Commonwealth Coat of Arms of Australia

Social Security Act 1991

No. 46, 1991

Compilation No. 218

Compilation date: 29 March 2024

Includes amendments: Act No. 100, 2023

Registered: 8 April 2024

This compilation is in 5 volumes

Volume 1: sections 1–661F

Volume 2: sections 665A–1067L

Volume 3: sections 1068–1263

 Schedule 1A

Volume 4: Endnotes 1–4

Volume 5: Endnote 5

Each volume has its own contents

About this compilation

This compilation

This is a compilation of the Social Security Act 1991 that shows the text of the law as amended and in force on 29 March 2024 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.

Selfrepealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

 

 

 

Contents

Chapter 3—General provisions relating to payability and rates

Part 3.6—Benefit Rate Calculator B

1068 Rate of jobseeker payment

Benefit Rate Calculator B

Module A—Overall rate calculation process

Module B—Maximum basic rate

Module BA—Pension supplement 

Module C—Energy supplement

Module D—Pharmaceutical allowance

Module G—Income test

Module J—Remote area allowance

Part 3.6A—Parenting Payment Rate Calculator

1068A Rate of parenting payment—pension PP (single)

Pension PP (Single) Rate Calculator

Module A—Overall rate calculation process

Module B—Maximum basic rate

Module BA—Pension supplement

Module BB—Energy supplement

Module C—Pharmaceutical allowance

Module E—Ordinary income test

Module F—Remote area allowance

1068B Rate of parenting payment—PP (partnered)

Benefit PP (Partnered) Rate Calculator

Module A—Overall rate calculation process

Module C—Maximum basic rate

Module D—Income test

Module DA—Pension supplement

Module DB—Energy supplement

Module E—Pharmaceutical allowance

Module G—Remote area allowance

Part 3.7—Rent assistance

Division 1—Operation of this Part

1070 When this Part applies

1070A Effect of this Part

Division 2—Qualification for rent assistance

1070B Qualification—general rule

1070C Common requirements (about aged care residence, home ownership and rent)

1070D Specific requirement (carer payments and certain age and disability support pensions)

1070E Specific requirement (certain parenting payments)

1070F Specific requirement (certain disability support pensions)

1070G Specific requirement (youth allowance)

1070H Specific requirement (austudy payment and jobseeker payment)

1070J Specific requirement (certain parenting payments)

Division 3—Rate of rent assistance

1070K Rate depends on social security payment and family situation

1070L Rate for carer payments and certain age and disability support pensions

1070M Rate for certain parenting payments

1070N Rate for disability support pension (person aged under 18)

1070P Rate for disability support pension (person aged between 18 and 21)

1070Q Rate for youth allowance, austudy payment and jobseeker payment

1070R Rate for certain parenting payments

Division 4—Certain concepts used in this Part

1070S Division has effect for purposes of Part

1070T Rent threshold amount

1070U Fortnightly rent

1070V Rent paid by a member of certain couples

1070W Partner with a rent increased pension

1070X Partner with a rent increased benefit

Part 3.9—Seniors Health Card Income Test Calculator

1071 Seniors Health Card Income Test Calculator

Seniors Health Card Income Test Calculator

Part 3.9A—Health Care Card Income Test Calculator

1071A Health care card income test

Health Care Card Income Test Calculator

Part 3.10—General provisions relating to the ordinary income test

Division 1—Ordinary income concept and treatment of certain income amounts

1072 General meaning of ordinary income

1072A Treatment of certain lump sum payments

1073 Certain amounts taken to be received over 12 months

Division 1AAA—Work bonus

1073AA Work bonus

1073AAA Meaning of gainful work

1073AB Unused concession balance

Division 1AA—Employment income attribution rules

1073A Attribution of employment income paid in respect of a particular period or periods

1073B Attribution of employment income paid monthly

1073BA Attribution of employment income paid not in respect of a particular period

1073BB Antiavoidance

1073BC Exclusion of certain payments

1073BD Daily attribution of employment income for amounts not elsewhere covered in this Division

1073C Fortnightly or yearly expression of attributed employment income

Division 1AB—Working credit accrual and depletion rules and their consequences

1073D To whom do working credit accrual and depletion rules apply?

1073E Opening balance

1073F Working out accruals and depletions of working credit for social security beneficiaries

1073G Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary

1073H Working out accruals and depletions of working credit for social security pensioners

1073I Working out the effect of a working credit depletion on the yearly rate of ordinary income for a social security pensioner

1073J Working credit balance prevents loss of qualification in certain cases

Division 1A—Business income

1074 Ordinary income from a business—treatment of trading stock

1075 Permissible reductions of business income

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

1077 Deemed income from financial assets—members of pensioner couples

1078 Deemed income from financial assets—members of nonpensioner couples

1081 Deeming threshold

1082 Below threshold rate, above threshold rate

1083 Actual return on financial assets not treated as ordinary income

1084 Certain money and financial investments not taken into account

1084A Valuation and revaluation of certain financial investments

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

1098 Income from assettest exempt income stream

1099 Income—income stream not a defined benefit income stream

1099A Income—income stream is a defined benefit income stream

1099AA Income from marketlinked assettest exempt income stream

1099B Income from assettested income stream (long term)

1099C Income—assettested income stream (long term) that is not a defined benefit income stream

1099D Income—assettested income stream (long term) that is a defined benefit income stream

1099DAA Income from certain lowpayment assettested income streams

1099DAB Income—assettested income stream (lifetime)

Subdivision C—Family law affected income streams

1099DA Scope of Subdivision

1099DB Income from assettest exempt income streams

1099DC Income from assettested income stream (long term)

1099DCA Income from assettested income stream (lifetime)

1099DD Decisionmaking principles

Division 1D—Aged care accommodation bonds: certain transactions before 6 November 1997

1099E Scope of Division

1099F Exempt bond amount does not count as income

1099G Person’s ordinary income reduced using financial asset rules

1099H Meaning of exempt bond amount

Division 1E—Refunds to charge exempt residents

1099J Scope of Division

1099K Refunded amount does not count as income

1099L Person’s ordinary income reduced using financial asset rules

1099M Application of Division

Division 2—Conversion of foreign currency amounts

1100 How value of a payment received in a foreign currency is to be determined

1100A Determining value of a payment originally denominated in a foreign currency but made in Australian currency

Division 3—Disposal of ordinary income

1106 Disposal of ordinary income

1107 Amount of disposition

1108 Disposal of ordinary income—individuals

1109 Disposal of ordinary income—members of couples

1111 Dispositions more than 5 years old to be disregarded

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

1118A Value of superannuation investments determined by Minister to be disregarded

1118AA Value of assets reduced by amounts received from Mark Fitzpatrick Trust

1118AB Value of person’s assets reduced: certain transactions to do with aged care accommodation bonds

1118AC Value of person’s assets reduced: refunds to charge exempt residents

1119 Value of assettested income streams that are not defined benefit income streams, assettested income streams (lifetime) or family law affected income streams

1120 Value of assettested income streams that are defined benefit income streams

1120AA Value of assettested income streams (lifetime) that are managed investments

1120AB Value of assettested income streams (lifetime) that are not managed investments

1120A Value of assettested FLA income streams

1120B Value of partially assettest exempt income streams

1120C Value of superannuation reserves for superannuation funds of 4 members or less

1121 Effect of charge or encumbrance on value of assets

1121A Effect of certain liabilities on value of assets used in primary production

1121B Value of life policy

1122 Loans

Division 2—Disposal of assets

1123 Disposal of assets

1124 Amount of disposal or disposition

1124A Disposal of assets in prepension years—individuals

1125 Disposal of assets in pension years—individuals

1125A Disposal of assets in prepension years—members of couples

1126 Disposal of assets in pension years—members of couples

1126AA Disposal of assets in income year—individuals

1126AB Disposals of assets in 5 year period—individuals

1126AC Disposal of assets in income year—members of couples

1126AD Disposal of assets in 5 year period—members of couples

1126A Disposal of assets in prepension year—family members

1126B Disposal of assets in pension year—family members

1126C Disposal of assets in income year—family members

1126D Disposals of assets in 5 year period—family members

1126E Modification of this Division in respect of certain assets

1127 Disposition more than 5 years old to be disregarded

1127A Division does not apply for purposes of care receiver assets test

Division 3—Financial hardship

1129 Access to financial hardship rules—pensions

1130 Application of financial hardship rules—pensions

1130A Division does not apply for purposes of care receiver assets test

1130B Access to financial hardship rules—pension PP (single)

1130C Application of financial hardship rules—pension PP (single)

1131 Access to financial hardship rules—benefits

1132 Application of financial hardship rules—benefits

Division 4—Pension loans scheme

1133AA Pension loans scheme definitions

1133 Qualification for participation in pension loans scheme

1134 Effect of participation in pension loans scheme—pension rate

1134A Pension loans scheme advance payment

1135 Effect of participation in pension loans scheme—creation of debt

1135A Effect of participation in pension loans scheme—maximum loan available

1136 Need for a request to participate

1137 Need for a request to later nominate or change nominated amount or rate of pension

1137AA Need for a request for a pension loans scheme advance payment

1137A Nonreceipt of social security pension or social security payment

1138 Existence of debt results in charge over real assets

1139 Debt not to be recovered until after death

1140 Enforcement of charge

1141 Person ceases to participate in pension loans scheme if debt exceeds maximum loan available

1141A Secretary may cease person’s participation in pension loans scheme

1142 Person withdraws from pension loans scheme

1142A Repayment or recovery of debt after pension loans scheme ceases to operate

1143 Registration of charge

1144 Manner of enforcement of charge

1144AA No negative equity guarantee

1144A Division does not apply for purposes of care receiver assets test

Division 5—Provisions relating to special residences and special residents

Subdivision A—General

1145A Application of Division to granny flat residents

1146 Basis for different treatment

1147 Entry contribution

1148 Extra allowable amount

1149 Renegotiation of retirement village agreement

Subdivision B—Residents who are not members of a couple

1150 Residents who are not members of a couple

Subdivision C—Residents who are members of couple and share principal home

1151 Members of couples

Subdivision D—Residents who are members of illness separated couple

1152 Members of illness separated couples (both in special residences)

1153 Members of illness separated couples (partner not in special residence and partner homeowner)

1154 Members of illness separated couples (partner not in special residence and partner not homeowner)

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)

