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Social Security Act 1991

  • - C2006C00270
  • In force - Superseded Version
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Act No. 46 of 1991 as amended, taking into account amendments up to Act No. 47 of 2006
An Act to provide for the payment of certain pensions, benefits and allowances, and for related purposes
Administered by: DEST; DEWR; FaCSIA
Registered 29 May 2006
Start Date 22 May 2006
End Date 30 Jun 2006

Social Security Act 1991

Act No. 46 of 1991 as amended

This compilation was prepared on 24 May 2006
taking into account amendments up to Act No. 47 of 2006

Volume 5 includes:       Table of Contents
                                    Sections 1061ZA – 1067L-F9

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

 

  

  

  


Contents

Chapter 2A—Benefits and concessions other than payments                      1

Part 2A.1—Concession cards                                                                                           1

Division 1—Qualification for, and issue of, pensioner concession card                1

1061ZA General qualification rules.................................................................. 1

1061ZB. Extended qualification rule: former recipient of mature age allowance etc.              2

1061ZC. Extended qualification rule: long-term recipient of social security benefits             4

1061ZD Extended qualification rule: former recipient of disability support pension           6

1061ZE. Extended qualification rule: former recipient of wife pension............ 7

1061ZEAFurther extended qualification rule: loss of payment because of employment income          8

1061ZF. Issue of pensioner concession card................................................... 10

Division 2—Qualification for seniors health card                                        11

1061ZG Qualification rules............................................................................. 11

1061ZH Newly arrived resident’s waiting period.......................................... 11

1061ZI.. Duration of newly arrived resident’s waiting period........................ 12

1061ZJ.. Giving of copy of assessment of taxable income to Secretary......... 13

Division 3—Qualification for health care card                                               14

Subdivision A—Qualification for automatic issue health care card               14

1061ZK Qualification: general rules................................................................ 14

1061ZL. Qualification: certain disabled young persons.................................. 15

1061ZM.......... Qualification for health care card: employment-affected person  16

1061ZMAFurther extended qualification rule: loss of payment because of employment income         18

1061ZN Residence requirement...................................................................... 19

Subdivision B—Qualification for health care cards for which claim required 20

1061ZO Qualification..................................................................................... 20

1061ZP. Person subject to newly arrived resident’s waiting period............... 22

1061ZQ Newly arrived resident’s waiting period.......................................... 22

1061ZR. Duration of newly arrived resident’s waiting period........................ 22

Subdivision C—Miscellaneous provisions relating to health care cards       23

1061ZS. Issue of health care cards.................................................................. 23

1061ZT. Certain dependants not qualified for health care card....................... 23

Chapter 2B—Student Financial Supplement Scheme                                      24

Part 2B.1—Establishment of scheme                                                                        24

Division 1—Preliminary                                                                                            24

1061ZW Object of this Chapter...................................................................... 24

1061ZX Outline of the scheme....................................................................... 24

Division 2—Eligibility to obtain financial supplement                               26

1061ZY. Eligibility to obtain financial supplement......................................... 26

1061ZZ. Category 1 student........................................................................... 26

1061ZZACategory 2 student.......................................................................... 27

1061ZZAAFailure by person to comply with request to provide
person’s tax file number................................................................... 28

1061ZZABFailure by person to comply with request to provide the tax
file number of a parent of the person............................................... 29

Division 3—Decision and notice about eligibility to obtain financial supplement            31

1061ZZACSecretary’s decision...................................................................... 31

1061ZZADRevocation or variation of decision after review.......................... 32

1061ZZAETransitional................................................................................... 32

Division 4—Agreements between Commonwealth and financial corporations 34

1061ZZAFApplications for financial supplement......................................... 34

1061ZZAGAgreements................................................................................... 34

Division 5—Application for financial supplement                                        36

1061ZZAHWhen to apply............................................................................. 36

1061ZZAIHow to apply................................................................................ 36

1061ZZAJChanging an application................................................................. 36

Division 6—Amount of financial supplement                                                 37

Subdivision A—Category 1 students                                                                     37

1061ZZAKMaximum amount of financial supplement.................................. 37

Subdivision B—Category 2 students                                                                     39

1061ZZALChange in eligibility period........................................................... 39

1061ZZAMEligibility period (short course).................................................. 39

1061ZZANEligibility period (no short course).............................................. 40

1061ZZAOMaximum amount of financial supplement.................................. 41

Subdivision C—Provisions applying to both category 1 students and category 2 students               42

1061ZZAPMinimum amount of financial supplement................................... 42

1061ZZAQPerson doing more than one course.............................................. 42

Division 7—Trading in youth allowance, austudy payment or pensioner education supplement for financial supplement                                                                          43

1061ZZARPurpose of Division...................................................................... 43

1061ZZASReduction of youth allowance, austudy payment or
pensioner education supplement for financial supplement.............. 43

Division 8—Obtaining or increasing financial supplement by trading back youth allowance, austudy payment or pensioner education supplement                      44

Subdivision A—Purpose of Division                                                                      44

1061ZZATPurpose of Division...................................................................... 44

Subdivision B—When a person may repay youth allowance, austudy payment or pensioner education supplement to obtain or increase financial supplement                                  44

1061ZZAUElection to repay youth allowance, austudy payment or
pensioner education supplement...................................................... 44

1061ZZAVTiming of repayment.................................................................... 45

Subdivision C—Repayment                                                                                     46

1061ZZAWEffect of repayment..................................................................... 46

Division 9—Financial supplement contracts                                                  47

Subdivision A—Making a contract for payment of financial supplement       47

1061ZZAXMaking a contract between person and participating corporation 47

1061ZZAYExisting contracts.......................................................................... 48

1061ZZAZLiability for money paid under a financial supplement contract.. 48

1061ZZBAValidity of financial supplement contract.................................... 48

Subdivision B—When a financial supplement contract can be cancelled      49

1061ZZBBPerson has right to cancel financial supplement contract............. 49

1061ZZBCHow to cancel financial supplement contract............................... 49

1061ZZBDWhen to cancel financial supplement contract............................. 49

1061ZZBEPayments made during cooling off period..................................... 49

1061ZZBFPerson may waive right to cancel contract.................................... 50

1061ZZBGHow to waive right to cancel contract.......................................... 50

1061ZZBHWhen to waive right to cancel contract......................................... 50

Subdivision C—Financial supplement contract exempt from certain laws and taxes         50

1061ZZBIFinancial supplement contract exempt from certain laws
and taxes........................................................................................... 50

Division 10—Payment of financial supplement                                             51

1061ZZBJPayment by instalments................................................................ 51

1061ZZBKRounding off................................................................................. 51

1061ZZBLTo whom instalments must be paid.............................................. 51

1061ZZBMPayment into bank account......................................................... 52

Division 11—Protection of financial supplement                                         53

1061ZZBNFinancial supplement to be absolutely inalienable....................... 53

1061ZZBOEffect of garnishee or attachment order........................................ 53

Division 12—Obligations of category 2 students                                        54

Subdivision A—Statements about tax file numbers                                            54

1061ZZBPSecretary may request person obtaining financial supplement to give statement of person’s tax file number    54

1061ZZBQSecretary may request person obtaining financial supplement to give statement of parent’s tax file number    54

Subdivision B—Notice of events or changes in circumstances                        55

1061ZZBRSecretary may give notice requiring information........................... 55

1061ZZBSEvent or change relevant to payment............................................ 56

1061ZZBTFormalities related to notice.......................................................... 56

1061ZZBUValidity of notice.......................................................................... 56

1061ZZBVPeriod within which information to be given................................ 56

1061ZZBWRefusal or failure to comply with notice..................................... 57

1061ZZBXApplication overseas.................................................................... 57

Subdivision C—Notice about a matter relevant to payment of financial supplement          58

1061ZZBYSecretary may give notice requiring statement on matter............. 58

1061ZZBZFormalities related to notice.......................................................... 58

1061ZZCAValidity of notice.......................................................................... 58

1061ZZCBPeriod within which statement to be given................................... 58

1061ZZCCStatement must be in approved form............................................ 59

1061ZZCDRefusal or failure to comply with notice...................................... 59

1061ZZCEApplication overseas..................................................................... 59

Division 13—Early repayments of financial supplement                          60

Subdivision A—Calculation and notification of amount outstanding under financial supplement contract  60

1061ZZCFApplication of Subdivision........................................................... 60

1061ZZCGCalculation of amount outstanding under financial supplement contract before 1 June in the year after the year in which the contract was made............................................................ 60

1061ZZCHCalculation of amount outstanding under financial supplement contract at a later time     60

1061ZZCINotification of amount outstanding............................................... 62

Subdivision B—Person’s rights to make repayments during contract period 62

1061ZZCJPerson not required to, but may, make repayments during
contract period.................................................................................. 62

1061ZZCKWhat happens if person makes an excess repayment.................. 63

1061ZZCLAmount repaid not to include certain amounts............................. 63

1061ZZCMHow to work out discount.......................................................... 63

1061ZZCNEffect of making a repayment during contract period.................. 64

1061ZZCORights and liabilities of participating corporation if
repayment made............................................................................... 66

Subdivision C—What happens at the end of the contract period                      66

1061ZZCPCorporation’s rights at end of contract period.............................. 66

1061ZZCQTermination notice........................................................................ 67

1061ZZCRSecretary may give notice correcting information in
previous notice................................................................................. 67

1061ZZCSPerson may request notice to be corrected.................................... 68

1061ZZCTEffect of notices and requests....................................................... 68

Part 2B.2—Payments of financial supplement under scheme to stop in certain circumstances     69

Division 1—Payments to stop at request of recipient                               69

1061ZZCUPerson may ask for payment to stop........................................... 69

1061ZZCVEffect of notice.............................................................................. 69

Division 2—Payments to stop if the maximum amount of financial supplement is reduced to the amount already paid or a lesser amount                                                  70

Subdivision A—Notice that payments are to stop                                                70

1061ZZCWSecretary must give notice to person and corporation................. 70

1061ZZCXEffect of notice............................................................................. 71

1061ZZCYThis Subdivision is subject to sections 1061ZZFS and
1061ZZFT........................................................................................ 71

Subdivision B—Original amount paid because person failed to notify change of circumstances    71

1061ZZCZSecretary may give notice to person and corporation................... 71

1061ZZDAEffect of notice............................................................................. 72

1061ZZDBTransfer of corporation’s rights to Commonwealth..................... 72

1061ZZDCApportionment of financial supplement...................................... 73

1061ZZDDLiability of Commonwealth to corporation................................. 73

1061ZZDELiability of person to Commonwealth.......................................... 73

1061ZZDFThis Subdivision not to affect Subdivision A............................... 74

Subdivision C—Original amount paid because of false or misleading information           74

1061ZZDGSecretary may give notice to person and corporation.................. 74

1061ZZDHEffect of notice............................................................................. 75

1061ZZDITransfer of corporation’s rights to Commonwealth...................... 75

1061ZZDJApportionment of financial supplement....................................... 76

1061ZZDKLiability of Commonwealth to corporation................................. 76

1061ZZDLLiability of person to Commonwealth.......................................... 76

1061ZZDMThis Subdivision not to affect Subdivision A............................. 76

Division 3—Payments to stop if person ceases to be eligible to obtain financial supplement  77

Subdivision A—Notice that payments are to stop                                                77

1061ZZDNSecretary must give notice to person and corporation................. 77

1061ZZDOEffect of notice............................................................................. 77

1061ZZDPThis Subdivision is subject to sections 1061ZZFS and 1061ZZFT 78

Subdivision B—Financial supplement paid because person failed to notify change of circumstances           78

1061ZZDQSecretary may give notice to person and corporation.................. 78

1061ZZDREffect of notice............................................................................. 79

1061ZZDSTransfer of corporation’s rights to Commonwealth..................... 79

1061ZZDTApportionment of financial supplement...................................... 80

1061ZZDULiability of Commonwealth to corporation................................. 80

1061ZZDVLiability of person to Commonwealth......................................... 80

1061ZZDWThis Subdivision not to affect Subdivision A.............................. 81

Division 4—Payments to stop if person is found never to have been eligible to obtain financial supplement                                                                                             82

Subdivision A—Notice that payments are to stop                                                82

1061ZZDXSecretary must give notice to person and corporation................. 82

1061ZZDYEffect of notice............................................................................. 82

1061ZZDZThis Subdivision is subject to sections 1061ZZFS and 1061ZZFT 83

Subdivision B—Financial supplement paid because of false or misleading information   83

1061ZZEASecretary may give notice to person and corporation................... 83

1061ZZEBEffect of notice.............................................................................. 83

1061ZZECTransfer of corporation’s rights to Commonwealth..................... 83

1061ZZEDLiability of Commonwealth to corporation.................................. 84

1061ZZEELiability of person......................................................................... 84

1061ZZEFDefinitions..................................................................................... 84

1061ZZEGThis Subdivision not to affect Subdivision A............................... 85

Division 5—Payments to stop if person dies                                                 86

1061ZZEHSecretary may give notice to corporation if other party to
 contract dies..................................................................................... 86

1061ZZEIEffect of notice............................................................................... 86

1061ZZEJDischarge of corporation’s liability................................................ 86

1061ZZEKTransfer of corporation’s rights to Commonwealth..................... 86

1061ZZELLiability of Commonwealth to corporation................................... 87

1061ZZEMDischarge of person’s liability..................................................... 87

Part 2B.3—Repayment of financial supplement through taxation system after termination date               88

Division 1—Purpose and application of Part                                                  88

1061ZZENPurpose and application of Part................................................... 88

Division 2—FS debt and accumulated FS debt                                             89

1061ZZEOFS debt owed by person............................................................... 89

1061ZZEPHow to work out FS debt.............................................................. 89

1061ZZEQAccumulated FS debt incurred by person..................................... 89

1061ZZERHow to work out accumulated FS debt......................................... 90

1061ZZESAdjusted accumulated FS debt....................................................... 90

1061ZZETIndexation factor............................................................................ 91

1061ZZEUAccumulated FS debt discharges earlier debts.............................. 92

Division 3—Information to be given to Commissioner of Taxation  93

1061ZZEVSecretary to give notice to Commissioner of Taxation.................. 93

1061ZZEWSecretary to give further notice to Commissioner of Taxation..... 93

1061ZZEXSecretary to give certificate to Commissioner of Taxation........... 93

Division 4—Voluntary repayments of FS debts                                            95

1061ZZEYVoluntary repayments of FS debts............................................... 95

Division 5—Compulsory repayments of accumulated FS debt             96

1061ZZEZPerson’s liability........................................................................... 96

1061ZZFAAmount of liability....................................................................... 96

1061ZZFBMeaning of relevant debt............................................................... 96

1061ZZFCMeaning of minimum prescribed amount..................................... 97

1061ZZFDMeaning of intermediate prescribed amount................................ 97

1061ZZFEMeaning of maximum prescribed amount..................................... 98

1061ZZFFMeaning of AWE............................................................................ 98

Division 6—Application of tax legislation                                                        99

1061ZZFGApplication of tax legislation........................................................ 99

Division 7—Assessments                                                                                      100

1061ZZFHCommissioner of Taxation may make assessment...................... 100

1061ZZFINotice of assessment may be served............................................ 100

Division 8—Commissioner of Taxation may delay assessment         101

1061ZZFJCommissioner of Taxation may delay assessment....................... 101

1061ZZFKCommissioner of Taxation may amend assessment.................... 101

1061ZZFLWhen Commissioner of Taxation must make decision to
delay or amend assessment............................................................. 101

Division 9—Review of Commissioner of Taxation’s decision            103

1061ZZFMApplication to Administrative Appeals Tribunal..................... 103

Division 10—Treatment of payments under financial supplement scheme         104

1061ZZFNPayments not subject to taxation................................................ 104

1061ZZFOApplication of payments............................................................ 104

1061ZZFPDebt discharged by death............................................................ 104

Part 2B.4—Miscellaneous                                                                                             105

Division 1—Application of the Bankruptcy Act 1966                             105

1061ZZFQApplication of Division.............................................................. 105

1061ZZFRTreatment of debt........................................................................ 105

Division 2—Review of decisions                                                                        107

1061ZZFSWhat happens if a decision of the Secretary is set aside............. 107

1061ZZFTWhat happens if a decision of the Secretary is varied................. 107

Division 3—Transfer of rights under this Chapter                                   108

1061ZZFUNotices of transfer...................................................................... 108

1061ZZFVTransfers not subject to State or Territory taxes........................ 108

Chapter 2C—Assurances of support                                                                       109

Part 2C.1—Giving assurances                                                                                     109

1061ZZGAWhat is an assurance of support?.............................................. 109

1061ZZGBWho may give an assurance of support?.................................... 109

1061ZZGCHow to give an assurance of support......................................... 110

Part 2C.2—Acceptance of assurances                                                                    111

1061ZZGDAccepting or rejecting an assurance of support......................... 111

1061ZZGENotices relating to an assurance of support................................ 112

Part 2C.3—Effect of accepted assurances                                                           114

1061ZZGFWhen an accepted assurance is in force...................................... 114

1061ZZGGLiability to pay for social security payments............................ 115

Part 2C.4—Determinations                                                                                           116

1061ZZGHDeterminations........................................................................... 116

Part 2C.5—Assurances by unincorporated bodies                                           118

1061ZZGIApplication of social security law to unincorporated bodies...... 118

Chapter 3—General provisions relating to payability and rates             120

Part 3.1—Rate Calculators (General)                                                                     120

1062...... Steps in rate calculation.................................................................. 120

1063...... Standard categories of family situations......................................... 120

Part 3.2—Pension Rate Calculator A                                                                      121

