section 1123.
Note 2: For amount of disposition see section 1124.
(2) If:
(a) amounts are included under subsection (1) in the value of the other person’s assets because of a disposition of an asset by the relevant person; and
(b) the relevant person ceases to be a family member of the other person;
any amount that was included in the value of the other person’s assets because of the disposition ceases to be included in the value of those assets.
(3) If:
(a) an amount is included under subsection (1) in the value of the assets of the other person because of a disposition of an asset by the relevant person; and
(b) the relevant person dies;
any amount that was included in the value of those assets because of the disposition ceases to be included in the value of those assets.
1126C Disposal of assets in income year—family members
Disposals to which section applies
(1) This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person (the relevant person) who is a family member of another person (the other person) who has claimed or is receiving a youth allowance.
Increase in value of assets
(2) Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the relevant person or the other person during the income year in which the relevant disposal took place, exceeds $10,000, then, for the purpose of determining whether a youth allowance is payable to the other person, the lesser of the following amounts is to be included in the value of the other person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:
(a) the amount of the relevant disposal;
(b) the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the relevant person or the other person during the income year in which the relevant disposal took place, exceeds $10,000.
Note: See also section 1126E (about modification of this Division in respect of certain assets).
Effect of ceasing to be family member
(3) If:
(a) an amount is included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and
(b) the relevant person ceases to be a family member of the other person;
any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.
Effect of death
(4) If:
(a) an amount is included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and
(b) the relevant person dies;
any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.
1126D Disposals of assets in 5 year period—family members
Disposals to which section applies
(1) This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person (the relevant person) who is a family member of another person (the other person) who has claimed or is receiving youth allowance.
Increase in value of assets
(2) If:
(a) the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets made during the rolling period by the relevant person or the other person;
less
(b) the sum of any amounts included in the value of the other person’s assets during the rolling period under section 1126C or any previous application or applications of this section;
exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the other person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:
(c) an amount equal to the excess;
(d) the amount of the relevant disposal.
Note: See also section 1126E (about modification of this Division in respect of certain assets).
Effect of ceasing to be family member
(3) If:
(a) amounts are included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and
(b) the relevant person ceases to be a family member of the other person;
any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.
Effect of death
(4) If:
(a) an amount is included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and
(b) the relevant person dies;
any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.
Rolling period
(5) For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002.
1126E Modification of this Division in respect of certain assets
(1) This section applies if:
(a) in respect of a disposal (the relevant disposal) of an asset, an amount (the current amount) is being included under this Division (including because of this section) in the value of the assets of a person (the affected person); and
(b) during the 5‑year period referred to in subsection 1126AA(2), 1126AB(2), 1126AC(2), 1126AD(2), 1126C(2) or 1126D(2), one of the following events happens:
(i) in the case of section 1126AA or 1126AB—the person referred to in subsection 1126AA(1) or 1126AB(1) acquires the asset or receives consideration for the asset;
(ii) in the case of section 1126AC or 1126AD—the person referred to in paragraph 1126AC(1)(a) or 1126AD(1)(a), or the person’s partner, acquires the asset or receives consideration for the asset or they jointly acquire the asset or jointly receive consideration for the asset;
(iii) in the case of section 1126C or 1126D—the relevant person referred to in subsection 1126C(1) or 1126D(1) acquires the asset or receives consideration for the asset; and
(c) during that 5‑year period, the Secretary is notified in writing of the circumstances covered by paragraph (b).
(2) The Secretary may, having regard to the event, determine in writing that:
(a) from the start of the day on which the notification occurs, section 1126AA, 1126AB, 1126AC, 1126AD, 1126C or 1126D ceases to apply in respect of the relevant disposal; or
(b) both:
(i) from the start of the day on which the notification occurs, the current amount ceases to be included in the value of the affected person’s assets; and
(ii) from the start of the day on which the notification occurs until the end of that 5‑year period, an amount specified in the determination (being an amount less than the current amount) is to be included in the value of the affected person’s assets in respect of the relevant disposal.
(3) The Secretary must give the affected person written notice of the determination.
(4) A determination under subsection (2) is not a legislative instrument.
1127 Disposition more than 5 years old to be disregarded
This Division does not apply to a disposition of an asset that took place:
(a) more than 5 years before the time when:
(i) the person who disposed of the asset; or
(ii) if that person was, at the time when the disposition took place, a member of a couple—the person’s partner; or
(iii) if that person was, at that time, a family member of another person who is receiving or claiming youth allowance and is not independent—the other person;
became qualified for a social security pension or a social security benefit; or
(b) less than 5 years before the time referred to in paragraph (a) and before the time when the Secretary is satisfied that the person who disposed of the asset could reasonably have expected that the person, the person’s partner or the other person, as the case may be, would become qualified for such a pension or benefit.
1127A Division does not apply for purposes of care receiver assets test
This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test).
Division 3—Financial hardship
1129 Access to financial hardship rules—pensions
(1) If:
(a) either:
(i) a social security pension is not payable to a person because of the application of an assets test; or
(ii) a person’s social security pension rate is determined by the application of an assets test; and
(b) either:
(i) sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC, 1126AD and 1126E (so far as section 1126E relates to sections 1126AA, 1126AB, 1126AC and 1126AD) (disposal of assets) do not apply to the person; or
(ii) the Secretary determines that the application of those sections to the person should, for the purposes of this section, be disregarded; and
(c) the person, or the person’s partner, has an unrealisable asset; and
(d) the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and
(e) the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person;
the Secretary must determine that this section applies to the person.
Note 1: For social security pension see subsection 23(1).
Note 2: For unrealisable asset see subsections 11(12) and (13).
(1A) In subsection (1):
social security pension does not include a pension PP (single).
Note: Financial hardship rules for pension PP (single) are contained in sections 1130B and 1130C.
(2) A decision under subsection (1) takes effect:
(a) on the day on which the request under paragraph (1)(d) was lodged with the Department; or
(b) if the Secretary so decides in the special circumstances of the case—on a day not more than 6 months before the day referred to in paragraph (a).
1130 Application of financial hardship rules—pensions
Value of unrealisable asset to be disregarded
(1) If section 1129 applies to a person, the value of:
(a) any unrealisable asset of the person; and
(b) any unrealisable asset of the person’s partner;
is to be disregarded in working out the person’s social security pension rate.
Deduction from social security pension maximum payment rate
(2) If section 1129 applies to a person, there is to be deducted from the person’s social security pension maximum payment rate an amount equal to the person’s adjusted annual rate of ordinary income.
Adjusted annual rate of ordinary income
(3) A person’s adjusted annual rate of ordinary income is an amount per year equal to the sum of:
(a) the person’s annual rate of ordinary income (other than income from assets); and
(b) the person’s annual rate of ordinary income from assets that are not assets tested; and
(c) either:
(i) the person’s annual rate of ordinary income from unrealisable assets; or
(ii) the person’s notional annual rate of ordinary income from unrealisable assets;
whichever is the greater; and
(d) an amount per year equal to $19.50 for each $250 of the value of the person’s assets (other than disregarded assets); and
(e) any amounts that are not income of the person because of paragraph 8(8)(zp).
Assets tested asset
(4) For the purposes of subsection (3), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).
Notional annual rate of ordinary income from unrealisable assets
(5) A person’s notional annual rate of ordinary income from unrealisable assets is:
(a) the amount per year equal to 2.5% of the value of the person’s and the person’s partner’s unrealisable assets; or
(b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person’s and the person’s partner’s unrealisable assets;
whichever is the less.
Family farms
(6) If:
(a) an unrealisable asset is a farm; and
(b) the farm is operated by a person who is a family member of the person to whom this section applies; and
(c) it is not reasonable to expect the farm to be used for another purpose;
the Secretary, in working out the amount per year that could reasonably be expected to be obtained from a purely commercial application of the farm, is to have regard to the overall financial situation of the person operating the farm.
(6A) If:
(a) section 1129 applies to a person; and
(b) the person, or the person’s partner, owns residential premises; and
(c) the premises are an unrealisable asset; and
(d) a family member of the person, or of the partner, lives at the premises; and
(e) one of the following conditions is satisfied:
(i) the family member previously provided substantial care for the person or the partner at the premises at a time when the premises were the principal home of the person or the partner;
(ii) the family member has resided at the premises for a period of, or periods that add up to, 10 years or more;
(iii) the family member is:
(A) a child of the person or the partner; and
(B) disabled;
and the person or the partner is promoting the independent living of the family member; and
(f) it is not reasonable to expect the premises to be sold or otherwise used to provide income support for the person;
the Secretary, in working out the amount per year that could reasonably be expected to be obtained from a purely commercial application of the premises, is to have regard to whether the family member is financially capable of obtaining suitable alternative accommodation.
Note: For family member see subsection 23(1).
(7) Subsections (6) and (6A) do not limit the matters to which the Secretary may have regard in exercising the powers under paragraph (5)(b).
(8) Subsection (2) applies:
(a) subject to subsection (10); and
(b) despite section 1064.
(9) If:
(a) a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC, 1126AD or 1126E (so far as section 1126E relates to section 1126AA, 1126AB, 1126AC or 1126AD) applies to the disposition; and
(b) the Secretary has made a determination under subparagraph 1129(1)(b)(ii) in relation to the disposition;
this section applies to the person as if the person had not disposed of the assets.
(10) If the sum of the rate of pension that would, apart from this subsection, be payable to a person and the annual rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per annum of the excess.
1130A Division does not apply for purposes of care receiver assets test
This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test).
1130B Access to financial hardship rules—pension PP (single)
(1) If:
(a) a pension PP (single) is not payable to a person because of the application of an assets test; and
(b) the person is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and
(c) either:
(i) sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC, 1126AD and 1126E (so far as section 1126E relates to sections 1126AA, 1126AB, 1126AC and 1126AD) (disposal of assets) do not apply to the person; or
(ii) the Secretary decides that the application of those sections to the person should, for the purposes of this section, be disregarded; and
(d) the person has an unrealisable asset; and
(e) the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and
(f) the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person;
the Secretary must determine that this section applies to the person.
Note: For unrealisable asset see subsections 11(12) and (13).
(2) A reference in subsection (1) to acceptable alternative Commonwealth income support in relation to a person is a reference to payments (other than payments under the Farm Household Support Act 2014):
(a) that are made available by the Commonwealth by way of income support; and
(b) the rate of which is not less than the rate of pension PP (single) that would be applicable to the person if pension PP (single) were payable to the person.
(3) A decision under subsection (1) takes effect:
(a) on the day on which the request under paragraph (1)(e) was lodged with the Department; or
(b) if the Secretary so decides in the special circumstances of the case—on a day not more than 6 months before the day on which the request under paragraph (1)(e) was lodged with the Department.
1130C Application of financial hardship rules—pension PP (single)
Value of unrealisable asset to be disregarded
(1) If section 1130B applies to a person, the value of any unrealisable asset of the person is to be disregarded in working out whether a pension PP (single) is payable to the person.
Deduction from pension PP (single) maximum payment rate
(2) If section 1130B applies to a person, there is to be deducted from the person’s pension PP (single) maximum payment rate an amount equal to the person’s adjusted annual rate of ordinary income.
Note: For maximum payment rate see Step 4 of the method statement in point 1068A‑A1.
Adjusted annual rate of ordinary income
(3) The person’s adjusted annual rate of ordinary income is an amount per year equal to the sum of:
(a) the person’s annual rate of ordinary income (other than income from assets); and
(b) the person’s annual rate of ordinary income from assets that are not assets tested; and
(c) either:
(i) the person’s annual rate of ordinary income from unrealisable assets; or
(ii) the person’s notional annual rate of ordinary income from unrealisable assets;
whichever is the greater; and
(d) an amount per year equal to $26.00 for each $250 of the value of the person’s assets (other than disregarded assets); and
(e) any amounts that are not income of the person because of paragraph 8(8)(zp).
Assets tested asset
(5) For the purposes of paragraph (3)(b), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).
Notional annual rate of ordinary income from unrealisable assets
(6) A person’s notional annual rate of ordinary income from unrealisable assets is:
(a) the amount per year equal to 2.5 per cent of the value of the person’s unrealisable assets; or
(b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person’s unrealisable assets;
whichever is the lesser.
(7) Subsection (2) applies:
(a) subject to subsection (9); and
(b) despite section 500Q.
(8) If:
(a) a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC, 1126AD or 1126E (so far as section 1126E relates to section 1126AA, 1126AB, 1126AC or 1126AD) applies to the disposition; and
(b) the Secretary has made a determination under paragraph 1130B(1)(c) in relation to the disposition;
this section applies to the person as if the person had not disposed of the assets.
(9) If the sum of the rate of pension PP (single) that would, apart from this subsection, be payable to a person and the annual rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per year of the excess.
1131 Access to financial hardship rules—benefits
(1) If:
(a) a social security benefit is not payable to a person because of the application of an assets test; and
(b) the person is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and
(c) the person’s partner is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and
(d) either:
(i) sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC, 1126AD and 1126E (so far as section 1126E relates to sections 1126AA, 1126AB, 1126AC and 1126AD) (disposal of assets) do not apply to the person; or
(ii) the Secretary decides that the application of those sections to the person should, for the purposes of this section, be disregarded; and
(e) the person, or the person’s partner, has an unrealisable asset; and
(f) the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and
(g) the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person;
the Secretary must determine that this section applies to the person.
Note: For unrealisable asset see subsections 11(12) and (13).
(1A) In subsection (1):
assets test does not include the parental means test in section 1067G (Youth Allowance Rate Calculator).
(2) A reference in subsection (1) to acceptable alternative Commonwealth income support in relation to a person is a reference to payments (other than payments under the Farm Household Support Act 2014):
(a) that are made available by the Commonwealth by way of income support; and
(b) the rate of which is not less than the rate of jobseeker payment, youth allowance or austudy payment that would be applicable to the person if that payment or allowance were payable to the person.
(3) A decision under subsection (1) takes effect:
(a) on the day on which the request under paragraph (1)(f) was lodged with the Department; or
(b) if the Secretary so decides in the special circumstances of the case—on a day not more than 6 months before the day on which the request under paragraph (1)(f) was lodged with the Department.
1132 Application of financial hardship rules—benefits
Value of unrealisable asset to be disregarded
(1) If section 1131 applies to a person, the value of:
(a) any unrealisable asset of the person; and
(b) any unrealisable asset of the person’s partner;
is to be disregarded in working out whether a social security benefit is payable to the person.
Deduction from social security benefit maximum payment rate
(2) If section 1131 applies to a person, there is to be deducted from the person’s social security benefit maximum payment rate an amount equal to the person’s adjusted fortnightly rate of ordinary income.
Note: For maximum payment rate, see, for example, Step 4 of the Method statement in point 1068‑A1.
Adjusted fortnightly rate of ordinary income
(3) The person’s adjusted fortnightly rate of ordinary income is an amount per fortnight equal to the sum of:
(a) the person’s fortnightly rate of ordinary income (other than income from assets); and
(b) the person’s fortnightly rate of ordinary income from assets that are not assets tested; and
(c) either:
(i) the person’s fortnightly rate of ordinary income from unrealisable assets; or
(ii) the person’s notional fortnightly rate of ordinary income from unrealisable assets;
whichever is the greater; and
(d) an amount per fortnight equal to $1 for each $250 of the value of the person’s assets (other than disregarded assets); and
(e) any amounts that are not income of the person because of paragraph 8(8)(zp).
Assets tested asset
(4) For the purposes of paragraph (3)(b), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).
Notional fortnightly rate of ordinary income from unrealisable assets
(5) A person’s notional fortnightly rate of ordinary income from unrealisable assets is:
(a) the amount per fortnight equal to one twenty‑sixth of 2.5% of the value of the person’s and the person’s partner’s unrealisable assets; or
(b) the amount per fortnight that could reasonably be expected to be obtained from a purely commercial application of the person’s and the person’s partner’s unrealisable assets;
whichever is the less.
(6) Subsection (2) applies:
(a) subject to subsection (8); and
(b) despite sections 601, 733, 1067G, 1067L and 1068.
(7) If:
(a) a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC, 1126AD or 1126E (so far as section 1126E relates to section 1126AA, 1126AB, 1126AC or 1126AD) applies to the disposition; and
(b) the Secretary has made a determination under paragraph 1131(1)(d) in relation to the disposition;
this section applies to the person as if the person had not disposed of the assets.
(8) If the sum of the rate of benefit that would, apart from this subsection, be payable to a person and the fortnightly rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per fortnight of the excess.
Division 4—Pension loans scheme
1133AA Pension loans scheme definitions
(1) In this Division, unless the contrary intention appears:
disposes of real assets has its ordinary meaning.
maximum payment rate means the rate worked out at Step 4 of the Method statement in Module A of the relevant Pension Rate Calculator.
nominated amount means the amount (if any) specified to be the nominated amount under paragraph 1136(1A)(b) or subsection 1137(1) (as the case may be).
real assets, in relation to a person or couple, means the real property (including the principal home) of the person or couple in Australia, but does not include any real property specified under paragraph 1136(1A)(a).
(2) For the purposes of this Division, a reference to a charge under section 1138 includes a reference to a charge continued in force by subsection 1138(3) or paragraph 1139(2A)(b).
1133 Qualification for participation in pension loans scheme
Person not member of a couple
(1) A person who is not a member of a couple is qualified to participate in the pension loans scheme if:
(a) the person is receiving or is qualified for:
(i) age pension; or
(ii) disability support pension; or
(iii) carer payment; and
(c) the person has reached pension age; and
(ca) the person is not bankrupt; and
(cb) the person is not subject to a personal insolvency agreement under Part X of the Bankruptcy Act 1966; and
(cc) the Secretary is satisfied that there is adequate and appropriate insurance in relation to the person’s real assets; and
(d) either:
(i) the Secretary is satisfied that the value of the person’s real assets (after deduction of any nominated amount) is sufficient to secure the payment of any debt that may become payable to the Commonwealth under this Division; or
(ii) subsection (3) applies to the person.
Note 2: For real assets see subsection 1133AA(1).
Note 3: For nominated amount, see subsection 1133AA(1).
Note 4: For pension age see subsections 23(5A), (5B), (5C) and (5D).
Person member of a couple
(2) A person who is a member of a couple is qualified to participate in the pension loans scheme if:
(a) the person is receiving or is qualified for:
(i) an age pension; or
(ii) a disability support pension; or
(iv) a carer payment; and
(c) the person:
(i) has reached pension age; or
(ii) is the partner of a person who has reached pension age; and
(ca) the person is not bankrupt; and
(cb) the person is not subject to a personal insolvency agreement under Part X of the Bankruptcy Act 1966; and
(cc) the Secretary is satisfied that there is adequate and appropriate insurance in relation to the couple’s real assets; and
(d) either:
(i) the Secretary is satisfied that the value of the couple’s real assets (after deduction of any nominated amount) is sufficient to secure the payment of any debt that may become payable to the Commonwealth under this Division; or
(ii) subsection (3) applies to both of the members of the couple.
Note 2: For real assets see subsection 1133AA(1).
Note 3: For nominated amount, see subsection 1133AA(1).
Note 4: For pension age see subsections 23(5A), (5B), (5C) and (5D).
(3) This subsection applies to a person if:
(a) either:
(i) the person is an attributable stakeholder of a company or trust (within the meaning of Part 3.18); or
(ii) the person is a member of a couple and the other member of the couple is an attributable stakeholder of a company or trust (within the meaning of Part 3.18); and
(b) the company or trustee has given the Commonwealth a guarantee that the company or trustee will pay any debt that may become payable to the Commonwealth by the person under this Division; and
(c) the company’s or trustee’s liability under the guarantee is secured by a charge against real property of the company or trust in Australia; and
(d) the Secretary is satisfied that the value of that real property is sufficient to secure the payment of any amount that may become payable by the company or trustee under the guarantee; and
(e) the Secretary has, by writing, approved the guarantee and the charge.
Value of real property
(4) In working out the value of real property for the purposes of subparagraph (1)(d)(i) or (2)(d)(i) or paragraph (3)(d):
(a) disregard section 1121; and
(b) the Secretary may take into account any charge or encumbrance over the property.
1134 Effect of participation in pension loans scheme—pension rate
(1) If:
(a) a person is qualified to participate in the pension loans scheme; and
(b) the person makes a request to participate under section 1136; and
(d) the Secretary is satisfied that the amount of any debt that becomes payable by the person to the Commonwealth under this Division is readily recoverable;
then:
(e) the rate of the pension payable to the person by operation of the scheme is to be:
(i) 1.5 multiplied by the maximum payment rate; or
(ia) if DFISA under Part VIIAB of the Veterans’ Entitlements Act is payable to the person—1.5 multiplied by the maximum payment rate less the DFISA rate; or
(ii) some other rate nominated by the person;
whichever is the lowest.
Note: For maximum payment rate see subsection 1133AA(1).
(2) The pension is to commence to be paid at the rate payable by operation of the scheme in respect of the first instalment period for which an instalment is paid after the request is lodged.
1135 Effect of participation in pension loans scheme—creation of debt
(1) If the rate of the pension payable by operation of the pension loans scheme is more than the rate that would have been received by the person but for the operation of the scheme, the person owes a debt to the Commonwealth.
(3) This is how to work out the amount of the debt owed by the person from time to time:
Method statement
Step 1. Work out the sum of the amount of pension received by the person from time to time under the pension loans scheme: the result is the primary loan amount.
Step 2. Add to the primary loan amount the amount of any registration costs payable by the person under subsection 1143(4): the result is the registration cost adjusted amount.
Step 3. Take away from the registration cost adjusted amount the sum of the amount of pension (if any) that would have been received by the person but for the operation of the scheme: the result is the basic amount of debt.
Step 4. Add to the basic amount of debt the amount of interest payable. The interest payable is compound interest at the rate fixed under subsection (4) and compounding fortnightly: the result is the total amount of debt.
Step 5. From the total amount of debt take away any amount of the debt already paid to the Commonwealth: the result is the current amount of debt owed by the person.
(4) The rate at which compound interest is payable under subsection (3) is the rate fixed from time to time by the Minister by legislative instrument.
1135A Effect of participation in pension loans scheme—maximum loan available
(1) The maximum loan available to a person under the pension loans scheme is the amount worked out using the formula:
where:
age component amount means the amount that is specified in a determination under subsection (3) and that relates to:
(a) if the person is not a member of a couple—the age the person turned on his or her last birthday; or
(b) if the person is a member of a couple—the age the younger member of the couple turned on his or her last birthday.
value of real assets means:
(a) if neither subparagraph 1133(1)(d)(ii) nor subparagraph 1133(2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme—the value of the real assets (after deduction of any nominated amount); or
(b) if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme—the value of the charge referred to in paragraph 1133(3)(c).
Note 1: For real assets see subsection 1133AA(1).
Note 2: For nominated amount see subsection 1133AA(1).
(2) For the purposes of subsection (1), the following provisions have effect:
(a) if, but for this paragraph, the value of real assets would be an amount that exceeds $10,000 but is not a multiple of $10,000, the value is to be taken to be the next lower amount that is a multiple of $10,000;
(b) if, but for this paragraph, the value of real assets would be less than $10,000, the value is to be taken to be nil.
(3) The Minister may, by legislative instrument, make a determination for the purposes of the following:
(a) the definition of age component amount in subsection (1) of this section;
(b) the definition of age component amount in subsection 52ZCA(1) of the Veterans’ Entitlements Act 1986.
1136 Need for a request to participate
(1) A person who wants to participate in the pension loans scheme must make a request to participate in accordance with this section.
(1A) A request under subsection (1) must:
(a) specify any real property that is not to be included in working out the value of real assets for the purposes of sections 1133 and 1135A, or that is not to be subject to a charge under section 1138; and
(b) specify an amount (if any) to be the nominated amount for the purposes of this Division; and
(c) specify the rate of the pension (if any) nominated by the person for the purposes of subparagraph 1134(1)(e)(ii).
(1B) Paragraphs (1A)(a) and (b) do not apply if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme.
(2) The request must be signed:
(a) if the person is not a member of a couple—by the person; or
(b) if the person is a member of a couple—by both members of the couple.
(3) The request must be:
(a) in writing; and
(b) in a form approved by the Secretary; and
(c) lodged at an office of the Department.
1137 Need for a request to later nominate or change nominated amount or rate of pension
(1) A person who is participating in the pension loans scheme and who wants to:
(a) nominate an amount to be the nominated amount for the purposes of this Division; or
(b) nominate a rate of pension for the purposes of subparagraph 1134(1)(e)(ii); or
(c) change the nominated amount earlier specified; or
(d) change the rate of the pension earlier specified;
must make a request that specifies the nomination or change (as the case may be).