1156 Members of ordinary couple with different principal homes (partner not in special residence and partner homeowner)

1157 Members of ordinary couple with different principal homes (partner not in special residence and partner not homeowner)

Part 3.12A—Provisions for carer allowance and seniors health card income test

Division 1—Purpose of this Part

1157A Purpose of Part

Division 2—Benefits that may be assessable fringe benefits

1157B Benefits received in or outside Australia

1157C Car benefits

1157D Exempt car benefits

1157E School fees benefits

1157F Health insurance benefits

1157G Loan benefits

1157H Exempt loan benefit

1157I Housing benefits

1157J Exempt housing benefits—livein residential care workers

1157JA Expense benefits

1157JB Exempt expense benefit

1157JC Financial investment benefit

Division 3—Value of car fringe benefits

1157K Method of valuing car fringe benefits

1157L Value of car fringe benefits

1157M Minister may determine alternative method of valuing car fringe benefits

Division 4—Value of school fees fringe benefits

1157N Value of school fees fringe benefits

Division 5—Value of health insurance fringe benefits

1157O Value of health insurance fringe benefits

Division 6—Value of loan fringe benefits

1157P Method of valuing loan fringe benefits

1157Q Value of loan fringe benefits

1157R Minister may determine alternative method of valuing loan fringe benefits

Division 7—Value of housing fringe benefits

Subdivision A—Grants of housing rights

1157S Methods of valuing housing fringe benefits—grants of housing rights

1157T Value of grants of housing rights—general

1157TA Value of grants of housing rights—employees of the Defence Force

Subdivision B—Payments associated with loans

1157TB Method of valuing housing fringe benefits—payments associated with loans

1157TC Value of payments associated with loans

Subdivision C—Payments associated with enjoying housing rights

1157TD Methods of valuing housing fringe benefits—payments associated with enjoying housing rights

1157TE Value of payments associated with enjoying housing rights—general

1157TF Value of payments associated with enjoying housing rights—employees of the Defence Force

Subdivision D—Alternative methods of valuing housing fringe benefits

1157U Minister may determine alternative method of valuing housing fringe benefits

Division 8—Value of expense fringe benefit

1157UA Value of expense fringe benefits

Division 9—Value of financial investment fringe benefit

1157UB Value of financial investment fringe benefit

Division 10—Foreign currency rates

1157V Foreign currency rates

Part 3.13—Imprisonment

1158 Some social security payments not payable during period in gaol or in psychiatric confinement following criminal charge

1159 Payment may be redirected to dependent partner or child

1159A Person not qualified for some concession cards when in gaol or in psychiatric confinement following criminal charge

Part 3.14—Compensation recovery

Division 1—General

1160 General effect of Part

1161 Application of Part

1161A Application of Part to supplementary compensation affected payments

1162 Part to bind Crown

1163 Interpretation

1164 Certain lump sums to be treated as though they were received as periodic compensation payments

1165 Effect of certain State and Territory laws

Division 2—Enforcement of compensation rights

1166 Secretary may require person to take action to obtain compensation

1167 Failure to comply with a requirement to take action to obtain compensation

Division 3—Receipt of compensation

1168 Application

1169 Compensation affected payment not payable during lump sum preclusion period

1170 Lump sum preclusion period

1171 Deemed lump sum payment arising from separate payments

1172 Lump sum compensation not counted as ordinary income

1173 Effect of periodic compensation payments on rate of person’s compensation affected payment

1174 Effect of periodic compensation payments on rate of partner’s compensation affected payment

1175 Rate reduction under both income/assets test and this Part

1176 Periodic compensation not counted as ordinary income

Division 4—Recoverable amounts

Subdivision A—Preliminary

1177 Interpretation

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

1179 The section 1178 recoverable amount

1180 Repayment where both periodic compensation payments and payments of compensation affected payment have been received

1181 The section 1180 recoverable amount

Subdivision C—Recovery from compensation payers and insurers

1182 Secretary may send preliminary notice to potential compensation payer or insurer

1183 Potential compensation payer or insurer must notify Secretary of liability

1184 Secretary may send recovery notice to compensation payer or insurer

1184A The section 1184 recoverable amount

1184B Preliminary notice or recovery notice suspends liability to pay compensation

1184C Compensation payer’s or insurer’s payment to Commonwealth discharges liability to compensation claimant

1184D Offence to make compensation payment after receiving preliminary notice or recovery notice

1184E Liability of compensation payer or insurer to pay the Commonwealth if there is a contravention of section 1184D

Division 5—Recoverable debts

1184F Debts resulting from notices under section 1178 or 1180

1184G Debts resulting from notices under section 1184

1184H Debts resulting from contravention of section 1184D

1184I Compensation arrears debts

Division 6—Miscellaneous

1184J Secretary may give recovery notice either to compensation payer or to insurer but not to both

1184K Secretary may disregard some payments

1184L Application to review compensation decision—disability support pension

Part 3.15—Selfemployment programs

1186 General effect of Part

1187 Reduction in rate of payments under this Act if recipient or partner also receiving payments under a selfemployment program

1188 Rate reduction under this Part

Part 3.16—Indexation and adjustment of amounts

Division 1—Preliminary

1189 Analysis of Part

1190 Indexed and adjusted amounts

Division 2—CPI indexation

1191 CPI Indexation Table

1192 Indexation of amounts

1193 Indexation factor

1194 Rounding off indexed amounts

1195 Certain indexed amounts to be increased in line with increases in Male Total Average Weekly Earnings

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

1197 Living cost indexation factor

1198 Rounding off amounts

Division 4—Adjustment of other rates

1198A Adjustment of single pension rate MBR amounts

1198B Adjustment of disability support pension (under 21) MBRs

1198C Adjustment of youth disability supplement

1203 Adjustment of pension “single nonhomeowner” AVL

1204 Adjustment of benefit AVLs

1205 Adjustment of special illness separated special resident AVL

1206A Adjustment of certain pharmaceutical allowance rates

1206B Adjustment of certain telephone allowance rates

Part 3.16A—Advance payment deductions

1206H Advance payment deduction

1206J Amount of advance payment deduction—basic calculation

1206K Person may request larger advance payment deduction

1206L Reduction of advance payment deduction in cases of severe financial hardship

1206M The final advance payment deduction

1206N Provisional payment rate insufficient to cover advance payment deduction

1206P Rounding of amounts

Part 3.16B—Special employment advance deductions

1206Q Special employment advance deduction

1206R Amount of special employment advance deduction—basic calculation

1206S Person may request larger special employment advance deduction

1206T Reduction of special employment advance deduction in cases of severe financial hardship

1206U The final special employment advance deduction

1206V Provisional payment rate insufficient to cover special employment advance deduction

1206W Rounding of amounts

Part 3.18—Means test treatment of private companies and private trusts

Division 1—Introduction

1207 Simplified outline

1207A Definitions

1207B Relatives

1207C Associates

1207D When a company is sufficiently influenced by an entity

1207E Majority voting interest in a company

1207F Entitled to acquire

1207G Transfer of property or services

1207H Constructive transfers of property or services to an entity

1207J Active involvement with a primary production enterprise

1207K Power to veto decisions of a trustee

1207L Extraterritorial operation

1207M Application to things happening before commencement

Division 2—Designated private companies

1207N Designated private companies

Division 3—Designated private trusts

1207P Designated private trusts

Division 4—Controlled private companies

1207Q Controlled private companies

1207R Direct voting interest in a company

1207S Voting power

1207T Direct control interest in a company

1207U Interest in a share

Division 5—Controlled private trusts

1207V Controlled private trusts

1207W Interest in a trust

Division 6—Attributable stakeholders and attribution percentages

1207X Attributable stakeholder, asset attribution percentage and income attribution percentage

Division 7—Attribution of income of controlled private companies and controlled private trusts

1207Y Attribution of income

1207Z No double counting of attributed income

1208 Ordinary income of a company or trust

1208A Ordinary income from a business—treatment of trading stock

1208B Permissible reductions of business and investment income

1208C Derivation periods

1208D Attribution periods

Division 8—Attribution of assets of controlled private companies and controlled private trusts

1208E Attribution of assets

1208F When attributed asset is unrealisable

1208G Effect of charge or encumbrance on value of assets

1208H Effect of unsecured loan on value of assets

1208J Value of company’s or trust’s assets etc.

Division 9—Modification of asset deprivation rules

1208K Individual disposes of asset to company or trust

1208L Disposal of asset by company or trust

1208M Individual ceases to be an attributable stakeholder of a company or trust

1208N Individual disposes of asset to company or trust before 1 January 2002—individual is attributable stakeholder

1208P Individual disposes of asset to company or trust before 1 January 2002—individual’s spouse is attributable stakeholder

Division 10—Modification of income deprivation rules

1208Q Individual disposes of ordinary income to company or trust

1208R Disposal of income by company or trust

1208S Individual disposes of income to company or trust before 1 January 2002—individual is attributable stakeholder

1208T Individual disposes of income to company or trust before 1 January 2002—individual’s spouse is attributable stakeholder

Division 11—Concessional primary production trusts

1208U Concessional primary production trusts

1208V Individual ceases to be an attributable stakeholder of trust—receipt of remuneration or other benefits from trust during asset deprivation period

1208W Net value of asset

1208X Value of entity’s assets

1208Y When asset is controlled by an individual

1208Z Adjusted net value of asset

1209 Adjusted net primary production income

1209A Net income of a primary production enterprise

1209B Net income from a primary production enterprise—treatment of trading stock

1209C Permissible reductions of income from carrying on a primary production enterprise

Division 12—Antiavoidance

1209D Antiavoidance

Division 13—Decisionmaking principles

1209E Decisionmaking principles

Division 14—Information management

1209F Transitional period

1209G Informationgathering powers

1209H Secretary may obtain tax information

1209J Disclosure of tax information

1209K Disclosure of tax file number information

Part 3.18A—Private financial provision for certain people with disabilities

Division 1—Special disability trusts

1209L What is a special disability trust?