1064...... Rate of age, disability support, wife pensions and carer payment and of disability wage supplement (people who are not blind)........................................................................................ 121

Pension Rate Calculator A                                                                                     124

Module A—Overall rate calculation process                                              124

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]      126

Module BA—Pension supplement                                                                    126

Module C—Pharmaceutical allowance [see Appendix for CPI adjusted figures] 127

Module E—Ordinary income test [see Appendix for CPI adjusted figures]     131

Module G—Assets test [see Appendix for CPI adjusted figures]                          135

Module H—Remote area allowance                                                                 138

Part 3.3—Pension Rate Calculator B                                                                      141

1065...... Rate of age and disability support pension and of disability wage supplement (blind people)              141

Pension Rate Calculator B                                                                                     143

Module A—Overall rate calculation process                                              143

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]      144

Module BA—Pension supplement                                                                    145

Module C—Pharmaceutical allowance [see Appendix for CPI adjusted figures] 146

Module E—Remote area allowance                                                                 149

Part 3.4—Pension Rate Calculator C                                                                      152

1066...... Rate of sole parent pension, bereavement allowance and widow B pension           152

Pension Rate Calculator C                                                                                     153

Module A—Overall rate calculation process                                              153

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]      155

Module BA—Pension supplement                                                                    155

Module C—Pharmaceutical allowance [see Appendix for CPI adjusted figures] 156

Module E—Ordinary income test [see Appendix for CPI adjusted figures]     158

Module G—Assets test [see Appendix for CPI adjusted figures]                          161

Module H—Remote Area Allowance                                                              164

Part 3.4A—Pension Rate Calculator D                                                                  167

1066A... Rate of disability support pension (people under 21 who are not blind)               167

Pension Rate Calculator D                                                                                     168

Module A—Overall rate calculation process                                              168

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]      170

Module C—Youth disability supplement [see Appendix for CPI adjusted figures]              173

Module D—Pharmaceutical allowance [see Appendix for CPI adjusted figures] 173

Module F—Ordinary income test [see Appendix for CPI adjusted figures]     176

Module H—Assets test [see Appendix for CPI adjusted figures]                         181

Module I—Remote area allowance                                                                   184

Part 3.4B—Pension Rate Calculator E                                                                   187

1066B... Rate of disability support pension and of disability wage supplement (people under 21 who are blind)              187

Pension Rate Calculator E                                                                                     188

Module A—Overall rate calculation process                                              188

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]      189

Module C—Youth disability supplement [see Appendix for CPI adjusted figures]              192

Module D—Pharmaceutical allowance [see Appendix for CPI adjusted figures] 192

Module F—Remote area allowance                                                                  195

Part 3.5—Youth Allowance Rate Calculator                                                       198

1067...... Definitions...................................................................................... 198

1067A... When a person is regarded as independent..................................... 199

1067B... Accommodated independent person.............................................. 202

1067C... Member of a YA couple................................................................. 203

1067D... Person required to live away from home........................................ 205

1067E.... Person living at home...................................................................... 206

1067F.... Long term income support student................................................ 206

1067G... Rate of youth allowance................................................................. 207

Youth Allowance Rate Calculator                                                                      208

Module A—Overall rate calculation process [see Note 5]                         208

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]      210

Module C—Pharmaceutical allowance [see Appendix for CPI adjusted figures] 213

Module F—Parental income test                                                                       214

Submodule 1—Effect of parental income on maximum payment rate            214

Submodule 2—Application of parental income test                                          215

Submodule 3—Appropriate tax year                                                                    216

Submodule 4—Combined parental income                                                         218

Submodule 5—Parental income free area [see Appendix for CPI adjusted figures]  221

Submodule 6—Reduction for parental income                                                  223

Module G—Family actual means test                                                              223

Submodule 1—Preliminary                                                                                   223

Submodule 2—Persons to whom family actual means test applies                224

Submodule 3—Identification of appropriate tax year                                        225

Submodule 4—Actual means of person’s family                                               227

Submodule 5—Family actual means free area                                                   231

Submodule 6—Reduction for family actual means                                           231

Module H—Income test                                                                                         232

Module J—Student income bank                                                                       243

Module K—Remote area allowance                                                                 249

Module L—Table of pensions, benefits, allowances and compensation               251

Part 3.5A—Austudy Payment Rate Calculator                                                  254

1067H... Definitions...................................................................................... 254

1067J.... Person living at home...................................................................... 254

1067K... Long term income support student................................................ 254

1067L.... Rate of austudy payment............................................................... 255

Austudy Payment Rate Calculator                                                                     256

Module A—Overall rate calculation process                                              256

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]      257

Module C—Pharmaceutical allowance [see Appendix for CPI adjusted figures] 258

Module D—Income test                                                                                         260

Module E—Student income bank                                                                      270

Module F—Remote area allowance                                                                  274


Chapter 2ABenefits and concessions other than payments

Part 2A.1Concession cards

Division 1Qualification for, and issue of, pensioner concession card

1061ZA  General qualification rules

1061ZA(1)  Subject to subsection (3), a person is qualified for a pensioner concession card on a day if:

                     (a)  a social security pension; or

                     (b)  a mature age allowance under Part 2.12B;

is payable to the person for that day.

1061ZA(2)  Subject to subsection (3), a person is qualified for a pensioner concession card on a day (the qualification day) if, on that day:

                     (a)  the person has attained 60 years of age; and

                     (b)  the person is receiving:

                              (i)  newstart allowance; or

                             (ii)  partner allowance; or

                            (iii)  widow allowance; or

                            (iv)  benefit PP (partnered); or

                             (v)  sickness allowance; or

                            (vi)  special benefit; and

                     (c)  the person has been receiving, for a continuous period of not less than 39 weeks ending immediately before the qualification day:

                              (i)  one or more of the social security benefits referred to in paragraph (b); or

                             (ii)  a social security pension.

1061ZA(3)  Subject to subsection (4), subsections (1) and (2) only apply to a person in relation to a day on which the person is in Australia and is an Australian resident.

1061ZA(4)  In spite of subsection (3), subsections (1) and (2) apply to a person in relation to a day on which the person:

                     (a)  is in Australia; and

                     (b)  is receiving a social security pension or benefit solely because of the operation of the scheduled international agreement between Australia and New Zealand.

1061ZB  Extended qualification rule: former recipient of mature age allowance etc.

1061ZB(1)  Subject to subsection (2), if:

                     (a)  a person is receiving:

                              (i)  a mature age allowance under Part 2.12A; or

                             (ii)  a mature age partner allowance under Part 2.12A; or

                            (iii)  a mature age allowance under Part 2.12B; and

                     (b)  either:

                              (i)  the person or the person’s partner commences employment; or

                             (ii)  there is an increase in the ordinary income of the person or the person’s partner from employment; and

                     (c)  but for the commencement of employment or increase in ordinary income, as the case may be, the person would have been, or would have continued to be, qualified for a pensioner concession card under subsection 1061ZA(1);

the person is qualified for a pensioner concession card:

                     (d)  if the person is qualified for such a card under section 1061ZEA until a particular day—for the period of 26 weeks after that day; and

                     (e)  in any other case—for the period of 26 weeks after the commencement or increase, as the case may be.

1061ZB(1A)  If:

                     (a)  either:

                              (i)  the person first referred to in subsection (1) commences employment; or

                             (ii)  there is an increase in the ordinary income from employment of the person so referred to; and

                     (b)  at the start of the instalment period of the person in which the commencement or increase occurs, the person’s working credit balance is greater than nil; and

                     (c)  the balance is subsequently reduced to nil because of the commencement or increase; and

                     (d)  the person is not qualified for a pensioner concession card under section 1061ZEA;

paragraph (1)(e) has effect as if the reference to 26 weeks after the commencement or increase were a reference to 26 weeks after the day on which the balance is reduced to nil.

1061ZB(1B) If:

                     (a)  either:

                              (i)  the partner of the person first referred to in subsection (1) commences employment; or

                             (ii)  there is an increase in the ordinary income from employment of the partner of the person so referred to; and

                     (b)  at the start of the instalment period of the partner in which the commencement or increase occurs:

                              (i)  the partner is a working credit participant or a person to whom the student income bank applies; and

                             (ii)  the partner’s working credit balance or student income bank balance is greater than nil; and

                     (c)  the balance is subsequently reduced to nil because of the commencement or increase; and

                     (d)  the person is not qualified for a pensioner concession card under section 1061ZEA;

paragraph (1)(e) has effect as if the reference to 26 weeks after the commencement or increase were a reference to 26 weeks after the day on which the balance is reduced to nil.

1061ZB(2)  Subsection (1) (including that subsection as modified by subsection (1A) or (1B)) only applies to a person while the person is in Australia and is an Australian resident.

1061ZB(3)  If, during the period of 26 weeks referred to in subsection (1) (including that subsection as modified by subsection (1A) or (1B)), a person receives an instalment of a social security pension or a mature age allowance under Part 2.12B that relates to one or more days within that period, the person is not qualified under this section for a pensioner concession card on the day or days in relation to which the person receives the instalment.

1061ZC  Extended qualification rule: long-term recipient of social security benefits

1061ZC(1)  Subject to subsection (2), if:

                     (a)  a person has been receiving a social security benefit referred to in paragraph 1061ZA(2)(b) for a continuous period of not less than 39 weeks; and

                     (b)  either:

                              (i)  the person or the person’s partner commences employment; or

                             (ii)  there is an increase in the ordinary income of the person or the person’s partner from employment; and

                     (c)  but for the commencement of employment or increase in ordinary income, as the case may be, the person would have been, or would have continued to be, qualified for a pensioner concession card under subsection 1061ZA(2);

the person is qualified for a pensioner concession card:

                     (d)  if the person is qualified for a pensioner concession card under section 1061ZEA until a particular day—for the period of 26 weeks after that day; and

                     (e)  in any other case—for the period of 26 weeks after the commencement or increase, as the case may be.

1061ZC(1A)   If:

                     (a)  either:

                              (i)  the person first referred to in subsection (1) commences employment; or

                             (ii)  there is an increase in the ordinary income from employment of the person so referred to; and

                     (b)  at the start of the instalment period of the person in which the commencement or increase occurs:

                              (i)  the person is a working credit participant; and

                             (ii)  the person’s working credit balance is greater than nil; and

                     (c)  the balance is subsequently reduced to nil because of the commencement or increase; and

                     (d)  the person is not qualified for a pensioner concession card under section 1061ZEA;

paragraph (1)(e) has effect as if the reference to 26 weeks after the commencement or increase were a reference to 26 weeks after the day on which the balance is reduced to nil.

1061ZC(1B) If:

                     (a)  either:

                              (i)  the partner of the person first referred to in subsection (1) commences employment; or

                             (ii)  there is an increase in the ordinary income from employment of the partner of the person so referred to; and

                     (b)  at the start of the instalment period of the partner in which the commencement or increase occurs:

                              (i)  the partner is a working credit participant or a person to whom the student income bank applies; and

                             (ii)  the partner’s working credit balance or student income bank balance is greater than nil; and

                     (c)  the balance is subsequently reduced to nil because of the commencement or increase; and

                     (d)  the person is not qualified for a pensioner concession card under section 1061ZEA;

paragraph (1)(e) has effect as if the reference to 26 weeks after the commencement or increase were a reference to 26 weeks after the day on which the balance is reduced to nil.

1061ZC(1C) If the person:

                     (a)  is qualified for a pensioner concession card under section 1061ZEA until a particular day; and

                     (b)  has, immediately before becoming so qualified, been receiving a social security benefit referred to in paragraph 1061ZA(2)(b) for a continuous period of less than 39 weeks;

the person is taken, for the purpose of the reference in paragraph (1)(a) to a continuous period of not less than 39 weeks, to be receiving the benefit until the particular day.

1061ZC(2)  Subject to subsection (4), subsection (1) (including that subsection as modified by subsection (1A), (1B) or (1C)) only applies to a person while the person is in Australia and is an Australian resident.

1061ZC(3)  If, during the period of 26 weeks referred to in subsection (1) (including that subsection as modified by subsection (1A) or (1B)), a person receives an instalment of a social security pension or a mature age allowance under Part 2.12B that relates to one or more days within that period, the person is not qualified under this section for a pensioner concession card on the day or days in relation to which the person receives the instalment.

1061ZC(4)  In spite of subsection (2), subsection (1) (including that subsection as modified by subsection (1A), (1B) or (1C)) applies to a person when:

                     (a)  the person is in Australia; and

                     (b)  the social security benefit that the person had been receiving was received solely because of the operation of the scheduled international agreement between Australia and New Zealand.

1061ZD  Extended qualification rule: former recipient of disability support pension

1061ZD(1)  Subject to subsection (5), a person is qualified for a pensioner concession card for the period of 52 weeks starting on the day on which this section begins to apply to the person.

1061ZD(2)  Subject to subsection (4), this section applies to a person if:

                     (a)  the person has been receiving a disability support pension; and

                     (b)  the person commences employment that requires him or her to work for at least 30 hours per week; and

                     (c)  because of the commencement of that employment, the person ceases (having regard, where appropriate, to the operation of section 1073J) to be qualified for the disability support pension.

1061ZD(3)  Subject to subsection (4), this section applies to a person if:

                     (a)  the person has been receiving a disability support pension; and

                     (b)  because there is an increase in the person’s ordinary income from employment (and after any working credit balance of the person is reduced to nil), the disability support pension ceases to be payable to the person.

1061ZD(4)  Subject to subsection (6), this section only applies to a person while the person is in Australia and is an Australian resident.

1061ZD(5)  If, during the period of 52 weeks referred to in subsection (1), a person receives an instalment of a social security pension or a mature age allowance under Part 2.12B that relates to one or more days within that period, the person is not qualified under this section for a pensioner concession card on the day or days in relation to which the person receives the instalment.

1061ZD(6)  In spite of subsection (4), this section applies to a person in relation to a day if:

                     (a)  the person is in Australia on that day; and

                     (b)  the disability support pension that the person had been receiving was received solely because of the operation of the scheduled international agreement between Australia and New Zealand.

1061ZE  Extended qualification rule: former recipient of wife pension

1061ZE(1)  Subject to subsection (5), a person is qualified for a pensioner concession card for the period of 52 weeks starting on the day on which this section begins to apply to the person.

1061ZE(2)  Subject to subsection (4), this section applies to a person if:

                     (a)  the person has been receiving a wife pension; and

                     (b)  the person’s partner has been receiving disability support pension; and

                     (c)  the person’s partner commences employment that requires him to work for at least 30 hours per week; and

                     (d)  the person ceases to be qualified for wife pension because the partner of the person:

                              (i)  commences that employment; and

                             (ii)  as a result, ceases (having regard, where appropriate, to the operation of section 1073J) to be qualified for the disability support pension.

1061ZE(3)  Subject to subsection (4), this section applies to a person if:

                     (a)  the person has been receiving a wife pension; and

                     (b)  the person’s partner has been receiving disability support pension; and

                     (c)  the wife pension ceases to be payable to the person because there is an increase in the ordinary income of the person’s partner from employment (and after any working credit balance of the partner is reduced to nil).

1061ZE(4)  Subject to subsection (6), this section only applies to a person while the person is in Australia and is an Australian resident.

1061ZE(5)  If, during the period of 52 weeks referred to in subsection (1), a person receives an instalment of a social security pension or a mature age allowance under Part 2.12B that relates to one or more days within that period, the person is not qualified under this section for a pensioner concession card on the day or days in relation to which the person receives the instalment.

1061ZE(6)  In spite of subsection (4), this section applies to a person in relation to a day if:

                     (a)  the person is in Australia on that day; and

                     (b)  the wife pension that the person had been receiving was received solely because of the operation of the scheduled international agreement between Australia and New Zealand.

1061ZEA  Further extended qualification rule: loss of payment because of employment income

1061ZEA(1) This section does not apply in any case where a person is qualified for a pensioner concession card under section 1061ZD or 1061ZE.

1061ZEA(2) 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 Chapter 3; and

                     (c)  the person has not reached pension age; and

                     (d)  the person is qualified for a pensioner concession card; and

                     (e)  the person or the person’s partner earns, derives or receives, or is taken to earn, derive or receive, employment income; and

                      (f)  a payment mentioned in subsection 1061ZA(1) ceases to be payable to the person or the person ceases to receive a payment mentioned in subsection 1061ZA(2):

                              (i)  if paragraph (e) applies to the person—because of the employment income of the person (either alone or in combination with any other ordinary income earned, derived or received, or taken to have been earned, derived or received, by the person) (and after any working credit balance of the person is reduced to nil); or

                             (ii)  if paragraph (e) applies to the partner—because of the employment income of the partner (either alone or in combination with any other ordinary income earned, derived or received, or taken to have been earned, derived or received, by the partner) (and after any working credit balance or student income bank balance of the partner is reduced to nil); and

                     (g)  but for the employment income, or the combined income, referred to in paragraph (f), the person would have been, or would have continued to be, qualified for a pensioner concession card:

                              (i)  under subsection 1061ZA(1)—because the payment referred to in that subsection would have continued to be payable to the person; or

                             (ii)  under subsection 1061ZA(2)—because the person would have continued to receive the payment referred to in that subsection; and

                    (ga)  the person:

                              (i)  in the case of a woman to whom wife pension ceases to be payable because of the employment income, or the combined income, referred to in subparagraph (f)(ii)—continues, but for that employment income or combined income, to be qualified for wife pension; and

                             (ii)  in the case of a person to whom pension PP (single) ceases to be payable, or who ceases to receive benefit PP (partnered)—continues, but for the requirement to have at least one PP child, to be qualified for that pension or benefit; and

                            (iii)  in any other case—continues to be qualified for the payment referred to in section 1061ZA;

the person is qualified for a pensioner concession card until:

                     (h)  12 weeks after the end of the instalment period in which the payment ceases to be payable to the person or the person ceases to receive the payment, as the case requires; or

                      (i)  the day the person reaches pension age; or

                      (j)  the day the person would cease to be qualified for a pensioner concession card as mentioned in paragraph (g) for a reason other than the employment income, or the combined income, referred to in paragraph (f); or

                     (k)  the day the person ceases to be qualified as mentioned in paragraph (ga);

whichever happens first.