(1A) Paragraphs (1)(a) and (c) do not apply if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme.
(2) A request under subsection (1) must be signed:
(a) if the person is not a member of a couple—by the person; or
(b) if the person is a member of a couple—by both members of the couple.
(3) The request must:
(a) be in writing; and
(b) be lodged at an office of the Department.
1137A Non‑receipt of social security pension or social security payment
(1) This section applies for the purposes of a provision (the relevant provision) of this or another Act if:
(a) the relevant provision provides a benefit (whether the benefit is a pension, benefit, payment, supplement, subsidy, pensioner concession card, seniors health card or any other sort of benefit) to a person; and
(b) in relation to that benefit, it is necessary to work out whether:
(i) the person or another person is receiving or is not receiving a social security pension or social security payment or is receiving or is not receiving a particular kind of social security pension whose rate may be worked out under this Division; or
(ii) the person or another person is a recipient or is not a recipient of a social security pension or social security payment or is a recipient or is not a recipient of a particular kind of social security pension whose rate may be worked out under this Division; or
(iii) a social security pension or social security payment, or a particular kind of social security pension whose rate may be worked out under this Division, is payable to the person or another person.
(2) For the purposes of the relevant provision:
(a) a person is taken not to be receiving a social security pension or social security payment or the particular kind of social security pension; and
(b) a person is taken not to be a recipient of a social security pension or social security payment or the particular kind of social security pension; and
(c) a social security pension or social security payment, or the particular kind of social security pension, is taken not to be payable to the person;
merely because:
(d) the person receives a social security pension, or the kind of social security pension, at a rate worked out under this Division; or
(e) a social security pension, or the kind of social security pension, is payable to the person at a rate worked out under this Division.
(3) Subsection (2) does not apply in relation to a person and a day if on that day:
(a) the person is receiving a social security pension at a rate worked out under this Division; and
(b) but for the operation of this Division, the person would have been receiving that pension at a rate greater than nil.
1138 Existence of debt results in charge over real assets
Person not member of a couple
(1) If a person who is not a member of a couple is participating in the pension loans scheme, the person’s real assets are subject to a charge in favour of the Commonwealth to secure the payment of the debt to the Commonwealth.
Person member of a couple
(2) If:
(a) a person who is a member of a couple is participating in the pension loans scheme; and
(b) the person’s partner has signed the person’s request under subsection 1136(2);
the couple’s real assets are subject to a charge in favour of the Commonwealth to secure the payment of a debt to the Commonwealth.
(3) If:
(a) the pension loans scheme ceases to operate in relation to a person because of the effect of section 1141, 1141A or 1142; and
(b) at the time the scheme ceases to operate, the person owes a debt to the Commonwealth because of the person’s participation in the scheme;
the charge in favour of the Commonwealth under subsection (1) or (2) of this section continues in relation to the real assets until the debt is repaid or recovered.
Note 1: Section 1141 provides that a person ceases to participate in the scheme if the debt owed by the person exceeds the maximum loan available.
Note 1A: Section 1141A provides that the scheme ceases to operate in relation to a person if the Secretary is satisfied that the person ceases to be qualified to participate in the scheme and the Secretary determines that the scheme ceases to operate in relation to the person.
Note 2: Section 1142 provides for a person to withdraw from the scheme.
(4) This section does not apply if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme.
1139 Debt not to be recovered until after death
(1) The Commonwealth is not entitled to recover a debt under section 1135 from a person until after the person’s death.
(2) In the following circumstances, the Commonwealth is not entitled to recover the debt until after the person’s death and after:
(a) if:
(i) the person was a member of a couple at the time of death; and
(ii) the person’s partner survives the person; and
(iii) an amount of bereavement payment is payable to the partner because of the person’s death;
the last instalment of bereavement payment has been paid; or
(b) if:
(i) the person was a member of a couple at the time of death; and
(ii) the person’s partner survives the person; and
(iii) the person’s partner has the use of the assets or part of the assets that are subject to a charge; and
(iv) the partner has reached pension age;
the death of the partner.
Note: For pension age see subsections 23(5A), (5B), (5C) and (5D).
(2A) In relation to the period between the person’s death and the time of recovery of the debt by the Commonwealth:
(a) compound interest continues to accrue, and forms part of the debt, in accordance with Step 4 of the Method statement in subsection 1135(3); and
(b) the charge in favour of the Commonwealth under section 1138 continues in relation to the real assets until the debt is recovered.
(3) This section is subject to section 1140 (enforcement of charge if assets change hands).
(4) If the Secretary decides that the debt is to be recovered before the events referred to in subsection (1) or (2), the debt may be so recovered in spite of those subsections.
1140 Enforcement of charge
(1) If:
(a) real assets of a person are subject to a charge under section 1138; and
(b) any of those real assets cease to be real assets of the person; and
(c) the person receives proceeds from the sale or other disposal of the real assets;
the Secretary may recover from the person, out of those proceeds, the whole or part of the debt secured by the charge.
(2) If:
(a) real assets of a person are subject to a charge under section 1138; and
(b) any of those real assets are disposed of to another person (in this section called the new owner);
the Secretary may, subject to subsection (3), enforce the charge against those real assets.
(2A) For the purposes of paragraph (2)(b), it does not matter whether:
(a) the disposal of the real assets is by way of sale, transfer, gift, will or otherwise; or
(b) the disposal is by the person referred to in paragraph (2)(a) or any other person.
(3) The Secretary may not enforce the charge against the assets if the new owner is a bona fide purchaser for value without notice.
1141 Person ceases to participate in pension loans scheme if debt exceeds maximum loan available
If:
(a) a person is participating in the pension loans scheme; and
(b) the debt owed by the person under section 1135 exceeds the maximum loan available to the person under the scheme;
the scheme ceases to operate in relation to the person at the beginning of the first instalment period for the pension being paid to the person that begins after the debt exceeds the maximum loan available.
Note 1: The maximum loan available is worked out by using the formula set out in subsection 1135A(1).
Note 2: For repayment or recovery of the debt owed by the person see sections 1139 and 1142A.
1141A Secretary may cease person’s participation in pension loans scheme
(1) If:
(a) a person is participating in the pension loans scheme; and
(b) the Secretary is satisfied that the person ceases to be qualified to participate in the scheme;
the Secretary may determine that the scheme ceases to operate in relation to the person. The scheme ceases to operate in relation to the person at the beginning of the first instalment period for the social security pension being paid to the person that begins after the determination is made.
Note: For repayment or recovery of the debt owed by the person, see sections 1139 and 1142A.
(2) The Secretary must give the person notice of the determination.
(3) A determination under subsection (1) is not a legislative instrument.
1142 Person withdraws from pension loans scheme
(1) If a person who is participating in the pension loans scheme makes a request to withdraw from the scheme, the scheme ceases to operate in relation to the person at the beginning of the first instalment period for the pension being paid to the person that begins after the request is lodged.
Note: For repayment or recovery of the debt owed by the person, see sections 1139 and 1142A.
(2) A request under subsection (1) must be signed:
(a) if the person is not a member of a couple—by the person; or
(b) if the person is a member of a couple—by both members of the couple.
(3) The request must:
(a) be in writing; and
(b) be lodged at an office of the Department.
1142A Repayment or recovery of debt after pension loans scheme ceases to operate
(1) The debt owed by a person under section 1135, at the time the pension loans scheme ceases to operate in relation to the person by operation of section 1141, 1141A or 1142, may be repaid by the person at any time.
Note 1: Section 1141 provides that a person ceases to participate in the scheme if the debt owed by the person exceeds the maximum loan available.
Note 1A: Section 1141A provides that the scheme ceases to operate in relation to a person if the Secretary is satisfied that the person ceases to be qualified to participate in the scheme and the Secretary determines that the scheme ceases to operate in relation to the person.
Note 2: Section 1142 provides for a person to withdraw from the scheme.
(2) If the debt owed by the person is not repaid by the person at the time the scheme ceases to operate in relation to the person, compound interest continues to accrue, and forms part of the debt, in accordance with Step 4 of the Method statement in subsection 1135(3), until the debt is repaid or recovered.
(3) If the debt is not repaid under subsection (1) of this section, subject to section 1139 the Commonwealth is entitled to recover the debt.
Note: Section 1139 provides that a debt cannot be recovered from a person until after the person’s death.
1143 Registration of charge
(1) If real assets are subject to a charge under section 1138, the Secretary may lodge a notice in writing of the charge with the appropriate officer of the State or Territory in which the real assets are situated.
(2) The appropriate officer may register the charge as if the Secretary’s notice were an instrument of charge or encumbrance duly executed under the laws in force in the State or Territory.
(3) The Secretary may require the person whose real assets are subject to the charge to execute an instrument relating to the registration of the charge.
(4) If the Commonwealth incurs costs associated with:
(a) the registration of the charge; or
(b) the registration of the discharge of the charge;
those costs are payable by the person whose real assets are subject to the charge.
1144 Manner of enforcement of charge
If a charge against real assets is enforceable under this Division, the Secretary may enforce the charge against those real assets or against part of those real assets in any manner that the Secretary decides.
1144A Division does not apply for purposes of care receiver assets test
(1) This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test).
(2) This section is for the avoidance of doubt.
Division 5—Provisions relating to special residences and special residents
Subdivision A—General
1145A Application of Division to granny flat residents
This Division applies to a granny flat resident only if the resident acquired or retained the person’s granny flat interest in the person’s principal home on or after 22 August 1990.
1146 Basis for different treatment
This Division’s operation on a special resident depends on:
(a) whether the resident is:
(i) not a member of a couple; or
(ii) a member of a couple; or
(iii) a member of an illness separated couple; or
(iv) a member of an ordinary couple with different principal homes; and
(b) the resident’s entry contribution; and
(c) the resident’s extra allowable amount.
Note 1: For member of an ordinary couple with different principal homes see subsection 12(2).
Note 2: For entry contribution see section 1147.
Note 3: For extra allowable amount see section 1148.
1147 Entry contribution
(1) A special resident’s entry contribution is:
(a) if the resident is not a member of a couple—the resident’s individual residence contribution; or
(b) if the resident is a member of a couple, shares the resident’s principal home with the resident’s partner and is not a member of an illness separated couple—an amount equal to 50% of the resident’s individual residence contribution and of the partner’s individual residence contribution; or
(c) if the resident is a member of an illness separated couple—the resident’s individual residence contribution; or
(d) if:
(i) the resident is a member of an ordinary couple with different principal homes; and
(ii) the principal home of the resident’s partner is not a special residence;
the resident’s individual residence contribution; or
(e) if:
(i) the resident is a member of an ordinary couple with different principal homes; and
(ii) the principal home of the resident’s partner is also a special residence;
an amount equal to 50% of the resident’s individual residence contribution and of the partner’s individual residence contribution.
(1A) A special resident’s entry contribution is the resident’s individual residence contribution plus the amount paid, or agreed to be paid, for the resident’s current right (if any) to share the resident’s principal home with a partner if:
(a) the resident was a member of a couple at the time when the resident took up residence in the retirement village or granny flat; and
(b) the resident has ceased to be a member of a couple.
(1B) A special resident’s entry contribution is the resident’s individual residence contribution if:
(a) the resident was a member of a couple at the time when the sale leaseback agreement was entered into; and
(b) the resident has ceased to be a member of a couple.
(1C) For the purposes of this Division, the individual residence contribution is:
(a) for a retirement village resident—the total amount paid, or agreed to be paid, for the resident’s current right to live in the retirement village; and
(b) for a granny flat resident—the total amount paid, or agreed to be paid, for the resident’s current right to live in the granny flat; and
(c) for a sale leaseback resident—the deferred payment amount.
Note: For deferred payment amount see section 12B.
(1D) For the purposes of paragraph (1C)(b):
(a) the total amount paid to obtain for a person his or her current right to live in a granny flat is the amount equal to the value of the person’s granny flat interest; and
(b) the value of a person’s granny flat interest is:
(i) unless subparagraph (ii) applies—the amount paid, or agreed to be paid, for the interest; or
(ii) if the Secretary considers that, for any special reason in any particular case, that value should be another amount—that other amount.
(2) An amount that is rent for the purposes of this Act is to be disregarded in applying subsections (1), (1A) and (1B).
1148 Extra allowable amount
Residence taken up before 13 June 1989
(1) If a retirement village resident became entitled to take up residence in the retirement village before 13 June 1989, the resident’s extra allowable amount is:
(a) if the resident is not a member of a couple—$64,000; or
(b) if the resident is a member of an illness separated couple—$64,000; or
(c) in any other case—$32,000.
Residence taken up on or after 13 June 1989
(2) If a retirement village resident became entitled to take up residence in the retirement village on or after 13 June 1989, the resident’s extra allowable amount is:
(a) if the resident is not a member of a couple—the amount that, as at the time when the resident becomes entitled to take up that residence, is the difference between the pension “single” homeowner AVL and the pension “single” non‑homeowner AVL; or
(b) if the resident is a member of an illness separated couple—the amount that, as at the time when the resident becomes entitled to take up that residence, is the difference between the pension “single” homeowner AVL and the pension “single” non‑homeowner AVL; or
(c) in any other case—the amount that, as at the time when the resident becomes entitled to take up that residence, is the difference between the pension “partnered” homeowner AVL and the pension “partnered” non‑homeowner AVL.
(2A) A granny flat resident’s extra allowable amount is:
(a) if the resident is not a member of a couple—the amount that, as at the time when the resident becomes entitled to the granny flat interest, is the difference between the pension “single” homeowner AVL and the pension “single” non‑homeowner AVL; or
(b) if the resident is a member of an illness separated couple—the amount that, as at the time when the resident becomes entitled to the granny flat interest, is the difference between the pension “single” homeowner AVL and the pension “single” non‑homeowner AVL; or
(c) in any other case—the amount that, as at the time when the resident becomes entitled to the granny flat interest, is the difference between the pension “partnered” homeowner AVL and the pension “partnered” non‑homeowner AVL.
(2B) A sale leaseback resident’s extra allowable amount is:
(a) if the resident is not a member of a couple—the amount that, as at the time when the sale leaseback agreement is entered into, is the difference between the pension “single” homeowner AVL and the pension “single” non‑homeowner AVL; or
(b) if the resident is a member of an illness separated couple—the amount that, as at the time when the sale leaseback agreement is entered into, is the difference between the pension “single” homeowner AVL and the pension “single” non‑homeowner AVL; or
(c) in any other case—the amount that, as at the time when the sale leaseback agreement is entered into, is the difference between the pension “partnered” homeowner AVL and the pension “partnered” non‑homeowner AVL.
(3) For the purposes of this section, a person becomes entitled to take up residence in a retirement village when the person becomes entitled to take up residence in a retirement village pursuant to the agreement under which the person’s current right to live in the retirement village arises.
(4) In this section, “pension ‘single’ homeowner AVL”, “pension ‘single’ non‑homeowner AVL”, “pension ‘partnered’ homeowner AVL” and “pension ‘partnered’ non‑homeowner AVL” have the same meaning as in Part 3.16 (Indexation).
1149 Renegotiation of retirement village agreement
If a person who has a right to live in a retirement village under an agreement enters into a new agreement under which the person obtains a right to live in the retirement village, then, for the purposes of this Division, the total amount paid, or agreed to be paid, for the person’s current right to live in the retirement village is the sum of the following amounts:
(a) the total amount paid under the new agreement for that right; and
(b) so much (if any) of:
(i) any amount paid under an earlier agreement to obtain a right for the person to live in the retirement village; and
(ii) any amount that was, or would have been, payable to the person upon the termination of an earlier agreement;
as ought, in the Secretary’s opinion, to be attributed to the cost of the person’s current right to live in the retirement village.
Subdivision B—Residents who are not members of a couple
1150 Residents who are not members of a couple
(1) This section applies to a special resident who is not a member of a couple.
Entry contribution above extra allowable amount
(2) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was more than the extra allowable amount;
the resident is to be taken, for the purposes of this Act, to be a homeowner.
Entry contribution equal to or below extra allowable amount
(3) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was equal to or less than the extra allowable amount;
then, for the purposes of this Act:
(c) the resident is to be taken not to have a right or interest in relation to the resident’s principal home; and
(d) the resident’s assets are to be taken to include an asset the value of which is equal to the amount of the resident’s entry contributions; and
(e) sections 198H, 198HA, 198HB, 198J, 198JA and 198JB, subsection 1118(1) and section 1125 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, to be taken to have.
(4) Subsection (3) applies:
(a) whether or not the resident actually has any right or interest in the resident’s principal home; and
(b) whatever the value of any right or interest that the resident does have in the resident’s principal home.
Subdivision C—Residents who are members of couple and share principal home
1151 Members of couples
(1) This section applies to a special resident if:
(a) the resident is a member of a couple; and
(b) the resident shares the resident’s principal home with the resident’s partner.
Entry contribution above extra allowable amount
(2) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was more than the extra allowable amount;
the resident is to be taken, for the purposes of this Act, to be a homeowner.
Entry contribution equal to or below extra allowable amount
(3) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was equal to or less than the extra allowable amount;
then, for the purposes of this Act:
(c) the resident is to be taken not to have a right or interest in relation to the resident’s principal home; and
(d) the resident’s assets are to be taken to include an asset the value of which is equal to the amount of the resident’s entry contribution; and
(e) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, to be taken to have.
(4) Subsection (3) applies:
(a) whether or not the resident actually has any right or interest in the resident’s principal home; and
(b) whatever the value of any right or interest that the resident does have in the resident’s principal home.
Subdivision D—Residents who are members of illness separated couple
1152 Members of illness separated couples (both in special residences)
(1) This section applies to a special resident if:
(a) the resident is a member of an illness separated couple; and
(b) the principal home of the resident’s partner is also a special residence.
Both entry contributions above extra allowable amount
(2) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution, and the entry contribution of the resident’s partner, were each more than the extra allowable amount concerned;
then, for the purposes of this Act:
(c) the resident is to be taken to be a homeowner; and
(d) any right or interest of the resident in the partner’s principal home is to be disregarded in calculating the actual value of the resident’s assets for the purposes of this Act; and
(e) any right or interest of the partner in his or her principal home, or in the resident’s principal home, is to be disregarded in calculating the actual value of the partner’s assets for the purposes of this Act.
Both entry contributions equal to or below extra allowable amount
(3) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution, and the entry contribution of the resident’s partner, were each equal to or less than the extra allowable amount concerned;
then, for the purposes of this Act:
(c) the resident is to be taken not to have a right or interest in relation to the resident’s principal home; and
(d) the resident’s assets are to be taken to include an asset the value of which is equal to the amount of the resident’s entry contribution; and
(e) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, taken to have.
(4) Subsection (3) applies:
(a) whether or not the resident actually has any right or interest in the resident’s principal home; and
(b) whatever the value of any right or interest that the resident does have in the resident’s principal home.
Person’s entry contribution above extra allowable amount and partner’s entry contribution equal to or below extra allowable amount
(5) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was more than the extra allowable amount; and
(c) the resident’s partner’s entry contribution was equal to or less than the extra allowable amount;
the following provisions apply for the purposes of the application of this Act to the resident and to the partner:
(d) the resident is to be taken to be a homeowner;
(e) for the purposes of this Act:
(i) both the resident, and the partner, are to be taken not to have a right or interest in relation to the partner’s principal home; and
(ii) the partner’s assets are to be taken to include an asset whose value is equal to the amount of the partner’s entry contribution; and
(iii) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the partner is, because of subparagraph (ii) of this paragraph, to be taken to have;
(f) any right or interest of the partner in the resident’s principal home is to be disregarded in calculating the actual value of the partner’s assets for the purposes of this Act;
(g) the resident’s assets value limit and the partner’s assets value limit are both to be taken to be $237,500.
Note: The amount in paragraph (g) is adjusted annually: see section 1205.
(6) Subsection (5) applies:
(a) whether or not the resident’s partner actually has any right or interest in the partner’s principal home; and
(b) whatever the value of any right or interest that the partner does have in the partner’s principal home.
1153 Members of illness separated couples (partner not in special residence and partner homeowner)
(1) This section applies to a special resident if:
(a) the resident is a member of an illness separated couple; and
(b) the principal home of the resident’s partner is not a special residence; and
(c) the right or interest of the partner in the partner’s principal home is to be disregarded because of paragraph 1118(1)(b).
Entry contribution above extra allowable amount
(2) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was more than the extra allowable amount;
then:
(c) for the purposes of this Act, the resident is to be taken to be a homeowner; and
(d) any right or interest of the resident in the partner’s principal home referred to in paragraph (1)(c) is to be disregarded in calculating the actual value of the resident’s assets for the purposes of this Act; and
(e) any right or interest of the partner in the resident’s principal home is also to be disregarded in calculating the actual value of the partner’s assets for the purposes of this Act.
Entry contribution equal to or below extra allowable amount
(3) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was equal to or less than the extra allowable amount;
the following provisions apply for the purposes of the application of this Act to the resident and to the resident’s partner:
(c) for the purposes of this Act:
(i) the resident is to be taken not to be a homeowner; and
(ia) the partner is to be taken not to have a right or interest in relation to the resident’s principal home; and
(ii) the resident’s assets are to be taken to include an asset the value of which is equal to the amount of the resident’s entry contribution; and
(iii) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of subparagraph (ii) of this paragraph, to be taken to have;
(d) any right or interest of the resident in the partner’s principal home referred to in paragraph (1)(c) is to be disregarded in calculating the actual value of the resident’s assets for the purposes of this Act;
(e) the resident’s assets value limit and the partner’s assets value limit are both to be taken to be $237,500.
Note: The amount in paragraph (e) is adjusted annually: see section 1205.
(4) Subsection (3) applies:
(a) whether or not the resident actually has any right or interest in the resident’s principal home; and
(b) whatever the value of any right or interest that the resident does have in the resident’s principal home.
1154 Members of illness separated couples (partner not in special residence and partner not homeowner)
(1) This section applies to a special resident if:
(a) the resident is a member of an illness separated couple; and
(b) the principal home of the resident’s partner is not a special residence; and
(c) the resident’s partner does not have a right or interest in the partner’s principal home that is to be disregarded because of paragraph 1118(1)(b).
Entry contribution above extra allowable amount
(2) If:
(a) this section applies to a special resident; and
(c) the resident’s entry contribution was more than the extra allowable amount;
the following provisions apply for the purposes of the application of this Act to the resident and to the partner:
(d) for the purposes of this Act, the resident is to be taken to be a homeowner;
(e) any right or interest of the partner in the resident’s principal home is to be disregarded in calculating the actual value of the partner’s assets for the purposes of this Act;
(f) the resident’s assets value limit and the partner’s assets value limit are both to be taken to be $237,500.
Note: The amount in paragraph (f) is adjusted annually: see section 1205.
Entry contribution equal to or below extra allowable amount
(4) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was equal to or less than the extra allowable amount;
then, the following provisions apply for the purposes of the application of this Act to the resident and to the resident’s partner:
(c) both the resident, and the partner, are to be taken not to have a right or interest in relation to the resident’s principal home;
(d) the resident’s assets are to be taken to include an asset the value of which is equal to the amount of the resident’s entry contribution;
(e) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, taken to have.
(5) Subsection (4) applies:
(a) whether or not the resident actually has any right or interest in the resident’s principal home; and
(b) whatever the value of any right or interest that the resident does have in the resident’s principal home.
Subdivision E—Residents who are members of ordinary couple with different principal homes
1155 Members of ordinary couple with different principal homes (both in special residences)
(1) This section applies to a special resident if:
(a) the resident is a member of an ordinary couple with different principal homes; and
(b) the principal home of the resident’s partner is also a special residence.
Both entry contributions above extra allowable amount
(2) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution and the partner’s entry contribution, were each more than the extra allowable amount concerned;
then, for the purposes of this Act:
(c) the resident and the partner are each to be taken to be home owners; and
(d) the value of the resident’s principal home is taken to be the resident’s individual residence contribution; and
(e) the value of the partner’s principal home is taken to be the partner’s individual residence contribution; and
(f) any right or interest of the resident in:
(i) the more valuable of the 2 principal homes; or
(ii) where the value of the 2 principal homes is the same—the principal home of the younger person;
(in this subsection called the more valuable principal home) is to be disregarded in calculating the actual value of the resident’s assets; and
(g) any right or interest of the partner in the more valuable principal home is to be disregarded in calculating the actual value of the partner’s assets; and
(h) the assets of the person whose principal home is not the more valuable principal home are to be taken to include an asset the value of which is equivalent to the amount of that person’s entry contribution.