1209M Beneficiary requirements

1209N Trust purpose requirements

1209P Trust deed requirements

1209Q Trustee requirements

1209R Trust property requirements

1209RA Trust expenditure requirements

1209S Reporting requirements

1209T Audit requirements

1209U Waiver of contravention of this Division

Division 2—Income of special disability trusts

1209V Attribution of income

1209X Income amounts from special disability trusts

Division 3—Assets of special disability trusts

1209Y Attribution of assets

Division 4—Transfers to special disability trusts

1209Z Effect of certain transfers to special disability trusts

1209ZA The effect of exceeding the $500,000 limit

1209ZB Transfers by the immediate family members prior to reaching pension age etc.

1209ZC Transfers by principal beneficiaries or partners

1209ZD Cessation of special disability trusts

1209ZE Effect of this Division

Part 3.19—Miscellaneous

1210 Application of income and assets test reductions and of compensation reductions for income tax purposes

1210A Effect of nil rate of pension etc.

Chapter 4—International agreements and portability

Part 4.2—Overseas portability

Division 1—Preliminary

1211 Social Security (International Agreements) Act overrides Part

1212 Meaning of terms used in this Part

1212A Meaning of acute family crisis

1212B Meaning of humanitarian purpose

1212C Meaning of temporary absence

1212D Part does not affect need for qualification

Division 2—Portability of social security payments

Subdivision A—Basic portability provisions

1213 Persons to whom Division applies

1214 Some payments generally portable with no time limit

1215 Some payments generally portable with time limit

1216 Amounts added to rate

1217 Meaning of maximum portability period, allowable absence and portability period

Subdivision B—Exceptions to Subdivision A rules

1218AAA Unlimited portability period for disability support pension—severely impaired disability support pensioner

1218AA Unlimited portability period for disability support pension—terminally ill overseas disability support pensioner

1218AB Extended portability period for disability support pension

1218 Exception—fulltime students outside Australia for purposes of Australian course

1218A Exception—Reserve service

1218B Exception—waiting period in Australia before parenting payment is portable

1218BA Exception—new apprentices

1218C Extension of person’s portability period—general

1218D Extension of person’s portability period—lifesaving medical treatment overseas

1220 No portability where claim based on short residence

Division 3—Rate of portable pensions

1220A Proportionality—age pension rate

1220B Proportionality—disability support pension rate for a severely disabled person

1221 Pension Portability Rate Calculator

Pension Portability Rate Calculator

Module A—Overall rate calculation process

Module B—Australian working life residence

Module C—Residence factor

Chapter 5—Overpayments and debt recovery

Part 5.1—Effect of Chapter

1222 General effect of Chapter

Part 5.2—Amounts recoverable under this Act

1222A Debts due to the Commonwealth

1223 Debts arising from lack of qualification, overpayment etc.

1223A Debt resulting from commutation of assettest exempt income stream contrary to subsection 9A(2), 9B(2) or 9BA(2)

1223AA Debts arising from prepayments and certain other payments

1223AB Debts arising from AAT stay orders

1223ABAA Debts arising in respect of oneoff payments to older Australians

1223ABA Debts arising in respect of oneoff payments to carers

1223ABAAA Debts arising in respect of economic security strategy payments

1223ABAAB Debts arising in respect of training and learning bonuses etc.

1223ABB Debts in respect of child disability assistance

1223ABC Debts in respect of carer supplement for 2009

1223ABD Debts in respect of carer supplement for 2010 and later years

1223ABE Debts in respect of relocation scholarship payments

1223ABF Debts in respect of student startup loans

1223ABG Debts in respect of oneoff energy assistance payments

1223ABH Debts in respect of 2019 oneoff energy assistance payments

1223ABI Debts in respect of first 2020 economic support payments

1223ABJ Debts in respect of second 2020 economic support payments

1223ABK Debts in respect of additional economic support payment 2020

1223ABL Debts in respect of additional economic support payment 2021

1223ABM Debts in respect of 2022 cost of living payment

1224 Debts relating to clean energy advances

1224A Debts relating to essential medical equipment payments

1224AA Person other than payee obtaining payment of a cheque

1224AB Joint and several liability for persons involved in contravention of Act

1224B Education entry payment debt

1224C Datamatching Program (Assistance and Tax) Acts debts

1224D Mobility allowance advance debts

1224E Debts arising from advance payments of social security entitlements

1224EA Debts arising from special employment advances of special employment advance qualifying entitlements

1227 Assurance of support debt

1227B Debts arising under Part 8 of the Student Assistance Act 1973 as in force before 1 July 1998

1228 Overpayments arising under other Acts and schemes

1228A Comparable foreign payment debt recovery

1228B Additional 10% penalty for understatement etc. of income

1229 Notices in respect of debt

1229A Interest charge—no repayment arrangement in effect

1229B Interest charge—failure to comply with or termination of repayment arrangement

1229C Other rules for interest charge

1229D What is the interest charge rate?

1229E Exemption from interest charge—general

1229F Exemption from interest charge—Secretary’s determination

1229G Guidelines on interest charge provisions

1230 Debt from failure to comply with garnishee notice

1230A Debt from failure before 1 July 1991 to comply with garnishee notice under the 1947 Act

1230B Overseas application of provisions

1230C Methods of recovery of debt

Part 5.3—Methods of recovery

1231AA Application of sections dealing with deductions

1231 Deductions from debtor’s pension, benefit or allowance

1232 Legal proceedings

1233 Garnishee notice

1234 Arrangement for payment of debt

1234AA Recovery of amounts from financial institutions

1234A Deductions by consent from social security payment of person who is not a debtor

1234B No time limit on debt recovery action

Part 5.4—Nonrecovery of debts

1235 Meaning of debt

1236 Secretary may write off debt

1236A Application

1237 Power to waive Commonwealth’s right to recover debt

1237A Waiver of debt arising from error

1237AA Waiver of debt relating to an offence

1237AAA Waiver of small debt

1237AAB Waiver in relation to settlements

1237AAC Waiver where debtor or debtor’s partner would have been entitled to an allowance

1237AAD Waiver in special circumstances

1237AAE Extra rules for waiver of assurance of support debts

1237AB Secretary may waive debts of a particular class

Part 5.5—Departure prohibition orders

Division 1—Secretary may make departure prohibition orders

1240 Secretary may make departure prohibition orders

Division 2—Departure from Australia of debtors prohibited

1241 Departure from Australia of debtors prohibited

Division 3—Other rules for departure prohibition orders

1242 Notification requirements for departure prohibition orders

1243 Operation of departure prohibition order

1244 Revocation and variation of departure prohibition orders

1245 Notification requirements for revocations and variations

Division 4—Departure authorisation certificates

1246 Application for departure authorisation certificate

1247 When Secretary must issue departure authorisation certificate

1248 Security for person’s return to Australia

1249 What departure authorisation certificate must authorise

1250 Notification requirements for departure authorisation certificates

1251 Notification requirements for substituted days

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

1253 Jurisdiction of courts

1254 Orders of court on appeal

1255 Review of decisions

Division 6—Enforcement

1256 Powers of officers of Customs and members of the Australian Federal Police

1257 Privilege against selfincrimination

1258 Production of authority to depart

Division 7—Interpretation

1259 Interpretation—departure from Australia for foreign country

1260 Meaning of Australia

Chapter 6—Modification of social security law

1261 Simplified outline of this Chapter

1262 Minister may determine modifications of social security law

1263 Period that determination is in force and variation and revocation

Schedule 1A—Savings and transitional provisions

Part 1—General

1 Correspondence of pensions, benefits and allowances

2 Correspondence of provisions

2A References in other Acts and instruments to provisions of the 1947 Act

Part 2—Savings and Transitional Provisions Applicable on the Transition from the 1947 Act to this Act

Division 4—Continuation of earlier savings provisions

28 Rent assistance—retirement village residents (changes introduced on 13 June 1989)

Part 3—Saving and Transitional Provisions Applicable after the Commencement of this Act

36 Incentive allowance (changes introduced on 12 November 1991)

63 Rent assistance (changes introduced on 20 March 1993)

74 Partner allowance for persons born on or before 1 July 1955 (changes made on 1 July 1995)

86 Transitional and saving provisions applicable to the amendments relating to the pension loans scheme

88 Saving: Determinations under repealed sections 1099E and 1099L

96A Application of revised Schedule 1B

103 Application provision: income maintenance periods

105 Application and saving provisions: debts due to the Commonwealth and their recovery

105A Parenting payment (changes introduced 20 March 1998)

115 Persons under 21 receiving newstart allowance or sickness allowance on 17 June 1997

126 Application and transitional provisions relating to fares allowance

128 Saving provision—portability rules relating to rates of pension

128A Saving of certain pensions payable under 1986 Agreement between Australia and Italy

130 Saving provision—other portability rules

131 Certain payments not recoverable

132 Saving—ABSTUDY recipients

133 Meaning of Australian resident

134 Transitional and saving provisions—substitution of Part 3.14

135 Unlimited maximum portability period for disability support pension

136 Transitional definition of deductible amount (commencing 1 July 2007)

137 Application—general

138 Application—subsections 198AA(1) and (3)

139 Application—subsection 955(2)

139A Application—general

139B Application—sections 198AAA and 198AB

139C Application—subsections 731J(2) and (6)

139D Saving—principal beneficiary of a special disability trust

140 Person whose carer payment was cancelled on or after 1 July 2008 and before 1 July 2010

141 Saving—profoundly disabled child and disabled child

142 Person whose special benefit was cancelled on or after 1 July 2008 and before 1 July 2010

143 Saving—profoundly disabled child and disabled child

144 Saving and transitional provisions for section 93H

145 Saving provision for income test taper rate for disability support pensioners under 21 without dependent children

146 Transitional provision for rates of certain social security pensions on and after 20 September 2009

147 Amounts for subparagraph 146(4)(a)(i)

148 Rate of social security payments to partners of persons affected by clause 146

149 Payment and income tax consequences of receiving social security pension at rate affected by clause 146

150 Persons exempt from requirement to be Australian residents to qualify for disability support pension

Chapter 3General provisions relating to payability and rates

Part 3.6Benefit Rate Calculator B

 

1068  Rate of jobseeker payment

 (1) The rate of jobseeker payment 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 section 614.