1061ZEA(3) Subject to subsection (5), subsection (2) only applies to a person while the person is in Australia and is an Australian resident.

1061ZEA(4) If, during the period of 12 weeks referred to in subsection (2), a person receives an instalment of social security pension or a mature age allowance under Part 2.12B that relates to one or more days within that period, the person is not qualified under this section for a pensioner concession card on the day or the days in relation to which the person receives the instalment.

1061ZEA(5) In spite of subsection (3), subsection (2) applies to a person when:

                     (a)  the person is in Australia; and

                     (b)  the social security pension or the social security benefit that the person had been receiving was received solely because of the operation of the scheduled international agreement between Australia and New Zealand.

1061ZF  Issue of pensioner concession card

                   The Secretary must issue a pensioner concession card to a person who is qualified for such a card.


 

Division 2Qualification for seniors health card

1061ZG  Qualification rules

1061ZG(1)  Subject to subsection (2), a person is qualified for a seniors health card on a day if, on that day, the person:

                     (a)  has reached pension age; and

                     (b)  is an Australian resident or a special category visa holder residing in Australia; and

                     (c)  is in Australia; and

                     (d)  satisfies the seniors health card taxable income test; and

                     (e)  is not receiving a social security pension or benefit; and

                      (f)  is not receiving a service pension or an income support supplement; and

                     (g)  is not subject to a newly arrived resident’s waiting period.

1061ZG(2)  A person is not qualified for a seniors health card on a day if:

                     (a)  the person has failed to comply with section 1061ZJ in respect of the reference tax year; or

                    (aa)  on that day the person is the holder of a seniors health card under the Veterans’ Entitlements Act; or

                     (b)  where the person made an estimate of taxable income for the reference tax year and the estimate was accepted—the person did not give the Secretary a copy of a notice of assessment of the person’s taxable income for that tax year within 52 weeks after the end of that tax year.

1061ZG(3)  In subsection (2):

reference tax year has the same meaning as in the Seniors Health Card Taxable Income Test Calculator.

1061ZH  Newly arrived resident’s waiting period

1061ZH(1)  Subject to subsections (2), (3) and (4), for the purposes of this Division, a person who:

                     (a)  has entered Australia on or after 1 February 2000; and

                     (b)  has not been both:

                              (i)  an Australian resident or a special category visa holder residing in Australia; and

                             (ii)  in Australia;

                            for a period of, or for periods totalling, 104 weeks;

is subject to a newly arrived resident's waiting period.

1061ZH(2)  Subsection (1) does not apply to a person who has a qualifying residence exemption for a seniors health card.

1061ZH(3)  Subsection (1) does not apply to a person who has already served a newly arrived resident's waiting period.

1061ZH(4)  Subsection (1) does not apply to a person if:

                     (a)  the person is a New Zealand citizen; and

                     (b)  the person was an Australian resident on 1 February 2000.

1061ZH(5)  If, before 1 February 2000, a person had begun to serve a waiting period under subsection 1061ZA(2) of this Act as then in force but had not served the whole of the waiting period:

                     (a)  the person is subject to a waiting period under this section; and

                     (b)  this Division applies in relation to the person as if:

                              (i)  this Division had been in force when the person began to serve the waiting period; and

                             (ii)  the part of the waiting period served before 1 February 2000 had been served under this section.

1061ZI  Duration of newly arrived resident’s waiting period

                   If a person is subject to a newly arrived resident’s waiting period, the period:

                     (a)  starts on the day on which the person first became an Australian resident or a special category visa holder residing in Australia; and

                     (b)  ends when the person has been both:

                              (i)  an Australian resident or a special category visa holder residing in Australia; and

                             (ii)  in Australia;

                            for a period of, or for periods totalling, 104 weeks.

1061ZJ  Giving of copy of assessment of taxable income to Secretary

                   If a person who is the holder of a seniors health card receives a notice of assessment or amended assessment of his or her taxable income for a particular tax year, the person must, if requested by the Secretary to do so, give a copy of the notice to the Secretary within 13 weeks after the day on which the notice was received.


 

Division 3Qualification for health care card

Subdivision AQualification for automatic issue health care card

1061ZK  Qualification: general rules

1061ZK(1)  A person is qualified for a health care card on a day if this section applies to the person on that day.

1061ZK(2)  This section applies to a child on a day if a person is qualified under Part 2.19 for carer allowance for the child on that day.

1061ZK(3)  This section applies to a disabled child on a day if all of the following paragraphs are satisfied on that day:

                     (a)  the child is or would, but for subsection 5(3), be a dependent child of another person (the carer);

                     (b)  because of his or her disability, the child needs, on a daily basis, a level of care and attention that is substantially more than that needed by a person of the same age who does not have a physical, intellectual or psychiatric disability;

                     (c)  the child receives care and attention on a daily basis from:

                              (i)  if the carer is a member of a couple—the carer, the carer’s partner or the carer together with another person (whether or not the carer’s partner); or

                             (ii)  if the carer is not a member of a couple—the carer or the carer together with another person;

                     (d)  that care and attention is received in a private home that is the residence of the child and the carer.

1061ZK(4)  This section applies to a person on a day if, on that day:

                     (a)  the person is entitled, under the Family Assistance Administration Act, to be paid family tax benefit by instalment; and

                     (b)  the person’s daily rate of family tax benefit consists of, or includes, a Part A rate calculated under Part 2 of Schedule 1 to the Family Assistance Act; and

                     (c)  the person’s income excess for the purposes of Division 4 of Part 2 of Schedule 1 to the Family Assistance Act is nil.

1061ZK(5)  This section applies to a person on a day if:

                     (a)  the person is receiving a youth allowance on that day (otherwise than because of section 540AA) and, at the time when a determination was made to grant the person the youth allowance, the person was not undertaking full-time study; or

                     (b)  the person is receiving, on that day:

                              (i)  a newstart allowance; or

                             (ii)  a partner allowance; or

                            (iii)  a widow allowance; or

                            (iv)  benefit PP (partnered); or

                             (v)  sickness allowance; or

                            (vi)  special benefit.

1061ZK(6)  This section applies to a person on a day if, on that day, the person is receiving exceptional circumstances relief payment or farm help income support under the Farm Household Support Act 1992.

1061ZK(7)  This section applies to a person on a day if, on that day:

                     (a)  the person is receiving mobility allowance; or

                     (b)  the person is qualified for such an allowance but the allowance is not payable because of paragraph 1037(b).

1061ZK(8)  In this section:

disabled child means a person aged under 16 who:

                     (a)  has a physical, intellectual or psychiatric disability; and

                     (b)  is likely to suffer from that disability permanently or for an extended period.

1061ZK(9)  This section has effect subject to section 1061ZN.

1061ZL  Qualification: certain disabled young persons

1061ZL(1)  A person to whom this section applies is qualified for a health care card.

1061ZL(2)  This section applies to a person if:

                     (a)  clause 108 of Schedule 1A applied to the person immediately before the end of 30 June 1999; and

                     (b)  the person is a disabled adult within the meaning of Part 2.19 as that Part applies to the person in accordance with clause 108A of Schedule 1A.

1061ZL(3)  This section has effect subject to section 1061ZN.

1061ZM  Qualification for health care card: employment-affected person

1061ZM(1)  Subject to subsection (2), if:

                     (a)  either:

                              (i)  a person who is an employment-affected person or the partner of such a person commences employment; or

                             (ii)  there is an increase in the ordinary income from employment of a person who is an employment-affected person or the partner of such a person; and

                     (b)  because either:

                              (i)  the person or the partner commences employment; or

                             (ii)  there is an increase in the ordinary income of the person or the partner from employment;

                            the person ceases to be an employment-affected person; and

                     (c)  the person has been a qualified recipient for a continuous period of 52 weeks immediately before so ceasing;

the person is qualified for a health care card for the period of 26 weeks starting on the day on which the person ceases to be an employment-affected person.

1061ZM(1A)   If the person is qualified for a health care card under section 1061ZMA until a day (the particular day), subsection (1) has effect as if the reference to 26 weeks starting on the day on which the person ceases to be an employment-affected person were a reference to 26 weeks starting on the particular day.

1061ZM(1B)   If the person:

                     (a)  was an employment-affected person because of receiving pension PP (single); and

                     (b)  is qualified for a pensioner concession card under section 1061ZEA until a day (the particular day);

subsection (1) has effect as if the reference to the period of 26 weeks starting on the day on which the person ceases to be an employment-affected person were a reference to the period starting on the particular day and ending 26 weeks after the person ceases to be an employment-affected person.

1061ZM(1C)   If the person:

                     (a)  is qualified for a health care card under section 1061ZMA until a particular day; and

                     (b)  has, immediately before the commencement or increase mentioned in subsection (1), been a qualified recipient because of receiving newstart allowance, sickness allowance, widow allowance, partner allowance or youth allowance, other than while undertaking full-time study, for a continuous period of less than 52 weeks;

the person is taken, for the purpose of the reference in paragraph (1)(c) to a continuous period of 52 weeks, to be receiving the allowance until the particular day.

1061ZM(2)  If, during the period of 26 weeks referred to in subsection (1) (including that subsection as modified by subsection (1A)) or the period provided by subsection (1B), a person receives a payment of a social security pension or benefit specified in the definition of employment-affected person in subsection (3) that relates to one or more days within that period, the person ceases to be qualified under this section for a health care card on the day on which the person receives the payment.

1061ZM(3)  In this section:

employment-affected person means:

                     (a)  a person who is receiving any of the following:

                              (i)  pension PP (single);

                             (ii)  newstart allowance;

                            (iii)  sickness allowance;

                            (iv)  special benefit;

                             (v)  widow allowance;

                            (vi)  partner allowance; or

                     (b)  a person who is receiving a youth allowance but who is not undertaking full-time study.

qualified recipient means:

                     (a)  a person who is receiving:

                              (i)  a social security pension, other than a pension under Part 2.16; or

                             (ii)  a social security benefit, other than a youth allowance or austudy payment; or

                     (b)  a person who is receiving a youth allowance but is not undertaking full-time study.

1061ZM(4)  This section has effect subject to section 1061ZN.

1061ZMA  Further extended qualification rule: loss of payment because of employment income

1061ZMA(2) 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 Chapter 3; and

                     (c)  the person has not reached pension age; and

                     (d)  the person is qualified for a health care card; and

                     (e)  the person or the person’s partner earns, derives or receives, or is taken to earn, derive or receive, employment income; and

                      (f)  the person ceases to receive a payment mentioned in subsection 1061ZK(5):

                              (i)  if paragraph (e) applies to the person—because of the employment income of the person (either alone or in combination with any other ordinary income earned, derived or received, or taken to have been earned, derived or received, by the person) (and after any working credit balance of the person is reduced to nil); or

                             (ii)  if paragraph (e) applies to the partner—because of the employment income of the partner (either alone or in combination with any other ordinary income earned, derived or received, or taken to have been earned, derived or received, by the partner) (and after any working credit balance or student income bank balance of the partner is reduced to nil); and

                     (g)  but for the employment income, or the combined income, referred to in paragraph (f), the person would have been, or would have continued to be, qualified for a health care card under section 1061ZK because the person would have continued to receive the payment mentioned in subsection 1061ZK(5); and

                    (ga)  the person:

                              (i)  in the case of a person who ceases to receive benefit PP (partnered)—continues, but for the requirement to have at least one PP child, to be qualified for that benefit; and

                             (ii)  in any other case—continues to be qualified for the payment referred to in subsection 1061ZK(5);

the person is qualified for a health care card until:

                     (h)  12 weeks after the end of the instalment period in which the person ceases to receive the pension or benefit; or

                      (i)  the day the person reaches pension age; or

                      (j)  the day the person would cease to be qualified for a health care card as mentioned in paragraph (g) for a reason other than the employment income, or the combined income, referred to in paragraph (f); or

                     (k)  the day the person ceases to be qualified as mentioned in paragraph (ga);

whichever happens first.

1061ZMA(3) If, during the period of 12 weeks referred to in subsection (2), a person receives a payment of a social security pension or benefit specified in the definition of employment-affected person in subsection (4) that relates to one or more days within that period, the person ceases to be qualified under this section for a health care card on the day on which the person receives the payment.

1061ZMA(4) In this section:

employment-affected person has the same meaning as it has for the purposes of section 1061ZM.

1061ZMA(5) This section has effect subject to section 1061ZN.

1061ZN  Residence requirement

1061ZN(1)  Sections 1061ZK, 1061ZL, 1061ZM and 1061ZMA only have effect in relation to a person on a day on which:

                     (a)  the person is in Australia and is:

                              (i)  an Australian resident or a special category visa holder residing in Australia; or

                             (ii)  the holder of a visa included in a class of visas determined by the Minister for the purposes of this paragraph; or

                            (iii)  a person declared by the Minister to be a person to whom this subparagraph applies; or

                     (b)  the person:

                              (i)  is in Australia; and

                             (ii)  is receiving a social security pension or benefit solely because of the operation of the scheduled international agreement between Australia and New Zealand.

1061ZN(2)  The Minister may declare that a person who:

                     (a)  is included in a specified class of persons; and

                     (b)  is, or has been, in Australia in specified circumstances;

is a person to whom subparagraph (1)(a)(iii) applies.

1061ZN(3)  The circumstances that may be specified in a declaration under subsection (2) include circumstances that existed or exist at any time before or after the making of the declaration.

1061ZN(4)  A declaration under subsection (2):

                     (a)  must be in writing; and

                     (b)  is a disallowable instrument.

Subdivision BQualification for health care cards for which claim required

1061ZO  Qualification

1061ZO(1)  A person is qualified for a health care card on a day if this section applies to the person on that day.

1061ZO(2)  This section applies to a person on a day if, on that day:

                     (a)  in the case of a child—the person is:

                              (i)  an Australian resident or a special category visa holder residing in Australia; or

                             (ii)  living in Australia with an Australian resident or with a special category visa holder residing in Australia; and

                     (b)  in the case of a person other than a child—the person is:

                              (i)  an Australian resident or a special category visa holder residing in Australia; and

                             (ii)  in Australia; and

                     (c)  the person is not an FTB child aged over 16 years; and

                     (d)  the person satisfies the health care card income test.

1061ZO(3)  This section applies to a person on a day if, on that day, the person:

                     (a)  is an Australian resident or a special category visa holder residing in Australia; and

                     (b)  is in Australia; and

                     (c)  is an FTB child who is 16 or more, but not yet 19, years of age; and

                     (d)  is not undertaking secondary studies; and

                     (e)  satisfies the health care card income test.

1061ZO(4)  This section applies to a person on a day if, on that day, the person:

                     (a)  is an Australian resident or a special category visa holder residing in Australia; and

                     (b)  is in Australia; and

                     (c)  is an FTB child who is 19 or more years of age; and

                     (d)  satisfies the health care card income test.

1061ZO(5)  This section applies to a child on a day if:

                     (a)  on that day, the child is in foster care; and

                     (b)  the child is living in Australia with an Australian resident or with a special category visa holder residing in Australia.

1061ZO(7)  The Minister may declare that a person who:

                     (a)  is included in a specified class of persons; and

                     (b)  is, or has been, in Australia in specified circumstances;

is a person to whom this section applies.

1061ZO(8)  The circumstances that may be specified in a declaration under subsection (7) include circumstances that existed or exist at any time before or after the making of the declaration.

1061ZO(9)  A declaration under subsection (7):

                     (a)  must be in writing; and

                     (b)  is a disallowable instrument.

1061ZP  Person subject to newly arrived resident’s waiting period

                   This Subdivision does not apply to a person while the person is subject to a newly arrived resident’s waiting period.

1061ZQ  Newly arrived resident’s waiting period

1061ZQ(1)  Subject to subsection (2), for the purposes of this Division, a person who has entered Australia on or after 1 February 2000 is subject to a newly arrived resident’s waiting period.

1061ZQ(2)  Subsection (1) does not apply to a person who:

                     (a)  has a qualifying residence exemption for a health care card; or

                     (b)  has already served a newly arrived resident’s waiting period; or

                     (c)  has been an Australian resident, or a special category visa holder residing in Australia, and in Australia for a period of, or for periods totalling, 104 weeks; or

                     (d)  holds, or formerly held, a visa included in a class of visas determined by the Minister for the purposes of subsection 739A(6); or

                     (e)  is not subject to a newly arrived resident’s waiting period under subsection 739A(1) or (2) because of the operation of subsection 739A(7).

1061ZR  Duration of newly arrived resident’s waiting period

                   If a person is subject to a newly arrived resident’s waiting period, the period:

                     (a)  starts on the day on which the person first became an Australian resident or a special category visa holder residing in Australia; and

                     (b)  ends when the person has been both:

                              (i)  an Australian resident or a special category visa holder residing in Australia; and

                             (ii)  in Australia;

                            for a period of, or for periods totalling, 104 weeks.

Subdivision CMiscellaneous provisions relating to health care cards

1061ZS  Issue of health care cards

                   The Secretary must issue an automatic issue health care card to a person who is qualified for such a card.