Both entry contributions equal to or below extra allowable amount
(3) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution, and the partner’s entry contribution, were each less than or equal to the extra allowable amount concerned;
then, for the purposes of this Act:
(c) the resident and the partner are each to be taken not to have a right or interest in relation to the resident’s principal home or the partner’s principal home; and
(d) the resident’s assets are taken to include an amount equal to the resident’s individual residence contribution; and
(e) the partner’s assets are taken to include an amount equal to the partner’s individual residence contribution.
(4) Subsection (3) applies:
(a) whether or not the resident actually has any right or interest in the resident’s principal home; and
(b) whatever the value of any right or interest that the resident does have in the resident’s principal home; and
(c) whether or not the partner actually has any right or interest in the partner’s principal home; and
(d) whatever the value of any right or interest that the partner does have in the partner’s principal home.
1156 Members of ordinary couple with different principal homes (partner not in special residence and partner homeowner)
(1) This section applies to a special resident if:
(a) the resident is a member of an ordinary couple with different principal homes; and
(b) the principal home of the resident’s partner is not a special residence; and
(c) the right or interest of the partner in the partner’s principal home would, but for this section, be disregarded because of paragraph 1118(1)(b).
(2) If this section applies to a special resident, then, for the purposes of this Act:
(a) the resident and the resident’s partner are each to be taken to have a right or interest in a principal home to which paragraph 1118(1)(b) applies; and
(b) the value of the resident’s principal home is to be taken to be the amount of the resident’s entry contribution; and
(c) any right or interest of the resident in:
(i) the more valuable of the 2 principal homes; or
(ii) where the value of the 2 principal homes is the same—the principal home that is not a special residence;
(in this subsection called the more valuable principal home) is to be disregarded in calculating the actual value of the resident’s assets; and
(d) any right or interest of the partner in the more valuable principal home is to be disregarded in calculating the actual value of the partner’s assets; and
(e) the assets of the person whose principal home is not the more valuable principal home are to be taken to include an asset whose value is equivalent to the value of the less valuable principal home.
1157 Members of ordinary couple with different principal homes (partner not in special residence and partner not homeowner)
(1) This section applies to a special resident if:
(a) the resident is a member of an ordinary couple with different principal homes; and
(b) the principal home of the resident’s partner is not a special residence; and
(c) the partner does not have a right or interest in the partner’s principal home that is to be disregarded because of paragraph 1118(1)(b).
Entry contribution above extra allowable amount
(2) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was more than the amount that would be the extra allowable amount if the resident were not a member of a couple;
then, for the purposes of this Act, the resident and the partner are each to be taken to have a right or interest in a principal home to which paragraph 1118(1)(b) applies.
Entry contribution equal to or below extra allowable amount
(3) If:
(a) this section applies to a special resident; and
(b) the resident’s entry contribution was equal to or less than the amount that would be the extra allowable amount if the resident were not a member of a couple;
then, the following provisions apply for the purposes of the application of this Act to the resident and to the resident’s partner:
(c) both the resident, and the partner, are to be taken not to have a right or interest in relation to the resident’s principal home; and
(d) the resident’s assets are to be taken to include an asset whose value is equal to the amount of the resident’s entry contribution.
(4) Subsection (3) applies:
(a) whether or not the resident actually has any right or interest in the resident’s principal home; and
(b) whatever the value of any right or interest that the resident does have in the resident’s principal home; and
(c) whether or not the partner actually has any right or interest in the resident’s principal home; and
(d) whatever the value of any right or interest that the partner does have in the resident’s principal home.
Part 3.12A—Provisions for carer allowance and seniors health card income test
Division 1—Purpose of this Part
1157A Purpose of Part
(1) Division 2 of this Part describes the kind of benefits that can be assessable fringe benefits. Divisions 3 to 9 tell you how to work out the value of the assessable fringe benefits received by a person in a tax year. Division 10 deals with foreign currency conversions.
These provisions are necessary for the purposes of the carer allowance income test and the Seniors Health Card 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).
(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 Car benefits
(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.
(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.
(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.
(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.
(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.
(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.
(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 Exempt car benefits
(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.
(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.
(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.
1157E School fees benefits
Payment to recipient
(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 jobseeker payment 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
(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 jobseeker payment;
the payment constitutes a school fees benefit provided by the provider to the recipient.
Note: For school see section 10A.
Boarding fees
(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
(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 jobseeker payment or a youth allowance;
the payment constitutes a health insurance benefit provided by the provider to the recipient.
Payment to the health insurance fund
(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 jobseeker payment;
the payment constitutes a health insurance benefit provided by the provider to the recipient.
1157G Loan benefits
(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.
(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
(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.
(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.
(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.
(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.
(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.
(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 Exempt loan benefit
(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.
(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 Housing benefits
(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.
(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.
(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.
(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).
(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.
(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
(1) If, during a period:
(a) the employer of an employee is:
(i) a government body; or
(ii) a registered religious institution; or
(iii) a company that is registered under the Australian Charities and Not‑for‑profits Commission Act 2012 and does not meet the description of the subtype of entity in column 2 of item 4of the table in subsection 25‑5(5) of that Act; or
(iv) a company that is a not‑for‑profit entity and is not an ACNC type of entity;
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.
(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 Expense benefits
(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.
(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 jobseeker payment.
1157JB Exempt expense benefit
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
(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.
(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.
(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 jobseeker payment.
Division 3—Value of car fringe benefits
1157K Method of valuing car fringe benefits
(1) Subject to subsection (2), the value of a car fringe benefit is to be worked out in accordance with section 1157L.
(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
(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)).
(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 | Period of use (completed months) |
| 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 | 1542 | 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 |
| | | | | | | | | | | | | | | |
(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
(1) The Minister may, by legislative instrument, determine an alternative method for valuing car fringe benefits.
(2) The determination:
(a) commences on the day after the day when it is registered in the Federal Register of Legislation under the Legislation Act 2003; and
(b) ceases to have effect 6 months after the day it commences, if it has not already been revoked.
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
(1) Subject to subsection (2), the value of a loan fringe benefit is to be worked out in accordance with section 1157Q.
(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
(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)).
(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.
(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.
(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.
(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 determination made, by legislative instrument, by the Minister.
(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.
(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.
(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
(1) The Minister may, by legislative instrument, determine an alternative method for valuing loan fringe benefits.
(2) The determination:
(a) commences on the day after the day when it is registered in the Federal Register of Legislation under the Legislation Act 2003; and
(b) ceases to have effect 6 months after the day it commences, if it has not already been revoked.
Division 7—Value of housing fringe benefits
Subdivision A—Grants of housing rights
1157S Methods of valuing housing fringe benefits—grants of housing rights
(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.
(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.
(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
(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.
(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).
(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.
(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
(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.
(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).
(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.
(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
(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.
(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
(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.
(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.
(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
(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.
(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).
(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.
(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
(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.
(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).
(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.
(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
(1) The Minister may, by legislative instrument, determine an alternative method for valuing housing fringe benefits.
(1A) A determination under subsection (1) may apply to all housing fringe benefits or only to specified kinds of housing fringe benefits.
(2) The determination:
(a) commences on the day after the day when it is registered in the Federal Register of Legislation under the Legislation Act 2003; and
(b) ceases to have effect 6 months after the day it commences, if it has not already been revoked.
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 10—Foreign currency rates
1157V Foreign currency rates
(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.
(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.
(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.
Part 3.13—Imprisonment
1158 Some social security payments not payable during period in gaol or in psychiatric confinement following criminal charge
An instalment of a social security pension, a social security benefit, a parenting payment, a carer allowance, 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
(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.
(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.
1159A Person not qualified for some concession cards when in gaol or in psychiatric confinement following criminal charge
(1) A person is not qualified under section 1061ZG or 1061ZO for a seniors health card or health care card on 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).
(2) This section has effect despite sections 1061ZG and 1061ZO.
Part 3.14—Compensation recovery
Division 1—General
1160 General effect of Part
(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.
(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 Application of Part
(1) Subject to subsections (2) to (6A), 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 jobseeker payment in relation to which, under Subdivision BA of Division 1 of Part 2.12, the recipient of the payment is not required to satisfy the activity test; 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.
(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.
(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.
(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.
(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.
(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.
1161A Application of Part to supplementary compensation affected payments
(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.
(2) Except as mentioned in this section, this Part does not apply to a supplementary compensation affected payment.
(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.
(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.
(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.
(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.
1162 Part to bind Crown
This Part binds the Crown in right of the Commonwealth, of each of the States, of the Australian Capital Territory and of the Northern Territory.
1163 Interpretation
(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.
(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.
(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
(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.
(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.
(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.
(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
(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.
(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
1168 Application
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
(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.
(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
(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).
(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).
(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).
(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
(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
(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.
(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
(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).
(2) The person’s daily rate of compensation affected payment is reduced by the amount of the person’s daily rate of periodic compensation.
(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.
(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
(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).
(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.
(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
Subdivision A—Preliminary
1177 Interpretation
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 Repayment of amount where both lump sum and payments of compensation affected payment have been received
(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.
(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 Repayment where both periodic compensation payments and payments of compensation affected payment have been received
(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.
(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
(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.
(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
(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.
(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.
(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
(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.
(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.
(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
(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.
(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.
(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.
(4) The amount to be specified in the notice is the recoverable amount under section 1184A.
(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.
(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
(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.
(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.
(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.
(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
(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.
(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 Compensation payer’s or insurer’s payment to Commonwealth discharges liability to compensation claimant
(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.
(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
(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.
(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.
(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.
(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.
(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 Liability of compensation payer or insurer to pay the Commonwealth if there is a contravention of section 1184D
(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.
(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.
(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.
Division 5—Recoverable debts
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
(1) An amount payable by a compensation payer under section 1184E is a debt due by the compensation payer to the Commonwealth.
(2) An amount payable by an insurer under section 1184E is a debt due by the insurer to the Commonwealth.
1184I Compensation arrears debts
(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.
(2) In this section:
adverse determination means a determination under section 79, 80, 81 or 82 of the Administration Act.
Division 6—Miscellaneous
1184J Secretary may give recovery notice either to compensation payer or to insurer but not to both
(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.
(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
(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.
(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
(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.
(2) If:
(a) an application referred to in section 142 of the Administration Act is made for AAT first 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; and
(c) the person who claimed the disability support pension 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
(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.
(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.
(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.
(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.
(5) In this section:
dependency‑based payment means:
(b) mature age partner allowance; or
(c) partner allowance.
Part 3.15—New Enterprise Incentive Scheme
1186 General effect of Part
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 Reduction in rate of payments under this Act if recipient or partner also receiving payments under New Enterprise Incentive Scheme (NEIS)
(1) If:
(a) an instalment of:
(ia) age pension; or
(i) disability support pension; or
(iii) carer payment; or
(iv) parenting payment; or
(vi) special needs pension;
is payable to a person during an instalment period; and
(b) NEIS is payable to the person during that instalment period;
the rate of the payment referred to in paragraph (a) is to be reduced under this Part.
(1A) If:
(a) a payment of:
(ia) widow allowance; or
(ii) jobseeker payment; or
(iv) special benefit; or
(iva) partner allowance; or
(va) mature age allowance under Part 2.12B;
is payable to a person during an instalment period; and
(b) NEIS is payable to the person, or in respect of the person, during that instalment period;
the rate of the payment referred to in paragraph (a) is to be reduced under this Part.
(2) If:
(a) an instalment of:
(ia) age pension; or
(i) disability support pension;
is payable to a person during an instalment period; and
(b) NEIS is payable to the person during that instalment period; and
(c) an instalment of carer payment in respect of the person is payable to the person’s partner during an instalment period;
the rate of the partner’s payment is to be reduced under this Part.
1188 Rate reduction under this Part
(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.
(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.
(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
Division 1—Preliminary
1188A General effect of Part
(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.
(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
(1) If immediately before 1 July 2009 a person was entitled to receive a CDEP Scheme payment under an agreement of the kind referred to in the definition of CDEP Scheme provider in subsection 23(1), the person is a CDEP Scheme participant in respect of a day on or after 1 July 2009 if the person is entitled, on that day, to receive such a payment under such an agreement.
Note: For CDEP Scheme payment see subsection 23(1).
(2A) Without limiting persons who are not CDEP Scheme participants, a person who is undertaking an activity approved by the Secretary under section 1188BA as a Northern Territory CDEP transitional activity is not a CDEP Scheme participant.
1188BA Approval of Northern Territory CDEP transitional activities
(1) The Secretary may, in writing, approve an activity as a Northern Territory CDEP transitional activity for the purposes of this Act.
(2) An approval under subsection (1) is not a legislative instrument.
1188BB Effect of undertaking Northern Territory CDEP transitional activities
A person is not taken to be:
(a) a worker carrying out work in any capacity for the Commonwealth, or an employee of the Commonwealth, for the purposes of the Work Health and Safety Act 2011; or
(b) an employee within the meaning of section 5 of the Safety, Rehabilitation and Compensation Act 1988; or
(c) an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992; or
(d) an employee for the purposes of the Fair Work Act 2009;
merely by undertaking an activity approved by the Secretary under section 1188BA as a Northern Territory CDEP transitional activity for the purposes of this Act.
Division 2—Reduction in rate of pension or allowance
1188C Reductions in rate of payments under this Act if recipient or partner also receiving payments under CDEP Scheme
(1) If:
(a) an instalment of any of the following:
(i) age pension;
(ii) disability support pension;
(iv) carer payment;
(v) parenting payment at the rate applicable for a person who is not a member of a couple;
(ix) special needs pension;
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.
(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.
(3) If:
(a) a payment of any of the following:
(i) widow allowance;
(ii) jobseeker payment;
(iii) youth allowance;
(iv) parenting payment at the rate applicable for a person who is a member of a couple;
(v) partner allowance;
(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 person, for the purposes of working out the rate of the person’s partner’s social security benefit, includes an amount equal to the person’s CDEP payment.
(4) This section applies in respect of payment periods beginning on or after 20 March 2000.
(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 4 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 4 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 |
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 |
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 |
16 | Jobseeker payment | 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 | Jobseeker payment | 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, income support supplement or a veteran payment | The amount specified in column 3B of item 5 of Table B in point 1068‑B1 |
18 | Jobseeker payment | 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, income support supplement or a veteran payment | The amount specified in column 3B of item 4B of Table B in point 1068‑B1 |
19 | Jobseeker payment | 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 |
19A | Jobseeker payment | Not member of a couple and not required to satisfy the activity test because of a determination in relation to the person under subsection 602C(3) or (3A) | The amount worked out under point 1068‑B5 |
20 | Jobseeker payment | 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 | Jobseeker payment | 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 | Jobseeker payment | 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, income support supplement or a veteran payment | 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, income support supplement or a veteran payment | 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 |
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 |
35 | Youth allowance | Independent, not long term income support student, not member of a couple and has an exemption under section 542FA because of a determination in relation to the person under subsection 542FA(3) or (3A) | The amount worked out under point 1067G‑B3A |
Note: For CDEP Scheme payment see subsection 23(1).
(5A) To avoid doubt, for the purposes of item 19 of Table A in subsection (5), a person is taken to have a dependent child if point 1068‑B1B has the effect that the person’s maximum basic rate of jobseeker payment is worked out as if the person had a dependent child.
(5B) Subsection (5A) does not limit the circumstances in which a person has a dependent child for the purposes of the item mentioned in that subsection.
(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.
(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.
(8) To avoid doubt, for the purposes of item 34 of Table A in subsection (5), a person is taken to have a dependent child if point 1067G‑B3AA has the effect that the person’s maximum basic rate of youth allowance is worked out as if the person had a dependent child.
(9) Subsection (8) does not limit the circumstances in which a person has a dependent child for the purposes of the item mentioned in that subsection.
Division 3—CDEP Scheme Participant Supplement
1188D Entitlement to Supplement: people receiving pension‑type payments on or after 20 March 1999
(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.
(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;
(iv) carer payment;
(v) parenting payment at the rate applicable for a person who is not a member of a couple;
(viii) special needs pension;
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).
(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.
(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.
(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).
(6) A person cannot receive more than one payment of CDEP Scheme Participant Supplement in respect of a fortnightly period.
1188E Entitlement to Supplement between 20 March 1999 and 19 March 2000: people not covered by section 1188D
(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.
(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).
(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.
(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.
(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.
(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.
(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.
(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).
(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
(1) This section applies in respect of payment periods beginning on or after 20 March 2000.
(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) jobseeker payment;
(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;
(iv) carer payment;
(v) parenting payment at the rate applicable for a person who is not a member of a couple;
(viii) special needs pension;
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.
(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.
(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.
(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.
(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).
(7) The requirement of this subsection is that the relevant payment period does not fall 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.
(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.
(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.
(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.
(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).
(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.
1188H Person receiving CDEP Scheme Participant Supplement to be taken to be in receipt of social security benefit or pension
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
(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.
(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.
(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.
(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.
(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 Need for a claim
(1) A person who wants to be granted a CDEP Scheme Participant Supplement must make a proper claim for the supplement.
(2) To be a proper claim, a claim must be made in such manner, and within such period, as the Secretary determines.
1188KA CDEP Scheme Participant Supplement not payable in certain circumstances
A CDEP Scheme Participant Supplement is not payable to a person in respect of a fortnight if a training supplement or a National Green Jobs Corps supplement is payable to the person in respect of the fortnight.
Division 4—Transitional
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.
1188M Certain people receiving CDEP Scheme Participant Supplement to be taken to have been receiving social security benefit for 9 months
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
Division 1—Preliminary
1189 Analysis of Part
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
(aa) the indexation of the maximum basic rates for certain social security pensions using the Pensioner and Beneficiary Living Cost Index; and
(c) the adjustment of other amounts in line with the increases in the amounts indexed.
1190 Indexed and adjusted amounts
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 payable to a person who is partnered or for pension PP (single) (except disability support pension payable to a person who is under 21 and has no dependent children) | pension MBR | [Pension Rate Calculator A—point 1064‑B1—Table B—item 2—column 3]
[Pension Rate Calculator B—point 1065‑B1—Table B—item 2—column 3]
[Pension PP (Single) Rate Calculator—point 1068A‑B1] |
1AAA. | Maximum basic rates for a social security pension that are to be worked out by reference to the maximum basic rates for a social security pension payable to a person who is partnered | single pension rate MBR | [Pension Rate Calculator A—point 1064‑B1—Table B—items 1, 3, 4 and 5—column 3]
[Pension Rate Calculator B—point 1065‑B1—Table B—items 1, 3, 4 and 5—column 3] |
1AA. | Combined couple rate of pension supplement | PS rate | [subsection 20A(1)] |
1AB. | Combined couple rate of minimum pension supplement | PS minimum rate | [subsection 20A(2)] |
1AC. | Pension supplement basic amount | PS basic rate | [each item of the table in subsection 20A(5)] |
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 3—all amounts]
[Pension Rate Calculator E—point 1066B‑B1—Table B—column 3—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]
[Benefit Rate Calculator B—point 1068‑B1—Table B—column 3B—items 4A, 4B, 5, 7 and 9]
[Benefit PP (Partnered) Rate Calculator—point 1068B‑C2—Table C—column 3—all amounts] |
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 or to a recipient of youth allowance who is under 22 | youth disability supplement | [Pension Rate Calculator D—point 1066A‑C1—the annual rate]
[Pension Rate Calculator E—point 1066B‑C1—the annual rate]
[Youth Allowance Rate Calculator—point 1067G‑D1—the fortnightly 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—section 1070L—Table—column 4—items 1, 2, 5, 6, 7, 8, 9 and 10] [Part 3.7—section 1070M—Table—column 3—amount] [Part 3.7—sections 1070N and 1070P—Table—column 4—items 1, 2, 5, 6, 7, 8, 9 and 10] [Part 3.7—section 1070Q—Table—column 4—items 1, 2, 4, 5, 6 and 7] [Part 3.7—section 1070R—Table—column 4—items 1, 3, 4, 5 and 6] |
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]
[Pension Rate Calculator D—point 1066A‑F3—Table F‑1—column 3—all amounts]
[Pension PP (Single) Rate Calculator—point 1068A‑E14—Table E—column 2] |
20AA. | Ordinary income free area for youth allowance and austudy payment | YA and austudy ordinary income free area | [Youth Allowance Rate Calculator—paragraphs 1067G‑H29(a) and (aa)]
[Austudy Payment Rate Calculator—point 1067L‑D28] |
20AAA. | Ordinary income free area for some social security payments | payment free area | [Benefit Rate Calculator B—point 1068‑G12]
[Benefit PP (Partnered) Rate Calculator—point 1068B‑D27] |
| YA and austudy range reduction boundary | | |
20AB. | Dollar amount of boundary between lower and upper range reduction for ordinary income reduction | YA and austudy range reduction boundary | [Youth Allowance Rate Calculator—paragraphs 1067G‑H32(a) and (b) and 1067G‑H33(a) and (b)] [Austudy Payment Rate Calculator—points 1067L‑D31 and 1067L‑D32] |
20A. | Income ceiling for care receiver | CP income ceiling | [Subsection 198A(1)] |
| Student income bank balance limit | | |
21. | Student income bank balance limit | student income bank balance limit | [Youth Allowance Rate Calculator—point 1067G‑J3—method statement—step 3—paragraph (a)]
[Austudy Payment Rate Calculator—point 1067L‑E2—method statement—step 3—paragraph (a)] |
| 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]
[Pension Rate Calculator D—point 1066A‑H3—Table H‑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]
[Pension Rate Calculator D—point 1066A‑H3—Table H‑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]
[Pension Rate Calculator D—point 1066A‑H3—Table H‑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]
[Pension Rate Calculator D—point 1066A‑H3—Table H‑1—column 3B—items 2 and 3] |
27A. | Assets value limit for care receiver | CP AVL | [Subsections 198D(1), (1A), (1C), (1DA) 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]
[paragraph 547C(b)]
[paragraph 573B(a)]
[subsection 611(2)—Table—column 3A—item 1]
[subsection 733(3)—Table—column 3A—item 1]
[subsection 500Q(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]
[paragraph 547C(c)]
[paragraph 573B(b)]
[subsection 611(2)—Table—column 3B—item 1]
[subsection 733(3)—Table—column 3B—item 1]
subsection 500Q(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)]
[paragraph 573B(c)]
[subsection 611(2)—Table—column 3A—item 2]
[subsection 733(3)—Table—column 3A—item 2]
[subsection 500Q(3)—Table—Column 3A—item 1] |
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)]
[paragraph 573B(d)]
[subsection 611(2)—Table—column 3B—item 2]
[subsection 733(3)—Table—column 3B—item 2]
[subsection 500Q(3)—Table—Column 3B—item 1] |
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]
[subsection 733(3)—Table—column 3A—item 3]
[subsection 771HF(2)—Table—column 3—item 1]
[subsection 500Q(3)—Table—Column 3A—item 2] |
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]
[subsection 733(3)—Table—column 3B—item 3]
[subsection 771HF(2)—Table—column 3—item 2]
[subsection 500Q(3)—Table—Column 3B—item 2] |
34. | Assets value limit for some illness separated special residents | special illness separated special resident AVL | [paragraph 1152(5)(g)]
[paragraph 1153(3)(e)]
[paragraph 1154(2)(f)] |
35. | Assets value limit of special disability trust (see section 1209Y) | special disability trust AVL | [subsection 1209Y(3)] |
36. | exempt funeral investment threshold | exempt funeral investment threshold | [paragraph 19E(1)(b)] |
| Income limits | | |
36A. | seniors health card income limit | seniors health card income limit | [Point 1071‑12—table—column 3—all amounts] |
| Pension bonus | | |
37. | Pension supplement component for pension bonus | Pension supplement component for pension bonus | [subsection 93H(4)—all amounts] |
| 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 turned 16, but not 22, can earn in a financial year without ceasing to be a student child, dependent child or secondary pupil child | Permissible child earnings limit (child aged 16 to 21 years) | [paragraphs 5(1A)(b) and (4)(b) and 5F(b)] |
44. | Pharmaceutical allowance 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 D—point 1066A‑D8—Table—column 3—item 1] [Pension Rate Calculator E—point 1066B‑D8—Table—column 3—item 1] [Pension PP (Single) Rate Calculator—point 1068A‑C7] |
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 D—point 1066A‑D8—Table—column 3—item 2] [Pension Rate Calculator E—point 1066B‑D8—Table—column 3—item 2] |
47. | Rate of pharmaceutical allowance for a person who is receiving a social security benefit and who has a partner | Benefit PA “partnered” (item 2) rate | [Benefit Rate Calculator B—point 1068‑D10—Table—column 3—item 2]
[Benefit PP (Partnered) Rate Calculator—point 1068B‑E8—Table E—column 3—item 1] |
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 D—point 1066A‑D8—Table—column 3—items 3 and 4] [Pension Rate Calculator E—point 1066B‑D8—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]
[Benefit PP (Partnered) Rate Calculator—point 1068B‑E8—Table E—column 3—items 2 and 3] |
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 5) rate | [Pension Rate Calculator D—point 1066A‑D8—Table—column 3—item 5] [Pension Rate Calculator E—point 1066B‑D8—Table—column 3—item 5] |
49B. | Rate of pharmaceutical allowance for a person who is receiving a social security benefit and has a partner who is getting a service pension | Benefit PA “Partnered (partner getting service pension)” rate | [Benefit Rate Calculator B—point 1068‑D10—Table—column 3—item 6] [Benefit PP (Partnered) Rate Calculator—point 1068B‑E8—Table—column 3—item 4] |
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 | Pension PA “partnered” (item 6) rate | [Pension Rate Calculator D—point 1066A‑D8—Table—column 3—item 6]
[Pension Rate Calculator E—point 1066B‑D8—Table—column 3—item 6] |
49D. | Rate of pharmaceutical allowance for a person who is receiving a social security benefit and has a partner who is in gaol | Benefit PA “partnered” (item 7) rate | [Benefit Rate Calculator B—point 1068‑D10—Table—column 3—item 7]
[Benefit PP (Partnered) Rate Calculator—point 1068B‑E8—Table E—column 3—item 5] |
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 rate | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 1—column 3]
[Austudy Payment Rate Calculator—point 1067L‑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 (item 49F) rate | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 2—column 3]
[Austudy Payment Rate Calculator—point 1067L‑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) rate | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—items 3 and 4—column 3]
[Austudy Payment Rate Calculator—point 1067L‑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) rate | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 5—column 3]
[Austudy Payment Rate Calculator—point 1067L‑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) rate | [Youth Allowance Rate Calculator—point 1067G‑C3—Table C—item 6—column 3]
[Austudy Payment Rate Calculator—point 1067L‑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 veterans supplement or MRCA supplement | 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 veterans supplement or MRCA supplement | TA “partnered” (item 8) rate | section 1061S—Table—column 3—item 8 |
56AA. | Rate of telephone allowance for a person with a partner where the partner is in gaol | TA “partnered” (item 9) rate | section 1061S—Table—column 3—item 9 |
56AB. | Increased rate of telephone allowance for a person who is not a member of a couple and has home internet | TA (internet) “single” rate | section 1061SA—Table—column 3—item 1 |
56AC. | Increased rate of telephone allowance for a person with a partner where the partner is getting neither pension nor benefit and the person has home internet | TA (internet) “partnered” (item 3) rate | section 1061SA—Table—column 3—item 3 |
56AD. | Increased rate of telephone allowance for a person with a partner where the partner is getting pension or benefit but not getting telephone allowance and the person has home internet | TA (internet) “partnered” (item 4) rate | section 1061SA—Table—column 3—item 4 |
56AE. | Increased rate of telephone allowance for a person with a partner where the partner is getting pension or benefit and getting telephone allowance at the increased rate and the person has home internet | TA (internet) “partnered” (item 5) rate | section 1061SA—Table—column 3—item 5 |
56AF. | Increased rate of telephone allowance for a member of an illness separated or respite care couple and the person has home internet | TA (internet) “partnered” (item 6) rate | section 1061SA—Table—column 3—item 6 |
56AG. | Increased rate of telephone allowance for a person with a partner where the partner is not getting veterans supplement or MRCA supplement and the person has home internet | TA (internet) “partnered” (item 7) rate | section 1061SA—Table—column 3—item 7 |
56AH. | Increased rate of telephone allowance for a person with a partner where the partner is getting veterans supplement or MRCA supplement and the person has home internet | TA (internet) “partnered” (item 8) rate | section 1061SA—Table—column 3—item 8 |
56AI. | Increased rate of telephone allowance for a person with a partner where the partner is in gaol and the person has home internet | TA (internet) “partnered” (item 9) rate | section 1061SA—Table—column 3—item 9 |
56AJ. | Increased rate of telephone allowance for a person with a partner where the partner is getting pension or benefit and getting telephone allowance at the standard rate and the person has home internet | TA (internet) “partnered” (item 10) rate | section 1061SA—Table—column 3—item 10 |
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] |
| Mobility allowance | | |
57. | mobility allowance for a person qualified under section 1035 | MA rate (standard) | [subsection 1044(1)] |
58. | mobility allowance for a person qualified under section 1035A | MA rate (increased) | [subsection 1044(1A)] |
| 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 |
| Maximum transitional pension rates | | |
66. | Maximum transitional pension rates | Maximum transitional pension rates | Subparagraph 146(4)(a)(i) of Schedule 1A |
| Amounts related to scholarships | | |
67. | threshold amount | scholarship threshold amount | subsection 8(8AB) |
69. | relocation scholarship payment amount | relocation scholarship payment amount | subsections 592L(1), (3) and (4) |
| Student start‑up loans | | |
69A. | student start‑up loan amount | student start‑up loan amount | section 1061ZVBD |
| Essential medical equipment payment | | |
70. | essential medical equipment payment | EMEP | section 917G |
Note: Indexing the PS minimum rate will also result in the indexation of the rate of quarterly pension supplement (see section 1061VB).