Note 2: For armed services widow see subsection 4(1).

Benefit Rate Calculator B

Module AOverall rate calculation process

Method of calculating rate

 1068A1 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) 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 1068J1 are satisfied.

Module BMaximum basic rate

Maximum basic rate

 1068B1 The maximum basic rate of a person 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.

 

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; and

(b) has not turned 55

$785.20

$733.10

4B

Not member of couple and person:

(a) receives jobseeker payment; and

(b) has turned 55; and

(c) has not been receiving one, or a combination, of social security pension or social security benefit or service pension, income support supplement or veteran payment for a continuous period of at least 9 months

$785.20

$733.10

5

Not member of couple and person:

(a) has turned 55; and

(b) has been receiving one, or a combination, of social security pension or social security benefit or service pension or income support supplement for a continuous period of at least 9 months

$785.20

$785.20

7

Partnered

$671.20

$671.20

9

Member of illness separated couple

$785.20

$785.20

11

Partnered (partner in gaol)

$785.20

$785.20

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 1068B2).

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 1068B5).

Certain children who are not young persons are to be treated as dependent children

 1068B1A 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

 1068B1B 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 daytoday 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 1068B1C, 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).

 1068B1C The Secretary may, in writing, determine a period of either 14 days or 28 days for the purposes of subparagraph 1068B1B(b)(ii). In making the determination, the Secretary must have regard to the guidelines (if any) determined under point 1068B1E.

 1068B1D A determination made under point 1068B1C is not a legislative instrument.

 1068B1E The Secretary may, by legislative instrument, determine guidelines to be complied with when making a determination under point 1068B1C.

Certain dependent children to be disregarded

 1068B2 For the purposes of items 4A and 4B of Table B in point 1068B1, 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.

 1068B3 On 20 March 1994 the amounts specified in items 3, 4, 4A and 4B in column 3B of Table B in point 1068B1 are increased by $6.00. The increase is to be made after the indexation of the amounts on that day has occurred.

 1068B4 The amounts in items 3, 4, 4A and 4B in columns 3A and 3B of Table B in point 1068B1 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

 1068B5 Despite point 1068B1, if a person:

 (a) is not a member of a couple; and

 (b) receives jobseeker payment; and

 (c) is not required to satisfy the employment pathway plan requirements because of a determination that is in effect under subsection 40P(2) of the Administration Act because of paragraph 40P(2)(a) or (b) of that Act;

the person’s maximum basic rate is the amount worked out as follows:

Start formula start fraction Pension PP (Single) maximum basic amount over 26 end fraction end formula

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 BAPension supplement

Pension supplement

 1068BA1 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.

 1068BA2 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 1068BA4; and

 (b) otherwise—the amount worked out under point 1068BA3.

Amount if no election in force

 1068BA3 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

 1068BA4 The person’s pension supplement amount is the amount worked out as follows:

 (a) work out the amount for the person under point 1068BA3 as if the election were not in force;

 (b) from that amount, subtract 1/26 of the person’s minimum pension supplement amount.

Module CEnergy supplement

 1068C1 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

 1068C2 If the recipient has reached pension age and is not covered by point 1068B5, 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

 1068C3 If the recipient has not reached pension age and is not covered by point 1068B5, 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 1068B1

$9.50

2

If the recipient’s maximum basic rate is worked out under column 3A of item 7 of the table in point 1068B1

$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 1068B1

$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 1068B1

$9.50

5

If the recipient’s maximum basic rate is worked out under column 3B of item 7 of the table in point 1068B1

$7.90

Recipient covered by point 1068B5

 1068C4 If the recipient is covered by point 1068B5, the recipient’s energy supplement is $12.00.

Module DPharmaceutical allowance

Qualification for pharmaceutical allowance

 1068D1 Subject to points 1068D3A, 1068D4, 1068D5, 1068D6 and 1068D8, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate if the person is receiving jobseeker payment and point 1068D2, 1068D2B or 1068D3 applies to the person.

Incapacity for work—jobseeker payment

 1068D2 This point applies to a person if the person is receiving jobseeker payment and the person is not required to satisfy the employment pathway plan requirements because of a determination that is in effect under section 40L of the Administration Act and that has been made because of the circumstance referred to in paragraph 40L(5)(a) of that Act.

Jobseeker payment recipients who have a partial capacity to work or are principal carers

 1068D2B 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 55

 1068D3 This point applies to a person if the person:

 (a) has turned 55; 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

 1068D3A 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

 1068D4 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

 1068D5 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

 1068D6 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 1068D7.

Advance payment period

 1068D7 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:

Start formula start fraction amount of advance times 26 over pharmaceutical allowance rate end fraction end formula

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

 1068D8 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

 1068D10 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 GIncome test

Effect of ordinary income on maximum payment rate

 1068G1 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 1068G4.

Step 2. If the person is a member of a couple, work out the partner income free area using point 1068G9.

 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 1068G10(a), (b) and (c) to work out whether the person has a partner income excess.

Step 4. If the requirements of paragraphs 1068G10(a), (b) and (c) are not satisfied then the person’s partner income excess is nil.

Step 5. If the requirements of paragraphs 1068G10(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 1068G11.

Step 7. Work out whether the person’s ordinary income exceeds the person’s ordinary income free area under point 1068G12.

 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 1068G14, 1068G15, 1068G16 and 1068G17.

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 1068A1.

Note 1: For ordinary income see section 8.

Note 2: See point 1068A1 (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 and the treatment of certain income amounts (Division 1 of Part 3.10);

 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

 1068G2 Subject to point 1068G3, 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

 1068G4 The ordinary income of a person to whom, or to whose partner, jobseeker payment is payable and who, or whose partner, is not required to satisfy the employment pathway plan requirements because of a determination that is in effect under section 40L of the Administration Act and that has been made because of the circumstance referred to in paragraph 40L(5)(a) of that Act, 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 those employment pathway plan requirements.

Board and lodging

 1068G6 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

 1068G7 Subject to points 1068G7AF to 1068G7AR (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

 1068G7AF 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 8210F 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

 1068G7AG 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

 1068G7AH 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 1068G7AG and 1068G7AH

 1068G7AI Point 1068G7AG or 1068G7AH does not apply in relation to a person’s entitlement referred to in paragraph 1068G7AG(c) or in relation to a person’s termination payment referred to in paragraph 1068G7AH(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 1068G7AG(c) arose, or the termination payment referred to in paragraph 1068G7AH(b) was paid, in the period applicable under paragraph (c) or (d) of this point.

More than one termination payment on a day

 1068G7AJ If:

 (a) the person is covered by point 1068G7AH; 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

 1068G7AK If the person is covered by point 1068G7AG, 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

 1068G7AKA Subject to point 1068G7AKC, if the person is covered by point 1068G7AH, the income maintenance period starts, subject to point 1068G7AKB, on the day the person is paid the termination payment.

Commencement of income maintenance period where there is a second termination payment

 1068G7AKB If a person who is covered by point 1068G7AH 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

 1068G7AKC If a person to whom point 1068G7AKA 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

 1068G7AL 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.

 1068G7AM 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

 1068G7AN For the purposes of points 1068G7AF to 1068G7AM (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

 1068G7AP If a person who is covered by point 1068G7AH receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068G7AG to 1068G7AN (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

 1068G7AQ In points 1068G7AG to 1068G7AP (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 8210F 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.

 1068G7AR In points 1068G7AG to 1068G7AQ (inclusive):

leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include an instalment of parental leave pay.

Ordinary income generally taken into account when first earned, derived or received

 1068G7A Subject to points 1068G7B, 1068G7C, 1068G8 and 1068G8A and sections 1072A and 1073, ordinary income (except employment income) is to be taken into account in the fortnight in which it is first earned, derived or received.

Note: See Division 1AA of Part 3.10 for the treatment of employment income.

Claimant or recipient receives lump sum amount for remunerative work

 1068G7B 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 1068G8 applies; and

 (c) is not an exempt lump sum; and

 (d) is not employment income;

the person is, for the purposes of this Module, taken to receive one fiftysecond 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

 1068G7C 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 1068G8 applies; and

 (iii) is not an exempt lump sum; and

 (iv) is not employment income;

the partner is, for the purposes of this Module, taken to receive one fiftysecond 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

 1068G7D A reference in point 1068G7B or 1068G7C 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 1068G7B and 1068G7C

 1068G7E Points 1068G7B and 1068G7C 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

 1068G8 Subject to points 1068G7AF to 1068G7AR (inclusive), if:

 (a) a person receives a number of payments of ordinary income (except employment income); 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.

Payment of arrears of periodic compensation payments

 1068G8A 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

 1068G9 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 fulltime 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.

 1068G9A For the purposes of paragraph 1068G9(a), disregard steps 2, 2A and 3 of the method statement in point 1067GA1.

 1068G9B For the purposes of paragraph 1068G9(b), disregard steps 2 and 3 of the method statement in point 1068A1.