1061ZT  Certain dependants not qualified for health care card

1061ZT(1)  Subject to subsection (2), a person is not qualified for a health care card in respect of any day on which the person:

                     (a)  is a dependant of any person; or

                     (b)  is wholly or substantially dependent on:

                              (i)  a resident of; or

                             (ii)  a corporation carrying on business in; or

                            (iii)  the government of;

                            a country other than Australia.

1061ZT(2)  Subsection (1) does not apply to:

                     (a)  a person who is the partner of another person; or

                     (b)  a person who is qualified for a health care card under subsection 1061ZK(2) or (3) or subsection 1061ZO(3), (4) or (5).


 

Chapter 2BStudent Financial Supplement Scheme

Part 2B.1Establishment of scheme

Division 1Preliminary

1061ZW  Object of this Chapter

                   The object of this Chapter is to establish a Student Financial Supplement Scheme enabling certain tertiary students to obtain a repayable financial supplement by entering into a contract for that purpose with a financial corporation that participates in the scheme.

1061ZX  Outline of the scheme

1061ZX(1)  The scheme provides for the reduction of the rate of youth allowance, austudy payment or pensioner education supplement payable to a person who obtains financial supplement.

1061ZX(2)  The scheme contains provisions under which the amount of supplement that the person is eligible to obtain depends on the total rate of youth allowance, austudy payment or pensioner education supplement that the person chooses to receive. Those provisions allow the person to choose to repay some or all of the youth allowance, austudy payment or pensioner education supplement, or to receive a lower rate of payment of such an allowance, payment or supplement, in order to receive a higher amount of financial supplement.

1061ZX(3)  The scheme provides that the person is not liable to pay interest to the financial corporation in respect of financial supplement received by the person, but provides for payment by the Commonwealth, without cost to the person, to the financial corporation of a subsidy that includes an amount in lieu of interest.

1061ZX(4)  The scheme provides for the amount of the financial supplement that has to be repaid under a contract to be indexed on 1 June in the year next following the year in which the contract is entered into, and on 1 June in each later year. The amount by which the supplement is increased by indexation is owed by the person to the Commonwealth and not to the financial corporation.

1061ZX(5)  Under the scheme, the person is entitled, but not required, to make early repayments in respect of the supplement during the period of the contract. The scheme provides for a discount for any repayments made before the end of that period.

1061ZX(6)  The scheme provides that, if financial supplement paid to a person is not repaid in full before the end of the period of the contract, the obligation to repay the outstanding amount of the supplement is transferred to the Commonwealth, and the indexed amount is repayable by the person to the Commonwealth through the taxation system when the person’s income reaches a specified level.


 

Division 2Eligibility to obtain financial supplement

1061ZY  Eligibility to obtain financial supplement

1061ZY(1)  Subject to subsection (2), a person is eligible to obtain financial supplement for a period (an eligibility period) that is a year or a part of a year if:

                     (a)  the person is undertaking, or intending to undertake, a tertiary course at an educational institution throughout the period; and

                     (b)  the person does not undertake a course of primary or secondary education at any time during the period; and

                     (c)  the person is a category 1 student or a category 2 student in respect of the period; and

                     (d)  the amount of financial supplement that the person is eligible to obtain under Division 6 for the year is not less than the minimum amount of financial supplement.

1061ZY(2)  A person is not eligible to obtain financial supplement for an eligibility period that begins on or after the day on which the Student Assistance Legislation Amendment Act 2006 receives the Royal Assent.

1061ZZ  Category 1 student

1061ZZ(1)  A person is a category 1 student in respect of a period if, throughout the period, one or more of the payments referred to in this section are payable to the person.

1061ZZ(2)  The payment may be youth allowance if:

                     (a)  the person’s youth allowance general rate is more than zero; and

                     (b)  the youth allowance is payable because the person is undertaking full-time study.

1061ZZ(3)  The payment may be austudy payment if the person’s austudy payment general rate is more than zero.

1061ZZ(4)  The payment may be pensioner education supplement.

1061ZZA  Category 2 student

1061ZZA(1) A person is a category 2 student in respect of a period if:

                     (a)  the person is not a category 1 student in respect of the period; and

                     (b)  throughout the period the person is undertaking full-time study; and

                     (c)  throughout the period youth allowance at the youth allowance general rate is not payable to the person only because of the operation of one or more of the following:

                              (i)  Module F (the parental income test) of the Youth Allowance Rate Calculator in section 1067G;

                             (ii)  Module G (the family actual means test) of that Calculator;

                            (iii)  Subdivision AB (the youth allowance assets test) of Division 2 of Part 2.11; and

                     (d)  if subparagraph (c)(i) applies—the person’s combined parental income for the appropriate tax year under Submodule 4 of Module F is throughout the period less than the person’s modified parental income free area; and

                     (e)  if subparagraph (c)(ii) applies—the actual means of the person’s family under Module G is throughout the period less than the person’s modified parental income free area; and

                    (ea)  if subparagraph (c)(iii) applies—the allowance would have been payable if the reference to 50% in subsection 547G(2) were instead a reference to 75%; and

                      (f)  neither section 1061ZZAA nor 1061ZZAB applies to the person.

1061ZZA(2) For the purposes of paragraphs (1)(d) and (e), the person’s modified parental income free area is the indexed amount that would be the person’s parental income free area under point 1067G-F22 if the amount of $23,400 that was specified in paragraph 1067G-F22(a) when that paragraph was enacted had been $54,949.

1061ZZAA  Failure by person to comply with request to provide person’s tax file number

1061ZZAA(1)   This section applies to a person if:

                     (a)  the Secretary has requested the person under section 1061ZZBP to:

                              (i)  give the Secretary a written statement of the person’s tax file number; or

                             (ii)  apply to the Commissioner of Taxation for a tax file number and give the Secretary a written statement of the person’s tax file number after it has been issued; and

                     (b)  at the end of 28 days after the request is made, the person has neither:

                              (i)  given the Secretary a written statement of the person’s tax file number; nor

                             (ii)  given the Secretary an employment declaration and satisfied either subsection (2) or (3).

1061ZZAA(2)   The person satisfies this subsection if:

                     (a)  the employment declaration states that the person:

                              (i)  has a tax file number but does not know what it is; and

                             (ii)  has asked the Commissioner of Taxation to inform him or her of the number; and

                     (b)  the person has given the Secretary a document authorising the Commissioner to tell the Secretary:

                              (i)  whether the person has a tax file number; and

                             (ii)  if the person has a tax file number—the tax file number; and

                     (c)  the Commissioner has not told the Secretary that the person has no tax file number.

1061ZZAA(3)   The person satisfies this subsection if:

                     (a)  the employment declaration states that the person has applied for a tax file number; and

                     (b)  the person has given the Secretary a document authorising the Commissioner of Taxation to tell the Secretary:

                              (i)  if a tax file number is issued to the person—the tax file number; or

                             (ii)  if the application is refused—that the application has been refused; or

                            (iii)  if the application is withdrawn—that the application has been withdrawn; and

                     (c)  the Commissioner has not told the Secretary that the person has not applied for a tax file number; and

                     (d)  the Commissioner has not told the Secretary that an application by the person for a tax file number has been refused; and

                     (e)  the application for a tax file number has not been withdrawn.

1061ZZAB  Failure by person to comply with request to provide the tax file number of a parent of the person

1061ZZAB(1)   Subject to subsection (4), this section applies to a person if:

                     (a)  the person is requested under section 1061ZZBQ to give the Secretary a written statement of the tax file number of a parent of the person; and

                     (b)  at the end of 28 days after the request is made the person has neither:

                              (i)  given the Secretary a written statement of the parent’s tax file number; nor

                             (ii)  given the Secretary a declaration by the parent in a form approved by the Secretary and satisfied either subsection (2) or (3).

1061ZZAB(2)   The person satisfies this subsection if:

                     (a)  the parent’s declaration states that the parent:

                              (i)  has a tax file number but does not know what it is; and

                             (ii)  has asked the Commissioner of Taxation to inform him or her of his or her tax file number; and

                     (b)  the person has given the Secretary a document signed by the parent that authorises the Commissioner to tell the Secretary:

                              (i)  whether the parent has a tax file number; and

                             (ii)  if the parent has a tax file number—the tax file number; and

                     (c)  the Commissioner has not told the Secretary that the parent has no tax file number.

1061ZZAB(3)   The person satisfies this subsection if:

                     (a)  the parent’s declaration states that he or she has applied for a tax file number; and

                     (b)  the person has given the Secretary a document signed by the parent that authorises the Commissioner of Taxation to tell the Secretary:

                              (i)  if a tax file number is issued to the parent—the tax file number; or

                             (ii)  if the application is refused—that the application has been refused; or

                            (iii)  if the application is withdrawn—that the application has been withdrawn; and

                     (c)  the Commissioner has not told the Secretary that an application by the parent for a tax file number has been refused; and

                     (d)  the application for a tax file number has not been withdrawn.

1061ZZAB(4)   The Secretary may waive the request for a statement of the parent’s tax file number if the Secretary is satisfied that:

                     (a)  the person does not know the parent’s tax file number; and

                     (b)  the person can obtain none of the following from the parent:

                              (i)  the parent’s tax file number;

                             (ii)  a statement of the parent’s tax file number;

                            (iii)  a declaration by the parent under subparagraph (1)(b)(ii).


 

Division 3Decision and notice about eligibility to obtain financial supplement

1061ZZAC  Secretary’s decision

1061ZZAC(1)   If a person claims youth allowance, austudy payment or pensioner education supplement, the Secretary must decide whether the person is eligible to obtain financial supplement for a period that is the whole or a part of a year.

1061ZZAC(2)   Also, if:

                     (a)  the Secretary has made a decision in a year that a person is eligible to obtain financial supplement for a period that is the whole or a part of that year; and

                     (b)  the person is likely to:

                              (i)  continue to undertake the person’s tertiary course in the next year; or

                             (ii)  undertake a new tertiary course in the next year when enrolments in the course are next accepted;

the Secretary must make a new decision, as early as practicable in the next year, about whether the person is eligible to obtain financial supplement for a period that is the whole or a part of that next year.

1061ZZAC(3)   If the Secretary decides that the person is eligible to obtain financial supplement for a period, the Secretary must give the person a notice (a supplement entitlement notice):

                     (a)  stating that the person is eligible to obtain financial supplement for that period; and

                     (b)  specifying the minimum and maximum amounts of financial supplement that the person can obtain.

1061ZZAC(4)   This section does not apply in relation to a period that is the whole or part of a year if the year begins on or after the day on which the Student Assistance Legislation Amendment Act 2006 receives the Royal Assent.

1061ZZAD  Revocation or variation of decision after review

1061ZZAD(1)   This section applies if:

                     (a)  the Secretary has made a decision under section 1061ZZAC in relation to a person; and

                     (b)  the Secretary has given the person a supplement entitlement notice under subsection 1061ZZAC(3) as a result of the decision; and

                     (c)  after the notice was given the decision is reviewed under Chapter 6; and

                     (d)  as a result of the review, the decision is revoked or varied.

1061ZZAD(2)   The revocation or variation revokes the supplement entitlement notice and the notice ceases to be valid for the purpose of applying for financial supplement.

1061ZZAD(3)   The Secretary must give the person a statement telling the person:

                     (a)  that the decision has been revoked, or has been varied in a manner set out in the statement, as the case may be; and

                     (b)  that the supplement entitlement notice has been revoked and ceases to be valid for the purpose of applying for financial supplement.

1061ZZAD(4)   If the decision is varied and, after the variation, the person is or becomes eligible to obtain financial supplement for a period, the Secretary must give the person a notice (also a supplement entitlement notice):

                     (a)  stating that the person is eligible to obtain financial supplement for that period; and

                     (b)  specifying the minimum and maximum amounts of financial supplement that the person can obtain.

1061ZZAE  Transitional

1061ZZAE(1)   This section applies if, immediately before the commencement of this Chapter, a person held a notice given under Part 3 of the Social Security Student Financial Supplement Scheme 1998.

1061ZZAE(2)   If the person had not used the notice before that commencement in an application for financial supplement under that Scheme, the person is eligible to obtain financial supplement under this Chapter for the period to which the notice related.

1061ZZAE(3)   The notice is taken to be a supplement entitlement notice given under this Division.


 

Division 4Agreements between Commonwealth and financial corporations

1061ZZAF  Applications for financial supplement

                   A person may apply for financial supplement only to a participating corporation.

1061ZZAG  Agreements

1061ZZAG(1)   The Minister may enter into an agreement, on behalf of the Commonwealth, with a financial corporation for the payment by the corporation after the commencement of this Chapter, in the year in which this Chapter commences or a later year, of financial supplement.

1061ZZAG(2)   An agreement referred to in subsection (1) does not have any effect unless it:

                     (a)  is expressed to have effect subject to this Chapter; and

                     (b)  provides for the payment by the Commonwealth to the financial corporation, in respect of each amount of financial supplement paid by the corporation to a person that has not been repaid, or in respect of which the rights of the corporation have been transferred to the Commonwealth, of a subsidy of such amount or amounts, or at such rate or rates, and in respect of such period or periods, as are stated in the agreement.

1061ZZAG(3)   If such an agreement is entered into, the corporation is a participating corporation for the purposes of this Chapter in respect of the year, or each year, concerned.

1061ZZAG(4)   The parties to an agreement referred to in subsection (2) (including such an agreement as previously amended under this subsection) may enter into an agreement amending or terminating it.

1061ZZAG(5)   The amendment or termination of an agreement does not affect any financial supplement contract that was in force immediately before the amendment or termination took effect.

1061ZZAG(6)   If an agreement was in force, immediately before the commencement of this Chapter, between the Commonwealth and a financial corporation under section 1.7 of the Social Security Student Financial Supplement Scheme 1998, the amendment or termination of the agreement, and the commencement of an agreement under this section, do not affect any financial supplement contract made under that Scheme.

1061ZZAG(7)   An agreement between the Commonwealth and a financial corporation is not subject to any stamp duty or other tax under a law of a State or Territory.

1061ZZAG(8)   An officer may disclose to a participating corporation any information about a person that is relevant to the exercise or performance by the corporation of any of its rights or obligations in respect of the person under this Chapter.

1061ZZAG(9)   A participating corporation may disclose to an officer any information about a person that is relevant to the exercise or performance of any rights, powers or obligations conferred or imposed on an officer or on the Commonwealth in respect of the person under this Chapter.


 

Division 5Application for financial supplement

1061ZZAH  When to apply

                   A person who is eligible to obtain financial supplement for an eligibility period may apply to a participating corporation, during that period, for financial supplement.

1061ZZAI  How to apply

                   A person may only apply for financial supplement by:

                     (a)  completing an application form approved by the Secretary; and

                     (b)  lodging it, with the person’s supplement entitlement notice, at an office of a participating corporation.

1061ZZAJ  Changing an application

                   A person who has applied for financial supplement for the eligibility period may, at any time, lodge another application form approved by the Secretary at an office of the participating corporation, telling the corporation that the person requires for that period:

                     (a)  a specified lesser amount of financial supplement, which must be:

                              (i)  not less than the total amount of financial supplement already paid to the person for the period; and

                             (ii)  not less than the minimum amount of financial supplement in respect of the person for the year that constitutes, or includes, the eligibility period; or

                     (b)  a specified greater amount of financial supplement, which must be not more than the maximum amount of financial supplement in respect of the person for the period.


 

Division 6Amount of financial supplement

Subdivision ACategory 1 students

1061ZZAK  Maximum amount of financial supplement

1061ZZAK(1)   If the relevant eligibility period of a person who is a category 1 student is a year, the maximum amount of financial supplement for the period in respect of the person is the lesser of:

                     (a)  $7,000; and

                     (b)  the amount worked out using the following Method statement.

Method statement

Step 1.   Work out the total amount of youth allowance general rate, austudy payment general rate or pensioner education supplement that would be payable to the person for the eligibility period if the person did not apply for financial supplement.

Step 2.   Work out the total amount of advance payment deductions (if any) to be made from the person’s rate of youth allowance or austudy payment, under Part 3.16A, in the eligibility period.

              Subtract that total amount from the total amount worked out under Step 1.

Step 3.   Work out the total amount of overpayments (if any) for the eligibility period.

              Subtract that total amount from the total amount worked out under Step 2.

Step 4.   Work out the total amount of deductions (if any) that are to be paid to the Commissioner of Taxation, under section 1359, for the eligibility period.

                   Note:             Section 1359 provides for the deduction and payment to the Commissioner of Taxation of amounts of tax that a person is required to pay.

              Subtract that total amount from the total amount worked out under Step 3.

Step 5.   Work out the total amount (if any) of youth allowance general rate, austudy payment general rate or pensioner education supplement that has already been paid for the eligibility period.

              Ignore any amount that has already been dealt with under Step 2.

              Ignore any amount that is taken never to have been paid because of section 1061ZZAW.

              Subtract the total amount from the amount worked out under Step 4.

Step 6.   Multiply the amount left by 2.

Step 7.   If the result is not a number of whole dollars, round the result up to the next number of whole dollars.

1061ZZAK(2)   If the relevant eligibility period of a person who is a category 1 student is less than a year, the maximum amount of financial supplement for the period in respect of the person is the lesser of:

                     (a)  the amount worked out using the Method statement in subsection (1); and

                     (b)  the amount worked out using the following Method statement.

Method statement

Step 1.   Multiply $7,000 by the number of days in the eligibility period.

Step 2.   Divide the result by the number of days in the year in which the eligibility period is included.

              If the result is not a number of whole dollars, round the result up to the next number of whole dollars.

1061ZZAK(3)   This section has effect subject to Subdivision C.