Division 2—CPI indexation
1191 CPI Indexation Table
(1) 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. | PS 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 2009) | $5.20 |
1B. | PS minimum 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 2009) | $5.20 |
1C. | PS basic rate | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than December quarter 2008) | $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 |
14AA. | YA and austudy ordinary income free area | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 2011) | $1.00 |
14AAA. | payment free area | 1 July | March | most recent March quarter before reference quarter | $2.00 |
| YA and austudy range reduction boundary | | | | |
14AB. | YA and austudy range reduction boundary | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 2011) | $1.00 |
14A. | CP income ceiling | 1 January | June | most recent June quarter before reference quarter | not applicable—see subsection 1194(3A) |
15. | student income bank balance limit | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 2011) | $100.00 |
| 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‑
homeowner AVL | 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 |
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‑
homeowner AVL | 1 July | December | most recent December quarter before reference quarter | $250.00 |
25. | special disability trust AVL | 1 July | December | most recent December quarter before reference quarter | $250.00 |
26. | exempt funeral investment threshold | 1 July | December | most recent December quarter before reference quarter | $250.00 |
| Income limits | | | | |
26A. | seniors health card income limit | 20 September | June | highest June quarter before reference quarter (but not earlier than June quarter 2013) | $1.00 |
| Pension bonus | | | | |
27. | Pension supplement component for pension bonus | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 2008) | $2.60 |
| 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 |
| 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 (partner getting service pension)” 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 |
33AAA. | TA (internet) “single” rate | 20 September | June | most recent June quarter before reference quarter | $0.80 |
33AAB. | TA (internet) “partnered” (item 10) 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) rate PA (YA/AP) (item 49H) rate | 1 January | September | highest September quarter before reference quarter (but not earlier than Sept quarter 1997) | $0.10 |
| Mobility allowance | | | | |
34. | MA rate (standard) | 1 January | June | highest June quarter before the reference quarter (but not earlier than June 1991 quarter) | $0.10 |
34A. | MA rate (increased) | 1 January | June | highest June quarter before the reference quarter (but not earlier than June 2006 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 |
| Maximum transitional pension rates | | | | |
38. | Maximum transitional pension rates | (a) 20 March (b) 20 September | (a) December (b) June | highest June or December quarter before reference quarter (but not earlier than June quarter 2008) | $2.60 |
| Amounts related to scholarships | | | | |
39. | scholarship threshold amount | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 2009) | $1.00 |
41. | relocation scholarship payment amount | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 2009) | $1.00 |
| Student start‑up loans | | | | |
41A. | student start‑up loan amount | 1 January | June | highest June quarter before reference quarter (but not earlier than June quarter 2016) | $1.00 |
| Essential medical equipment payment | | | | |
42. | EMEP | 1 July | December | highest December quarter before reference quarter (but not earlier than the December quarter of 2011) | $1.00 |
| | | | | | | | |
Highest quarter
(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 Indexation of amounts
(1) If an amount is to be indexed under this Division on an indexation day, this Act has effect as if the indexed amount were substituted for that amount on that day.
(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: subject to Division 3, the result is the indexed amount. (The indexed amount (including one replaced under Division 3) may be increased under section 1195 in certain cases.)
Note: For current figure see subsection 20(1).
(4AB) The first indexation of the amounts to which item 14AAA of the CPI Indexation Table in subsection 1191(1) relates is to take place on 1 July 2015.
(4AC) Amounts under item 14AAA of the CPI Indexation Table in subsection 1191(1) are not to be indexed on 1 July of the first financial year beginning on or after the day this subsection commences and on 1 July of the next 2 financial years.
(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.
(5AAA) The amount under item 14 of the CPI Indexation Table in subsection 1191(1), to the extent to which that item relates to the amount in column 2 of Table E in point 1068A‑E14 of the Pension PP (Single) Rate Calculator, is not to be indexed on 1 July of the first financial year beginning on or after the day this subsection commences and on 1 July of the next 2 financial years.
(5AAB) Amounts under items 14AA, 14AB and 15 of the CPI Indexation Table in subsection 1191(1) are not to be indexed on 1 January of the first calendar year beginning on or after the day this subsection commences and on 1 January of the next 2 calendar years.
(5AB) Amounts under items 21, 22 and 23 of the CPI Indexation Table in subsection 1191(1) are not to be indexed on 1 July 2015 and 1 July 2016.
(5A) The first indexation of an amount under item 25 of the CPI Indexation Table in subsection 1191(1) is to take place on 1 July 2007.
(5B) The first indexation of amounts under item 26A of the CPI Indexation Table in subsection 1191(1) is to take place on 20 September 2014.
(5C) For the purposes of working out the indexed amount for pension “single” homeowner AVL on 1 July 2017, the current figure for pension “single” homeowner AVL immediately before that day is taken to be $250,000.
(5D) For the purposes of working out the indexed amount for pension “partnered” homeowner AVL on 1 July 2017, the current figure for pension “partnered” homeowner AVL immediately before that day is taken to be $187,500.
(5E) For the purposes of working out the indexed amount for pension “partnered” non‑homeowner AVL on 1 July 2017, the current figure for pension “partnered” non‑homeowner AVL immediately before that day is taken to be $287,500.
(5F) For the purposes of working out the indexed amount for benefit “single” homeowner AVL on 1 July 2017, the current figure for benefit “single” homeowner AVL immediately before that day is taken to be $250,000.
(5G) For the purposes of working out the indexed amount for benefit “partnered” (item 3) homeowner AVL on 1 July 2017, the current figure for benefit “partnered” (item 3) homeowner AVL immediately before that day is taken to be $187,500.
(5H) For the purposes of working out the indexed amount for benefit “partnered” (item 3) non‑homeowner AVL on 1 July 2017, the current figure for benefit “partnered” (item 3) non‑homeowner AVL immediately before that day is taken to be $287,500.
(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.
(8B) The student start‑up loan amount (see item 41A of the CPI Indexation Table in subsection 1191(1)) is not to be indexed on 1 January 2016.
1193 Indexation factor
(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.
(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.
(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
(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.
(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.
(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.
(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.
(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.
(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 Certain indexed amounts to be increased in line with increases in Male Total Average Weekly Earnings
(1) For the purposes of this section:
(a) a category A amount is the annual rate specified in point 1068A‑B1; 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.
(2) If:
(a) a category A amount is to be indexed under this Division on an indexation day; 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 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.
(2A) If:
(a) a category B amount is to be indexed under this Division on an indexation day; and
(b) 50% of the combined couple benchmark for that indexation day exceeds the indexed amount for the category B amount;
then:
(c) the indexed amount for the category B amount is to be increased by an amount equal to the excess; and
(d) if the indexed amount for the category B 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.
(2B) For the purposes of this section, the combined couple benchmark, for an indexation day, is 41.76% of the annualised MTAWE figure for whichever of the following quarters is applicable:
(a) if the indexation day is a 20 March—the most recent December quarter;
(b) if the indexation day is a 20 September—the most recent June quarter.
(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”.
(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.
(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.
(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.
(7) In this section:
December quarter means a quarter ending on 31 December.
June quarter means a quarter ending on 30 June.
Division 3—Social security pension indexation using Pensioner and Beneficiary Living Cost Index
1196 Social security pension indexation using Pensioner and Beneficiary Living Cost Index
(1) This section applies to the amount (the starting amount) referred to in column 2 of item 1 of the table in subsection 1191(1), except to the extent that it covers the maximum basic rate for pension PP (single).
(2) If the indexed amount for the starting amount, worked out under section 1192 on an indexation day and disregarding section 1195 and this Division, is less than the living cost amount worked out on that indexation day using the following method statement, then that indexed amount is taken to be an amount equal to that living cost amount:
Method statement
Step 1. Use section 1197 to work out the living cost indexation factor on that indexation day.
Step 2. Work out the current figure for the starting amount immediately before that indexation day.
Note: For current figure see subsection 20(1).
Step 3. Multiply the current figure by the living cost indexation factor: the result is the provisional living cost amount.
Step 4. Use section 1198 to round off the provisional living cost amount: the result is the living cost amount.
Note 1: If the indexed amount for the starting amount, worked out under section 1192, is taken to be an amount equal to that living cost amount, there may be a further increase of that replaced indexed amount under section 1195.
Note 2: On and after 20 March 2013, the indexation of certain amounts may be affected by Division 8.
1197 Living cost indexation factor
(1) Subject to subsections (5) and (6), the living cost indexation factor on an indexation day is:
worked out to 3 decimal places.
Definitions
(2) For the purposes of this section, the living cost index number, in relation to a quarter, is the All Groups Pensioner and Beneficiary Living Cost Index number that is the weighted average of the 8 capital cities and is published by the Australian Statistician in respect of that quarter.
(3) For the purposes of this section, the reference quarter is:
(a) if the indexation day is a 20 March—the most recent December quarter before the indexation day; and
(b) if the indexation day is a 20 September—the most recent June quarter before the indexation day.
(4) For the purposes of this section, the base quarter is the June or December quarter that:
(a) is a quarter before the reference quarter; and
(b) has the highest living cost index number.
Rounding
(5) If a living cost 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, that indexation factor is to be increased by 0.001.
(6) If a living cost indexation factor worked out under subsections (1) and (5) would be less than 1, that indexation factor is to be increased to 1.
Publication of substituted living cost index numbers
(7) Subject to subsection (8), if at any time (whether before or after the commencement of this section) the Australian Statistician publishes a living cost index number for a quarter in substitution for a living cost index number previously published by the Australian Statistician for that quarter, the publication of the later living cost index number is to be disregarded for the purposes of this section.
Change to index reference period
(8) If at any time (whether before or after the commencement of this section) the Australian Statistician changes the index reference period for the Pensioner and Beneficiary Living Cost Index, regard is to be had, for the purposes of applying this section after the change takes place, only to living cost index numbers published in terms of the new index reference period.
1198 Rounding off amounts
(1) If a provisional living cost amount is a multiple of $2.60, the provisional living cost amount becomes the living cost amount.
(2) Subject to subsection (3), if a provisional living cost amount is not a multiple of $2.60, the living cost amount is the provisional living cost amount rounded up or down to the nearest multiple of $2.60.
(3) If a provisional living cost amount is not a multiple of $2.60 but is a multiple of $1.30, the living cost amount is the provisional living cost amount rounded up to the nearest multiple of $2.60.
Division 4—Adjustment of other rates
1198A Adjustment of single pension rate MBR amounts
(1) This Act has effect as if, on 20 March (an indexation day) and 20 September (an indexation day) each year, the adjusted single pension amount were substituted for each single pension rate MBR amount (see item 1AAA of the table in section 1190).
(2) For the purposes of this section, the adjusted single pension amount is worked out as follows:
Method statement
Step 1. Work out the amount substituted for the amount specified in column 3 of item 2 of Table B in point 1064‑B1 on that indexation day under section 1192.
Step 2. Multiply the amount worked out at step 1 by 2.
Step 3. Work out 66.33% of the amount worked out at step 2.
Step 4. Round the amount worked out at step 3 to the nearest multiple of $2.60 (rounding up if necessary): the result is the adjusted single pension amount.
1198B Adjustment of disability support pension (under 21) MBRs
This Act (and any other Act that refers to this Act) has 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 |
3 | column 3—item 1 | column 3—item 1 |
4 | column 3—item 5 | column 3—items 2, 4, 5 and 6 |
5 | column 3—item 2 | column 3—item 3 |
1198C Adjustment of youth disability supplement
(1) 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 under Module C of Pension Rate Calculator D or Module C of Pension Rate Calculator E:
where:
CA rate is the current figure, as at that 1 January, for the CA rate.
Note: For current figure see subsection 20(1).
(2) This Act (and any other Act that refers to this Act) has effect as if, on 1 January each year, the current figure, as at that 1 January, was substituted for the amount of the rate of the youth disability supplement under Module D of the Youth Allowance Rate Calculator.
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:
“partnered” homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” homeowner AVL.
“partnered” non‑homeowner AVL is the current figure, as at that 1 July, for the pension “partnered” non‑homeowner AVL.
“single” homeowner AVL is the current figure, as at that 1 July, for the pension “single” homeowner AVL.
1204 Adjustment of benefit AVLs
(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:
benefit “partnered” (item 3) homeowner AVL is the current figure, as at that 1 July, for the benefit “partnered” (item 3) homeowner AVL.
benefit “partnered” (item 3) non‑homeowner AVL is the current figure, as at that 1 July, for the benefit “partnered” (item 3) non‑homeowner AVL.
benefit “single” homeowner AVL is the current figure, as at that 1 July, for the benefit “single” homeowner AVL.
(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:
benefit “partnered” (item 3) homeowner AVL is the current figure, as at that 1 July, for the benefit “partnered” (item 3) homeowner AVL.
(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:
benefit “partnered” (item 3) non‑homeowner AVL is the current figure, as at that 1 July, for the benefit “partnered” (item 3) 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
(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).
(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: The formula reflects the Benefit PA “partnered” (item 2) rate being multiplied by 26 to convert to a yearly amount and then being multiplied 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).
(3) This Act has effect as if, on 1 January each year, there were substituted for:
(a) the Benefit PA “single” rate; and
(b) the Benefit PA “partnered” (item 7) rate; and
(c) 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.
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).
(4) This Act has effect as if, on 1 January each year, there were substituted for:
(a) the PA (YA/AP) single rate; and
(b) the PA (YA/AP) (item 49G) rate; and
(c) the PA (YA/AP) (item 49J) rate;
the amount worked out by using the formula:
where:
PA (YA/AP) partnered (item 49F) rate means the current figure, as at that 1 January, for the PA (YA/AP) partnered (item 49F) rate.
Note 1: For current figure see subsection 20(1).
Note 2: The PA (YA/AP) partnered (item 49F) rate is indexed on each 1 January (see the CPI Indexation Table in section 1191—item 33A).
1206B Adjustment of certain telephone allowance rates
(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; and
(d) TA “partnered” (item 9) 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, TA “partnered” (item 7) rate and TA “partnered” (item 9) rate see items 52, 54, 55 and 56AA 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.
(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).
(3) This Act has effect as if, on 20 September each year, there were substituted for:
(a) the TA (internet) “partnered” (item 4) rate; and
(b) the TA (internet) “partnered” (item 6) rate; and
(c) the TA (internet) “partnered” (item 7) rate; and
(d) the TA (internet) “partnered” (item 9) rate; and
the amount of the current figure, as at 20 September, for the TA (internet) “single” rate.
Note 1: For TA (internet) “partnered” (item 4) rate, TA (internet) “partnered” (item 6) rate, TA (internet) “partnered” (item 7) rate and TA (internet) “partnered” (item 9) rate see items 56AD, 56AF, 56AG and 56AI of the Indexed and Adjusted Amounts Table in section 1190.
Note 2: For current figure see subsection 20(1).
Note 3: For TA (internet) “single” rate see item 56AB of the Indexed and Adjusted Amounts Table in section 1190.
(4) This Act has effect as if, on 20 September each year, there were substituted for:
(a) the TA (internet) “partnered” (item 3) rate; and
(b) the TA (internet) “partnered” (item 5) rate; and
(c) the TA (internet) “partnered” (item 8) rate;
the amount worked out using the following formula:
where:
TA (internet) “single” rate is the current figure, as at 20 September, for the TA (internet) “single” rate.
Note 1: For TA (internet) “partnered” (item 3) rate, TA (internet) “partnered” (item 5) rate and TA (internet) “partnered” (item 8) rate see items 56AC, 56AE and 56AH of the Indexed and Adjusted Amounts Table in section 1190.
Note 2: For TA (internet) “single” rate see item 56AB of the Indexed and Adjusted Amounts Table in section 1190.
Note 3: For current figure see subsection 20(1).
Part 3.16A—Advance payment deductions
1206H Advance payment deduction
(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).
(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.
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
(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.
(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
(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
(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
(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
(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
(2) This section has effect subject to section 1206N.
1206N Provisional payment rate insufficient to cover advance payment deduction
(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.
(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).
(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).
(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).
(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).
1206P Rounding of amounts
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
(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).
(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.
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
(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.
(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
(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.
(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.
(3) A variation or revocation of a determination must be in writing.
1206U The final special employment advance deduction
(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.
(2) This section has effect subject to section 1206V.
1206V Provisional payment rate insufficient to cover special employment advance deduction
(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.
(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).
(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).
(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).
(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).
1206W Rounding of amounts
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
Division 1—Introduction
1207 Simplified outline
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.
1207A Definitions
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: without limiting who is a child of a person for the purposes of this Part, each of the following is the child of a person:
(a) an adopted child, step‑child or foster‑child of the person;
(b) someone who is a child of the person within the meaning of the Family Law Act 1975.
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 Relatives
(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.
(2) For the purposes of this section, if one person is the child of another person because of the definition of child in section 1207A, relationships traced to or through the person are to be determined on the basis that the person is the child of the other person.
1207C Associates
(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
(2) The Secretary may, by legislative instrument, 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.
(3) A determination under subsection (2) has effect accordingly.
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.
1207F Entitled to acquire
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
(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.
(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.
(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.
(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
(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).
(2) Subsection (1) does not limit the operation of subsection (3).
(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.
(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.
(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.
(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.
(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
(1) This Part extends to acts, omissions, matters and things outside Australia.
(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
(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 revenue for the financial year of the company and its subsidiaries is less than $25 million, or any other amount prescribed by regulations made for the purposes of paragraph 45A(2)(a) of the Corporations Act 2001;
(ii) the value of the consolidated gross assets at the end of the financial year of the company and its subsidiaries is less than $12.5 million, or any other amount prescribed by regulations made for the purposes of paragraph 45A(2)(b) of the Corporations Act 2001;
(iii) the company and its subsidiaries have fewer than 50, or any other number prescribed by regulations made for the purposes of paragraph 45A(2)(c) of the Corporations Act 2001, 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
(2) The Secretary may, by legislative instrument, determine that each company included in a specified class of companies is a declared private company for the purposes of this section.
(3) A determination under subsection (2) has effect accordingly.
Excluded companies
(5) The Secretary may, by legislative instrument, declare that each company included in a specified class of companies is an excluded company for the purposes of this section.
(6) A declaration under subsection (5) has effect accordingly.
Definitions
(8) In this section:
consolidated 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
(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)).
(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
(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 the Income Tax Assessment Act 1997 in relation to that tax year.
Excluded trusts
(4) The Secretary may, by legislative instrument, declare that each trust included in a specified class of trusts is an excluded trust for the purposes of this section.
(5) The declaration has effect accordingly.
Definitions
(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
(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
(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
(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
(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).
(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
(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.
(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 Voting power
(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.
(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.
(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.
(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
(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.
(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.
(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.
(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 Interest in a share
(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.
(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.
(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.
(4) Subsection (3) does not, by implication, limit subsection (2).
(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.
(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.
(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
(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
(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
(ca) it could reasonably be expected that the trustee of the trust would make an application of the corpus or income of the trust to the individual if the individual could not meet his or her reasonable costs of living (within the meaning of subsection 19C(5)); 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
(da) either or both of the following apply:
(i) the individual is eligible to receive an application of the corpus or income of the trust;
(ii) one or more of the individual’s associates are eligible to receive an application of the corpus or income of the trust;
and the aggregate number of entities covered by subparagraphs (i) and (ii) is 50% or more of the total number of entities eligible to receive an application of the corpus or income of the trust; 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.
(2A) For the purposes of paragraph (2)(da), an entity is eligible to receive an application of the corpus or income of the trust if the trustee of the trust has a discretion to make an application of the corpus or income of the trust to the entity.