Partner income excess

 1068G10 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

 1068G11 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 1068G9 is $640.

Application: Colin’s ordinary income exceeds the partner income free area. He therefore has a partner income excess under point 1068G10 of:

Start formula $800 minus $640 equals $160 end formula

 Susan’s partner income reduction under point 1068G11 is therefore:

Start formula 60% times $160 equals $96 end formula

Ordinary income free area

 1068G12 A person’s ordinary income free area is $150.

Note: The income free area is used in the ordinary income test in relation to fortnightly income.

Ordinary income excess

 1068G13 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

 1068G14 Subject to point 1068G17, 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 1068G15); and

 (b) the person’s upper range reduction (if any) (see point 1068G16).

Lower range reduction

 1068G15 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 $106.

Upper range reduction

 1068G16 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 $106.

Ordinary income reduction for certain recipients of jobseeker payment

 1068G17 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 JRemote area allowance

Remote area allowance—person physically in remote area

 1068J1 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

 1068J3 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

 1068J4 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 SCH6G1 of the VEA.

In remote area

 1068J5 For the purposes of Table J in point 1068J3, 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

 1068J7 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

 1068J8 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

 1068J9 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 3.6AParenting 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 AOverall rate calculation process

Method of calculating rate

 1068AA1 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 BMaximum basic rate

Maximum basic rate

 1068AB1 A person’s maximum basic rate is $21,470.80 per year ($825.80 per fortnight).

Note: The maximum basic rate is indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

Module BAPension supplement

Pension supplement

 1068ABA1 A pension supplement amount is to be added to the person’s maximum basic rate.

Residents of pension age who are in Australia etc.

 1068ABA2 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 1068ABA4; and

 (d) otherwise—the amount worked out under point 1068ABA3.

Residents of pension age in Australia etc.—no election in force

 1068ABA3 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

 1068ABA4 The person’s pension supplement amount is the amount worked out as follows:

 (a) work out the amount for the person under point 1068ABA3 as if the election were not in force;

 (b) from that amount, subtract the person’s minimum pension supplement amount.

Other persons

 1068ABA5 If the person is not covered by point 1068ABA2, the person’s pension supplement amount is the person’s pension supplement basic amount.

Module BBEnergy supplement

 1068ABB1 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

 1068ABB2 If the recipient has reached pension age, the recipient’s energy supplement is $366.60.

Recipient has not reached pension age

 1068ABB3 If the recipient has not reached pension age, the recipient’s energy supplement is $312.00.

Module CPharmaceutical allowance

Qualification for pharmaceutical allowance

 1068AC1 Subject to points 1068AC1A, 1068AC2, 1068AC3 and 1068AC5, 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

 1068AC1A 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

 1068AC2 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

 1068AC3 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 1068AC4.

Advance payment period

 1068AC4(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:

Start formula start fraction Amount of advance times 26 over Pharmaceutical allowance rate end fraction end formula

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

 1068AC5 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

 1068AC7 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 EOrdinary income test

Effect of income on maximum payment rate

 1068AE1 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 1068AE14 to 1068AE18 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 1068AE19 and 1068AE20 below.

Note 1: See point 1068AA1 (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 and the treatment of certain income amounts (Division 1 of Part 3.10);

(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

 1068AE2 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 8210F 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

 1068AE3 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

 1068AE4 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

 1068AE5 If:

 (a) the person is covered by point 1068AE4; 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

 1068AE6 If the person is covered by point 1068AE3, 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

 1068AE7 If the person is covered by point 1068AE4, the income maintenance period starts, subject to point 1068AE8, on the day the person is paid the termination payment.

Commencement of income maintenance period where there is a second termination payment

 1068AE8 If a person who is covered by point 1068AE4 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.

 1068AE9 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

 1068AE10 For the purposes of points 1068AE2 to 1068AE9 (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

 1068AE11 If a person who is covered by point 1068AE4 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068AE3 to 1068AE10 (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

 1068AE12 In points 1068AE3 to 1068AE12 (inclusive):

leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include an instalment of parental leave 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 8210F 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

 1068AE13 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

 1068AE14 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 1068AE21.

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

 1068AE15 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

 1068AE16 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 1068AE17 do not result in a reduction.

Payments that do not reduce additional free area

 1068AE17 No reduction is to be made under point 1068AE16 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

 1068AE18 Examples of the kinds of payments that result in a reduction under point 1068AE16 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 1068AE17) paid in respect of the child under educational schemes; or

 (d) foster care allowance payments made by a State welfare authority.

Ordinary income excess

 1068AE19 A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Reduction for ordinary income

 1068AE20 A person’s reduction for ordinary income is:

Start formula Ordinary income excess times 0.4 end formula

 1068AE21 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 FRemote area allowance

Remote area allowance

 1068AF1 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

 1068AF2 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 AOverall rate calculation process

Method of calculating rate—general

 1068BA1 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 nonindependent YA recipient (see point 1068BA2); and

 (b) one for a person who is a partner of a nonindependent YA recipient (see point 1068BA3).

Note: For partner of a nonindependent YA recipient see subsection 23(1).

Method of calculating rate for person who is not a partner of a nonindependent YA recipient

 1068BA2 If a person is not the partner of a nonindependent 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 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 nonindependent 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 nonindependent YA recipient

 1068BA3 If a person is the partner of a nonindependent 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 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 nonindependent 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 CMaximum basic rate

Maximum basic rate

 1068BC2 A 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

$671.20

2

Member of illness separated couple

$785.20

3

Member of respite care couple

$785.20

4

Partnered (partner in gaol)

$785.20

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).

Module DIncome test

Effect of income on maximum payment rate

 1068BD1 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 1068BD2 to 1068BD21.

Step 2. Work out the partner income free area using point 1068BD22.

 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 1068BD23 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 1068BD24.

Step 5. Work out whether the person’s ordinary income exceeds the person’s ordinary income free area (see point 1068BD27).

 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 1068BD29 to 1068BD31.

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 1068BA2.

Note 1: For ordinary income see section 8.

Note 2: See point 1068BA2 (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 and the treatment of certain income amounts (Division 1 of Part 3.10);

(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

 1068BD2 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

 1068BD6 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

 1068BD7 Subject to points 1068BD8 to 1068BD18 (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

 1068BD8 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 8210F 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

 1068BD9 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

 1068BD10 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

 1068BD11 If:

 (a) the person is covered by point 1068BD10; 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

 1068BD12 If the person is covered by point 1068BD9, 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

 1068BD13 If the person is covered by point 1068BD10, the income maintenance period starts, subject to point 1068BD14, on the day the person is paid the termination payment.

Commencement of income maintenance period where there is a second termination payment

 1068BD14 If a person who is covered by point 1068BD10 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.

 1068BD15 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

 1068BD16 For the purposes of points 1068BD8 to 1068BD15 (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

 1068BD17 If a person who is covered by point 1068BD10 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068BD9 to 1068BD16 (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

 1068BD18 In points 1068BD9 to 1068BD18 (inclusive):

leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include an instalment of parental leave 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 8210F 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

 1068BD19 Subject to points 1068BD8 to 1068BD18 (inclusive), a person’s ordinary income (except employment income) is to be taken into account over such period, not exceeding 52 weeks, as the Secretary determines.

Note 1: This point, in conjunction with point 1068BD20, enables the Secretary to determine the person’s fortnightly income amount that best represents the person’s income situation.

Note 2: See Division 1AA of Part 3.10 for the treatment of employment income.

Fortnightly rate of ordinary income

 1068BD20 For the purposes of this Module, the person’s ordinary income (except employment 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

 1068BD21 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

 1068BD22 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 fulltime 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.

 1068BD22A For the purposes of paragraph 1068BD22(a), disregard steps 2, 2A and 3 of the method statement in point 1067GA1.

 1068BD22B For the purposes of paragraph 1068BD22(b), disregard steps 2 and 3 of the method statement in point 1068A1.

Partner income excess

 1068BD23 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

 1068BD24 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

 1068BD27 A person’s ordinary income free area is $150.

Note: The income free area is used in the ordinary income test in relation to fortnightly income.

Ordinary income excess

 1068BD28 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

 1068BD29 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 1068BD30); and

 (b) the person’s upper range reduction (if any) (see point 1068BD31).

Lower range reduction

 1068BD30 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 $106.

Upper range reduction

 1068BD31 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 $106.

Module DAPension supplement

Pension supplement

 1068BDA1 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.

 1068BDA2 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 1068BDA4; and

 (b) otherwise—the amount worked out under point 1068BDA3.

Amount if no election in force

 1068BDA3 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

 1068BDA4 The person’s pension supplement amount is the amount worked out as follows:

 (a) work out the amount for the person under point 1068BDA3 as if the election were not in force;

 (b) from that amount, subtract 1/26 of the person’s minimum pension supplement amount.

Module DBEnergy supplement

 1068BDB1 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

 1068BDB2 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

 1068BDB3 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 1068BC2

$7.90

2

If the recipient’s maximum basic rate is worked out under item 2, 3 or 4 of the table in point 1068BC2

$9.50

Module EPharmaceutical allowance

Qualification for pharmaceutical allowance

 1068BE1 Subject to points 1068BE1A, 1068BE2, 1068BE3, 1068BE4 and 1068BE6, an additional amount by way of pharmaceutical allowance is to be included in a person’s maximum payment rate in points 1068BA2 and 1068BA3 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 55, 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) the person is not required to satisfy the employment pathway plan requirements because of a determination that is in effect under section 40L of the Administration Act and that has been made because of the circumstance referred to in paragraph 40L(5)(a) of that Act;

 (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

 1068BE1A 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

 1068BE2 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

 1068BE3 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

 1068BE4 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 1068BE5.

Advance payment period

 1068BE5(1) A person’s advance payment period starts on the day on which the advance pharmaceutical allowance is paid to the person.