Subdivision BCategory 2 students

1061ZZAL  Change in eligibility period

1061ZZAL(1)   The maximum amount of financial supplement in respect of a person who is a category 2 student depends on the person’s eligibility period.

1061ZZAL(2)   If the person is undertaking, or intends to undertake, a short course, it is necessary to work out whether the person’s eligibility period is to be changed under section 1061ZZAM.

1061ZZAL(3)   If the person is neither undertaking, nor intending to undertake, a short course, it is necessary to work out whether the person’s eligibility period is to be changed under section 1061ZZAN.

1061ZZAM  Eligibility period (short course)

1061ZZAM(1)  This section explains whether, and how, to change the eligibility period for a person who is undertaking, or intending to undertake, a short course.

1061ZZAM(2)  Subject to subsection (3), the eligibility period that would have applied to the person apart from this subsection (the eligibility period otherwise applicable) must be changed if the person applied for financial supplement more than 4 weeks after being given a supplement entitlement notice.

1061ZZAM(3)  The Secretary may decide that the eligibility period otherwise applicable is not to be changed if the Secretary is satisfied that:

                     (a)  the person took reasonable steps to apply within 4 weeks after being given a supplement entitlement notice; and

                     (b)  circumstances beyond the person’s control prevented the person from applying within the 4 weeks; and

                     (c)  the person applied as soon as practicable after the circumstances stopped.

1061ZZAM(4)  If the eligibility period otherwise applicable is to be changed, the person’s new eligibility period is the period:

                     (a)  starting on the later of:

                              (i)  the day when the person applied; and

                             (ii)  the start of the eligibility period otherwise applicable; and

                     (b)  ending when the eligibility period otherwise applicable would have ended.

1061ZZAN  Eligibility period (no short course)

1061ZZAN(1)   This section explains whether, and how, to change the eligibility period for a person who is neither undertaking, nor intending to undertake, a short course.

1061ZZAN(2)   Subject to subsection (3), the eligibility period that would have applied to the person apart from this subsection (the eligibility period otherwise applicable) must be changed if the person applied for financial supplement after 31 May in the year in which the period is included.

1061ZZAN(3)   The Secretary may decide that the period is not to be changed if the Secretary is satisfied that:

                     (a)  the person took reasonable steps to apply within 4 weeks after being given a supplement entitlement notice; and

                     (b)  circumstances beyond the person’s control prevented the person from applying within the 4 weeks; and

                     (c)  the person applied as soon as practicable after the circumstances stopped.

1061ZZAN(4)   If the eligibility period otherwise applicable is to be changed and the person applied before 1 October in the year, the person’s new eligibility period is the period:

                     (a)  starting on the later of 1 July and the start of the eligibility period otherwise applicable; and

                     (b)  ending when the eligibility period otherwise applicable would have ended.

1061ZZAN(5)   If the eligibility period otherwise applicable is to be changed and the person applied on or after 1 October in the year, the person’s new eligibility period is the period:

                     (a)  starting on the later of:

                              (i)  the day when the person applied; and

                             (ii)  the start of the eligibility period otherwise applicable; and

                     (b)  ending when the eligibility period otherwise applicable would have ended.

1061ZZAO  Maximum amount of financial supplement

1061ZZAO(1)   If:

                     (a)  the person is undertaking, or intending to undertake, a short course; or

                     (b)  the person is neither undertaking, nor intending to undertake, a short course and the person’s eligibility period is less than a year;

the maximum amount of financial supplement for the eligibility period in respect of the person is worked out using the following Method statement.

Method statement

Step 1.   Multiply $2,000 by the number of days in the eligibility period.

Step 2.   Divide the result by the number of days in the year that includes the eligibility period.

              If the result is not a number of whole dollars, round the result up to the next number of whole dollars.

1061ZZAO(2)   If the person is neither undertaking, nor intending to undertake, a short course, and the person’s eligibility period is a year, the maximum amount of financial supplement for the eligibility period in respect of the person is $2,000.

1061ZZAO(3)   This section has effect subject to Subdivision C.

Subdivision CProvisions applying to both category 1 students and category 2 students

1061ZZAP  Minimum amount of financial supplement

                   The minimum amount of financial supplement in respect of a person is $500.

1061ZZAQ  Person doing more than one course

1061ZZAQ(1)   This section applies if a person undertakes, or intends to undertake, more than one tertiary course in the same period in a year.

1061ZZAQ(2)   The maximum amount of financial supplement for the period in respect of the person is the maximum amount worked out under this Division for the period in respect of the person for one of the courses.


 

Division 7Trading in youth allowance, austudy payment or pensioner education supplement for financial supplement

1061ZZAR  Purpose of Division

1061ZZAR(1)   Financial supplement will be paid to a person who is eligible to obtain financial supplement at a rate determined by the person’s financial supplement contract.

1061ZZAR(2)   If youth allowance, austudy payment or pensioner education supplement is payable to the person, the payment of financial supplement will reduce the rate at which the youth allowance, austudy payment or pensioner education supplement is payable.

1061ZZAR(3)   The reduction of the rate of payment is a trade in.

1061ZZAR(4)   The Division explains how trade in works.

1061ZZAS  Reduction of youth allowance, austudy payment or pensioner education supplement for financial supplement

1061ZZAS(1)    The period for which a payment of financial supplement will be made is an instalment period.

1061ZZAS(2)    Subject to subsection (3), the rate of youth allowance, austudy payment or pensioner education supplement that would have been payable to the person in an instalment period is reduced by an amount equal to one-half of the amount of financial supplement to be paid during the instalment period under the financial supplement contract.

1061ZZAS(3)    If, apart from this subsection, the amount by which the rate would be reduced is an amount including one-half of a cent, the amount is to be increased by one-half of a cent.

1061ZZAS(4)    This section has effect despite any other provision of this Act.


 

Division 8Obtaining or increasing financial supplement by trading back youth allowance, austudy payment or pensioner education supplement

Subdivision APurpose of Division

1061ZZAT  Purpose of Division

1061ZZAT(1)   If a person who is eligible to obtain financial supplement wishes to obtain financial supplement, the person may repay an amount of youth allowance, austudy payment or pensioner education supplement.

1061ZZAT(2)   If a person who is obtaining financial supplement wishes to increase the amount of financial supplement, the person may repay an amount of youth allowance, austudy payment or pensioner education supplement.

1061ZZAT(3)   The repayment of the youth allowance, austudy payment or pensioner education supplement is a trade back.

1061ZZAT(4)   This Division explains how trade back works.

1061ZZAT(5)   This Division also sets out the effect of trade back.

1061ZZAT(6)   This Division does not affect the operation of Chapter 5.

Subdivision BWhen a person may repay youth allowance, austudy payment or pensioner education supplement to obtain or increase financial supplement

1061ZZAU  Election to repay youth allowance, austudy payment or pensioner education supplement

1061ZZAU(1)   A person to whom youth allowance, austudy payment or pensioner education supplement was payable during a payment period may elect to repay to the Commonwealth some or all of the youth allowance, austudy payment or pensioner education supplement.

1061ZZAU(2)   The person must make the election using the form approved under paragraph 1061ZZAI(a).

1061ZZAU(3)   A payment period is:

                     (a)  the part of a year starting on 1 January and ending on 31 May; or

                     (b)  the part of a year starting on 1 July and ending on 30 September.

1061ZZAV  Timing of repayment

1061ZZAV(1)   A person who is not obtaining financial supplement may, in order to obtain financial supplement, repay to the Commonwealth youth allowance, austudy payment or pensioner education supplement:

                     (a)  while the person is eligible to obtain financial supplement; and

                     (b)  during the payment period.

1061ZZAV(2)   However, if the person does not repay youth allowance, austudy payment or pensioner education supplement during the payment period, the person may, in order to obtain financial supplement, repay youth allowance, austudy payment or pensioner education supplement after that period if the Secretary is satisfied that:

                     (a)  the person took reasonable steps to repay it during the payment period; and

                     (b)  circumstances beyond the person’s control prevented the person from repaying it during the period; and

                     (c)  the person repays it as soon as practicable after the end of the payment period and during the year that includes the payment period.

1061ZZAV(3)   A person who is obtaining financial supplement may, in order to increase the amount of financial supplement, repay to the Commonwealth youth allowance, austudy payment or pensioner education supplement:

                     (a)  while the person is eligible to obtain financial supplement; and

                     (b)  during the year in which the youth allowance, austudy payment or pensioner education supplement was paid.

Subdivision CRepayment

1061ZZAW  Effect of repayment

                   If an amount is repaid by a person under this Division, the amount is taken never to have been paid to the person.


 

Division 9Financial supplement contracts

Subdivision AMaking a contract for payment of financial supplement

1061ZZAX  Making a contract between person and participating corporation

1061ZZAX(1)   If a person applies to a participating corporation under Division 5 for the payment of financial supplement for an eligibility period, the corporation must, as soon as practicable, accept the application by written notice to the person.

1061ZZAX(2)   A contract is made when the corporation accepts the application by giving the notice referred to in subsection (1). The contract is a financial supplement contract.

1061ZZAX(3)   A financial supplement contract is a contract for the making of a loan by the corporation to the person under this Division without any requirement on the person to pay interest.

1061ZZAX(4)   The contract must be for the amount of financial supplement for which the person from time to time asks, but the amount must not be less than the minimum amount, or more than the maximum amount, of financial supplement that the person is, from time to time, eligible to obtain under Division 6.

1061ZZAX(5)   The contract must also allow, but not compel, the person to make repayments during the contract period under Division 13 of the amount outstanding at any time under the contract.

1061ZZAX(6)   The contract must set out the termination date for the contract. The date to be set out is the last day of the contract period.

1061ZZAX(7)   The contract period is the period beginning on the day when the contract is made and ending on 31 May in the year in which the last of the periods referred to in paragraph 1061ZZCH(1)(b) ends.

1061ZZAY  Existing contracts

1061ZZAY(1)   A contract is also a financial supplement contract if it is a contract referred to in section 8.2 of the Social Security Student Financial Supplement Scheme 1998.

1061ZZAY(2)   The termination date for the contract is the date set out in the contract.

1061ZZAY(3)   The contract period is the period beginning on the day when the contract was made and ending on 31 May in the year in which the last of the periods referred to in paragraph 1061ZZCH(1)(b) ended or ends.

1061ZZAZ  Liability for money paid under a financial supplement contract

1061ZZAZ(1)   A participating corporation may rely on advice given by the Commonwealth to decide:

                     (a)  whether it must pay financial supplement to a person; and

                     (b)  the amount of financial supplement.

1061ZZAZ(2)   An amount paid to a person by a corporation, relying on advice given by the Commonwealth, is taken to be financial supplement paid under the contract even though the person may not have been eligible to obtain the amount.

1061ZZAZ(3)   Subsection (2) does not affect the operation of Part 2B.2.

1061ZZBA  Validity of financial supplement contract

1061ZZBA(1)   The validity of a financial supplement contract with a person is not affected merely because the person was not eligible to obtain financial supplement when the contract was made, or ceases at a later time to be eligible.

1061ZZBA(2)   The contract is not invalid, and is not voidable, under any other law (whether written or unwritten) in force in a State or Territory.

1061ZZBA(3)   The contract is not invalid merely because the person is an undischarged bankrupt when the contract is made.

1061ZZBA(4)   Bankruptcy does not release a person from his or her obligations under the contract.

Subdivision BWhen a financial supplement contract can be cancelled

1061ZZBB  Person has right to cancel financial supplement contract

1061ZZBB(1)   A person who makes a financial supplement contract has a right to cancel the contract.

1061ZZBB(2)   Subsection (1) does not affect the operation of section 1061ZZCU.

1061ZZBB(3)   If, under section 1061ZZBF, the person waives his or her right to cancel the contract, sections 1061ZZBC to 1061ZZBE do not apply to the contract.

1061ZZBC  How to cancel financial supplement contract

1061ZZBC(1)   To exercise the right to cancel the contract, the person must give to the participating corporation written notice that the person is withdrawing his or her application for financial supplement

1061ZZBC(2)   The notice must be lodged at an office of the corporation.

1061ZZBD  When to cancel financial supplement contract

                   The person’s right may be exercised within 14 days (the cooling off period) after the day when the contract is made under section 1061ZZAX.

1061ZZBE  Payments made during cooling off period

1061ZZBE(1)    In the cooling off period, the participating corporation must not make a payment to the person under the contract.

1061ZZBE(2)    If the corporation makes a payment to the person under the contract within the cooling off period, the payment is taken not to be a payment of financial supplement if the person repays to the corporation an amount equal to the payment within 7 days after the date of the payment.

1061ZZBE(3)    If the corporation makes a payment to the person under the contract after the cooling off period and the person has exercised the right to cancel the contract, the payment is taken not to be a payment of financial supplement if the person repays to the corporation an amount equal to the payment within 7 days after the date of the payment.

1061ZZBF  Person may waive right to cancel contract

                   The person may waive the right to cancel the contract.

1061ZZBG  How to waive right to cancel contract

                   To waive the right to cancel the contract, the person must give to the participating corporation written notice that he or she is waiving the right to cancel the contract.

1061ZZBH  When to waive right to cancel contract

                   To exercise the right of waiver, the person must give the participating corporation the notice referred to in section 1061ZZBG immediately after the contract is made under section 1061ZZAX.

Subdivision CFinancial supplement contract exempt from certain laws and taxes

1061ZZBI  Financial supplement contract exempt from certain laws and taxes

1061ZZBI(1)     A law of a State or Territory about giving credit or other financial assistance does not apply to a financial supplement contract.

1061ZZBI(2)     An application for the payment of financial supplement, a financial supplement contract, or an act or thing done or transaction entered into under such a contract, is not taxable under any law of a State or Territory.


 

Division 10Payment of financial supplement

1061ZZBJ  Payment by instalments

1061ZZBJ(1)    Financial supplement is to be paid by instalments for periods determined by the Secretary.

1061ZZBJ(2)    Instalments of financial supplement are to be paid at times determined by the Secretary.

1061ZZBK  Rounding off

                   If the amount of an instalment includes a fraction of a cent, the amount is to be rounded to the nearest whole cent (0.5 cent being rounded upwards).

1061ZZBL  To whom instalments must be paid

1061ZZBL(1)    If a person who is a category 1 student is trading in, or trading back, youth allowance, financial supplement must be paid to the person to whom instalments of youth allowance are or were being paid under section 559D or 559E.

1061ZZBL(2)    If a person who is a category 1 student is trading in, or trading back, austudy payment, financial supplement must be paid to the person to whom instalments of austudy payment are or were being paid under section 584D.

1061ZZBL(3)    If a person who is a category 1 student is trading in, or trading back, pensioner education supplement, financial supplement must be paid to the person to whom instalments of pensioner education supplement are or were being paid under section 1061PZK.

1061ZZBL(4)    If a person who is a category 2 student obtains financial supplement, it must be paid to the person to whom instalments of youth allowance would be paid under section 559D or 559E if youth allowance were payable to the student.

1061ZZBL(5)    This section does not affect the liability of a person to make repayments under Part 2B.3.

1061ZZBM  Payment into bank account

1061ZZBM(1)   If an amount of financial supplement is paid to a person, it must be paid to the credit of a bank account nominated and maintained by the person.

1061ZZBM(2)   The bank account may be maintained by the person alone or jointly or in common with someone else.


 

Division 11Protection of financial supplement

1061ZZBN  Financial supplement to be absolutely inalienable

                   Financial supplement is absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy or otherwise.

1061ZZBO  Effect of garnishee or attachment order

1061ZZBO(1)   This section applies if:

                     (a)  a person has an account with a financial institution (whether the account is maintained by the person alone, or jointly or in common with someone else); and

                     (b)  a court order in the nature of a garnishee order comes into force in respect of the account; and

                     (c)  an amount of financial supplement has been paid (whether on the person’s own behalf or not) to the credit of the account in the 4 weeks immediately before the court order came into force.

1061ZZBO(2)   The court order does not apply to the saved amount (if any) in the account.

1061ZZBO(3)   The saved amount is the amount worked out using the following Method statement.

Method statement

Step 1.   Work out the amount of financial supplement paid to the credit of the account in the 4 weeks.

Step 2.   Subtract from that amount the total amount withdrawn from the account in the 4 weeks.

              The amount left is the saved amount.


 

Division 12Obligations of category 2 students

Subdivision AStatements about tax file numbers

1061ZZBP  Secretary may request person obtaining financial supplement to give statement of person’s tax file number

Request for tax file number

1061ZZBP(1)    The Secretary may request, but not compel, a person who is a category 2 student and is obtaining financial supplement:

                     (a)  if the person has a tax file number—to give the Secretary a written statement of the person’s tax file number; or

                     (b)  if the person does not have a tax file number:

                              (i)  to apply to the Commissioner of Taxation for a tax file number; and

                             (ii)  to give the Secretary a written statement of the person’s tax file number after the Commissioner has issued it.

Failure to satisfy request

1061ZZBP(2)    A person is not eligible to obtain financial supplement if, at the end of 28 days after a request is made:

                     (a)  the person has failed to satisfy the request; and

                     (b)  the Secretary has not exempted the person from having to satisfy the request.

1061ZZBQ  Secretary may request person obtaining financial supplement to give statement of parent’s tax file number

Request for parent’s tax file number

1061ZZBQ(1)   If:

                     (a)  a person (the recipient) who is a category 2 student is obtaining financial supplement; and

                     (b)  the income of a parent of the recipient is required to be taken into account for the purpose of working out the recipient’s eligibility for financial supplement; and

                     (c)  the parent is in Australia;

the Secretary may request, but not compel, the recipient to give the Secretary a written statement of the parent’s tax file number.