(2B) For the purposes of applying paragraph (2)(da) at a particular time, subparagraph (2)(da)(i) is taken to apply at that particular time to the individual if the individual was eligible to receive an application of the corpus or income of the trust at any time during:
(a) the period beginning at the start of the financial year in which that particular time occurs and ending at that particular time; or
(b) the preceding financial year.
(2C) For the purposes of applying paragraph (2)(da) at a particular time, subparagraph (2)(da)(ii) is taken to apply at that particular time to an entity that is an associate of the individual at that particular time if:
(a) the entity was eligible to receive an application of the corpus or income of the trust at any time during:
(i) the period beginning at the start of the financial year in which that particular time occurs and ending at that particular time; or
(ii) the preceding financial year; and
(b) the entity was an associate of the individual at the time the entity was so eligible.
(2D) For the purposes of applying paragraph (2)(da) at a particular time, in working out the total number of entities eligible to receive an application of the corpus or income of the trust, take into account an entity that was eligible to receive an application of the corpus or income of the trust at any time during:
(a) the period beginning at the start of the financial year in which that particular time occurs and ending at that particular time; or
(b) the preceding financial year.
(2E) No paragraph of subsection (2) limits any other paragraph of that subsection.
Source test
(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
(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
(5) In this section:
income means income within the ordinary meaning of that expression.
1207W Interest in a trust
(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.
(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.
(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.
(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
(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
(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.
(2A) The only attributable stakeholder of a special disability trust is the principal beneficiary of the trust.
Note 1: For special disability trust, see section 1209L.
Note 2: For principal beneficiary of a special disability trust, see subsection 1209M(1).
Determinations
(3) A determination under this section is to be in writing.
(4) A determination under this section has effect accordingly.
(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 Attribution of income
(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:
Note: For attribution of the income of a special disability trust, see section 1209V.
Excluded income
(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.
(3) A determination under subsection (2) has effect accordingly.
(4) In making a determination under subsection (2), the Secretary must comply with any relevant decision‑making principles.
Accrual v. cash accounting
(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.
(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
(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.
(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.
(3) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
(4) This section is to be disregarded for the purposes of paragraph 1207Y(1)(d).
1208 Ordinary income of a company or trust
(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.
(2) Paragraphs (1)(a) and (c) have effect subject to paragraph 1207Y(1)(d).
(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
(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.
(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
(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 8‑1 of the Income Tax Assessment Act 1997; and
(b) amounts that relate to the business or investment and can be deducted in respect of plant (within the meaning of the Income Tax Assessment Act 1997) under Division 40 of that Act; 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.
(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)).
(3) The Secretary may, by legislative instrument, determine that a specified deduction is an ineligible deduction for the purposes of this section.
(4) The Secretary may, by legislative instrument, determine that a specified amount is an ineligible amount for the purposes of this section.
(5) The Secretary may, by legislative instrument, determine that a specified part of a specified deduction is an ineligible part of the deduction for the purposes of this section.
(6) A determination under subsection (3), (4) or (5) has effect accordingly.
1208C Derivation periods
(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.
(2) Subsection (1) has effect subject to subsection (3).
(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.
(4) A determination under subsection (3) has effect accordingly.
(5) In making a determination under subsection (3), the Secretary must comply with any relevant decision‑making principles.
(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.
(7) A derivation period may begin or end before the commencement of this Part.
1208D Attribution periods
(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.
(2) A determination under subsection (1) has effect accordingly.
(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.
(4) An attribution period may, but is not required to, overlap (in whole or in part) the derivation period to which it relates.
(5) An attribution period does not have to be of the same length as the derivation period to which it relates.
(6) Attribution periods do not have to be of the same length.
(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 Attribution of assets
(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).
Note: For attribution of the assets of a special disability trust, see section 1209Y.
Excluded assets
(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.
(3) A determination under subsection (2) has effect accordingly.
(4) In making a determination under subsection (2), the Secretary must comply with any relevant decision‑making principles.
1208F When attributed asset is unrealisable
(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.
(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.
(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
(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.
(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
(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:
(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).
(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
(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).
(7) A determination under subsection (6) has effect accordingly.
(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
(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.
(2) A determination under subsection (1) has effect accordingly.
(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.
(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 sections 11 and 11A 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.
(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
(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.
(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
(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).
(2) Subsection (1) has effect subject to subsection (3).
Secretarial determinations
(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.
(4) A determination under subsection (3) has effect accordingly.
(5) In making a determination under subsection (3), the Secretary must comply with any relevant decision‑making principles.
General disposal
(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.
(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
(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.
(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
(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;
(v) a veteran payment; 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;
(v) a veteran payment; 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 Individual disposes of asset to company or trust before 1 January 2002—individual is attributable stakeholder
(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.
(2) A determination under subsection (1) has effect accordingly.
(3) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles.
1208P Individual disposes of asset to company or trust before 1 January 2002—individual’s spouse is attributable stakeholder
(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.
(2) A determination under subsection (1) has effect accordingly.
(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
(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.
(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
(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).
(2) Subsection (1) has effect subject to subsection (3).
Secretarial determinations
(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.
(4) A determination under subsection (3) has effect accordingly.
(5) In making a determination under subsection (3), the Secretary must comply with any relevant decision‑making principles.
General disposal
(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.
(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
(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;
(v) a veteran payment; 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;
(v) a veteran payment; 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
(9) In this section:
ordinary income, in relation to a company or trust, has the same meaning as in Division 7.
1208S Individual disposes of income to company or trust before 1 January 2002—individual is attributable stakeholder
(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.
(2) A determination under subsection (1) has effect accordingly.
(3) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles.
1208T Individual disposes of income to company or trust before 1 January 2002—individual’s spouse is attributable stakeholder
(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.
(2) A determination under subsection (1) has effect accordingly.
(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
(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 38N 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 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.
(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.
(3) In making a determination under paragraph (1)(f), the Secretary must comply with any relevant decision‑making principles.
(3A) For the purposes of paragraph (1)(h), an eligible descendant, in relation to a person, is:
(a) a child, step‑child or adopted child of the person or of a partner of the person; or
(b) a descendant in direct line of a child described in paragraph (a); or
(c) any other person who, in the opinion of the Secretary, should be treated for the purposes of this definition as a person described in paragraph (a) or (b).
(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.
(5) Subparagraph (1)(n)(ii) has effect subject to section 1208V.
(6) For the purposes of this section, the primary production attribution threshold is $750,000.
(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 Individual ceases to be an attributable stakeholder of trust—receipt of remuneration or other benefits from trust during asset deprivation period
(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.
(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 38N 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.
(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.
(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 Net value of asset
(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).
(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.
(3) A determination under this section has effect accordingly.
(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 sections 11 and 11A 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
(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.
(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.
(3) In making a determination under subsection (2), the Secretary must comply with any relevant decision‑making principles.
1208Z Adjusted net value of asset
(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.
(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.
(3) In making a determination under this section, the Secretary must comply with any relevant decision‑making principles.
1209 Adjusted net primary production income
(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.
(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
(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.
(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
(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.
(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
(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 8‑1 of the Income Tax Assessment Act 1997; and
(b) amounts that relate to the primary production enterprise and can be deducted in respect of plant (within the meaning of the Income Tax Assessment Act 1997) under Division 40 of that Act; 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.
(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)).
(3) The Secretary may, by legislative instrument, determine a specified deduction is an ineligible deduction for the purposes of this section.
(4) The Secretary may, by legislative instrument, determine that a specified amount is an ineligible amount for the purposes of this section.
(5) The Secretary may, by legislative instrument, determine that a specified part of a specified deduction is an ineligible part of the deduction for the purposes of this section.
(6) A determination under subsection (3), (4) or (5) has effect accordingly.
Division 12—Anti‑avoidance
1209D Anti‑avoidance
(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.
(2) A determination under subsection (1) has effect accordingly.
Obtaining a social security advantage
(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;
(v) a veteran payment; 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;
(v) a veteran payment; 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
The Secretary may, by legislative instrument, 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.
Division 14—Information management
1209F Transitional period
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
(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.
(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.
(3) The Commissioner of Taxation must comply with a requirement under subsection (1) or (2).
(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.
(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.
(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.
Part 3.18A—Private financial provision for certain people with disabilities
Division 1—Special disability trusts
1209L What is a special disability trust?
A trust is a special disability trust if the following requirements of this Division are complied with:
(a) the beneficiary requirements (see section 1209M);
(b) the trust purpose requirements (see section 1209N);
(c) the trust deed requirements (see section 1209P);
(d) the trustee requirements (see section 1209Q);
(e) the trust property requirements (see section 1209R);
(ea) the trust expenditure requirements, if any (see section 1209RA);
(f) the reporting requirements (see section 1209S);
(g) the audit requirements (see section 1209T).
Note: The Secretary may waive one or more requirements in certain circumstances (see section 1209U).
1209M Beneficiary requirements
Single beneficiary rule
(1) The trust must have no more than one beneficiary (the principal beneficiary), not including any residuary beneficiary.
Impairment or disability conditions
(2) If the principal beneficiary has reached 16 years of age:
(a) the beneficiary must:
(i) have an impairment that would qualify the person for disability support pension; or
(ii) be receiving invalidity service pension under Part III of the Veterans’ Entitlements Act; or
(iii) be receiving income support supplement under the Veterans’ Entitlements Act on the grounds of permanent incapacity; and
(b) the beneficiary must:
(i) have a disability that would, if the person had a sole carer, qualify the carer for carer payment or carer allowance; or
(ii) be living in an institution, hostel or group home in which care is provided for people with disabilities, and for which funding is provided (wholly or partly) under an agreement, between the Commonwealth, the States and the Territories, nominated by the Secretary under subsection (3); and
(c) the beneficiary must have a disability as a result of which either:
(i) he or she is not working, and has no likelihood of working, for more than 7 hours a week for a wage that is at or above the relevant minimum wage; or
(ii) he or she is working for wages set in accordance with the program administered by the Commonwealth known as the supported wage system.
Note: For relevant minimum wage, see subsection 23(1).
(3) The Secretary may, by legislative instrument, nominate an agreement for the purpose of subparagraph (2)(b)(ii).
(4) If the principal beneficiary is under 16 years of age, subsection (4A) must apply to him or her.
(4A) This subsection applies if:
(a) the principal beneficiary is a person with a severe disability or a severe medical condition; and
(b) another person (the carer) has been given a qualifying rating of intense under the Disability Care Load Assessment (Child) Determination for caring for the principal beneficiary; and
(c) a treating health professional has certified in writing that, because of that disability or condition:
(i) the principal beneficiary will need personal care for 6 months or more; and
(ii) the personal care is required to be provided by a specified number of persons; and
(d) the carer has certified in writing that the principal beneficiary will require the same care, or an increased level of care, to be provided to him or her in the future.
Living beneficiary rule
(5) A trust stops being a special disability trust when the principal beneficiary dies.
Single trust rule
(6) A trust is not a special disability trust for a particular principal beneficiary if, at the time of its creation, there is already another trust in existence for that person that is:
(a) a special disability trust; or
(b) a special disability trust within the meaning of the Veterans’ Entitlements Act.
1209N Trust purpose requirements
Primary purpose—care and accommodation for principal beneficiary
(1) Subject to this section, the primary purpose of the trust during the lifetime of the principal beneficiary, as provided by the trust deed for the trust, must be to meet reasonable care and accommodation needs of the beneficiary.
Note: The provision of care and accommodation for the principal beneficiary is also dealt with at section 1209R.
Other purposes
(2) The trust may have other purposes that are:
(a) both ancillary to the primary purpose and necessary or desirable to facilitate the achievement of that purpose; or
(b) primarily for the benefit of the principal beneficiary.
Note 1: A particular purpose may be covered by both of paragraphs (2)(a) and (b).
Note 2: The application of the income and assets of the trust for purposes (other than the primary purpose) that are primarily for the benefit of the principal beneficiary is dealt with by section 1209RA.
Guidelines relating to purposes
(3) If guidelines are made under subsection (4) then, for the purposes of this section:
(a) the reasonable care and accommodation needs of a principal beneficiary of a special disability trust must be decided in accordance with the guidelines if they deal with those needs; and
(b) purposes, other than the primary purpose of a special disability trust, that are primarily for the benefit of the principal beneficiary of a trust must be decided in accordance with the guidelines if they deal with those other purposes.
(4) The Secretary may, by legislative instrument, make guidelines for deciding either or both of the following for the purposes of this section:
(a) what are, and what are not, reasonable care and accommodation needs for beneficiaries of trusts;
(b) what are, and what are not, trusts’ purposes, other than the primary purpose described in subsection (1), that are primarily for the benefit of beneficiaries of the trusts.
1209P Trust deed requirements
Compliance with determination
(1) If a determination is made under subsection (2), the trust deed for the trust must comply with the determination.
(2) The Secretary may, by legislative instrument, determine one or more of the following:
(a) the form of the trust deed required for a special disability trust;
(b) provisions which must be included in the trust deed;
(c) the form of those provisions;
(d) provisions which cannot be included in the trust deed.
Contravention of trust deed
(3) A person must not contravene a provision of the trust deed that is required by this section to be included in the deed (whether or not the provision is required to be included in any particular form).
1209Q Trustee requirements
(1) A trustee of the trust who is an individual must:
(a) be an Australian resident; and
(b) not have been convicted at any time (including a time before the commencement of this section) of any of the following offences:
(i) an offence of dishonest conduct against, or arising out of, a law of the Commonwealth, a State, a Territory or a foreign country;
(ii) an offence against, or arising out of, this Act, the Administration Act or the Veterans’ Entitlements Act; and
(c) not have been disqualified at any time (including a time before the commencement of this section) from managing corporations under the Corporations Act 2001.
(2) In addition, if a trustee of the trust is a corporation, subsection (1) applies to each director of the trustee.
1209R Trust property requirements
(1) The assets of the trust must not include any asset transferred to the trust by the principal beneficiary of the trust, or the principal beneficiary’s partner, unless:
(a) the transferred asset is all or part of a bequest, or of a superannuation death benefit; and
(b) the transferor received the bequest or superannuation death benefit not more than 3 years before transferring the transferred asset.
(2) The assets of the trust must not include any compensation received by or on behalf of the principal beneficiary.
(3) The trust must not be used to pay an immediate family member, or a child, of the principal beneficiary for the provision to the beneficiary of:
(a) care services; or
(b) services for the repair or maintenance of the beneficiary’s accommodation.
Note: For immediate family member, see subsection 23(1).
(4) The trust must not be used to purchase or lease property from an immediate family member, or a child, of the principal beneficiary, even if the property is to be used for the beneficiary’s accommodation.
Note: For immediate family member, see subsection 23(1).
(5) In this section:
child of a principal beneficiary means:
(a) a natural child, adopted child or step‑child of the beneficiary; or
(b) someone who is a child of the beneficiary within the meaning of the Family Law Act 1975.
property includes:
(a) a right to accommodation for life in a residence; and
(b) a life interest in a residence.
1209RA Trust expenditure requirements
Limit on expenditure for purposes other than primary purpose
(1) If:
(a) a determination has been made under subsection (3); and
(b) the trust has one or more purposes, other than its primary purpose described in subsection 1209N(1), that are primarily for the benefit of the principal beneficiary;
the total value of the income and assets of the trust applied for those other purposes in a financial year must not exceed the value specified in the determination for that year.
Instruments fixing limits and purposes to be taken into account
(2) If guidelines are made under paragraph 1209N(4)(b), the question whether a purpose for which income and assets of a trust have been applied is one of the other purposes described in subsection (1) must be decided in accordance with the guidelines.
Note: Paragraph 1209N(4)(b) provides for guidelines for deciding what are, and what are not, trusts’ purposes, other than the primary purpose described in subsection 1209N(1), that are primarily for the benefit of beneficiaries of the trusts.
(3) The Secretary may, by legislative instrument, determine the total value of income and assets of a special disability trust that may be applied in a specified financial year for purposes, other than the primary purpose described in subsection 1209N(1), that are primarily for the benefit of the principal beneficiary of the trust.
1209S Reporting requirements
(1) The trustees of the trust must, on or before 31 March each year, give the Secretary written financial statements about the trust in relation to the financial year ending on 30 June in the previous year.
(2) The financial statements must be prepared by:
(a) if a determination is made under subsection (4) that requires such financial statements to be prepared by a person with stated qualifications—such a person; or
(b) whether or not such a determination is made—a person approved by the Secretary for the purpose.
(3) If a determination is made under subsection (4) that requires financial statements to include information of a stated kind, the financial statements must include information of that kind.
(4) The Secretary may, by legislative instrument, make determinations for the purposes of this section.
1209T Audit requirements
Trustee duties
(1) The trustees of the trust must, within a reasonable time after receiving a request under subsection (3):
(a) cause an audit of the trust to be carried out in relation to the period mentioned in subsection (2); or
(b) if, at the time of the request for the audit, an audit (the earlier requested audit) of the trust had already been carried out, or was being carried out, for the purpose of this section in relation to that period—give a copy of the report of the earlier requested audit to the person making the request.
Audit period
(2) The audit must relate to:
(a) the financial year ending on the 30 June last preceding the request; or
(b) if a determination is made under subsection (7) that provides for a different period—that period.
Who may request audit
(3) The following persons may request an audit of the trust for the purposes of this section:
(a) the principal beneficiary;
(b) an immediate family member of the principal beneficiary;
(c) a person who is, under the law of the Commonwealth, a State or a Territory, the legal guardian or financial administrator of the principal beneficiary;
(d) a person who is otherwise acting as the principal beneficiary’s guardian on a long‑term basis;
(e) the Secretary.
Note: For immediate family member, see subsection 23(1).
Copies of audit report
(4) If an audit report for a trust is given to the trustees for the purpose of subsection (1), the trustees must, within a reasonable time, give a copy of the report to:
(a) the person requesting the audit; and
(b) if the guardian or administrator mentioned in paragraph (3)(c) did not request the audit—the guardian or administrator; and
(c) if the Secretary did not request the audit—the Secretary.
Auditor qualifications and required information
(5) The audit must be prepared by:
(a) if a determination is made under subsection (7) that requires such audits to be prepared by a person with stated qualifications—such a person; or
(b) whether or not such a determination is made—a person approved by the Secretary for the purpose.
(6) If a determination is made under subsection (7) that requires audits requested under this section to include information of a stated kind, the audit must include information of that kind.
(7) The Secretary may, by legislative instrument, make determinations for the purposes of this section.
1209U Waiver of contravention of this Division
(1) A contravention of a requirement of this Division concerning a particular matter, in relation to a trust that would be a special disability trust if it were not for the contravention, does not prevent the trust being a special disability trust if:
(a) the Secretary, by written notice (a waiver notice) to the trustees, waives the requirement as it concerns that matter; and
(b) in a case where the waiver notice requires the trustees to comply with any conditions relating to the matter—the trustees comply with those conditions within the time or times (if any) stated in the waiver notice.
(2) A waiver notice has effect, subject to any conditions mentioned in paragraph (1)(b):
(a) from:
(i) the time of the contravention; or
(ii) if the waiver notice states a time for the start of its period of effect that is after the time of the contravention—the stated time; and
(b) if the waiver notice states a time for the end of its period of effect—until the stated time.
(3) If guidelines are made under subsection (4), a decision in relation to giving a waiver notice to the trustees of the trust must be made in accordance with the guidelines.
(4) The Secretary may, by legislative instrument, make guidelines for deciding any or all of the following:
(a) whether or not to give waiver notices to trustees of trusts;
(b) what conditions to include in waiver notices;
(c) the periods during which waiver notices are to have effect.
Division 2—Income of special disability trusts
1209V Attribution of income
(1) For the purposes of this Act, an amount of income that a special disability trust derives is taken not to be income received by any individual.
Note: For special disability trust, see section 1209L.
(2) This section has effect despite Division 7 of Part 3.18 and any other provisions of this Act.
1209X Income amounts from special disability trusts
An income amount that the principal beneficiary of a special disability trust receives is not income of the beneficiary for the purposes of this Act to the extent that consideration for the income amount was provided by a distribution from the trust.
Note 1: For income amount, see section 8.
Note 2: For special disability trust, see section 1209L.
Division 3—Assets of special disability trusts
1209Y Attribution of assets
(1) For the purposes of this Act, the assets of a special disability trust are not to be included in the assets of the principal beneficiary of the trust.
Note: For special disability trust, see section 1209L.
(2) However, this section does not apply to the extent that the value of the assets owned by the trust exceeds the trust’s asset value limit.
(3) The asset value limit of a special disability trust is $500,000.
Note: This amount is indexed annually on 1 July (see sections 1191 to 1194).
(4) For the purposes of subsection (2), disregard the value of any right or interest of the trust in the principal home of the principal beneficiary of the trust.
Note: For principal home, see subsections 11(5) to (7).
(5) This section has effect despite Division 8 of Part 3.18 and any other provisions of this Act.
Division 4—Transfers to special disability trusts
1209Z Effect of certain transfers to special disability trusts
(1) If a person transfers an asset (the transferred asset) to a special disability trust, the transfer is taken not to be a disposal of the asset (within the meaning of section 1123) if:
(a) the person is an immediate family member of the principal beneficiary of the trust; and
(b) the person, or the person’s partner:
(i) is receiving a social security pension and has reached pension age; or
(ii) is receiving a service pension and has reached pension age within the meaning of the Veterans’ Entitlements Act; or
(iii) is receiving income support supplement and has reached qualifying age within the meaning of section 5Q of the Veterans’ Entitlements Act; or
(iv) is receiving a veteran payment and has reached pension age; and
(c) the person receives no consideration, and is not entitled to any consideration, for the transfer; and
(d) the transfer is unconditional; and
(e) the value of the transferred asset does not exceed $500,000; and
(f) in a case where there has already been a transfer to which this section has applied (an exempt transfer), by that person or any other person, to the trust or any other special disability trust that had the same principal beneficiary—the sum of:
(i) the values of all of the assets transferred, by exempt transfers that have already been made, to the trust or any other special disability trust that had the same principal beneficiary; and
(ii) the value of the transferred asset;
does not exceed $500,000.
Note 1: For special disability trust, see section 1209L.
Note 2: For immediate family member, see subsection 23(1).
Note 3: For pension age (except for the purposes of subparagraph (1)(b)(ii) of this section), see subsections 23(5A) to (5D).
Note 4: For social security pension, service pension and income support supplement, see subsection 23(1).
(2) This section has effect subject to sections 1209ZA and 1209ZD.
(3) In this section:
other special disability trust includes a special disability trust within the meaning of the Veterans’ Entitlements Act.
value, of an asset transferred to a special disability trust, means the market value of the asset at the time of the transfer.
1209ZA The effect of exceeding the $500,000 limit
(1) If section 1209Z would apply to a transfer of an asset except for the fact that the value of the transferred asset exceeds $500,000, that section does not prevent the transfer from being a disposal or disposition of the asset, but the amount of the disposal or disposition is taken to be the amount of the excess.
(2) If:
(a) section 1209Z would apply to a transfer of an asset but for the fact that the sum of:
(i) the values of all of the exempt transfers that have already been made to the trust or any other special disability trust that had the same principal beneficiary; and
(ii) the value of the transferred asset;
exceeds $500,000; and
(b) that sum would not exceed $500,000 if the value of the transferred asset were disregarded;
that section does not prevent the transfer from being a disposal of the asset, but the amount of the disposal or disposition is taken to be the amount of the excess referred to in paragraph (a).
(3) This section has effect subject to section 1209ZD.
(4) In this section:
other special disability trust includes a special disability trust within the meaning of the Veterans’ Entitlements Act.
value, of an asset transferred to a special disability trust, means the market value of the asset at the time of the transfer.
1209ZB Transfers by the immediate family members prior to reaching pension age etc.
(1) If:
(a) an immediate family member of the principal beneficiary of a special disability trust transfers an asset to the trust; and
(b) at the time of the transfer, neither the immediate family member nor the partner of the immediate family member is a person who:
(i) is receiving a social security pension and has reached pension age; or
(ii) is receiving a service pension and has reached pension age within the meaning of the Veterans’ Entitlements Act; or
(iii) is receiving income support supplement and has reached qualifying age within the meaning of section 5Q of the Veterans’ Entitlements Act; or
(iv) is receiving a veteran payment and has reached pension age;
the immediate family member is taken for the purposes of this Division only to transfer the asset to the trust at the earliest time at which subparagraph (b)(i), (ii), (iii) or (iv) applies to the immediate family member or partner.
Note 1: For immediate family member, see subsection 23(1).