 1068BE5(2) The period ends after the number of paydays worked out using the following formula have passed:

Start formula start fraction Amount of advance times 26 over Pharmaceutical allowance rate end fraction end formula

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 1068BA2 and 1068BA3 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

 1068BE6 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

 1068BE8 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 GRemote area allowance

Remote area allowance—person physically in remote area

 1068BG1 An amount by way of remote area allowance is to be added in step 7 of the method statements in points 1068BA2 and 1068BA3 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

 1068BG2 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

 1068BG3 In point 1068BG2, 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 SCH6G1 of the VEA.

FTB or regular care child must be present in Australia

 1068BG4 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

 1068BG5 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

 1068BG6 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 3.7Rent assistance

Division 1Operation 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 (jobseeker payment);

 (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 2Qualification 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 stepparent 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 and jobseeker payment)

 (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 stepparent 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 3Rate 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 twothirds 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

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

2

Partnered and partner does not have rent increased pension

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 4 end fraction end formula

$170.20

3

Partnered and partner:

(a) is receiving a social security pension; and

(b) has rent increased pension

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $273.00 close bracket over 8 end fraction end formula

$106.80

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $273.00 close bracket over 8 end fraction end formula

$120.00

7

Partnered—member of an illness separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

8

Partnered—member of a respite care couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

9

Partnered—member of a temporarily separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$170.20

10

Partnered (partner in gaol)

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

 (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 twothirds of rate B.

 

Rate of rent assistance

Column 1

Item

Column 2

Rate A

Column 3

Rate B

1

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

2

Partnered and partner does not have rent increased pension

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 4 end fraction end formula

$170.20

3

Partnered and partner:

(a) is receiving a social security pension; and

(b) has rent increased pension

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $273.00 close bracket over 8 end fraction end formula

$106.80

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $273.00 close bracket over 8 end fraction end formula

$120.00

7

Partnered—member of an illness separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

8

Partnered—member of a respite care couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

9

Partnered—member of a temporarily separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$170.20

10

Partnered (partner in gaol)

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

2

Partnered and partner does not have rent increased pension

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 4 end fraction end formula

$170.20

3

Partnered and partner:

(a) is receiving a social security pension; and

(b) has rent increased pension

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $273.00 close bracket over 8 end fraction end formula

$106.80

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $273.00 close bracket over 8 end fraction end formula

$120.00

7

Partnered—member of an illness separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

8

Partnered—member of a respite care couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

9

Partnered—member of a temporarily separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$170.20

10

Partnered (partner in gaol)

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

1070Q  Rate for youth allowance, austudy payment and jobseeker payment

 (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 twothirds 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

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

2

Partnered—partner does not have rent increased benefit

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 4 end fraction end formula

$170.20

3

Partnered—partner has rent increased benefit

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

Half the rate specified in column 4 of item 2

4

Partnered—member of an illness separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

5

Partnered—member of a respite care couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

6

Partnered—member of a temporarily separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$170.20

7

Partnered (partner in gaol)

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

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

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 4 end fraction end formula

$170.20

2

Partnered—partner has rent increased benefit

Start formula 3 times start fraction open bracket Fortnightly rent minus $227.40 close bracket over 8 end fraction end formula

Half the rate specified in column 4 of item 1

3

Partnered—member of an illness separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

4

Partnered—member of a respite care couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

5

Partnered—member of a temporarily separated couple

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$170.20

6

Partnered (partner in gaol)

Start formula 3 times start fraction open bracket Fortnightly rent minus $140.40 close bracket over 4 end fraction end formula

$180.80

Division 4Certain 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 $140.40.

 (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 $140.40, being the amount that, in the formula in column 3 of that table, is deducted from the person’s fortnightly rent. Indexation of the $140.40 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 3.9Seniors 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

 10711 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 longterm financial asset (see point 107113), 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 107111A; or

 (b) if, at the test time, the person is a member of a couple—point 107111B.

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 107112.

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

 10712(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

 10713 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 10714.

Note 2: For fringe benefits value see point 10716.

Note 3: For target foreign income see subsection 10A(2) and point 10717.

Taxable income

 10714 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

 10715 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

 10716 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

 10717 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

 10718 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

 10719 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 107110 and accepted by the Secretary for the purposes of this Part.

Notice estimating income component

 107110(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

 107111 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

 107111A 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 longterm financial assets (see point 107113) 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.

 107111B 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 longterm financial assets (see point 107113) at the test time.

Step 2. If, at the test time, the person’s partner has reached the minimum age mentioned in section 30110 of the Income Tax Assessment Act 1997, work out the total value of all of the person’s partner’s longterm financial assets (see point 107113) 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

 107112 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

$90,000

$639.60

2

Partnered

$72,000

$639.60

3

Member of illness separated couple

$90,000

$639.60

4

Member of respite care couple

$90,000

$639.60

5

Partnered (partner in gaol)

$90,000

$639.60

Note: The amounts in column 3 are indexed annually on 20 September in line with CPI increases (see sections 1190 to 1194). However, indexation of these amounts is modified for 2023 (see subsection 1192(5BB)).

Longterm financial asset

 107113 For the purposes of this Part, a longterm 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 assettested 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 longterm 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 3.9AHealth 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

 1071A1 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

 1071A2 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

 1071A2A For the purposes of step 2 of the method statement in point 1071A1 or 1071A2:

 (a) disregard steps 1A, 2 and 3 of the method statement in point 1068A1; and

 (b) the amount at step 1B of the method statement in point 1068A1 is taken to be the amount applicable under item 5 of the table in point 1068C3.

Cessation of dependency

 1071A3 For the purposes of point 1071A2, 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

 1071A4 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 oneincome 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

 (d) payments under a selfemployment program; and

 (e) payments of compensation, including compensation within the meaning of the Military Rehabilitation and Compensation Act; and

 (f) instalments of parental leave pay.

 1071A5 If a weekly rate of income referred to in subparagraph (a)(i) of the definition of allowable income in point 1071A4 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.

 1071A6 A couple is a oneincome couple for the purposes of point 1071A4 if only one member of the couple is receiving income.

Part 3.10General provisions relating to the ordinary income test

Division 1Ordinary income concept and treatment of certain income amounts

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).

1072A  Treatment of certain lump sum payments

 (1) This section applies if:

 (a) a person has claimed a social security pension or a social security benefit; and

 (b) on or after the first day of the period of 12 months ending at the end of the day the person made the claim, the person receives an amount of income in the form of a lump sum payment of arrears of periodic payments; and

 (c) the lump sum payment is not income within the meaning of Division 1B or 1C of this Part; and

 (d) the lump sum payment is not in relation to remunerative work undertaken by the person; and

 (e) the lump sum payment is not an exempt lump sum; and

 (f) the lump sum payment is not a payment of compensation.

 (2) The Secretary may determine that the person is taken to have received the lump sum payment over such period, not exceeding 52 weeks, as the Secretary determines.

 (3) The period determined by the Secretary must begin on the day on which the person received the lump sum payment.

 (4) For each day in the period determined by the Secretary, the person is taken to have received an amount of ordinary income worked out by dividing the amount of the lump sum payment by the number of days in that period.

1073  Certain amounts taken to be received over 12 months

 (1) Subject to points 1067GH5 to 1067GH20 (inclusive), 1067LD5 to 1067LD16 (inclusive), 1068G7AF to 1068G7AR (inclusive), 1068AE2 to 1068AE12 (inclusive) and 1068BD7 to 1068BD18 (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 fiftysecond 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;

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 1AAAWork 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 has $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 has $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 has $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 has $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 taken, in accordance with Division 1AA, to have been received 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:

Start formula start fraction Annual amount over 364 end fraction end 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:

Start formula $300 times start fraction Number of days in the instalment period over 14 end fraction end formula

Interpretation

 (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:

Start formula start fraction Total amount of gainful work income for that period over Number of days in that period end fraction times 364 end 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 1064E2.

 (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 1064E2, 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 dwellinghouse—any land or building that is adjacent to the dwellinghouse and that is used primarily for private or domestic purposes in association with that dwellinghouse; 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

Existing unused concession balances before 1 January 2024

 (1) If, immediately before 1 January 2024, a person has an unused concession balance (including a balance of nil or a retained balance under subsection (3)), the person retains that unused concession balance on 1 January 2024.

Initial unused concession balance after 1 January 2024

 (1A) A person has an unused concession balance of $4,000 on the first day that is on or after 1 January 2024 and is a day on which section 1073AA applies to the person.

 (1B) Subsection (1A) does not apply on a day if the person has an unused concession balance (including a balance of nil or a retained balance under subsection (3)) immediately before that day.

Increase of unused concession balance in specified circumstances

 (1C) If:

 (a) a person ceases to receive the social security pension referred to in paragraph 1073AA(1)(a); and

 (b) the person retains an unused concession balance (the old balance) under subsection (3) of less than $4,000; and

 (c) neither this subsection nor subsection (1A) has previously applied in relation to the person within the most recent 2 year period that starts on or after 1 July 2024;

then, on the first day that is on or after 1 July 2024 and is a day on which section 1073AA applies to the person again, the person’s unused concession balance is increased by an amount equal to the difference between the old balance and $4,000.

 (1D) Subsection (1C) does not apply if section 1073AA applies to the person again immediately following:

 (a) the person’s pension being suspended; or

 (b) the person being taken to be receiving the pension under subsection 23(4A).

Maximum unused concession balance

 (2) If, apart from this subsection, the person’s unused concession balance would exceed $11,800, that balance is instead taken to be $11,800.

Example: John has an unused concession balance of $11,700. John has $100 of work bonus income in an instalment period of 14 days.

 Instead of John’s unused concession balance increasing to $11,900 under subsection 1073AA(4A), John’s unused concession balance increases to $11,800.