Failure to satisfy request

1061ZZBQ(2)   A recipient is not eligible to obtain financial supplement if, at the end of 28 days after the request is made:

                     (a)  the recipient has failed to satisfy the request; and

                     (b)  the Secretary has not exempted the recipient from having to satisfy the request.

1061ZZBQ(3)   In this section:

parent has the same meaning as in paragraph (b) of the definition of parent in subsection 5(1).

Note 1:       In some cases the request can be satisfied in relation to a parent by giving the Secretary a declaration by the parent about the parent’s tax file number and an authority by the parent to the Commissioner of Taxation to give the Secretary certain information relevant to the parent’s tax file number (see subsections 1061ZZAB(2) and (3).

Note 2:       The Secretary may waive the requirement in some cases (see subsection 1061ZZAB(4)).

Subdivision BNotice of events or changes in circumstances

1061ZZBR  Secretary may give notice requiring information

1061ZZBR(1)   The Secretary may give a notice under this section to a person who is a category 2 student if:

                     (a)  financial supplement is paid to the person on the person’s own behalf; or

                     (b)  financial supplement is paid to someone else, on the person’s behalf, under section 1061ZZBL.

1061ZZBR(2)   The notice must require the person to tell the Department if:

                     (a)  a stated event or change of circumstances happens; or

                     (b)  the person becomes aware that a stated event or change of circumstances is likely to happen.

1061ZZBS  Event or change relevant to payment

                   An event or change of circumstances is not to be stated in a notice given under section 1061ZZBR unless the event or change of circumstances might affect the payment of financial supplement.

1061ZZBT  Formalities related to notice

                   Subject to section 1061ZZBU, a notice under section 1061ZZBR:

                     (a)  must be in writing; and

                     (b)  may be given personally or by post; and

                     (c)  must state how the person is to give the information to the Department; and

                     (d)  must state the period in which the person is to give the information to the Department; and

                     (e)  must state that the notice is a recipient notification notice given under this Act.

1061ZZBU  Validity of notice

                   A notice under section 1061ZZBR is not invalid merely because it does not comply with paragraph 1061ZZBT(c) or (e).

1061ZZBV  Period within which information to be given

1061ZZBV(1)   Subject to this section, the period stated under paragraph 1061ZZBT(d) must be the period of 14 days after:

                     (a)  the day on which the event or change of circumstances happens; or

                     (b)  the day on which the person becomes aware that the event or change of circumstances is likely to happen.

1061ZZBV(2)   If the Secretary is satisfied that there are special circumstances related to the person to whom the notice under section 1061ZZBR is to be given, the period to be stated under paragraph 1061ZZBT(d) is such period as the Secretary directs in writing, being a period that ends not less than 15 days, and not more than 28 days, after:

                     (a)  the day on which the event or change of circumstances happens; or

                     (b)  the day on which the person becomes aware that the event or change of circumstances is likely to happen.

1061ZZBV(3)   If the notice specifies an event consisting of the death of a person, the period to be stated under paragraph 1061ZZBT(d) is a period of 28 days after the day on which the event happens.

1061ZZBV(4)   If the notice requires the person to tell the Department of a proposal by the person to leave Australia, subsection (1) does not apply to that requirement.

1061ZZBV(5)   If the notice requires information about receipt of a compensation payment, the period stated under paragraph 1061ZZBT(d) in relation to the information must end at least 7 days after the day when the person becomes aware that he or she has received, or is to receive, a compensation payment.

1061ZZBW  Refusal or failure to comply with notice

1061ZZBW(1)  A person is guilty of an offence if:

                     (a)  the person is required to comply with a notice; and

                     (b)  the notice is a notice under section 1061ZZBR; and

                     (c)  the person refuses or fails to comply with the notice; and

                     (d)  the person is reckless as to the requirement.

Penalty:  Imprisonment for 6 months.

1061ZZBW(2)  Subsection (1) applies only to the extent to which the person is capable of complying with the notice.

1061ZZBW(3)  Subsection (1) does not apply if the person has a reasonable excuse.

1061ZZBW(4)  Strict liability applies to paragraph (1)(b).

1061ZZBX  Application overseas

                   This Subdivision extends to:

                     (a)  acts, omissions, matters and things outside Australia whether or not in a foreign country; and

                     (b)  all people irrespective of their nationality or citizenship.

Subdivision CNotice about a matter relevant to payment of financial supplement

1061ZZBY  Secretary may give notice requiring statement on matter

1061ZZBY(1)   The Secretary may give a notice under this section to a person who is a category 2 student if:

                     (a)  financial supplement is paid to the person on the person’s own behalf; or

                     (b)  financial supplement is paid to someone else, on the person’s behalf, under section 1061ZZBL.

1061ZZBY(2)   The notice must require the person to give the Department a statement about a matter that might affect the payment of financial supplement.

1061ZZBZ  Formalities related to notice

                   Subject to section 1061ZZCA, a notice under section 1061ZZBY:

                     (a)  must be in writing; and

                     (b)  may be given personally or by post; and

                     (c)  must state how the statement is to be given to the Department; and

                     (d)  must state the period within which the person is to give the statement to the Department; and

                     (e)  must state that the notice is a recipient statement notice given under this Act.

1061ZZCA  Validity of notice

                   A notice under section 1061ZZBY is not invalid merely because it does not comply with paragraph 1061ZZBZ(c) or (e).

1061ZZCB  Period within which statement to be given

                   The period stated under paragraph 1061ZZBZ(d) must be at least 14 days after the day on which the notice is given.

1061ZZCC  Statement must be in approved form

                   A statement given in response to a notice under section 1061ZZBY must be in writing and in accordance with a form approved by the Secretary.

1061ZZCD  Refusal or failure to comply with notice

1061ZZCD(1)   A person is guilty of an offence if:

                     (a)  the person is required to comply with a notice; and

                     (b)  the notice is a notice under section 1061ZZBY; and

                     (c)  the person refuses or fails to comply with the notice; and

                     (d)  the person is reckless as to the requirement.

Penalty:  Imprisonment for 6 months.

1061ZZCD(2)   Subsection (1) applies only to the extent to which the person is capable of complying with the notice.

1061ZZCD(3)   Subsection (1) does not apply if the person has a reasonable excuse.

1061ZZCD(4)   Strict liability applies to paragraph (1)(b).

1061ZZCE  Application overseas

                   This Subdivision extends to:

                     (a)  acts, omissions, matters and things outside Australia whether or not in a foreign country; and

                     (b)  all people irrespective of their nationality or citizenship.


 

Division 13Early repayments of financial supplement

Subdivision ACalculation and notification of amount outstanding under financial supplement contract

1061ZZCF  Application of Subdivision

                   This Subdivision has effect subject to section 1061ZZEE.

1061ZZCG  Calculation of amount outstanding under financial supplement contract before 1 June in the year after the year in which the contract was made

1061ZZCG(1)   The amount outstanding under a financial supplement contract at a time (the test time) before 1 June in the year immediately after the year in which the contract was made is the amount worked out using the formula:

1061ZZCG(2)   For the purpose of applying the formula in subsection (1) at the test time:

amounts repaid means the total of the amounts repaid under the contract before the test time.

discounts means the total of the discounts to which the person became entitled before the test time.

principal sum means the principal sum at the test time.

1061ZZCH  Calculation of amount outstanding under financial supplement contract at a later time

1061ZZCH(1)   Subject to subsections 1061ZZCN(6) and (7), the amount outstanding under a financial supplement contract at a time (the test time) during a period of 12 months (the test period) referred to in either of the following paragraphs:

                     (a)  the period of 12 months beginning on 1 June in the year immediately after the year in which the contract was made; or

                     (b)  any of the following 3 periods of 12 months;

is the amount worked out using the formula:

1061ZZCH(2)   For the purpose of applying the formula in subsection (1) at the test time:

amounts repaid means the total of the amounts repaid under the contract during the test period but before the test time.

discounts means the total of the discounts to which the person became entitled during the test period but before the test time.

indexation factor means the number worked out using the method statement in subsection (3).

previous amount outstanding means the amount outstanding under the contract immediately before the beginning of the test period.

1061ZZCH(3)   The Method statement for the purposes of the definition of indexation factor in subsection (2) is as follows:

Method statement

Step 1.   Work out the total of the index number for the March quarter in the later reference period and the index numbers for the 3 immediately preceding quarters.

Step 2.   Work out the total of the index number for the March quarter in the earlier reference period and the index numbers for the 3 immediately preceding quarters.

Step 3.   Divide the total worked out under Step 1 by the total worked out under Step 2.

Step 4.   Round the result to 3 decimal places.

1061ZZCH(4)   In subsection (3):

earlier reference period means the period of 12 months immediately before the later reference period.

later reference period means the period of 12 months immediately before the test period.

1061ZZCH(5)   If an indexation factor worked out under subsection (3) would end with a number greater than 4, were it to be worked out to 4 decimal places, the indexation factor is increased by 0.001.

1061ZZCH(6)   If, apart from this subsection, an amount worked out under this section would be an amount of dollars and cents, disregard the amount of the cents.

1061ZZCI  Notification of amount outstanding

1061ZZCI(1)     The Secretary must give to a person who is a party to a financial supplement contract with a participating corporation a notice of an amount outstanding under the contract that exists on:

                     (a)  1 June in the year following the year in which the contract was made; or

                     (b)  1 June in any of the following 3 years.

1061ZZCI(2)     The notice must state the amount outstanding under the contract at that date.

Subdivision BPerson’s rights to make repayments during contract period

1061ZZCJ  Person not required to, but may, make repayments during contract period

1061ZZCJ(1)    Subject to sections 1061ZZDE, 1061ZZDL, 1061ZZDV and 1061ZZEE, a person who is a party to a financial supplement contract with a participating corporation is not required during the contract period to make a repayment of the amount outstanding under the contract.

1061ZZCJ(2)    Non-payment by the person during the contract period of the amount outstanding is not a default under the contract for the purposes of any law of the Commonwealth, of a State or of a Territory.

1061ZZCJ(3)    However, the person may, at any time during the contract period, make a repayment (an amount repaid) to the corporation of the whole or a part of the amount outstanding at that time.

1061ZZCJ(4)    Subsection (3) has effect subject to section 1061ZZCL.

1061ZZCK  What happens if person makes an excess repayment

                   If a person purports to make a repayment to a participating corporation under a financial supplement contract by paying an amount under subsection 1061ZZCJ(3) that exceeds the amount that, having regard to the discount to which the person is entitled, would be needed to pay in full the amount outstanding, the excess:

                     (a)  is taken not to be a repayment; and

                     (b)  must be repaid by the corporation to the person.

1061ZZCL  Amount repaid not to include certain amounts

                   If the person makes a repayment under subsection 1061ZZCJ(3), the amount repaid is to be disregarded for the purposes of this Division:

                     (a)  to the extent to which it relates to wrongly paid supplement; or

                     (b)  if it is repaid after the giving of a notice under section 1061ZZCZ, 1061ZZDG, 1061ZZDQ or 1061ZZEA.

1061ZZCM  How to work out discount

1061ZZCM(1)   If, during the contract period, a person makes a repayment of an amount that is less than the amount outstanding, the person is entitled, in respect of the repayment, to a discount of an amount worked out using the formula:

1061ZZCM(2)   If, during the contract period, a person makes a repayment of an amount that is equal to the amount outstanding, the person is entitled, in respect of the repayment, to a discount of an amount worked out using the formula:

1061ZZCM(3)   If, apart from this subsection, an amount worked out under subsection (1) or (2) would be an amount of dollars and cents, the amount is to be rounded to the nearest number of whole dollars (rounding 50 cents upwards).

1061ZZCN  Effect of making a repayment during contract period

Application

1061ZZCN(1)   This section applies if a person, at a time (the repayment time) during the contract period of a financial supplement contract made by the person with a participating corporation, makes a repayment (the relevant repayment) in respect of the amount outstanding under the contract. For the purposes of this section, it is first necessary to work out whether an indexation amount is taken to have existed in respect of the contract immediately before the repayment time.

When an indexation amount is taken to have existed

1061ZZCN(2)   For the purposes of this section, an indexation amount is taken to have existed in respect of the contract immediately before the repayment time if:

                     (a)  an amount outstanding under the contract existed immediately before the repayment time under section 1061ZZCH; and

                     (b)  that amount outstanding exceeds the amount worked out using the formula:

Meaning of expressions used in formula

1061ZZCN(3)   For the purpose of applying the formula in subsection (2) immediately before the repayment time:

amounts repaid means the total of the amounts repaid under the contract before the repayment time.

amounts previously notionally repaid means the total of the amounts notionally repaid under the contract before the repayment time because of the application of this section in respect of previous repayments.

principal sum means the principal sum immediately before the repayment time.

What constitutes indexation amount

1061ZZCN(4)   The indexation amount referred to in subsection (2) is the amount of the excess referred to in paragraph (2)(b).

If no indexation amount

1061ZZCN(5)   If no indexation amount existed in respect of the contract immediately before the repayment time, the person is taken to have repaid to the corporation at the repayment time an amount (an amount notionally repaid) equal to the discount to which the person is entitled in respect of the relevant repayment.

If discount does not exceed indexation amount

1061ZZCN(6)   If:

                     (a)  an indexation amount existed in respect of the contract immediately before the repayment time; and

                     (b)  the discount to which the person is entitled in respect of the relevant repayment is equal to or less than the indexation amount;

the amount outstanding under the contract is taken to be reduced by the discount.

If discount exceeds indexation amount

1061ZZCN(7)   If:

                     (a)  an indexation amount existed in respect of the contract immediately before the repayment time; and

                     (b)  the discount to which the person is entitled in respect of the relevant repayment exceeds the indexation amount;

the following paragraphs have effect:

                     (c)  the amount outstanding under the contract is taken to be reduced by the indexation amount;

                     (d)  the person is taken to have repaid to the corporation at the repayment time an amount (an amount notionally repaid) equal to the excess.

Commonwealth to pay corporation amounts notionally repaid

1061ZZCN(8)   The Commonwealth must pay to the corporation an amount equal to any amount notionally repaid.

1061ZZCO  Rights and liabilities of participating corporation if repayment made

1061ZZCO(1)   This section applies if, immediately after a repayment is made under a financial supplement contract made by a participating corporation, the total of the amounts repaid and the amounts notionally repaid is equal to or exceeds the principal sum.

1061ZZCO(2)   The corporation’s rights under the contract are, by this subsection, transferred to the Commonwealth immediately after the repayment is made.

1061ZZCO(3)   If the total of the amounts repaid and the amounts notionally repaid exceeds the principal sum, the corporation must pay the excess to the Commonwealth.

Subdivision CWhat happens at the end of the contract period

1061ZZCP  Corporation’s rights at end of contract period

1061ZZCP(1)    This section applies if, at the end of the contract period of a financial supplement contract made by a participating corporation, the corporation’s rights under the contract have not previously been transferred to the Commonwealth.

1061ZZCP(2)    The corporation’s rights under the contract are, by this subsection, transferred to the Commonwealth at the end of the contract period.

1061ZZCP(3)    If the principal sum exceeds the total of the amounts repaid and the amounts notionally repaid, the Commonwealth must pay the excess to the corporation.

1061ZZCQ  Termination notice

1061ZZCQ(1)   As soon as practicable after the termination date of a financial supplement contract made by a person with a participating corporation, the Secretary must arrange for written notice (the termination notice) to be given to the person if such a notice has not already been given under the Social Security Student Financial Supplement Scheme 1998 or the Student Assistance Act 1973 as in force at a time before 1 July 1998.

1061ZZCQ(2)   The termination notice must:

                     (a)  state that, at the end of the contract period, the person no longer owes a debt to the corporation under the contract and will not receive a discount for repayments made after that time; and

                     (b)  state that, on a date referred to in the notice, being 1 June immediately following the termination date, the person incurred or will incur an FS debt or FS debts to the Commonwealth; and

                     (c)  specify the amount of that debt or the amounts of those debts; and

                     (d)  state that the person is entitled at any time to make repayments in respect of that debt or those debts and that so much of that debt or those debts as is not voluntarily repaid by the person will be recovered through the taxation system.

1061ZZCR  Secretary may give notice correcting information in previous notice

                   If, after a notice has been given to a person under this Division or under the corresponding provision of the Social Security Student Financial Supplement Scheme 1998 or of the Student Assistance Act 1973 as in force at a time before 1 July 1998 (including a notice previously given under this section or under a provision of that Scheme or Act corresponding to this section), the Secretary is satisfied that significant information in the notice was not, or is no longer, correct, the Secretary must arrange for a further written notice to be given to the person setting out the correct information.

1061ZZCS  Person may request notice to be corrected

1061ZZCS(1)    If a person considers that a notice given to the person under this Division or under the corresponding provision of the Social Security Student Financial Supplement Scheme 1998 or of the Student Assistance Act 1973 as in force at a time before 1 July 1998, was not, or is no longer, correct in a significant respect, the person may, by writing, request the Secretary to correct the notice.

1061ZZCS(2)    The person must make the request within 14 days after the date when the notice was received by the person or within such further period as the Secretary allows.

1061ZZCS(3)    A request must set out the information that is considered to be incorrect and the grounds on which the person considers the information to be incorrect.

1061ZZCS(4)    If a request is received by the Secretary, the Secretary must arrange, as soon as practicable, for it to be considered and for written notice of the decision on the request to be given to the person.