Note 2: For special disability trust, see section 1209L.
Note 3: For pension age (except for the purposes of subparagraph (1)(b)(ii) of this section), see subsections 23(5A) to (5D).
Note 4: For social security pension, service pension and income support supplement, see subsection 23(1).
(2) However, if under subsection (1) transfers of assets to the trust by different immediate family members are taken to have been made on the same day, the transfers are taken to have been made on that day in the order in which they would have been taken to be made but for this Division.
Note: For immediate family member, see subsection 23(1).
(3) This section does not affect the operation of Part 3.12 or any other provision of this Act outside of this Division.
1209ZC Transfers by principal beneficiaries or partners
(1) If a person transfers an asset to a special disability trust, the transfer is taken not to be a disposal of the asset (within the meaning of section 1123) if:
(a) the person is the principal beneficiary of the trust, or the principal beneficiary’s partner; and
(b) the person receives no consideration, and is not entitled to any consideration, for the transfer; and
(c) the transfer is unconditional.
Note 1: For special disability trust see section 1209L.
Note 2: Section 1209R limits the circumstances in which the principal beneficiary or the principal beneficiary’s partner can transfer assets to the trust.
(2) This section has effect subject to section 1209ZD.
1209ZD Cessation of special disability trusts
(1) If:
(a) a special disability trust ceases to exist or ceases to be a special disability trust; and
(b) a person had transferred an asset to the trust during the period of 5 years immediately preceding the cessation; and
(c) section 1209Z, 1209ZA or 1209ZC applied to the transfer;
then the transfer is taken, after the cessation, to be a disposal or disposition of the asset that occurred at the time of the transfer.
(2) The amount of the disposal or disposition is taken to be the amount worked out using the formula:
where:
asset value means:
(a) if section 1209Z or 1209ZC applied to the transfer—the value of the asset at the time of the transfer; or
(b) if subsection 1209ZA(1) applied to the transfer—$500,000; or
(c) if subsection 1209ZA(2) applied to the transfer—the difference between the value of the asset at the time of the transfer and the amount that was taken under that subsection to be the amount of the disposal or disposition of the asset.
final value of trust assets means the value of all of the assets of the trust at the time of the cessation.
initial value of trust assets means the value of all of the assets of the trust at the time of the transfer.
subsection 1209ZA(2) amount means the amount (if any) that was taken under subsection 1209ZA(2) to be the amount of the disposal or disposition of the asset.
(3) If the special disability trust ceases to exist, or ceases to be a special disability trust, because the principal beneficiary dies, the value of the asset at the time of the transfer is taken for the purposes of this section to be the value of so much (if any) of the asset as has not been returned to the person who had transferred the asset to the trust.
(4) This section does not affect the application of section 1209Z, 1209ZA or 1209ZC to the transfer prior to the cessation.
1209ZE Effect of this Division
This Division (other than section 1209ZB) has effect despite Division 2 of Part 3.12 and any other provisions of this Act.
Part 3.19—Miscellaneous
1210 Application of income and assets test reductions and of compensation reductions for income tax purposes
(1) If:
(a) the rate of a person’s social security payment is increased under Part 3.7 (rent assistance) and/or one or more of the following Modules of the Rate Calculator:
(i) the pension supplement Module (the PS Module) (if any);
(ia) the energy supplement Module (the ES Module);
(ii) the pharmaceutical allowance Module (the PA Module) (if any); and
(b) that rate is to be reduced under:
(i) the income test Module or the assets test Module of the Rate Calculator; or
(ii) section 1173 (compensation reductions);
the reduction is to be applied as follows (in descending order):
Item | Component of the rate |
1 | all of the rate apart from any increase mentioned in paragraph (a) |
2 | the portion of the person’s pension supplement amount (if any) equal to: (a) if the Rate Calculator produces an annual rate—the person’s pension supplement basic amount; and (b) if the Rate Calculator produces a fortnightly rate—1/26 of the person’s pension supplement basic amount |
3 | (a) if an election by the person under subsection 1061VA(1) is in force—any remaining portion of the person’s pension supplement amount; or (b) otherwise—any remaining portion of the person’s pension supplement amount to the extent to which it exceeds the person’s minimum pension supplement amount |
4 | the amount of any increase under Part 3.7 |
4A | the amount of any increase under the ES Module |
5 | the person’s minimum pension supplement amount |
6 | the amount of any increase under the PA Module |
Note 1: For table item 4A, the amount will be nil if quarterly energy supplement is payable to the person (for example, see point 1064‑C2). See also subsection (2A).
Note 2: Table item 5 will not apply if an election by the person under subsection 1061VA(1) is in force, as the rate would have already been reduced to nil.
(2) For the purposes of subsection (1):
(a) disregard table items 2, 3 and 5 if the person’s rate is increased under the PA Module (if any) of the Rate Calculator; and
(b) disregard table item 6 if the person’s rate is increased under the PS Module (if any) of the Rate Calculator.
(2A) If:
(a) quarterly energy supplement is payable to a person; and
(b) if quarterly energy supplement were not payable to the person:
(i) the rate (the main rate) of the person’s social security payment would be increased under the ES Module of the Rate Calculator; and
(ii) the main rate would be reduced as described in paragraph (1)(b); and
(c) the social security payment:
(i) is not a social security pension; or
(ii) is a disability support pension to which subsection 1066A(1) or 1066B(1) applies; or
(iii) if the person has not reached pension age—is a pension PP (single);
the reduction is to be applied to the components mentioned in items 5 and 6 of the table in subsection (1) only to the extent that the amount of the reduction (after it is applied to the components mentioned in items 1 to 4) exceeds the amount of the increase mentioned in subparagraph (b)(i) of this subsection.
(3) If:
(a) the rate (the main rate) of a person’s social security payment is increased under the PS Module of the Rate Calculator; and
(b) that rate is to be reduced as described in paragraph (1)(b); and
(c) an election by the person under subsection 1061VA(1) is in force;
the person’s quarterly pension supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s minimum pension supplement amount would be reduced under subsection (1) were the election not in force.
Note: The reduction will be disregarded unless the person’s quarterly pension supplement is reduced to nil (see subsection 43(5A) of the Administration Act).
(3A) If:
(a) quarterly energy supplement is payable to a person; and
(b) if quarterly energy supplement were not payable to the person:
(i) the rate (the main rate) of the person’s social security payment would be increased under the ES Module of the Rate Calculator; and
(ii) the main rate would be reduced as described in paragraph (1)(b);
the person’s quarterly energy supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s energy supplement would be reduced under subsection (1) were quarterly energy supplement not payable to the person.
Note: The reduction may be disregarded unless the main rate would be reduced to nil (see subsection 43(5B) of the Administration Act).
(4) The following table sets out details of the Modules relevant to subsection (1):
Relevant Modules |
| Pension Rate Calculator | PS Module | PA Module | ES Module | Income test Module | Assets test Module |
1 | Pension Rate Calculator A, section 1064 | BA | none | C | E | G |
3 | Pension Rate Calculator D, section 1066A | none | D | BA | F | H |
4 | Youth Allowance Rate Calculator, section 1067G | none | C | BA | H | none |
5 | Austudy Payment Rate Calculator, section 1067L | BA | C | BB | D | none |
6 | Benefit Rate Calculator B, section 1068 | BA | D | C | G | none |
7 | Pension PP (Single) Rate Calculator, section 1068A | BA | C | BB | E | none |
8 | Benefit PP (partnered) Rate Calculator, section 1068B | DA | E | DB | D | none |
1210A Effect of nil rate of pension etc.
(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.
(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.
1210B COVID‑19 supplement
(1) If:
(a) a person is receiving a social security payment (other than parenting payment, youth allowance, jobseeker payment or sickness allowance); and
(b) the social security payment is determined in an instrument under subsection (2);
then:
(c) the rate of the person’s social security payment is increased by the amount of the COVID‑19 supplement for the period determined in that instrument in relation to that payment; and
(d) the amount of the COVID‑19 supplement is the fortnightly amount determined in that instrument in relation to that payment.
(2) The Minister may, by legislative instrument, make a determination for the purposes of paragraphs (1)(b), (c) and (d). The Minister must be satisfied that the determination is in response to circumstances relating to the coronavirus known as COVID‑19.
(3) This section ceases to apply at the end of the period covered by subsection 646(2).
Chapter 4—International agreements and portability
Part 4.2—Overseas portability
Division 1—Preliminary
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.
Australian resident disability support pensioner means a person who qualifies for disability support pension only because he or she is an Australian resident.
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.
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.
severely impaired disability support pensioner means a person in respect of whom the Secretary has made a determination under subsection 1218AAA(1).
terminally ill overseas disability support pensioner means a person who qualifies for disability support pension because all the circumstances described in paragraphs 1218AA(1)(a), (b), (c), (d) and (e) exist in relation to the person.
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
(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.
(2) This section is subject to section 1220.
1215 Some payments generally portable with time limit
(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.
(2) This section is subject to Subdivision B of this Division (which contains exceptions) and section 1220.
1216 Amounts added to rate
During the period of absence, 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
(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
(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 applies, the absence does not:
(i) exceed the period specified in column 5 of that item; or
(ii) in the case of item 2—cause the total number of days (whether consecutive or not) of the person’s temporary absence from Australia in the last 12 months to exceed 28, ignoring days in accordance with that item.
Meaning of portability period if unlimited maximum portability period
(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
(4) If the person’s maximum portability period for the payment is not an unlimited period, 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 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 |
2 | Disability support pension | Australian resident disability support pensioner | Any temporary absence, except 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 | A total of 28 days (whether consecutive or not) of temporary absence from Australia for any purpose in the last 12 months, ignoring days on which the person was not receiving disability support pension (but see also sections 1218AAA, 1218AA, 1218AB, 1218, 1218C and 1218D) |
2AA | Disability support pension | Australian resident disability support pensioner | 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 | 4 weeks (but see also sections 1218AAA, 1218AA, 1218AB, 1218, 1218C and 1218D) |
2A | Disability support pension | Severely impaired disability support pensioner | Any absence | Unlimited period |
3 | Disability support pension | Terminally ill overseas disability support pensioner | Any absence | Unlimited period |
6 | Carer payment | All persons | Any temporary absence | 6 weeks (but see also section 1218) |
10 | Widow allowance | All persons | Any temporary absence | 6 weeks (but see also section 1218) |
11 | Parenting payment | All persons | Any temporary absence | 6 weeks (but see also sections 1218 and 1218B) |
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. | 6 weeks (but see also section 1218BA) |
13 | Youth allowance | Person undertaking full‑time study | A temporary absence for either of the following purposes: (a) to seek eligible medical treatment; (b) to attend to an acute family crisis | 6 weeks (but see also section 1218) |
14 | Austudy payment | All persons | A temporary absence for either of the following purposes: (a) to seek eligible medical treatment; (b) to attend to an acute family crisis | 6 weeks (but see also sections 1218 and 1218BA) |
15 | Jobseeker payment | 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. | 6 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. | 6 weeks |
20 | Partner allowance | All persons | Any temporary absence | 6 weeks (but see also section 1218) |
21 | Carer allowance | All persons | Any temporary absence | 6 weeks |
22 | Mobility allowance | All persons | Any temporary absence | 6 weeks |
23 | Telephone allowance | All persons | Any temporary absence | 6 weeks |
Subdivision B—Exceptions to Subdivision A rules
1218AAA Unlimited portability period for disability support pension—severely impaired disability support pensioner
(1) The Secretary may make a written determination 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 receiving disability support pension;
(b) the Secretary is satisfied that the person’s impairment is a severe impairment (within the meaning of subsection 94(3B));
(c) the Secretary is satisfied that the person will have that severe impairment for at least the next 5 years;
(d) the Secretary is satisfied that, if the person were in Australia, the severe impairment would prevent the person from performing any work independently of a program of support (within the meaning of subsection 94(4)) within the next 5 years.
(2) The Secretary must not make a determination under subsection (1) in relation to a person who is outside Australia unless the Secretary is satisfied that:
(a) the person is unable to return to Australia because of either of the following events:
(i) a serious accident involving the person;
(ii) the hospitalisation of the person; and
(b) the person’s portability period for disability support pension had not ended at the time the event occurred.
(3) The Secretary may revoke the determination if any of the qualifying circumstances ceases to exist.
(4) A determination under subsection (1) is not a legislative instrument.
(5) In this section:
work means work:
(a) that is on wages that are at or above the relevant minimum wage; and
(b) that exists in Australia, even if not within the person’s locally accessible labour market.
1218AA Unlimited portability period for disability support pension—terminally ill overseas disability support pensioner
(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.
(2) The Secretary may revoke the determination if any of the qualifying circumstances ceases to exist.
(3) If the Secretary revokes the determination, this Part has effect after the revocation as if:
(a) the person’s maximum portability period for the pension were worked out under whichever one of items 2, 2AA and 2A of the table in section 1217 applies; and
(b) if the person was absent from Australia at the time of the revocation—the person’s absence started on the revocation; and
(c) if item 2 of the table in section 1217 applies—the person had not been absent from Australia at any time in the 12 months before the revocation.
1218AB Extended portability period for disability support pension
(1) The Secretary may, by written determination, extend the person’s portability period for disability support pension if all of the following circumstances (the qualifying circumstances) exist:
(a) the person is severely disabled (see subsection 23(4B));
(b) the person is receiving disability support pension;
(c) the person is wholly or substantially dependent on a family member of the person (see subsection 23(14));
(d) the Secretary is satisfied that the person will be living with the family member of the person throughout the period of absence;
(e) the family member of the person is engaged in employment in Australia for an employer immediately before the start of the period of absence;
(f) the Secretary is satisfied that the family member of the person will be engaged in employment outside Australia for that employer throughout the period of absence.
(2) If the Secretary extends a person’s portability period under subsection (1), the person’s portability period for disability support pension, for the purposes of this Part, is the extended period.
(3) The Secretary may revoke the determination if any of the qualifying circumstances ceases to exist.
(4) A determination under subsection (1) is not a legislative instrument.
1218 Exception—full‑time students outside Australia for purposes of Australian course
(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 disability support pension, carer payment, widow allowance, parenting payment, youth allowance, austudy payment or partner allowance.
(2) The person’s right to continue to be paid disability support pension, carer payment, widow allowance, parenting payment, youth allowance, austudy payment or partner allowance 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.
(3) If the person returns to Australia for a period of 6 weeks or less, the return is taken not to affect the continuity of the period of absence.
(4) The Secretary may, by legislative instrument, make principles that must be complied with when deciding how much of a period of absence is for the purpose of undertaking studies that form part of a course of education.
1218A Exception—Reserve service
(1) This section applies if, immediately before the period of absence commenced, the person was receiving parenting payment, youth allowance, austudy payment or jobseeker payment.
(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
(1) If:
(a) immediately before the period of absence commenced, the person was receiving parenting payment; and
(b) at a time not more than 6 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.
(2) This section is subject to section 1218.
1218BA Exception—new apprentices
(1) This section applies if, immediately before the period of absence commenced, the person was receiving youth allowance on the basis of section 540AA applying (about new apprentices) or austudy payment on the basis of section 568AA applying (about new apprentices).
(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 the person’s full‑time apprenticeship, traineeship or trainee apprenticeship.
(3) The Secretary may, by legislative instrument, make principles that must be complied with when deciding how much of a period of absence is for the purpose of undertaking a full‑time apprenticeship, traineeship or trainee apprenticeship.
1218C Extension of person’s portability period—general
(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.
(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.
(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
(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.
(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
(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; and
(e) after the pension is granted, or the person is transferred to the pension, 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 based on that claim is not payable to the person during any period during which the person is outside Australia.
(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; and
(e) after the pension is granted, or the person is transferred to the pension, 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 based on that claim is not payable to the person during any period during which the person is outside Australia.
(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
(1) 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.
(2) Subsection (1) does not apply to a woman if, immediately before 20 March 2020, subsection 1221(1) did not apply to the woman because of subsection 1221(2).
(3) Subsection (1) does not apply to a woman if, immediately before 20 March 2020, subsection 796(2) did not apply to the woman because of subsection 796(4).
(4) Subsection (1) does not apply to a woman if:
(a) immediately before 20 March 2020, the woman was receiving a widow B pension mentioned in subclause 128A(2) of Schedule 1A; and
(b) immediately before 20 March 2020, subclause 128A(5) of Schedule 1A applied to the woman in relation to that pension.
(5) Subsection (1) does not apply to a woman if:
(a) immediately before 20 March 2020, the woman was receiving a wife pension under Part 2.4; and
(b) immediately before 20 March 2020, clause 128 of Schedule 1A applied to the woman in relation to that pension.
1220B Proportionality—disability support pension rate for a severely disabled person
(1) The rate of disability support pension for a person for whom an unlimited maximum portability period for the pension has been determined under section 1218AAA or 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.
(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 Pension Portability Rate Calculator
This section sets out the Pension Portability Rate Calculator for the purposes of this Part.
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.
Former recipients of widow B pension
1221‑A3 If:
(a) immediately before 20 March 2020, a woman was receiving a widow B pension under Part 2.8; and
(b) the woman had become qualified for the widow B pension because of the woman’s partner’s death; and
(c) on a day on or after 20 March 2020, the woman’s rate of age pension is worked out as mentioned in section 1220A; and
(d) on that day, that partner’s period of Australian working life residence (immediately before that partner’s death) exceeds the woman’s period of Australian working life residence on that day; and
(e) on that day, the woman is not a member of a couple;
then, for the purposes of working out that rate of age pension, the woman’s period of Australian working life residence is taken to be equal to that partner’s period of Australian working life residence (immediately before that partner’s death).
Former recipients of wife pension
1221‑A4 If immediately before 20 March 2020:
(a) either:
(i) a woman was receiving a wife pension under Part 2.4; or
(ii) a woman was receiving a wife pension under a scheduled international social security agreement; and
(b) the woman was a member of a couple; and
(c) the rate of the woman’s wife pension was required to be worked out having regard to the woman’s period of Australian working life residence; and
(d) the woman’s period of Australian working life residence was taken to be equal to the period of Australian working life residence of the woman’s partner;
then, for a day on or after 20 March 2020, the woman’s period of Australian working life residence is taken to be equal to the period of Australian working life residence of the woman’s partner if the following apply on that day:
(e) the woman is a member of that same couple;
(f) the woman’s rate of age pension is worked out as mentioned in section 1220A.
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.
Module C—Residence factor
Residence factor (period of Australian working life residence 35 years or more)
1221‑C1 If a person’s period of Australian working life residence is 420 months (35 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 35 years)
1221‑C2 If a person’s period of Australian working life residence is less than 420 months (35 years), the person’s residence factor is:
Chapter 5—Overpayments and debt recovery
Part 5.1—Effect of Chapter
1222 General effect of Chapter
(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
(ba) debts owed to the Commonwealth under Parts 3B and 3D of the Administration Act; 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.
(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
(pension loan debt) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
2 | 1223
(debt arising under this Act) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
3 | 1223AA
(debt arising from prepayment) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4 | 1223AB
(debt arising from AAT stay order) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4A | 1223ABB
(debts in respect of child disability assistance) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4B | 1223ABC
(debts in respect of carer supplement for 2009) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4C | 1223ABD
(debts in respect of carer supplement for 2010 and later years) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4D | 1223ABE
(debts in respect of relocation scholarship payments) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4E | 1223ABF
(debts in respect of student start‑up loans) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4F | 1223ABG
(debts in respect of one‑off energy assistance payments) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4G | 1223ABH
(debts in respect of 2019 one‑off energy assistance payments) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4H | 1223ABI
(debts in respect of first 2020 economic support payments) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4J | 1223ABJ
(debts in respect of second 2020 economic support payments) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4K | 1223ABK
(debts in respect of additional economic support payment 2020) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
4L | 1223ABL
(debts in respect of additional economic support payment 2021) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
5 | 1224AA | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
6 | 1224AB
(conviction of person for involvement in offence by debtor) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
7 | 1224B
(education entry payment) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
8 | 1224C
(Data‑matching program debts) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
9 | 1224D
(mobility allowance advance debt) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
10 | 1224E
(debt arising from advance payments of social security entitlements) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
11 | 1225
(compensation debt) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
12 | 1226
(compensation payer and insurer debts) | legal proceedings | 1232 |
13 | 1226A
(compensation arrears debt) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
14 | 1227
(assurance of support debt) | enforcement of security
deductions
legal proceedings
garnishee notice
repayment by instalments | 1230C
1231, 1234A
1232
1233
1234 |
15 | 1227B
(youth training allowance debts) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
15A | 1228A (comparable foreign payment debts) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
16 | 1229C
(interest on debt) | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
18 | 1230
(garnishee notice debt) | legal proceedings
garnishee notice | 1232
1233 |
19 | 1230A
(garnishee notice debt under 1947 Act) | legal proceedings
garnishee notice | 1232
1233 |
20 | Parts 3B and 3D of the Administration Act | deductions
legal proceedings
garnishee notice
repayment by instalments | 1231, 1234A
1232
1233
1234 |
Note: An additional 10% penalty is payable in some cases: see section 1228B.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(1AF) Except in the circumstances referred to in subsection (1AG), subsection (1) does not apply to a payment made under subsection 47(2) or 51(2) of the Administration Act.
(1AG) 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
(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 section 70 of the Administration Act;
the amount is not a debt due to the Commonwealth.
Some carer payment overpayments are debts if carer knew about care receiver’s affairs
(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.
Some parenting payment overpayments are not debts
(2) If:
(a) an amount has been paid to a person by way of parenting payment; and
(b) the person is someone to whom paragraph 500(1)(ca) applies; and
(c) the amount was paid on the basis that the person was qualified for parenting payment when the person was not qualified only because the person failed to meet one or more participation requirements that applied to the person under section 500A;
the amount is not a debt due to the Commonwealth.
Amount calculated using non‑income/assets tested add‑on amount—no add‑on amount payable
(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 parenting payment or newstart allowance—the rate of the person’s parenting payment or newstart allowance was increased by an amount of training supplement when that rate should not have been so increased; or
(iv) if the person was receiving disability support pension, parenting payment, youth allowance or jobseeker payment—the rate of the person’s disability support pension, parenting payment, youth allowance or jobseeker payment was increased by an approved program of work supplement when that rate should not have been so increased; or
(v) if the person was receiving a parenting payment, youth allowance or newstart allowance—the rate of the person’s parenting payment, youth allowance or newstart allowance was increased by an amount of National Green Jobs Corps 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 training supplement;
(f) the amount of approved program of work supplement;
(g) the amount of National Green Jobs Corps supplement.
Some parenting payment supplements are not debts
(7A) Despite subsection (7), if:
(a) an amount has been paid to a person by way of parenting payment; and
(b) the person is someone to whom paragraph 500(1)(ca) applies; and
(c) when the amount was calculated, the rate of the person’s parenting payment was increased by an amount (a supplement amount) of any of the following:
(i) approved program of work supplement;
(ii) training supplement;
(iii) National Green Jobs Corps supplement; and
(d) the amount of parenting payment was paid on the basis that the person was qualified for parenting payment when the person was not qualified only because the person failed to meet one or more participation requirements that applied to the person under section 500A;
the supplement amount is not a debt due to the Commonwealth.
Amount calculated using incorrect non‑income/assets tested add‑on amount—add‑on amount payable
(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.
(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 Debt resulting from commutation of asset‑test exempt income stream contrary to subsection 9A(2), 9B(2) or 9BA(2)
(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.
(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.
(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.
(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).
(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.
(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.
(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.
(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.
(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.
(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.
(11) In this section:
hardship amount has the same meaning as in section 9A.
1223AA Debts arising from prepayments and certain other payments
(1) If:
(a) a person has received a prepayment of a social security payment (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.
(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.
(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.
(1B) If:
(a) a person has received a prepayment of a social security payment for a period; and
(b) the amount of prepayment is more than the amount (if any) (the correct amount) of social security payment 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.
(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 payment (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 payment (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).
(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.
(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.
(2) In this section:
prepayment means:
(a) a payment under section 408GG, 652, 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 for AAT second review of a decision; and
(b) the AAT makes an order under subsection 41(2) of the AAT Act; 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.
1223ABAA Debts arising in respect of one‑off payments to older Australians
(1) This section applies in relation to an individual who has been paid a payment (the relevant payment) of:
(a) 2006 one‑off payment to older Australians under Division 2 of Part 2.2B; or
(b) 2007 one‑off payment to older Australians under Division 3 of Part 2.2B; or
(c) 2008 one‑off payment to older Australians under Division 4 of Part 2.2B.
(2) If the individual qualified for the relevant payment because of subsection 93Y(2), 93ZA(2) or 93ZC(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), 93ZA(2)(b) or 93ZC(2)(b).