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 1AAEmployment income attribution rules

1073A  Attribution of employment income paid in respect of a particular period or periods

 (1) This section applies 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

 (c) one or more amounts of employment income, each of which is in respect of a particular period or periods (each period is an employment period), are paid in an instalment period of the person to or for the benefit of the person by the same employer.

Note 1: If the person has multiple employers, this section applies separately in relation to each employer.

Note 2: If a person is receiving a social security pension and is paid employment income monthly, section 1073B may apply to that income instead of this section.

Note 3: Section 1073BA deals with the payment of employment income that is not in respect of a particular period.

 (2) The person is taken to have received the employment income over a period (the assessment period) that consists of the number of days that is equal to the sum of the number of days in each employment period, where the assessment period begins on the first day of the instalment period in which the amounts of employment income are paid.

Example: On 3 June a person is paid $756 employment income for work the person performed in the period beginning on 9 May and ending at the end of 29 May. The number of days in the employment period is 21.

 Assume the instalment period begins on 1 June. The person is taken to have received the $756 over the period beginning on 1 June and ending at the end of 21 June (a period of 21 days).

 (3) Subject to subsection (4), for each day in the assessment period, the person is taken to have received an amount of employment income worked out by dividing the total amount of the employment income covered by paragraph (1)(c) by the number of days in the assessment period.

Example: To continue the example in subsection (2), the person is taken to have received $36 ($756/21) on each of the days in the period beginning on 1 June and ending at the end of 21 June.

 (4) If the person is taken, under subsection (3), to have received employment income (the attributed employment income) during a part, but not the whole, of a particular instalment period, the person is taken to receive on each day in that instalment period an amount of employment income worked out by dividing the total amount of the attributed employment income by the number of days in the instalment period.

Example: To continue the example in subsection (2), for the instalment period beginning on 15 June and ending at the end of 28 June the person is taken, under subsection (3), to have received employment income during a part of that instalment period (15 June to 21 June). The person is taken to have received $252 ($36 x 7).

 Under subsection (4), the person is taken to receive on each day in that instalment period an amount of employment income of $18 ($252/14).

Interpretation

 (5) This section applies in relation to an amount of employment income paid on a day in an instalment period, whether or not the amount is received on that day.

 (6) In applying subsection (2) in relation to one or more amounts of employment income paid by a particular employer in an instalment period, in working out the sum of the number of days in each employment period, if a day in an employment period overlaps with a day in another employment period, that day must only be counted once.

1073B  Attribution of employment income paid monthly

 (1) This section applies if:

 (a) a person is receiving a social security pension; and

 (b) the person’s rate of payment of the pension is worked out with regard to the income test module of a rate calculator in this Chapter; and

 (c) an amount (the initial amount) of employment income, in respect of a period of 1 month, is paid on a day in a calendar month (the initial calendar month) to or for the benefit of the person by the person’s employer; and

 (d) the Secretary is satisfied that, for the reasonably foreseeable future, an amount of employment income, in respect of a period of 1 month, equal to the initial amount will be paid to or for the benefit of the person by that employer on the following:

 (i) the corresponding day in each calendar month (a later calendar month) after the initial calendar month;

 (ii) if there is no such day in a later calendar month month—the last day of the later calendar month.

Note: If the person has multiple employers, this section applies separately in relation to each employer.

 (2) Subject to this section, for the day on which the initial amount is paid and for each day after that day, the person is taken to have received an amount of employment income worked out as follows:

Start formula start fraction Initial amount times 12 over 364 end fraction end formula

 (3) If, after the day on which the initial amount is paid, the Secretary ceases to be satisfied as mentioned in paragraph (1)(d) in relation to the person and the person’s employer, then subsection (2) ceases to apply in relation to the person and the person’s employer at the end of the period of 1 month beginning on the last payment day.

 (4) For the purposes of this section, a payment day is:

 (a) the day in the calendar month on which the initial amount is paid by the person’s employer; or

 (b) the following on which an amount of employment income equal to the initial amount is paid to or for the benefit of the person by that employer:

 (i) a corresponding day in a later calendar month;

 (ii) if there is no such day in a later calendar month—the last day of the later calendar month.

 (5) If the person is taken, under this section, to have received employment income (the attributed employment income) during a part, but not the whole, of a particular instalment period, the person is taken to receive on each day in that instalment period an amount of employment income worked out by dividing the total amount of the attributed employment income by the number of days in the instalment period.

 (6) Section 1073A does not apply to an amount of employment income covered by paragraph (4)(a) or (b).

Interpretation

 (7) This section applies in relation to an amount of employment income paid on a day in a calendar month, whether or not the amount is received on that day.

 (8) Subsection (3) does not prevent a later application of this section in relation to the person, whether in connection with the same employer or another employer.

1073BA  Attribution of employment income paid not in respect of a particular period

 (1) This section applies 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

 (c) an amount of employment income is paid on a day to or for the benefit of the person; and

 (d) the employment income is not in respect of a particular period.

 (2) The person is taken to have received that employment income over such period, not exceeding 52 weeks, as the Secretary determines.

Note 1: When determining the period, the Secretary may take into consideration the following:

(a) the nature of the person’s remunerative work;

(b) the nature of the person’s employment income;

(c) the person’s financial interests;

(d) any financial hardship which may be caused to the person;

(e) whether the employment income relates to remunerative work that was undertaken at a time when the person was not receiving a social security pension or a social security benefit.

Note 2: The period determined by the Secretary should be fair and reasonably beneficial, taking into account the financial interests of the person receiving the social security pension or social security benefit.

 (3) The period determined by the Secretary must begin on the first day of the instalment period in which the amount of employment income is paid.

 (4) Subject to subsection (5), for each day in the period determined by the Secretary, the person is taken to have received an amount of employment income worked out by dividing the amount of employment income covered by paragraph (1)(c) by the number of days in that period.

 (5) If the person is taken, under subsection (4), to have received employment income (the attributed employment income) during a part, but not the whole, of a particular instalment period, the person is taken to receive on each day in that instalment period an amount of employment income worked out by dividing the total amount of the attributed employment income by the number of days in the instalment period.

Interpretation

 (6) This section applies in relation to an amount of employment income paid on a day, whether or not the amount is received on that day.

1073BB  Antiavoidance

 (1) This section applies if:

 (a) a person (the relevant person) is receiving a social security pension or a social security benefit; and

 (b) the relevant person earns or derives employment income during the whole or a part of an instalment period of the person; and

 (c) one or more entities (who may be, or may include, the relevant person) enter into, commence to carry out, or carry out, a scheme to defer the payment of that employment income; and

 (d) 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 a person (who may be the relevant person or may be the entity or one of the entities).

 (2) The Secretary may determine that the relevant person is taken to have received an amount of employment income, equal to the amount of employment income referred to in paragraph (1)(b), over the period determined by the Secretary.

 (3) The period determined by the Secretary must begin on the first day of the instalment period referred to in paragraph (1)(b).

 (4) Subject to subsection (5), for each day in the period determined by the Secretary, the relevant person is taken to have received an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (1)(b) by the number of days in that period.

 (5) If the relevant person is taken, under subsection (4), to have received employment income (the attributed employment income) during a part, but not the whole, of a particular instalment period, the relevant person is taken to receive on each day in that instalment period an amount of employment income worked out by dividing the total amount of the attributed employment income by the number of days in the instalment period.

 (6) Sections 1073A, 1073B and 1073BA do not apply in relation to the payment of the employment income referred to in paragraph (1)(b).

 (7) A determination under subsection (2) has effect accordingly.

Obtaining a social security advantage

 (8) For the purposes of this section, an entity has a purpose of obtaining a social security advantage for a person (who may be the entity) if the entity has a purpose of:

 (a) enabling the person 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;

 (vi) a payment under a current special educational assistance scheme; or

 (b) enabling the person 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;

 (vi) a payment under a current special educational assistance scheme.

Definitions

 (9) In this section:

entity means any of the following:

 (a) an individual;

 (b) a company within the meaning of the Income Tax Assessment Act 1997;

 (c) a trust;

 (d) a partnership within the meaning of the Income Tax Assessment Act 1997;

 (e) any other unincorporated association or body of persons;

 (f) a corporation sole;

 (g) a body politic.

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.

1073BC  Exclusion of certain payments

  Sections 1073A, 1073B, 1073BA and 1073BB do not apply in relation to the following:

 (a) a payment in respect of which a person is taken to have received ordinary income for a period under point 1064F4, 1066AG4, 1067GH11, 1067LD5, 1068G7AG, 1068AE3 or 1068BD9;

 (b) a payment in respect of which a person is taken to receive an amount under point 1064F10, 1066AG10, 1067GH15, 1067LD11 or 1068G7AL;

 (c) an amount that a person’s ordinary income is taken to include under point 1067GH5 or 1068G7AA.

1073BD  Daily attribution of employment income for amounts not elsewhere covered in this Division

  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

 (c) the person is taken, under a provision of this Act (except section 1073A, 1073B, 1073BA or 1073BB), to receive employment income during the whole or a part of a particular instalment period of the person;

the person is taken to 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 (c) by the number of days in the instalment period.

1073C  Fortnightly or yearly expression of attributed employment income

  If, in accordance with the operation of section 1073A, 1073B, 1073BA, 1073BB or 1073BD, a person is taken to 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 1ABWorking 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 fulltime study by youth allowance recipient

 (5) If:

 (a) a person is receiving youth allowance and is undertaking fulltime study; and

 (b) the person ceases to undertake fulltime 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 fulltime 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 (including a nil amount) of the participant’s employment income taken, in accordance with Division 1AA, to have been received on that 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 fulltime 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 (including a nil amount) of the participant’s employment income taken, in accordance with Division 1AA, to have been received on that 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 be taken, under a provision of this Act, to receive employment income; or

 (ii) there is an increase in the employment income that is taken, under a provision of this Act, to be 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 1ABusiness 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 81 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 29060 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 81 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 81 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 1BIncome 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.