1061ZZCT  Effect of notices and requests

1061ZZCT(1)    A notice to a person under this Division or under the corresponding provision of the Social Security Student Financial Supplement Scheme 1998 or of the Student Assistance Act 1973 as in force at a time before 1 July 1998, is intended only to give information to the person and an FS debt of the person is not affected by a failure to give a notice or by any incorrect statement or information in a notice given under this Division or that corresponding provision.

1061ZZCT(2)    The making by a person of a request for a notice to be corrected does not affect an FS debt of the person.


 

Part 2B.2Payments of financial supplement under scheme to stop in certain circumstances

Division 1Payments to stop at request of recipient

1061ZZCU  Person may ask for payment to stop

                   A person who is a party to a financial supplement contract with a participating corporation may, by written notice to the corporation lodged at an office of the corporation, tell the corporation that he or she does not want further payments under the contract to be made after a day stated in the notice.

1061ZZCV  Effect of notice

1061ZZCV(1)   If a person gives a notice referred to in section 1061ZZCU, the corporation is discharged from liability to make further payments to the person under the contract from the end of the day stated in the notice.

1061ZZCV(2)   However, if the corporation continues to make payments to the person after that day, any amounts paid after that day or the end of 4 weeks after the day on which the notice was given to the corporation, whichever is the later:

                     (a)  are taken not to be payments of financial supplement made under the contract; and

                     (b)  are repayable by the person to the corporation; and

                     (c)  may be recovered by the corporation as a debt due to it by the person.


 

Division 2Payments to stop if the maximum amount of financial supplement is reduced to the amount already paid or a lesser amount

Subdivision ANotice that payments are to stop

1061ZZCW  Secretary must give notice to person and corporation

1061ZZCW(1)  This section applies if:

                     (a)  a person is a party to a financial supplement contract with a participating corporation; and

                     (b)  the decision (the original decision) made in respect of the person under section 1061ZZAC, or under Part 3 of the Social Security Student Financial Supplement Scheme 1998, is reviewed under Chapter 6; and

                     (c)  the person remains eligible to obtain financial supplement for the year or part of the year to which the contract relates; and

                     (d)  because of the review, the original decision is varied so that the maximum amount (the original amount) of financial supplement that the person is eligible to obtain under the contract is reduced to another amount (the revised amount); and

                     (e)  the revised amount is equal to or less than the amount of financial supplement that the person has already been paid under the contract.

1061ZZCW(2)  The Secretary must give written notice to the person and to the corporation:

                     (a)  stating:

                              (i)  that this section applies to the contract; and

                             (ii)  that the corporation must stop paying financial supplement to the person; and

                     (b)  specifying:

                              (i)  the revised amount that the person is eligible to obtain; and

                             (ii)  the amount (if any) of financial supplement paid in excess of the revised amount.

1061ZZCX  Effect of notice

1061ZZCX(1)   If the Secretary gives a notice under section 1061ZZCW to the person and the corporation, then, unless the decision on the review is set aside or varied after a further review under Chapter 6, the following provisions have effect.

1061ZZCX(2)   From the time when the notice is given to the corporation, the corporation is discharged from liability to make further payments to the person under the contract.

1061ZZCX(3)   However, if the corporation continues to make payments to the person after that time, any amounts paid after the end of 4 weeks after the day on which the notice is given to the corporation:

                     (a)  are taken not to be payments of financial supplement made under the contract; and

                     (b)  are repayable by the person to the corporation; and

                     (c)  may be recovered by the corporation as a debt due to it by the person.

1061ZZCY  This Subdivision is subject to sections 1061ZZFS and 1061ZZFT

                   This Subdivision has effect subject to sections 1061ZZFS and 1061ZZFT.

Subdivision BOriginal amount paid because person failed to notify change of circumstances

1061ZZCZ  Secretary may give notice to person and corporation

1061ZZCZ(1)    If the Secretary is satisfied that:

                     (a)  a person who is a party to a financial supplement contract with a participating corporation was given a notice under section 1061ZZCW; and

                     (b)  the person failed to tell the Secretary, in response to a notice under section 561B, 586B, 1061PZQ or 1061ZZBR, about the happening of, or about becoming aware of the likely happening of, a stated event or change of circumstances within the period prescribed for complying with the notice; and

                     (c)  the person was paid the original amount after the end of that period; and

                     (d)  the payment of the original amount after the end of that period resulted from the person’s failure to comply with the notice referred to in paragraph (b);

the Secretary may give to the person and the corporation a notice stating that he or she is so satisfied and telling them that this Subdivision applies in relation to them.

1061ZZCZ(2)    If the Secretary is satisfied that:

                     (a)  a person who is a party to a financial supplement contract with a participating corporation was given a notice under section 14.5 of the Social Security Student Financial Supplement Scheme 1998; and

                     (b)  the person failed to tell the Secretary, in response to a notice under section 561B, 586B or 1061PZQ, or a notice under section 12.2 of that Scheme, about the happening of, or about becoming aware of the likely happening of, a stated event or change of circumstances within the period prescribed for complying with the notice; and

                     (c)  the person was paid the original amount after the commencement of this Chapter; and

                     (d)  the payment of the original amount after the commencement of this Chapter resulted from the person’s failure to comply with the notice referred to in paragraph (b);

the Secretary may give to the person and the corporation a notice stating that he or she is so satisfied and telling them that this Subdivision applies in relation to them.

1061ZZDA  Effect of notice

                   If the Secretary gives a notice under section 1061ZZCZ to the person and the corporation, then, unless the decision to give the notice is set aside or varied after a review under Chapter 6, the following provisions have effect.

1061ZZDB  Transfer of corporation’s rights to Commonwealth

1061ZZDB(1)   On the giving of the notice to the corporation, the corporation’s rights referred to in subsection (2) or (3), as the case may be, are transferred to the Commonwealth by this subsection.

1061ZZDB(2)   If the notice was given under subsection 1061ZZCZ(1), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the end of the period referred to in paragraph 1061ZZCZ(1)(b); and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZCX(3).

1061ZZDB(3)   If the notice was given under subsection 1061ZZCZ(2), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the commencement of this Chapter; and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZCX(3).

1061ZZDB(4)   Financial supplement paid during the period referred to in subsection (2) or (3), as the case requires, is wrongly paid supplement.

1061ZZDC  Apportionment of financial supplement

                   Repayments of financial supplement made by the person before the notice was given to the person under subsection 1061ZZCZ(1) or (2) are taken to have been made:

                     (a)  first, in or towards the repayment of the wrongly paid supplement; and

                     (b)  then, if those repayments exceed the amount of the wrongly paid supplement, in or towards the repayment of the rest of the financial supplement paid to the person under the contract.

1061ZZDD  Liability of Commonwealth to corporation

                   The Commonwealth is liable to pay to the corporation the amount of any wrongly paid supplement that has not been repaid.

1061ZZDE  Liability of person to Commonwealth

1061ZZDE(1)   If the notice was given to the person under subsection 1061ZZCZ(1), the person is liable to pay to the Commonwealth an amount equal to the total of:

                     (a)  the amount that the Commonwealth is liable to pay to the corporation under section 1061ZZDD; and

                     (b)  the interest subsidy for the period referred to in subsection 1061ZZDB(2).

1061ZZDE(2)   If the notice was given to the person under subsection 1061ZZCZ(2), the person is liable to pay to the Commonwealth an amount equal to the total of:

                     (a)  the amount that the Commonwealth is liable to pay to the corporation under section 1061ZZDD; and

                     (b)  the interest subsidy for the period referred to in subsection 1061ZZDB(3).

1061ZZDF  This Subdivision not to affect Subdivision A

                   This Subdivision does not affect the operation of Subdivision A.

Subdivision COriginal amount paid because of false or misleading information

1061ZZDG  Secretary may give notice to person and corporation

1061ZZDG(1)   If the Secretary is satisfied that:

                     (a)  a person who is a party to a financial supplement contract with a participating corporation was given a notice under section 1061ZZCW; and

                     (b)  false or misleading information was given to the Commonwealth in relation to the calculation of the original amount; and

                     (c)  the payment of financial supplement in excess of the revised amount resulted from the false or misleading information;

the Secretary may give to the person and the corporation a notice stating that he or she is so satisfied and telling them that this Subdivision applies in relation to them.

1061ZZDG(2)   If the Secretary is satisfied that:

                     (a)  a person who is a party to a financial supplement contract with a participating corporation was given a notice under section 14.5 of the Social Security Student Financial Supplement Scheme 1998; and

                     (b)  false or misleading information was given to the Commonwealth in relation to the calculation of the original amount; and

                     (c)  the payment of financial supplement in excess of the revised amount resulted from the false or misleading information;

the Secretary may give to the person and the corporation a notice stating that he or she is so satisfied and telling them that this Subdivision applies in relation to them.

1061ZZDH  Effect of notice

                   If the Secretary gives a notice under section 1061ZZDG to the person and the corporation, then, unless the decision to give the notice is set aside or varied after a review under Chapter 6, the following provisions have effect.

1061ZZDI  Transfer of corporation’s rights to Commonwealth

1061ZZDI(1)    On the giving of the notice to the corporation, the corporation’s rights referred to in subsection (2) or (3), as the case may be, are transferred to the Commonwealth by this subsection.

1061ZZDI(2)    If the notice was given under subsection 1061ZZDG(1), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the time when the person had been paid an amount equal to the revised amount; and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZCX(3).

1061ZZDI(3)    If the notice was given under subsection 1061ZZDG(2), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the commencement of this Chapter; and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZCX(3).

1061ZZDI(4)    Financial supplement paid during the period referred to in subsection (2) or (3), as the case requires, is wrongly paid supplement.

1061ZZDJ  Apportionment of financial supplement

                   Repayments of financial supplement made by the person before the notice was given to the person under subsection 1061ZZDG(1) or (2) are taken to have been made:

                     (a)  first, in or towards the repayment of the wrongly paid supplement; and

                     (b)  then, if those repayments exceed the amount of the wrongly paid supplement, in or towards the repayment of the rest of the financial supplement paid to the person under the contract.

1061ZZDK  Liability of Commonwealth to corporation

                   The Commonwealth is liable to pay to the corporation the amount of any wrongly paid supplement that has not been repaid.

1061ZZDL  Liability of person to Commonwealth

1061ZZDL(1)   If the notice was given to the person under subsection 1061ZZDG(1), the person is liable to pay to the Commonwealth an amount equal to the total of:

                     (a)  the amount that the Commonwealth is liable to pay to the corporation under section 1061ZZDK; and

                     (b)  the interest subsidy for the period referred to in subsection 1061ZZDI(2).

1061ZZDL(2)   If the notice was given to the person under subsection 1061ZZDG(2), the person is liable to pay to the Commonwealth an amount equal to the total of:

                     (a)  the amount that the Commonwealth is liable to pay to the corporation under section 1061ZZDK; and

                     (b)  the interest subsidy for the period referred to in subsection 1061ZZDI(3).

1061ZZDM  This Subdivision not to affect Subdivision A

                   This Subdivision does not affect the operation of Subdivision A.


 

Division 3Payments to stop if person ceases to be eligible to obtain financial supplement

Subdivision ANotice that payments are to stop

1061ZZDN  Secretary must give notice to person and corporation

1061ZZDN(1)   This section applies if:

                     (a)  a person is a party to a financial supplement contract with a participating corporation; and

                     (b)  the decision (the original decision) made in respect of the person under section 1061ZZAC or under Part 3 of the Social Security Student Financial Supplement Scheme 1998 is reviewed under Chapter 6; and

                     (c)  because of the review, the original decision is varied so that the person ceases to be eligible to obtain financial supplement.

1061ZZDN(2)   The Secretary must give written notice to the person and the corporation:

                     (a)  stating that the person ceased to be eligible; and

                     (b)  specifying the date when the person ceased to be eligible.

1061ZZDO  Effect of notice

1061ZZDO(1)   If the Secretary gives a notice under section 1061ZZDN to the person and the corporation, then, unless the decision on the review is set aside or varied after a further review under Chapter 6, the following provisions have effect.

1061ZZDO(2)   From the time when the notice is given to the corporation, the corporation is discharged from liability to make further payments to the person under the contract.

1061ZZDO(3)   However, if the corporation continues to make payments to the person after that time, any amounts paid after the end of 4 weeks after the day on which the notice is given to the corporation:

                     (a)  are taken not to be payments of financial supplement made under the contract; and

                     (b)  are repayable by the person to the corporation; and

                     (c)  may be recovered by the corporation as a debt payable to it by the person.

1061ZZDP  This Subdivision is subject to sections 1061ZZFS and 1061ZZFT

                   This Subdivision has effect subject to sections 1061ZZFS and 1061ZZFT.

Subdivision BFinancial supplement paid because person failed to notify change of circumstances

1061ZZDQ  Secretary may give notice to person and corporation

1061ZZDQ(1)   If the Secretary is satisfied that:

                     (a)  a person who is a party to a financial supplement contract with a participating corporation was given a notice under section 1061ZZDN; and

                     (b)  the person failed to tell the Secretary, in response to a notice under section 561B, 586B, 1061PZQ or 1061ZZBR, about the happening of, or about becoming aware of the likely happening of, a stated event or change in circumstances, within the period prescribed for complying with the notice; and

                     (c)  the person ceased to be eligible to obtain financial supplement because of the event or change in circumstances; and

                     (d)  the person was paid financial supplement after the end of the period referred to in paragraph (b); and

                     (e)  the payment of financial supplement after the end of that period resulted from the person’s failure to comply with the notice referred to in paragraph (b);

the Secretary may give to the person and the corporation a notice stating that he or she is so satisfied and telling them that this Subdivision applies in relation to them.

1061ZZDQ(2)   If the Secretary is satisfied that:

                     (a)  a person who is a party to a financial supplement contract with a participating corporation was given a notice under section 14.24 of the Social Security Student Financial Supplement Scheme 1998; and

                     (b)  the person failed to tell the Secretary, in response to a notice under section 561B, 586B or 1061PZQ, or a notice under section 12.2 of that Scheme, about the happening of, or about becoming aware of the likely happening of, a stated event or change of circumstances within the period prescribed for complying with the notice; and

                     (c)  the person was paid financial supplement after the commencement of this Chapter; and

                     (d)  the payment of financial supplement after the commencement of this Chapter resulted from the person’s failure to comply with the notice referred to in paragraph (b);

the Secretary may give to the person and the corporation a notice stating that he or she is so satisfied and telling them that this Subdivision applies in relation to them.

1061ZZDR  Effect of notice

                   If the Secretary gives a notice under section 1061ZZDQ to the person and the corporation, then, unless the decision to give the notice is set aside or varied after a review under Chapter 6, the following provisions have effect.

1061ZZDS  Transfer of corporation’s rights to Commonwealth

1061ZZDS(1)    On the giving of the notice to the corporation, the corporation’s rights referred to in subsection (2) or (3), as the case may be, are transferred to the Commonwealth by this subsection.

1061ZZDS(2)    If the notice was given under subsection 1061ZZDQ(1), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the end of the period referred to in paragraph 1061ZZDQ(1)(b); and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZDO(3).

1061ZZDS(3)    If the notice was given under subsection 1061ZZDQ(2), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the commencement of this Chapter; and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZDO(3).

1061ZZDS(4)    Financial supplement paid during the period referred to in subsection (2) or (3), as the case requires, is wrongly paid supplement.

1061ZZDT  Apportionment of financial supplement

                   Repayments of financial supplement made by the person before the notice was given to the person under subsection 1061ZZDQ(1) or (2) are taken to have been made:

                     (a)  first, in or towards the repayment of the wrongly paid supplement; and

                     (b)  then, if those repayments exceed the amount of the wrongly paid supplement, in or towards the repayment of the rest of the financial supplement paid to the person under the contract.

1061ZZDU  Liability of Commonwealth to corporation

                   The Commonwealth is liable to pay to the corporation the amount of any wrongly paid supplement that has not been repaid.

1061ZZDV  Liability of person to Commonwealth

1061ZZDV(1)   If the notice was given to the person under subsection 1061ZZDQ(1), the person is liable to pay to the Commonwealth an amount equal to the total of:

                     (a)  the amount that the Commonwealth is liable to pay to the corporation under section 1061ZZDU; and

                     (b)  the interest subsidy for the period referred to in subsection 1061ZZDS(2).

1061ZZDV(2)   If the notice was given to the person under subsection 1061ZZDQ(2), the person is liable to pay to the Commonwealth an amount equal to the total of:

                     (a)  the amount that the Commonwealth is liable to pay to the corporation under section 1061ZZDU; and

                     (b)  the interest subsidy for the period referred to in subsection 1061ZZDS(3).

1061ZZDW  This Subdivision not to affect Subdivision A

                   This Subdivision does not affect the operation of Subdivision A.


 

Division 4Payments to stop if person is found never to have been eligible to obtain financial supplement

Subdivision ANotice that payments are to stop

1061ZZDX  Secretary must give notice to person and corporation

1061ZZDX(1)   This section applies if:

                     (a)  a person is a party to a financial supplement contract with a participating corporation; and

                     (b)  the decision (the original decision) made in respect of the person under section 1061ZZAC or under Part 3 of the Social Security Student Financial Supplement Scheme 1998 is reviewed under Chapter 6; and

                     (c)  because of the review the original decision is varied so that the statement in the supplement entitlement notice given to the person that the person was eligible to obtain financial supplement during an eligibility period was incorrect.

1061ZZDX(2)   The Secretary must give written notice to the person and the corporation stating that the person had never been eligible to obtain financial supplement.

1061ZZDY  Effect of notice

1061ZZDY(1)   If the Secretary gives a notice under section 1061ZZDX to the person and the corporation, then, unless the decision on the review is set aside or varied after a further review under Chapter 6, the following provisions have effect.