(3) If the individual qualified for the relevant payment because of subsection 93Y(3), 93ZA(3) or 93ZC(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.
(4) If the individual qualified for the relevant payment because of subsection 93Y(4), 93ZA(4) or 93ZC(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), 93ZA(4)(a) or 93ZC(4)(a).
(4A) For the purposes of this section, the relevant day in respect of a relevant payment is:
(a) for a payment of 2006 one‑off payment to older Australians—9 May 2006; or
(b) for a payment of 2007 one‑off payment to older Australians—8 May 2007; or
(c) for a payment of 2008 one‑off payment to older Australians—13 May 2008.
(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 the relevant day 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 the relevant day, the relevant payment would not have been made;
the amount of the relevant payment is a debt due to the Commonwealth by the individual.
(6) If:
(a) an individual qualified for the relevant payment because of subsection 93Y(3), 93ZA(3) or 93ZC(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.
(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
(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); or
(k) 2007 one‑off payment to carers (carer payment related); or
(l) 2007 one‑off payment to carers (wife pension related); or
(m) 2007 one‑off payment to carers (partner service pension related); or
(n) 2007 one‑off payment to carers (carer service pension related); or
(o) 2007 one‑off payment to carers (carer allowance related); or
(p) 2008 one‑off payment to carers (carer payment related); or
(q) 2008 one‑off payment to carers (wife pension related); or
(r) 2008 one‑off payment to carers (partner service pension related); or
(s) 2008 one‑off payment to carers (carer service pension related); or
(t) 2008 one‑off payment to carers (carer allowance related).
What determinations are relevant?
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(3CF) If the relevant payment is a payment of 2007 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 261 of this Act was paid.
(3CG) If the relevant payment is a payment of 2007 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 263 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 263 of this Act was paid.
(3CH) If the relevant payment is a payment of 2007 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 265 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 265 of this Act was paid.
(3CI) If the relevant payment is a payment of 2007 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 267 of this Act was paid.
(3CJ) If the relevant payment is a payment of 2007 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 992WA of this Act was paid.
(3CK) If the relevant payment is a payment of 2008 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 269 of this Act was paid.
(3CL) If the relevant payment is a payment of 2008 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 271 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 271 of this Act was paid.
(3CM) If the relevant payment is a payment of 2008 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 273 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 273 of this Act was paid.
(3CN) If the relevant payment is a payment of 2008 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 275 of this Act was paid.
(3CO) If the relevant payment is a payment of 2008 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 992WD of this Act was paid.
What is the relevant date?
(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); or
(d) 8 May 2007, if the relevant payment is a payment of:
(i) 2007 one‑off payment to carers (carer payment related); or
(ii) 2007 one‑off payment to carers (wife pension related); or
(iii) 2007 one‑off payment to carers (partner service pension related); or
(iv) 2007 one‑off payment to carers (carer service pension related); or
(v) 2007 one‑off payment to carers (carer allowance related); or
(e) 13 May 2008, if the relevant payment is a payment of:
(i) 2008 one‑off payment to carers (carer payment related); or
(ii) 2008 one‑off payment to carers (wife pension related); or
(iii) 2008 one‑off payment to carers (partner service pension related); or
(iv) 2008 one‑off payment to carers (carer service pension related); or
(v) 2008 one‑off payment to carers (carer allowance related).
Situation in which whole amount is a debt
(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
(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
(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.
1223ABAAA Debts arising in respect of economic security strategy payments
(1) If:
(a) an individual has been paid an economic security strategy payment; and
(b) after the payment was made to the individual, a determination in relation to the individual, at least so far as it relates to 14 October 2008 or to a period that includes that day, is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(c) the determination is one to which subsection (3) applies in relation to the payment; and
(d) the decision to change, revoke, set aside or supersede the 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
(e) had the change, revocation, setting aside or superseding occurred on or before 14 October 2008, the payment would not have been made;
the amount of the payment is a debt due to the Commonwealth by the individual.
(2) If:
(a) an individual has been paid an economic security strategy payment; and
(b) after the payment was made to the individual, a determination in relation to the individual, at least so far as it relates to 14 October 2008 or to a period that includes that day, is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(c) the determination is one to which subsection (3) applies in relation to the payment; and
(d) the decision to change, revoke, set aside or supersede the 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
(e) had the change, revocation, setting aside or superseding occurred on or before 14 October 2008, the payment would have been reduced;
the amount by which the payment would have been reduced is a debt due to the Commonwealth by the individual.
(3) This subsection applies to:
(a) if the individual qualified for the payment because of subsection 900(2)—a determination made under Part 3 of the Administration Act because of which the individual was receiving a payment of a kind referred to in paragraph 900(2)(a); and
(b) if the individual qualified for the payment because of subsection 900(3)—a determination made under Part 3 of the Administration Act because of which the individual was receiving a payment of a kind referred to in paragraph 900(3)(b).
(4) If:
(a) an individual has been paid an economic security strategy payment; and
(b) the individual qualified for the payment because of subsection 900(4) in relation to having claimed a seniors health card; and
(c) the individual knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and
(d) but for that statement or information, the 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.
(5) 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.
1223ABAAB Debts arising in respect of training and learning bonuses etc.
(1) If:
(a) an individual has been paid a training and learning bonus or an education entry payment supplement; and
(b) after the payment was made to the individual, a determination in relation to the individual, at least so far as it relates to 3 February 2009 or to a period that includes that day, is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(c) the determination is one to which subsection (2) applies in relation to the payment; and
(d) the decision to change, revoke, set aside or supersede the 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
(e) had the change, revocation, setting aside or superseding occurred on or before 3 February 2009, the payment would not have been made;
the amount of the payment is a debt due to the Commonwealth by the individual.
(2) This subsection applies to:
(a) if the individual qualified for the payment because of paragraph 910(2)(a), (b), (c) or (d) of this Act—a determination made under Part 3 of the Administration Act because of which the individual was receiving a payment of a kind referred to in that paragraph; and
(b) if the individual qualified for the payment because of paragraph 910(2)(e) of this Act—a determination (however described) made under the ABSTUDY Scheme because of which the individual was receiving a payment of a kind referred to in that paragraph; and
(c) if the individual qualified for the payment because of paragraph 910(2)(f) of this Act—a determination (however described) made under the Veterans’ Children Education Scheme because of which the individual was receiving a payment of a kind referred to in that paragraph; and
(d) if the individual qualified for the payment because of paragraph 910(2)(g) of this Act—a determination (however described) made under the Military Rehabilitation and Compensation Act Education and Training Scheme because of which the individual was receiving a payment of a kind referred to in that paragraph; and
(e) if the individual qualified for the payment because of subsection 910(4) of this Act—a determination made under Part 3 of the Family Assistance Administration Act because of which the individual was entitled to family tax benefit; and
(h) if the individual qualified for the payment because of section 665ZZA of this Act—a determination made under Part 3 of the Administration Act because of which the individual was qualified for an education entry payment.
(3) If:
(a) the Secretary has paid a person’s training and learning bonus to another person (the recipient) under subsection 47C(3) or (4) of the Administration Act; and
(b) the reason why, or one of the reasons why, the Secretary decided to pay the bonus to the recipient was that the recipient made a particular statement or provided particular information; and
(c) after the payment is made, the Secretary becomes satisfied that:
(i) the statement or information is false or misleading; and
(ii) the recipient made the statement, or provided the information, knowing that it was false or misleading; and
(iii) the bonus should have been paid to a person other than the recipient;
the amount of the payment is a debt due to the Commonwealth by the recipient.
(4) 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.
1223ABB Debts in respect of child disability assistance
(1) If:
(a) child disability assistance is paid to a person; and
(b) the assistance is paid because the person was paid an instalment of carer allowance in respect of a period that included a particular 1 July; and
(c) the 1 July component of the instalment, or any part of the 1 July component, becomes a debt due to the Commonwealth;
then:
(d) the amount of child disability assistance determined under subsection (2) or (3) is a debt due to the Commonwealth; and
(e) the debt is taken to have arisen when the amount was paid to the person.
(2) If all of the 1 July component of the instalment becomes a debt due to the Commonwealth, the amount of child disability assistance that is a debt due to the Commonwealth is the amount of assistance that was paid in respect of the eligible care receiver to whose care the instalment relates.
(3) If only part of the 1 July component of the instalment becomes a debt due to the Commonwealth, the amount of child disability assistance that is a debt due to the Commonwealth is the difference between:
(a) the amount paid in respect of the eligible care receiver to whose care the instalment relates; and
(b) the amount applicable under subsection 992MD(2) for the eligible care receiver to whose care the instalment relates, based on the determination under subsection 981(1) that had effect in respect of the 1 July at the time the part of the 1 July component became a debt.
(4) In this section:
1 July component, of an instalment of carer allowance in respect of a period that includes a particular 1 July, means the amount of carer allowance in respect of that period that is applicable to the 1 July.
1223ABC Debts in respect of carer supplement for 2009
(1) This section applies if:
(a) carer supplement for 2009 is paid to a person; and
(b) after it is paid, a determination under Part 3 of the Administration Act or under the Veterans’ Entitlements Act because of which any of the following instalments was paid is or was (however described) changed, revoked, set aside, or superseded by another determination:
(i) a qualifying instalment (see section 992X);
(iii) an instalment of partner service pension under the Veterans’ Entitlements Act affecting the amount of the carer supplement paid; and
(c) the decision to change, revoke, set aside or supersede the earlier determination is or was made for the reason, or for reasons including the reason, that the person knowingly made a false or misleading statement, or knowingly provided false information.
When the whole payment is a debt
(2) The amount of the carer supplement paid to the person is a debt due to the Commonwealth by the person if carer supplement for 2009 would not have been paid to the person had the change, revocation, setting aside or superseding occurred on or before 12 May 2009.
When part of the payment is a debt
(3) If the amount of carer supplement for 2009 paid to the person would have been reduced had the change, revocation, setting aside or superseding occurred on or before 12 May 2009, the amount by which the carer supplement paid to the person would have been reduced is a debt due to the Commonwealth by the person.
Limit on debts under this section
(4) The total of debts arising under this section in relation to the carer supplement paid to the person cannot exceed the amount of the carer supplement.
Most other provisions under which debts arise do not apply
(5) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to payments of carer supplement for 2009.
1223ABD Debts in respect of carer supplement for 2010 and later years
(1) This section applies if:
(a) carer supplement for 2010 or a later year is paid to a person; and
(b) a debt (the primary debt) due to the Commonwealth by the person arises (under this Act or the Veterans’ Entitlements Act) in connection with any of the following instalments that is equal to all of the instalment or, if the instalment is of carer allowance, all or part of the instalment:
(i) a qualifying instalment (see section 992X);
(iii) an instalment of partner service pension under the Veterans’ Entitlements Act affecting the amount of the carer supplement paid; and
(c) the carer supplement would not have been paid, or less carer supplement would have been paid, had the circumstances that gave rise to the primary debt not occurred.
(2) If the primary debt is equal to all of the instalment, an amount, equal to so much of the carer supplement as would not have been paid if the instalment had not been paid, is a debt due to the Commonwealth by the person.
Note: If the instalment is the only qualifying instalment, the debt will equal the amount of the carer supplement, because none of it would have been paid if the qualifying instalment had not been paid.
(3) If:
(a) the primary debt arises in connection with an instalment of carer allowance because of a failure to take account, or an error in taking account, of a determination under subsection 981(1); and
(b) the primary debt is equal to part of the instalment;
an amount, equal to so much of the carer supplement as would not have been paid if the failure or error had not occurred, is a debt due to the Commonwealth by the person.
Consolidation of debts under this section
(4) If, apart from this subsection, 2 or more debts would arise under either or both of subsections (2) and (3) in relation to the carer supplement, then, instead of those debts arising, there is a single debt that:
(a) is due to the Commonwealth by the person; and
(b) is equal to the lesser of:
(i) the sum of the debts that would arise apart from this subsection; and
(ii) the amount of the carer supplement.
When debt is taken to arise under this section
(5) A debt is taken to have arisen under this section when the carer supplement was paid to the person.
1223ABE Debts in respect of relocation scholarship payments
Person does not start to undertake a course
(1) If a person:
(a) has received a relocation scholarship payment because the person is proposing to undertake an approved scholarship course; and
(b) does not start to undertake full‑time study in an approved scholarship course;
then:
(c) the amount of the payment is a debt due to the Commonwealth; and
(d) the debt is taken to have arisen when the person received the payment.
However, this subsection does not apply if, in the Secretary’s opinion, the person does not start to undertake full‑time study in an approved scholarship course because of exceptional circumstances beyond the person’s control.
Note: For approved scholarship course, see section 592M.
Person not continuing to undertake a course
(2) If a person:
(a) has received a relocation scholarship payment because the person is proposing to undertake an approved scholarship course (the qualifying course); and
(b) starts to undertake an approved scholarship course; and
(c) is not undertaking full‑time study in an approved scholarship course at the end of 35 days after the qualifying course commences;
then:
(d) the amount of the payment is a debt due to the Commonwealth; and
(e) the debt is taken to have arisen when the person received the payment.
Note: For approved scholarship course, see section 592M.
(3) If a person:
(a) has received a relocation scholarship payment because the person is undertaking an approved scholarship course; and
(b) is not undertaking full‑time study in an approved scholarship course at the end of 35 days after qualifying for the payment;
then:
(c) the amount of the payment is a debt due to the Commonwealth; and
(d) the debt is taken to have arisen when the person received the payment.
Note: For approved scholarship course, see section 592M.
(4) Subsections (2) and (3) do not apply if, in the Secretary’s opinion, the person is not undertaking full‑time study in an approved scholarship course because of exceptional circumstances beyond the person’s control.
1223ABF Debts in respect of student start‑up loans
(1) If:
(a) a person is paid a student start‑up loan for a qualification period; and
(b) the circumstances determined under subsection (2) apply to the person;
then:
(c) the amount of the loan is a debt due to the Commonwealth; and
(d) the debt is taken to have arisen when the person was paid the loan.
(2) The Minister may, by legislative instrument, determine circumstances in which subsection (1) applies to a person who has not met, or who has ceased to meet, the condition in subparagraph 1061ZVBB(1)(a)(iii) or (2)(a)(iii).
(3) Subsection (1) does not apply to a person if, in the Secretary’s opinion, the person did not meet, or ceased to meet, the condition in subparagraph 1061ZVBB(1)(a)(iii) or (2)(a)(iii) because of exceptional circumstances beyond the person’s control.
1223ABG Debts in respect of one‑off energy assistance payments
(1) If:
(a) after a one‑off energy assistance payment under Part 2.6 is paid to a person, an underlying determination in relation to the person, at least so far as it relates to 20 June 2017 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 underlying determination is or was made for the reason, or for reasons including the reason, that the person 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 20 June 2017, the one‑off energy assistance payment would not have been paid;
the amount of the one‑off energy assistance payment is a debt due to the Commonwealth by the person.
(2) For the purposes of this section, an underlying determination in relation to a person is a determination made under Part 3 of the Administration Act because of which age pension, disability support pension or pension PP (single) was payable to the person.
(3) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to one‑off energy assistance payments under Part 2.6.
1223ABH Debts in respect of 2019 one‑off energy assistance payments
(1) If:
(a) after a one‑off energy assistance payment under Part 2.6A is paid to a person, an underlying determination in relation to the person, at least so far as it relates to 2 April 2019 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 underlying determination is or was made for the reason, or for reasons including the reason, that the person 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 2 April 2019, the one‑off energy assistance payment would not have been paid;
the amount of the one‑off energy assistance payment is a debt due to the Commonwealth by the person.
(2) For the purposes of this section, an underlying determination in relation to a person is a determination made under Part 3 of the Administration Act because of which a benefit mentioned in subsection 302(2) of this Act was payable to the person.
(3) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to one‑off energy assistance payments under Part 2.6A.
1223ABI Debts in respect of first 2020 economic support payments
(1) If:
(a) a first 2020 economic support payment under Division 1 of Part 2.6B is paid to a person; and
(b) after the first 2020 economic support payment is paid to the person, an underlying determination in relation to the person, at least so far as it relates to:
(i) a day included in the period mentioned in subsection 304(1); or
(ii) a period that includes such a day;
is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(c) the decision to change, revoke, set aside or supersede the underlying determination is or was made for the reason, or for reasons including the reason, that the person knowingly made a false or misleading statement, or knowingly provided false information; and
(d) had the change, revocation, setting aside or superseding occurred on or before that day, the first 2020 economic support payment would not have been paid;
the amount of the first 2020 economic support payment is a debt due to the Commonwealth by the person.
(2) For the purposes of this section, an underlying determination in relation to a person is a determination made under Part 3 of the Administration Act because of which a benefit mentioned in subsection 308(2) of this Act was payable to the person.
(3) If:
(a) a first 2020 economic support payment under Division 1 of Part 2.6B is paid to a person; and
(b) the person qualified for the payment because of subsection 308(3) applying to the person in relation to having made a claim for a seniors health card; and
(c) the person knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and
(d) the first 2020 economic support payment would not have been paid to the person but for that statement or information;
the amount of the first 2020 economic support payment is a debt due to the Commonwealth by the person.
(4) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to first 2020 economic support payments under Division 1 of Part 2.6B.
1223ABJ Debts in respect of second 2020 economic support payments
(1) If:
(a) a second 2020 economic support payment under Division 2 of Part 2.6B is paid to a person; and
(b) after the second 2020 economic support payment is paid to the person, an underlying determination in relation to the person, at least so far as it relates to:
(i) 10 July 2020; or
(ii) a period that includes 10 July 2020;
is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(c) the decision to change, revoke, set aside or supersede the underlying determination is or was made for the reason, or for reasons including the reason, that the person knowingly made a false or misleading statement, or knowingly provided false information; and
(d) had the change, revocation, setting aside or superseding occurred on or before 10 July 2020, the second 2020 economic support payment would not have been paid;
the amount of the second 2020 economic support payment is a debt due to the Commonwealth by the person.
(2) For the purposes of this section, an underlying determination in relation to a person is a determination made under Part 3 of the Administration Act because of which a benefit mentioned in subsection 308(2) of this Act was payable to the person.
(3) If:
(a) a second 2020 economic support payment under Division 2 of Part 2.6B is paid to a person; and
(b) the person qualified for the payment because of subsection 308(3) applying to the person in relation to having made a claim for a seniors health card; and
(c) the person knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and
(d) the second 2020 economic support payment would not have been paid to the person but for that statement or information;
the amount of the second 2020 economic support payment is a debt due to the Commonwealth by the person.
(4) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to second 2020 economic support payments under Division 2 of Part 2.6B.
1223ABK Debts in respect of additional economic support payment 2020
(1) If:
(a) an additional economic support payment 2020 under Division 1 of Part 2.6C is paid to a person; and
(b) after the payment is paid to the person, an underlying determination in relation to the person, at least so far as it relates to:
(i) 27 November 2020; or
(ii) a period that includes 27 November 2020;
is or was (however described) changed, revoked, set aside or superseded by another determination; and
(c) the decision to change, revoke, set aside or supersede the underlying determination is or was made for the reason, or for reasons including the reason, that the person knowingly made a false or misleading statement, or knowingly provided false information; and
(d) had the change, revocation, setting aside or superseding occurred on or before 27 November 2020, the additional economic support payment 2020 would not have been paid;
the amount of the additional economic support payment 2020 is a debt due to the Commonwealth by the person.
(2) For the purposes of this section, an underlying determination in relation to a person is a determination made under Part 3 of the Administration Act because of which a payment mentioned in subsection 313(2) of this Act was payable to the person.
(3) If:
(a) an additional economic support payment 2020 under Division 1 of Part 2.6C is paid to a person; and
(b) the person qualified for the payment because of subsection 313(3) applying to the person in relation to having made a claim for a seniors health card; and
(c) the person knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and
(d) the additional economic support payment 2020 would not have been paid to the person but for that statement or information;
the amount of the additional economic support payment 2020 is a debt due to the Commonwealth by the person.
(4) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to an additional economic support payment 2020 under Division 1 of Part 2.6C.
1223ABL Debts in respect of additional economic support payment 2021
(1) If:
(a) an additional economic support payment 2021 under Division 2 of Part 2.6C is paid to a person; and
(b) after the payment is paid to the person, an underlying determination in relation to the person, at least so far as it relates to:
(i) 26 February 2021; or
(ii) a period that includes 26 February 2021;
is or was (however described) changed, revoked, set aside or superseded by another determination; and
(c) the decision to change, revoke, set aside or supersede the underlying determination is or was made for the reason, or for reasons including the reason, that the person knowingly made a false or misleading statement, or knowingly provided false information; and
(d) had the change, revocation, setting aside or superseding occurred on or before 26 February 2021, the additional economic support payment 2021 would not have been paid;
the amount of the additional economic support payment 2021 is a debt due to the Commonwealth by the person.
(2) For the purposes of this section, an underlying determination in relation to a person is a determination made under Part 3 of the Administration Act because of which a payment mentioned in subsection 313(2) of this Act was payable to the person.
(3) If:
(a) an additional economic support payment 2021 under Division 2 of Part 2.6C is paid to a person; and
(b) the person qualified for the payment because of subsection 313(3) applying to the person in relation to having made a claim for a seniors health card; and
(c) the person knowingly made a false or misleading statement, or knowingly provided false information, in relation to the claim; and
(d) the additional economic support payment 2021 would not have been paid to the person but for that statement or information;
the amount of the additional economic support payment 2021 is a debt due to the Commonwealth by the person.
(4) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to an additional economic support payment 2021 under Division 2 of Part 2.6C.
1224 Debts relating to clean energy advances
(1) This section applies if:
(a) an individual is paid a clean energy advance; and
(b) after the advance is paid, one of the following events happens to a determination that directly or indirectly affects the payability or amount of the advance paid to the individual:
(i) the determination is changed, revoked or set aside;
(ii) the determination is superseded by another determination; and
(c) the event happens wholly or partly because the individual knowingly made a false or misleading statement or knowingly provided false information; and
(d) had the event happened on or before the day the advance was paid:
(i) the advance would not have been paid; or
(ii) the advance would have been reduced.
Note 1: Examples of determinations directly affecting the payability or amount of the clean energy advance are as follows:
(a) a determination relating to the person’s qualification for the clean energy qualifying payment to which the advance related;
(b) the determination of the person’s qualification for the clean energy advance.
Note 2: An example of a determination indirectly affecting the amount of the advance is a determination relating to a change in circumstances that results in the person qualifying for a further payment of the advance under an instrument made under section 914G.
Creation and amount of debt
(2) The advance is a debt due to the Commonwealth by the individual if subparagraph (1)(d)(i) applies.
(3) The amount by which the advance would have been reduced is a debt due to the Commonwealth by the individual if subparagraph (1)(d)(ii) applies.
Relationship with other sections
(4) Apart from section 1224AA, the other provisions of this Part under which debts arise do not apply in relation to clean energy advances.
1224A Debts relating to essential medical equipment payments
(1) This section applies if:
(a) an individual has been paid an essential medical equipment payment because of a determination made under Part 3 of the Administration Act; and
(b) after the payment was made to the individual, the determination is or was (however described) changed, revoked, set aside, or superseded by another determination; and
(c) the decision to change, revoke, set aside or supersede the determination is or was made wholly or partly because the individual knowingly made a false or misleading statement, or knowingly provided false information; and
(d) apart from that statement or information, the payment would not have been paid.
(2) An amount equal to the payment is a debt due to the Commonwealth by the individual.
(3) 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
If:
(a) an amount of a social security payment or an amount of fares allowance 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, 11.2A, 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
(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.
(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
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.
1224D Mobility allowance advance debts
(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.
(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.
(3) In this section:
advance payment period for mobility allowance advance is the period of 26 weeks starting on the first payday for which it is practicable to pay the advance and adjust the mobility allowance payments of the recipient.
Note: Any reduction in the advance payment period under section 1044A is not taken into account for the purposes of this definition.
1224E Debts arising from advance payments of social security entitlements
(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 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).
1224EA Debts arising from special employment advances of special employment advance qualifying entitlements
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
(1) If a person is liable to pay an assurance of support debt, the debt is a debt due to the Commonwealth.
(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.
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
(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; 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.
(2) This subsection applies to:
(a) a payment of pension, veteran payment 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
(ca) an instalment of parental leave pay; or
(cb) dad and partner pay; 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.
(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.
(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.
(3) If:
(a) an amount was paid under the scheme administered by the Commonwealth known as Financial Case Management to, or for the benefit of, a person; and
(b) the amount should not have been paid; and
(c) the person is receiving a social security payment; and
(d) the person is qualified for the social security payment under this Act and the social security payment is payable to him or her;
the amount is an overpayment that is recoverable from the person by the Commonwealth by means of deductions.