 (3B) However, if subsection 1118(2) applies in relation to the person and:

 (a) the person has financial assets that are proceeds:

 (i) from the sale of the person’s principal home; and

 (ii) described in paragraph 1118(2)(a) or (c); and

 (b) the earlier of the times mentioned in that paragraph has not occurred for the person and the proceeds;

then:

 (c) those financial assets are to be disregarded for the purposes of working out the ordinary income the person is taken to receive under subsection (3) or (3A); and

 (d) the ordinary income the person is taken to receive per year on those financial assets is the amount worked out by multiplying the value of those financial assets by the below threshold rate.

 (4) The person is taken, for the purposes of this Act, to receive one fiftysecond of the sum of the amount calculated under subsection (3) or (3A) and the amount (if any) calculated under paragraph (3B)(d) 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.

 (3B) However, if subsection 1118(2) applies in relation to a member of the couple and:

 (a) the couple have financial assets that are proceeds:

 (i) from the sale of the principal home of a member of the couple; and

 (ii) described in paragraph 1118(2)(a) or (c); and

 (b) the earlier of the times mentioned in that paragraph has not occurred for the member of the couple and the proceeds;

then:

 (c) those financial assets are to be disregarded for the purposes of working out the ordinary income the couple is taken to receive under subsection (3) or (3A); and

 (d) the ordinary income the couple is taken to receive per year on those financial assets is the amount worked out by multiplying the value of those financial assets by the below threshold rate.

 (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:

Start formula start fraction Sum of the amount calculated under subsection (3) or (3A) and the amount (if any) calculated under paragraph (3B)(d) over 52 end fraction times 0.5 end formula

1078  Deemed income from financial assets—members of nonpensioner 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.

 (3B) However, if subsection 1118(2) applies in relation to the person and:

 (a) the person has financial assets that are proceeds:

 (i) from the sale of the person’s principal home; and

 (ii) described in paragraph 1118(2)(a) or (c); and

 (b) the earlier of the times mentioned in that paragraph has not occurred for the person and the proceeds;

then:

 (c) those financial assets are to be disregarded for the purposes of working out the ordinary income the person is taken to receive under subsection (3) or (3A); and

 (d) the ordinary income the person is taken to receive per year on those financial assets is the amount worked out by multiplying the value of those financial assets by the below threshold rate.

 (4) The person is taken, for the purposes of this Act, to receive one fiftysecond of the sum of the amount calculated under subsection (3) or (3A) and the amount (if any) calculated under paragraph (3B)(d) 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 onehalf 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 1CIncome from income streams not covered by Division 1B

Subdivision BIncome 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 assettested income stream (long term) that is an accountbased pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or

 (b) an assettested 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 assettest exempt income stream

 (1) For the purpose of working out the annual rate of ordinary income of a person from an assettest 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 assettest 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 assettest 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:

Start formula Annual payment minus start fraction Purchase price over Relevant number end fraction end formula

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:

Start formula $9,895 minus open bracket start fraction $100,000 over 16 years end fraction close bracket equals $3,645 end formula

1099A  Income—income stream is a defined benefit income stream

 (1) Subject to subsection (2), if the assettest 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:

Start formula Annual payment minus Deductible amount end formula

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 marketlinked assettest exempt income stream

 (1) If either of the following conditions is satisfied in relation to the assettest 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:

Start formula open bracket start fraction Total payments over Days in payment period end fraction minus start fraction Purchase price over Relevant number times 365 end fraction close bracket times 365 end 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:

Start formula open bracket start fraction Default amount over Days in payment period end fraction minus start fraction Purchase price over Relevant number times 365 end fraction close bracket times 365 end formula

where:

default amount means 100% of the amount worked out for the financial year using the formula in subsection 9BA(5) (for prorating, 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 prorata 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 assettested income stream (long term)

 (1) For the purpose of working out the annual rate of ordinary income of a person from an assettested 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—assettested income stream (long term) that is not a defined benefit income stream

  If the assettested 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:

Start formula Annual payment minus open bracket start fraction Purchase price minus Residual capital value over Relevant number end fraction close bracket end formula

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 assettested 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:

Start formula $18,337 minus start fraction $150,000 minus $20,000 over 10 end fraction equals $5,337 end formula

1099D  Income—assettested income stream (long term) that is a defined benefit income stream

 (1) Subject to subsection (2), if the assettested 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:

Start formula Annual payment minus Deductible amount end formula

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 lowpayment assettested income streams

 (1) If:

 (a) an income stream is an assettested 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:

Start formula open bracket start fraction Total payments over Days in payment period end fraction minus start fraction Purchase price over Relevant number times 365 end fraction close bracket times 365 end 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, 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:

Start formula open bracket start fraction Minimum amount over Days in payment period end fraction minus start fraction Purchase price over Relevant number times 365 end fraction close bracket times 365 end formula

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—assettested income stream (lifetime)

  If the income stream is an assettested income stream (lifetime), the amount that the person is taken to receive from the income stream each year is worked out as follows:

Start formula Annual payment times 0.6 end formula

where:

annual payment means the amount payable to the person for the year under the income stream.

Subdivision CFamily 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 assettested income stream (long term) that is an accountbased pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or

 (b) an assettested 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 assettest exempt income streams

 (1) For the purpose of working out the annual rate of ordinary income of a person from an assettest 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 decisionmaking principles in force under section 1099DD.

1099DC  Income from assettested income stream (long term)

 (1) For the purpose of working out the annual rate of ordinary income of a person from an assettested 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 decisionmaking principles in force under section 1099DD.

1099DCA  Income from assettested income stream (lifetime)

 (1) For the purpose of working out the annual rate of ordinary income of a person from an assettested 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 decisionmaking principles in force under section 1099DD.

1099DD  Decisionmaking principles

  The Secretary may, by legislative instrument, formulate principles (decisionmaking 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 1DAged 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 448B 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 448B 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 1ERefunds 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 561(kc) or 563(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 448A(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 2Conversion 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 ondemand 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 3Disposal 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 3.12General provisions relating to the assets test

Division 1Value 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 assettest exempt income stream of the person, other than a partially assettest exempt income stream;

 (da) half of the value of any partially assettest 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 assettest exempt income stream means:

 (a) an assettest 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 24 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 36 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 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 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 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 assettested income streams that are not defined benefit income streams, assettested income streams (lifetime) or family law affected income streams

 (1) This section applies to a person’s assettested income stream if it is not a defined benefit income stream, it is not an assettested income stream (lifetime) and it is not a family law affected income stream.

Note: For defined benefit income streams, see section 1120. For assettested 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:

Start formula Purchase price minus open square bracket open round bracket start fraction Purchase price minus Residual capital value over Relevant number end fraction close round bracket times Term elapsed close square bracket end formula

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 halfyear; 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:

Start formula $150,000 minus open square bracket open round bracket start fraction $150,000 minus $20,000 over 10 years end fraction close round bracket times 0 year close square bracket equals $150,000 end formula

 Her assessable asset after 30 June in that year will be:

Start formula $150,000 minus open square bracket open round bracket start fraction $150,000 minus $20,000 over 10 years end fraction close round bracket times 0.5 year close square bracket equals $143,500 end formula

1120  Value of assettested income streams that are defined benefit income streams

 (1) This section applies to a person’s assettested 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:

Start formula Annual payment times Pension valuation factor end formula

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 assettested income streams (lifetime) that are managed investments

 (1) This section applies to a person’s assettested 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 assettested 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):

Start formula Compounded amount for the relevant adjustment day times open bracket 1 plus Relevant above threshold rate for the relevant adjustment day close bracket end formula

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 12month 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 12month 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 assettested income streams (lifetime) that are not managed investments

 (1) This section applies to a person’s assettested 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 assettested 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 assettested 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:

  Start formula Purchase amount times 0.6 end formula

 (b) for a day after the person’s threshold day for the income stream:

  Start formula Purchase amount times 0.3 end formula

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 assettested 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 assettested 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 assettested 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 assettested 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 65year 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 5year 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 5year period beginning on the person’s assessment day for the income stream.

 (10) If:

 (a) an assettested 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):

Start formula Compounded amount for the relevant adjustment day times open bracket 1 plus Relevant above threshold rate for the relevant adjustment day close bracket end formula

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 12month 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:

  Start formula The rate applicable under subsection 1082(2) for that day, expressed as a decimal fraction times start fraction Relevant number of days over 365 end fraction end formula

relevant adjustment day means each of the following:

 (a) each 12month 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 12month 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 assettested 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 decisionmaking principles in force under subsection (5).

 (5) The Secretary may, by legislative instrument, formulate principles (decisionmaking principles) to be complied with by him or her in making decisions under:

 (a) subsection (2); or

 (b) subsection (3).

1120B  Value of partially assettest 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 assettested 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:

Start formula start fraction Person's interest in the fund over Total interest in the fund end fraction times Value of the fund's reserves end formula

 (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:

Start formula start fraction Value of the fund's reserves over Number of members in the fund end fraction end formula

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 assettested income stream (longterm).

 (3B) Subsection (1) does not apply to an asset that is a partially assettest exempt income stream (within the meaning of section 1118).

 (3C) Subsection (1) does not apply to an asset that is an assettested 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:

Start formula start fraction value of the charge or encumbrance times value of the other assets over value of all the assets end fraction end formula

 (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 2Disposal 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 prepension 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 prepension 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 prepension 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 firstmentioned disposition of assets and of the amounts (if any) of other dispositions of assets previously made by the person during that prepension year exceeds the disposal limit; or

 (e) the amount of the firstmentioned 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 firstmentioned 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 firstmentioned 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 prepension 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 prepension 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 prepension 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 prepension 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 firstmentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that prepension year exceeds the disposal limit; or

 (ii) 50% of the amount of the firstmentioned 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 firstmentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that prepension year exceeds the disposal limit; or

 (ii) 50% of the amount of the firstmentioned disposition;

  whichever is the lesser amount