Note: For deductions see section 1231.
1228A Comparable foreign payment debt recovery
(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.
(2) The amount by which the social security amount would have been reduced is a debt due to the Commonwealth.
(3) Section 1073 does not apply to the person in respect of the lump sum.
1228B Additional 10% penalty for understatement etc. of income
(1) An amount by way of penalty is added to a debt due to the Commonwealth under this Chapter by a person in relation to a social security payment if:
(a) at the time the payment was made, the person:
(i) had attained the minimum age for youth allowance as defined by section 543A; and
(ii) had not reached pension age; and
Note: For pension age see subsections 23(5A), (5B), (5C) and (5D).
(b) the payment was:
(i) a social security benefit; or
(ii) a disability support pension; or
(v) a pension PP (single); and
(c) the debt arose wholly or partly because the person had:
(i) refused or failed to provide information in relation to the person’s income from personal exertion; or
(ii) knowingly or recklessly provided false or misleading information in relation to the person’s income from personal exertion;
when required, under a provision of the social security law, to provide information in relation to the person’s income from personal exertion.
Note: For income from personal exertion see subsection 8(1).
(2) The amount added by way of penalty is an amount equal to 10% of so much of the debt as arose because the person refused or failed to provide the information or provided the false or misleading information.
(2A) To avoid doubt, the amount added by way of penalty is part of the debt.
(3) An amount worked out under subsection (2) must be rounded down to the nearest 5 cents.
(4) This section does not apply if the Secretary is satisfied that the person had a reasonable excuse for refusing or failing to provide the information.
(5) This section does not apply in relation to a debt due to the Commonwealth under section 1229C.
1229 Notices in respect of debt
(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
(ea) the effect of sections 1229A and 1229B; and
(f) that a range of options is available for repayment of the debt; and
(g) the contact details for inquiries concerning the debt.
(2) The outstanding amount of the debt is due and payable on the 28th day after the date of the notice.
(3) The Secretary may give more than one notice under subsection (1) in relation to a person and a debt of the person.
1229A Interest charge—no repayment arrangement in effect
(1) If:
(a) a notice is given to a person under subsection 1229(1) in relation to a debt; and
(b) an amount (the unpaid amount) of the debt remains unpaid at the end of the day (the due day) on which the debt is due to be paid; and
(c) at the end of the due day, there is no arrangement in effect under section 1234 in relation to the debt;
then the person is liable to pay, by way of penalty, interest charge, worked out under subsection (3), for each day in the period described in subsection (2).
Note: For exemptions, see sections 1229E and 1229F.
(2) The period starts at the beginning of the day after the due day and ends at the end of the earlier of the following days:
(a) the last day at the end of which any of the following remains unpaid:
(i) the unpaid amount;
(ii) interest charge on any of the unpaid amount;
(b) the day before the first day, after the due day, on which the person makes a payment under an arrangement under section 1234 in relation to the debt.
(3) The interest charge for a day in the period described in subsection (2) is worked out by multiplying the interest charge rate for that day by the sum of so much of the following amounts as remains unpaid:
(a) the unpaid amount;
(b) the interest charge from previous days.
Note 1: For interest charge rate see section 1229D.
Note 2: The interest charge for a day is due and payable to the Commonwealth at the end of that day and is a debt due to the Commonwealth: see section 1229C.
1229B Interest charge—failure to comply with or termination of repayment arrangement
(1) If:
(a) an arrangement is in effect under section 1234 in relation to a person and a debt; and
(b) the person fails to make a payment under the arrangement;
then the person is liable to pay, by way of penalty, interest charge, worked out under subsection (3), for each day in the period described in subsection (2).
Note: For exemptions, see sections 1229E and 1229F.
(2) The period starts at the beginning of the day after the day (the due day) on which the payment was required to be made under the arrangement and ends at the end of the earliest of the following days:
(a) the last day at the end of which any of the following remains unpaid:
(i) the outstanding amount of the debt;
(ii) interest charge on any of the outstanding amount of the debt;
(b) the day before the first day, after the due day, on which the person has paid all the payments that have so far become due and payable under the arrangement;
(c) the day before the day the arrangement is terminated under section 1234.
(3) The interest charge for a day in the period described in subsection (2) is worked out by multiplying the interest charge rate for that day by the sum of so much of the following amounts as remains unpaid:
(a) the outstanding amount of the debt;
(b) the interest charge from previous days.
Note 1: For interest charge rate see section 1229D.
Note 2: The interest charge for a day is due and payable to the Commonwealth at the end of that day and is a debt due to the Commonwealth: see section 1229C.
Repayment arrangement is terminated
(4) If:
(a) an arrangement is in effect under section 1234 in relation to a person and a debt; and
(b) the arrangement is then terminated under section 1234 on a day (the termination day);
then:
(c) the following amounts (if any) are due and payable on the 14th day after the termination day:
(i) the outstanding amount of the debt;
(ii) interest charge on any of the outstanding amount of the debt; and
(d) if, at the end of that 14th day, any of those amounts remains unpaid, the person is liable to pay, by way of penalty, interest charge, worked out under subsection (6), for each day in the period described in subsection (5).
Note: For exemptions, see sections 1229E and 1229F.
(5) The period starts at the beginning of the day after that 14th day and ends at the end of the earlier of the following days:
(a) the last day at the end of which any of the following remains unpaid:
(i) the outstanding amount of the debt;
(ii) interest charge on any of the outstanding amount of the debt;
(b) the day before the first day, after that 14th day, on which the person makes a payment under another arrangement under section 1234 in relation to the debt.
(6) The interest charge for a day in the period described in subsection (5) is worked out by multiplying the interest charge rate for that day by the sum of so much of the following amounts as remains unpaid:
(a) the outstanding amount of the debt;
(b) the interest charge from previous days.
Note 1: For interest charge rate see section 1229D.
Note 2: The interest charge for a day is due and payable to the Commonwealth at the end of that day and is a debt due to the Commonwealth: see section 1229C.
1229C Other rules for interest charge
When interest charge is due and payable
(1) The interest charge under section 1229A or 1229B for a day is due and payable to the Commonwealth at the end of that day.
Interest charge is a debt
(2) The interest charge under section 1229A or 1229B for a day is a debt due to the Commonwealth by the person.
Provisions that do not apply to interest charge debt
(3) Subsection 1229(1) does not apply in relation to the debt referred to in subsection (2) of this section.
1229D What is the interest charge rate?
(1) For the purposes of sections 1229A and 1229B, the interest charge rate for a day is the rate worked out by adding 7 percentage points to the base interest rate for that day, and dividing that total by the number of days in the calendar year.
(2) The base interest rate for a day depends on which quarter of the year the day is in. For each day in a quarter in column 1 of the table, it is the monthly average yield of 90‑day Bank Accepted Bills published by the Reserve Bank of Australia for the month in column 2 of the table.
Base interest rate |
Item | Column 1
For days in this quarter: | Column 2
the monthly average yield of 90‑day Bank Accepted Bills for this month applies: |
1 | 1 January to 31 March | the preceding November |
2 | 1 April to 30 June | the preceding February |
3 | 1 July to 30 September | the preceding May |
4 | 1 October to 31 December | the preceding August |
(3) If the monthly average yield of 90‑day Bank Accepted Bills for a particular month in column 2 of the table in subsection (2) is not published by the Reserve Bank of Australia before the beginning of the relevant quarter, assume that it is the same as the last monthly average yield of 90‑day Bank Accepted Bills published by the Reserve Bank of Australia before that month.
(4) The base interest rate must be rounded to the second decimal place (rounding .005 upwards).
1229E Exemption from interest charge—general
(1) A person is not liable to pay interest charge under section 1229A or 1229B if on the day before the start of the period in respect of which the person would otherwise have been liable to pay that charge:
(a) the person is receiving a social security payment; or
(b) the person is receiving a payment of pension, veteran payment or allowance under the Veterans’ Entitlements Act; or
(c) the person is receiving instalments of family tax benefit; or
(d) the person is receiving instalments under the ABSTUDY scheme (also known as the Aboriginal Study Assistance Scheme) that includes an amount identified as living allowance; or
(e) the person is receiving instalments under the Assistance for Isolated Children Scheme; or
(f) the circumstances determined in an instrument under subsection (2) apply in relation to the person.
(2) The Minister may, by legislative instrument, determine circumstances for the purposes of paragraph (1)(f).
1229F Exemption from interest charge—Secretary’s determination
(1) The Secretary may determine that interest charge is not payable, or is not payable in respect of a particular period, by a person on the outstanding amount of a debt.
(2) 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.
(3) The determination may relate to a period before, or to a period that includes a period before, the making of the determination.
(4) The determination may be expressed to be subject to the person complying with one or more specified conditions.
(5) If the determination is expressed to be subject to the person complying with one or more specified conditions, the Secretary must give written notice of the determination to the person as soon as practicable after the determination is made.
(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.
(7) The Secretary may cancel or vary the determination by written notice given to the person.
1229G Guidelines on interest charge provisions
The Minister may, by legislative instrument, determine guidelines relating to the operation of the provisions of this Part dealing with interest charge.
1230 Debt from failure to comply with garnishee notice
(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 or Part 3B or 3D of the Administration 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.
(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.
(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.
(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.
(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
(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.
(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.
(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.
(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.
(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, 1227B, 1228 and 1228B 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
(1) Subject to subsection (2), a debt due to the Commonwealth under this Act or Part 3B or 3D of the Administration 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.
(2) Subject to subsection (3), a debt due to the Commonwealth under this Act or Part 3B or 3D of the Administration 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.
(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.
(4) A debt due to the Commonwealth under section 1184G is recoverable by the Commonwealth by means of legal proceedings.
(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.
Part 5.3—Methods of recovery
1231AA Application of sections dealing with deductions
Sections 1231 and 1234A provide for debt recovery by deductions in the following situations:
(a) section 1231—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
(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;
(b) an overpayment arising under an Act or scheme referred to in subsection 1228(2);
(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);
(bb) a debt described in subsection 1228(2A) or (2B);
(bc) an overpayment described in subsection 1228(3);
(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.
(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.
(1AA) However, the Secretary:
(a) 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; and
(b) must not make a determination that would reduce (including reduce to nil) an economic security strategy payment, essential medical equipment payment or training and learning bonus, unless the person to whom the payment or bonus:
(i) is to be made; or
(ii) would, apart from the deduction, be made;
has requested that the Secretary determine under this section the amount of a deduction that is to be made from the payment or bonus; and
(c) must not make a determination that would reduce (including reduce to nil) a payment of a student start‑up loan.
(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.
(2) 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.
1232 Legal proceedings
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 jurisdiction.
1233 Garnishee notice
(1) If a debt is recoverable from a person (in this section called the debtor) by the Commonwealth under section 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.
(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.
(3) A person who fails to comply with a notice under subsection (1) commits 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).
(3A) Subsection (3) applies only to the extent to which the person is capable of complying with the notice.
(3B) Strict liability applies to the element of an offence against subsection (3) that a notice is a notice under subsection (1).
(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.
(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.
(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.
(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.
(7F) This section applies to money in spite of any law of a State or Territory (however expressed) under which the amount is inalienable.
(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
(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.
(1A) If a person is required to make a payment under an arrangement entered into under subsection (1) before the end of a particular day, the person must make that payment before the end of that day.
(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).
(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.
(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.
(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
(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.
(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.
(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.
(3) A financial institution must comply with a notice given to it under subsection (1) or (2).
Penalty: 300 penalty units.
(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.
(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
(1) If:
(a) a person (in this section called the debtor) incurs a debt under this Act, Part 3B or 3D of the Administration 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 2014, the Paid Parental Leave Act 2010 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 (other than a student start‑up loan) 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.
(2) The debtor’s debt is reduced by an amount equal to the amount deducted from the consenting person’s social security payment.
(3) The consenting person may revoke the consent at any time.
1234B No time limit on debt recovery action
For the purposes of this Chapter, legal proceedings, or any action under a provision of this Chapter, for the recovery of a debt or overpayment may be commenced or taken at any time.
Part 5.4—Non‑recovery of debts
1235 Meaning of debt
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
(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.
(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.
(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(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.
(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.
(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).
(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 Application
(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.
(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
(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, 1237AAD or 1237AB and, if the debt is an assurance of support debt, subject to section 1237AAE.
When waiver takes effect
(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
(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).
(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
(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
(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
(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.
(2) For the purposes of this section, a proportion of a debt may be 100% of the debt.
1237AAA Waiver of small debt
(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.
(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
(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
(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
(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
(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
(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
(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 by legislative instrument.
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).
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
(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).
(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
(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.
(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
(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
(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)
(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
(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, the Administration 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
(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.
(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.
(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.
(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.
(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
(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 or Part 3B or 3D of the Administration Act that are included in a class of debts specified, by legislative instrument, by the Minister.
(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).
(3) A legislative instrument under subsection (1) does not commence before the end of the period for disallowing the instrument.
Part 5.5—Departure prohibition orders
Division 1—Secretary may make departure prohibition orders
1240 Secretary may make departure prohibition orders
(1) The Secretary may make an order (a departure prohibition order) prohibiting a person from departing from Australia for a foreign country if:
(a) the person has one or more debts to the Commonwealth under the social security law; and
(b) there are not arrangements satisfactory to the Secretary for the one or more debts to be wholly paid; and
(c) the Secretary believes on reasonable grounds that it is desirable to make the order for the purpose of ensuring that the person does not depart from Australia for a foreign country without:
(i) having wholly paid the one or more debts; or
(ii) there being arrangements satisfactory to the Secretary for the one or more debts to be wholly paid.
Matters to be taken into account in making order
(2) Before making an order under this section, the Secretary must have regard to the following matters:
(a) the capacity of the person to pay the one or more debts;
(b) whether any action has been taken to recover any such debt, and the outcome of the recovery action;
(c) the length of time for which any such debt has remained unpaid after the day on which it became due and payable;
(d) such other matters as the Secretary considers appropriate.
Form of order
(3) A departure prohibition order must be in a form approved by the Secretary.
Division 2—Departure from Australia of debtors prohibited
1241 Departure from Australia of debtors prohibited
A person must not depart from Australia for a foreign country if:
(a) a departure prohibition order in respect of the person is in force, and the person knows that the order is in force, or is reckless as to whether the order is in force; and
(b) the person’s departure is not authorised by a departure authorisation certificate, and the person knows that the departure is not authorised by such a certificate, or is reckless as to whether the departure is authorised by such a certificate.
Penalty: Imprisonment for 12 months.
Division 3—Other rules for departure prohibition orders
1242 Notification requirements for departure prohibition orders
(1) This section applies if the Secretary makes a departure prohibition order in respect of a person.
Notifying person of order
(2) The Secretary must notify the person that the order has been made.
(3) The notice must be in a form approved by the Secretary and must be given as soon as practicable after making the order.
Notifying other persons of order
(4) Unless the Secretary is satisfied that the person is an Australian citizen, the Secretary must give the Secretary of the Department administered by the Minister administering the Migration Act 1958 a copy of the order, and information likely to facilitate identification of the person, for the purposes of administering that Act.
(5) The Secretary must also give a copy of the order, and information likely to facilitate identification of the person for the purposes of this Part, to such other persons as the Secretary considers appropriate in the circumstances, being persons declared in an instrument under subsection (6).
(6) The Secretary may, by legislative instrument, declare persons for the purposes of subsection (5).
(7) The Secretary must give a copy of the order or information under subsection (4) or (5) as soon as practicable after making the order.
1243 Operation of departure prohibition order
(1) A departure prohibition order comes into force when it is made, and continues in force until it is revoked, or until it is set aside by a court.
Note: Division 5 deals with appeals to the Federal Court of Australia or the Federal Circuit Court of Australia against the making of departure prohibition orders.
(2) However, a departure prohibition order in respect of a person is not in force during any period when a deportation order in respect of the person is in force under the Migration Act 1958.
1244 Revocation and variation of departure prohibition orders
(1) The Secretary must revoke a departure prohibition order in respect of a person if:
(a) the person no longer has any debts to the Commonwealth under the social security law; or
(b) there are arrangements satisfactory to the Secretary for the one or more debts the person has to the Commonwealth under the social security law to be wholly paid; or
(c) the Secretary is satisfied that the one or more debts the person has to the Commonwealth under the social security law are completely irrecoverable.
(2) The Secretary may revoke or vary a departure prohibition order in respect of a person if the Secretary considers it desirable to do so.
(3) A revocation or variation, under this section, of a departure prohibition order may be:
(a) on application by the person in a form approved by the Secretary; or
(b) on the Secretary’s own initiative.
1245 Notification requirements for revocations and variations
(1) If the Secretary revokes or varies a departure prohibition order in respect of a person, the Secretary must give notice of the revocation or variation to:
(a) the person; and
(b) each person to whom a copy of the departure prohibition order was given under subsection 1242(4) or (5).
(2) If:
(a) a person makes an application under paragraph 1244(3)(a) for the revocation or variation of a departure prohibition order; and
(b) the Secretary refuses to revoke or vary the order;
the Secretary must give notice of the refusal to the person.
(3) A notice under this section must be in a form approved by the Secretary and must be given as soon as practicable after the decision concerned is made.
Division 4—Departure authorisation certificates
1246 Application for departure authorisation certificate
(1) A person in respect of whom a departure prohibition order is in force may apply for a certificate (a departure authorisation certificate) authorising the person to depart from Australia for a foreign country.
(2) The application must be in a form approved by the Secretary.
1247 When Secretary must issue departure authorisation certificate
(1) This section applies if a person makes an application under section 1246 for a departure authorisation certificate.
(2) The Secretary must issue the departure authorisation certificate if the Secretary is satisfied:
(a) that, if the certificate is issued:
(i) it is likely that the person will depart from Australia and return to Australia within a period that the Secretary considers appropriate; and
(ii) it is likely that, within a period that the Secretary considers appropriate, the Secretary will be required by subsection 1244(1) to revoke the departure prohibition order in respect of the person; and
(b) that it is not necessary for the person to give security under section 1248 for the person’s return to Australia.
(3) If the Secretary is not satisfied as mentioned in subsection (2), the Secretary must issue the departure authorisation certificate if:
(a) the person has given security under section 1248 for the person’s return to Australia; or
(b) if the person is unable to give such security, the Secretary is satisfied:
(i) that the certificate should be issued on humanitarian grounds; or
(ii) that refusing to issue the certificate will be detrimental to Australia’s interests.
1248 Security for person’s return to Australia
(1) A person may give such security as the Secretary considers appropriate by bond, deposit or any other means, for the person’s return to Australia by such day as is agreed by the person and the Secretary and is specified in the departure authorisation certificate.
(2) The Secretary may substitute a later day for the day mentioned in subsection (1):
(a) on application by the person in a form approved by the Secretary; or
(b) on the Secretary’s own initiative.
(3) The Secretary may refuse an application by a person to substitute a later day if:
(a) the person refuses to increase the value of the security already given to a level that the Secretary considers appropriate; or
(b) the person refuses to give such further security as the Secretary considers appropriate; or
(c) the Secretary considers that it would not be appropriate to substitute the later day.
1249 What departure authorisation certificate must authorise
(1) A departure authorisation certificate in respect of a person must authorise the departure of the person on or before the seventh day after a day specified in the certificate.
(2) The day specified in the certificate must be a day that is after the day on which the certificate is issued, but not more than 7 days after that day.
1250 Notification requirements for departure authorisation certificates
(1) If the Secretary issues a departure authorisation certificate in respect of a person, the Secretary must, as soon as practicable, give a copy of the certificate to:
(a) the person; and
(b) each person to whom a copy of the departure prohibition order in respect of the person was given under subsection 1242(4) or (5).
(2) If:
(a) a person makes an application under section 1246 for a departure authorisation certificate; and
(b) the Secretary refuses to issue the certificate;
the Secretary must give notice of the refusal to the person.
(3) The notice must be in a form approved by the Secretary and must be given as soon as practicable after the refusal.
1251 Notification requirements for substituted days
(1) If, under section 1248, the Secretary substitutes a later day for a person’s return to Australia, the Secretary must give notice of that decision to:
(a) the person; and
(b) each person to whom a copy of the departure prohibition order in respect of the person was given under subsection 1242(4) or (5).
(2) If:
(a) a person makes an application under paragraph 1248(2)(a) to substitute a later day for the person’s return to Australia; and
(b) the Secretary refuses the application;
the Secretary must give notice of the refusal to the person.
(3) A notice under this section must be in a form approved by the Secretary and must be given as soon as practicable after the decision concerned is made.
Division 5—Appeals and review in relation to departure prohibition orders and departure authorisation certificates
1252 Appeals to courts against making of departure prohibition orders
(1) A person aggrieved by the making of a departure prohibition order may appeal to the Federal Court of Australia or the Federal Circuit Court of Australia against the making of the order.
(2) This section has effect subject to Chapter III of the Constitution.
1253 Jurisdiction of courts
The jurisdiction of a court under section 1252 must be exercised by a single Judge.
1254 Orders of court on appeal
A court hearing an appeal under section 1252 against the making of a departure prohibition order may, in its discretion:
(a) make an order setting aside the order; or
(b) dismiss the appeal.
1255 Review of decisions
(1) Applications may be made to the Administrative Appeals Tribunal for review of a decision of the Secretary under section 1244, 1247 or 1248.
(2) Despite any provision of Parts 4 and 4A of the Administration Act, those Parts do not apply in relation to any decision of the Secretary under this Part.
Division 6—Enforcement
1256 Powers of officers of Customs and members of the Australian Federal Police
(1) This section applies if an officer (within the meaning of the Customs Act 1901), or a member of the Australian Federal Police, believes on reasonable grounds that:
(a) a person is about to depart from Australia for a foreign country; and
(b) a departure prohibition order in respect of the person is in force; and
(c) the person’s departure is not authorised by a departure authorisation certificate.
(2) The officer or member may:
(a) take such steps as are reasonably necessary to prevent the person’s departure, including, but not limited to, steps to prevent the person going on board, or to remove the person from, a vessel or aircraft in which the officer or member believes on reasonable grounds the departure will take place; and
(b) require the person to answer questions or produce documents to the officer or member for the purposes of working out whether:
(i) a departure prohibition order in respect of the person is in force; and
(ii) if such an order in respect of the person is in force—whether the person’s departure is authorised by a departure authorisation certificate.
(3) A person commits an offence if:
(a) the person is subject to a requirement under paragraph (2)(b); and
(b) the person refuses or fails to comply with the requirement.
Penalty: 30 penalty units.
(4) Subsection (3) does not apply if the person answers the question or produces the document to the extent that the person is capable of answering the question or producing the document.
Note: A defendant bears an evidential burden in relation to the matters mentioned in subsection (4): see subsection 13.3(3) of the Criminal Code.
1257 Privilege against self‑incrimination
(1) An individual is not excused from answering a question, or producing a document, under paragraph 1256(2)(b) on the ground that the answer to the question or the production of the document might tend to incriminate the individual or expose the individual to a penalty.
(2) However:
(a) the answer given or document produced; and
(b) answering the question or producing the document; and
(c) any information, document or thing obtained as a direct or indirect consequence of the answering of the question or producing the document;
are not admissible in evidence against the individual in any criminal proceedings, other than proceedings under section 137.1 or 137.2 of the Criminal Code in relation to answering the question or producing the document.
1258 Production of authority to depart
(1) If:
(a) a departure prohibition order in respect of a person is in force; and
(b) the person is about to depart from Australia for a foreign country; and
(c) the person’s departure is authorised by a departure authorisation certificate;
an officer (within the meaning of the Customs Act 1901), or a member of the Australian Federal Police, may request the person to give a copy of the certificate to the officer or member for inspection.
(2) A person commits an offence of strict liability if:
(a) an officer (within the meaning of the Customs Act 1901), or a member of the Australian Federal Police, has made a request of the person under subsection (1); and
(b) the person refuses or fails to comply with the request.
Penalty for contravention of this subsection: 5 penalty units.
Division 7—Interpretation
1259 Interpretation—departure from Australia for foreign country
A reference in this Part to the departure of a person from Australia for a foreign country is a reference to the departure of the person from Australia for a foreign country, whether or not the person intends to return to Australia.
1260 Meaning of Australia
(1) For the purposes of this Part, Australia, when used in a geographical sense, includes the external Territories.
(2) For the purposes of this section:
(a) the definition of external Territory in subsection 23(1) does not apply; and
(b) external Territory has the meaning given by section 2B of the Acts Interpretation Act 1901.