1061ZZDY(2)   From the time when the notice is given to the corporation, the corporation is discharged from liability to make further payments to the person under the contract.

1061ZZDY(3)   However, if the corporation continues to make payments to the person after that time, any amounts paid after the end of 4 weeks after the day on which the notice is given to the corporation:

                     (a)  are taken not to be payments of financial supplement made under the contract; and

                     (b)  are repayable by the person to the corporation; and

                     (c)  may be recovered by the corporation as a debt payable to it by the person.

1061ZZDZ  This Subdivision is subject to sections 1061ZZFS and 1061ZZFT

                   This Subdivision has effect subject to sections 1061ZZFS and 1061ZZFT.

Subdivision BFinancial supplement paid because of false or misleading information

1061ZZEA  Secretary may give notice to person and corporation

                   If the Secretary is satisfied that the incorrectness of a statement referred to in section 1061ZZDX that was given to a person who is a party to a financial supplement contract with a participating corporation resulted from false or misleading information given to the Commonwealth about the person, the Secretary may give notice to the person and the corporation stating that he or she is so satisfied and that this Subdivision applies in relation to them.

1061ZZEB  Effect of notice

                   If the Secretary gives a notice under section 1061ZZEA to the person and the corporation, then, unless the decision to give the notice is set aside or varied after a review under Chapter 6, the following provisions have effect.

1061ZZEC  Transfer of corporation’s rights to Commonwealth

1061ZZEC(1)    On the giving of the notice to the corporation, the corporation’s rights referred to in subsection (2) or (3), as the case may be, are transferred to the Commonwealth by this subsection.

1061ZZEC(2)    If the statement was in a supplement entitlement notice given under subsection 1061ZZAC(3) or 1061ZZAD(4), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the start of the contract period; and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZDY(3).

1061ZZEC(3)    If the statement was in a supplement entitlement notice referred to in subsection 1061ZZAE(3), the rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the commencement of this Chapter; and

                     (b)  ending at the end of the period of 4 weeks referred to in subsection 1061ZZDY(3).

1061ZZEC(4)    Financial supplement paid during the period referred to in subsection (2) or (3), as the case requires, is wrongly paid supplement.

1061ZZED  Liability of Commonwealth to corporation

                   The Commonwealth is liable to pay to the corporation an amount worked out, as at the end of the period of 4 weeks referred to in subsection 1061ZZDY(3), using the formula:

1061ZZEE  Liability of person

1061ZZEE(1)    No amount is taken to be outstanding under the contract after the notice is given.

1061ZZEE(2)    However, the person is liable to pay to the Commonwealth an amount worked out, as at the end of the period of 4 weeks referred to in subsection 1061ZZDY(3), using the formula:

1061ZZEF  Definitions

                   In sections 1061ZZED and 1061ZZEE:

amounts notionally repaid means the total of the amounts notionally repaid before the notice was given.

amounts repaid means the total of the amounts repaid under the contract before the notice was given.

interest subsidy means the interest subsidy in relation to financial supplement paid under the contract.

principal sum means the principal sum at the time when the notice was given.

1061ZZEG  This Subdivision not to affect Subdivision A

                   This Subdivision does not affect the operation of Subdivision A.


 

Division 5Payments to stop if person dies

1061ZZEH  Secretary may give notice to corporation if other party to contract dies

                   If the Secretary becomes aware that a person who is a party to a financial supplement contract with a participating corporation has died, the Secretary may give written notice to the corporation stating that this Division applies in respect of the contract.

1061ZZEI  Effect of notice

                   If the Secretary gives a notice under section 1061ZZEH to the corporation, the following provisions have effect.

1061ZZEJ  Discharge of corporation’s liability

1061ZZEJ(1)     From the time when the notice is given to the corporation, the corporation is discharged from liability to make further payments under the contract.

1061ZZEJ(2)     However, if the corporation continues to make payments under the contract after that time, any amounts paid after the end of 4 weeks after the day on which the notice is given to the corporation:

                     (a)  are taken not to be payments of financial supplement made under the contract; and

                     (b)  are repayable from the person’s estate to the corporation; and

                     (c)  may be recovered by the corporation as a debt payable to it from the person’s estate.

1061ZZEK  Transfer of corporation’s rights to Commonwealth

1061ZZEK(1)   The corporation’s rights referred to in subsection (2) are transferred to the Commonwealth, by this subsection, at the earlier of:

                     (a)  the time when the corporation stopped making payments under the contract; or

                     (b)  the end of 4 weeks after the time when the notice was given.

1061ZZEK(2)   The rights transferred are the corporation’s rights under the contract that relate to payment of financial supplement during the period:

                     (a)  beginning at the start of the contract period; and

                     (b)  ending at the end of the period of 4 weeks referred to in paragraph (1)(b).

1061ZZEL  Liability of Commonwealth to corporation

1061ZZEL(1)    The Commonwealth is liable to pay to the corporation an amount worked out, as at the earlier of:

                     (a)  the time when the corporation stopped making payments under the contract; or

                     (b)  the end of the period of 4 weeks referred to in paragraph 1061ZZEK(1)(b);

using the formula:

1061ZZEL(2)    In this section:

amounts notionally repaid means the total of the amounts notionally repaid before the notice was given.

amounts repaid means the total of the amounts repaid under the contract before the notice was given.

principal sum means the principal sum at the time when the notice was given.

1061ZZEM  Discharge of person’s liability

                   The person’s liability to the Commonwealth under the contract as a result of the transfer referred to in section 1061ZZEK is discharged by this section.


 

Part 2B.3Repayment of financial supplement through taxation system after termination date

Division 1Purpose and application of Part

1061ZZEN  Purpose and application of Part

                   This Part provides for the recovery through the taxation system of a person’s debt in respect of financial supplement at the end of 4 years beginning on 1 June in the year immediately after the year in which the relevant financial supplement contract was made.


 

Division 2FS debt and accumulated FS debt

1061ZZEO  FS debt owed by person

1061ZZEO(1)   If, at the termination date of a financial supplement contract made by a person with a participating corporation, there was or is an amount outstanding under the contract, the person owes an FS debt to the Commonwealth.

1061ZZEO(2)   The FS debt is taken to have been incurred, or is incurred, as the case may be, on 1 June immediately after the termination date.

1061ZZEP  How to work out FS debt

1061ZZEP(1)    The FS debt is worked out using the formula:

1061ZZEP(2)    In subsection (1):

amount outstanding means the amount outstanding under the contract at the termination date.

indexation factor means the factor worked out under section 1061ZZET.

1061ZZEQ  Accumulated FS debt incurred by person

1061ZZEQ(1)   If:

                     (a)  a person had or has an FS debt or FS debts on 1 June in a year (the later date); and

                     (b)  the debt was not or is not, or the debts did not or do not include, an FS debt that existed on the previous 1 June;

the person is taken to have incurred, or incurs, as the case may be, an accumulated FS debt to the Commonwealth on the later date.

1061ZZEQ(2)   If:

                     (a)  a person had or has an FS debt or FS debts on 1 June in a year (the later date); and

                     (b)  the debt was or is, or the debts included or include, an FS debt that existed on the previous 1 June (the earlier date);

the person is taken to have incurred, or incurs, as the case may be, an accumulated FS debt to the Commonwealth on the later date.

1061ZZER  How to work out accumulated FS debt

1061ZZER(1)    A person’s accumulated FS debt referred to in subsection 1061ZZEQ(1) is an amount equal to the FS debt or the total of the FS debts referred to in that subsection.

1061ZZER(2)    A person’s accumulated FS debt referred to in subsection 1061ZZEQ(2) is an amount worked out using the formula:

1061ZZER(3)    In subsection (2):

adjusted accumulated FS debt means the person’s adjusted accumulated FS debt on the earlier date.

indexation factor means the factor worked out under section 1061ZZET.

later FS debts means any FS debt, or the total of any FS debts, of the person that did not exist on the earlier date.

1061ZZES  Adjusted accumulated FS debt

1061ZZES(1)    A person’s adjusted accumulated FS debt on the earlier date is the amount worked out using the formula:

1061ZZES(2)    In this section:

accumulated FS debt means the person’s accumulated FS debt on the earlier date as worked out under this Division as it previously applied in respect of that date.

FSA debts means the total of:

                     (a)  any FS assessment debt or FS assessment debts of the person, assessed on or after the earlier date and before the later date, excluding any FS assessment debt assessed because of a return lodged before the earlier date; and

                     (b)  any FS assessment debt or FS assessment debts of the person, assessed on or after the later date because of a return lodged before the later date.

increases in FSA debts means any amount, or the total of any amounts, by which any FS assessment debt is increased by an amendment of the relevant assessment (whether because of an increase in the person’s taxable income or otherwise) where the amendment was made on or after the earlier date and before the later date.

reductions in FSA debts means any amount, or the total of any amounts, by which any FS assessment debt is reduced by an amendment of the relevant assessment (whether as a result of a reduction in the person’s taxable income or otherwise) where the amendment was made on or after the earlier date and before the later date.

repayments means any amount, or the total of any amounts, repaid, except in discharge of an FS assessment debt, on or after the earlier date and before the later date in reduction of the accumulated FS debt on the earlier date as worked out under this Division as it previously applied in respect of that date.

1061ZZES(3)    For the purposes of subsection (2), an assessment or an amendment of an assessment is taken to have been made on the date stated in the notice of assessment or notice of amended assessment, as the case may be, to be the date of that notice.

1061ZZET  Indexation factor

1061ZZET(1)    The indexation factor for the purpose of calculating a person’s FS debt or accumulated FS debt at 1 June in a year (the relevant year), is worked out using the following Method statement.

Method statement

Step 1.   Work out the total of the index number for the March quarter in the relevant year and the index numbers for the 3 immediately preceding quarters.

Step 2.   Work out the total of the index number for the March quarter immediately before the relevant year and the index numbers for the 3 immediately preceding quarters.

Step 3.   Divide the total worked out using Step 1 by the total worked out using Step 2.

Step 4.   Round the result to 3 decimal places.

1061ZZET(2)    If an indexation factor worked out using the Method statement would end with a number greater than 4 were it to be worked out to 4 decimal places, the indexation factor is increased by 0.001.

1061ZZET(3)    If, apart from this subsection, the amount of an FS debt or accumulated FS debt worked out under this section would be an amount of dollars and cents, disregard the amount of the cents.

1061ZZEU  Accumulated FS debt discharges earlier debts

1061ZZEU(1)   An accumulated FS debt that a person is taken to have incurred or incurs on 1 June in a year (the relevant date) discharges, or discharges the unpaid part of:

                     (a)  an accumulated FS debt that the person incurred on the previous 1 June; and

                     (b)  an FS debt that the person incurred on the relevant date.

1061ZZEU(2)   The accumulated FS debt also discharges the person’s liability to pay the amount outstanding immediately before the relevant date.

1061ZZEU(3)   However, in applying sections 1061ZZEP to 1061ZZET, subsection (1) of this section is disregarded.


 

Division 3Information to be given to Commissioner of Taxation

1061ZZEV  Secretary to give notice to Commissioner of Taxation

                   If a person who has made a financial supplement contract with a participating corporation has an FS debt immediately after the termination date of the contract, the Secretary must, if such a notice has not already been given under the corresponding provision of the Social Security Student Financial Supplement Scheme 1998 or of the Student Assistance Act 1973 as in force at a time before 1 July 1998, give to the Commissioner of Taxation, as soon as practicable after that date, a notice stating as many of the following matters as the Secretary knows:

                     (a)  the person’s name;

                     (b)  the person’s identifying number;

                     (c)  the person’s last-known address;

                     (d)  the person’s tax file number;

                     (e)  the amount of the FS debt or the amounts of the FS debts that the person incurred on 1 June immediately following the termination date;

                      (f)  any other information about the person that is reasonably required by the Commissioner to administer this Part.

1061ZZEW  Secretary to give further notice to Commissioner of Taxation

                   If the Secretary or an officer of the Department is convinced that significant information in a notice referred to in section 1061ZZEV was not, or is no longer, correct, the Secretary must give to the Commissioner of Taxation a further notice setting out the correct information.

1061ZZEX  Secretary to give certificate to Commissioner of Taxation

                   The Secretary must, if asked by the Commissioner of Taxation to do so, give a written certificate to the Commissioner setting out a matter mentioned by the Commissioner that was, or was required to be, set out in a notice under section 1061ZZEV or 1061ZZEW.


 

Division 4Voluntary repayments of FS debts

1061ZZEY  Voluntary repayments of FS debts

1061ZZEY(1)   If a person has a debt to the Commonwealth under this Part, he or she may at any time make a payment to reduce the debt.

1061ZZEY(2)   A payment under subsection (1) must be made to the Commissioner of Taxation.


 

Division 5Compulsory repayments of accumulated FS debt

1061ZZEZ  Person’s liability

1061ZZEZ(1)    Subject to subsection (2), a person is liable, in respect of each year of income, to make payments, in accordance with this Part, to reduce the person’s relevant debt until that debt is repaid.

1061ZZEZ(2)    The person is liable to make a payment in respect of a year of income only if:

                     (a)  the person’s taxable income for the year of income is greater than the minimum prescribed amount for the year of income; and

                     (b)  the person had an accumulated FS debt on 1 June immediately before an assessment of the person’s income is made for the year of income.

1061ZZFA  Amount of liability

                   The person is liable to pay, in respect of a year of income, an amount equal to so much of the relevant debt as does not exceed:

                     (a)  if the person’s taxable income for the year of income is not greater than the intermediate prescribed amount for the year of income—2% of the taxable income; or

                     (b)  if the person’s taxable income for the year of income is greater than the intermediate prescribed amount for the year of income but is not greater than the maximum prescribed amount for the year of income—3% of the taxable income; or

                     (c)  if the person’s taxable income for the year of income is greater than the maximum prescribed amount for the year of income—4% of the taxable income.

1061ZZFB  Meaning of relevant debt

1061ZZFB(1)    The person’s relevant debt is:

                     (a)  if an amount or amounts have been paid to reduce the person’s accumulated FS debt referred to in paragraph 1061ZZEZ(2)(b) or an amount or amounts have been assessed under Division 7 or under the corresponding provision of the Social Security Student Financial Supplement Scheme 1998 or of the Student Assistance Act 1973 as in force at a time before 1 July 1998, to be payable to reduce it—the amount remaining after deducting from that accumulated FS debt the amount or the sum of the amounts so paid or assessed to be payable; or

                     (b)  otherwise—the person’s accumulated FS debt referred to in that paragraph.

1061ZZFB(2)    An amount assessed under Division 7, or under the corresponding provision of the Social Security Student Financial Supplement Scheme 1998 or of the Student Assistance Act 1973 as in force at a time before 1 July 1998, to be payable to reduce a person’s accumulated FS debt is, if the amount has been increased or reduced by an amendment of the relevant assessment, taken to be the increased or reduced amount.

1061ZZFC  Meaning of minimum prescribed amount

1061ZZFC(1)    For the year of income that ended on 30 June 1998, the minimum prescribed amount is $29,307.

1061ZZFC(2)    For a later year of income, the minimum prescribed amount is the number of whole dollars in the amount worked out using the formula:

1061ZZFD  Meaning of intermediate prescribed amount

1061ZZFD(1)    For the year of income that ended on 30 June 1998, the intermediate prescribed amount is $33,305.

1061ZZFD(2)    For a later year of income, the intermediate prescribed amount is the number of whole dollars in the amount worked out using the formula:

1061ZZFE  Meaning of maximum prescribed amount

1061ZZFE(1)    For the year of income that ended on 30 June 1998, the maximum prescribed amount is $46,629.

1061ZZFE(2)    For a later year of income, the maximum prescribed amount is the number of whole dollars in the amount worked out using the formula:

1061ZZFF  Meaning of AWE

1061ZZFF(1)    In sections 1061ZZFC, 1061ZZFD and 1061ZZFE:

AWE means:

                     (a)  the average weekly earnings for all employees for the reference period in the December quarter immediately before the year of income, as published by the Australian Statistician; and

                     (b)  the average weekly earnings for all employees for the reference period in each of the 4 quarters immediately before that December quarter, as published by the Australian Statistician.

1061ZZFF(2)    The reference period in a particular quarter in a year is the period described by the Australian Statistician as the pay period ending on or before the third Friday of the middle month of that quarter.


 

Division 6Application of tax legislation

1061ZZFG  Application of tax legislation

1061ZZFG(1)    Part IV, and Division 1 of Part VI, of the Income Tax Assessment Act 1936, and Part IVC of, and Part 4-15 in Schedule 1 to, the Taxation Administration Act 1953, apply, so far as they can be applied and subject to this Part, to a person’s FS assessment debt as if it were income tax assessed to be payable by a taxpayer by an assessment made under Part IV of the Income Tax Assessment Act 1936.

Note 1:       Part 4-15 in Schedule 1 to the Taxation Administration Act 1953 deals with collection and recovery of amounts on and after 1 July 2000, replacing some provisions in Division 1 of Part VI of the Income Tax Assessment Act 1936.

Note 2:       FS assessment debts are also collected through the Pay As You Go (PAYG) system of collecting income tax: see Parts 2-1, 2-5 and 2-10 in Schedule 1 to the Taxation Administration Act 1953.

1061ZZFG(2)    Sections 222A to 222F, 222 and 226G to 226ZB of the Income Tax Assessment Act 1936 apply as if a person’s FS assessment debt were income tax payable by the person for the year of income for which the assessment of that debt was made.


 

Division 7Assessments

1061ZZFH  Commissioner of Taxation may make assessment

1061ZZFH(1)    The Commissioner of Taxation may make an assessment of:

                     (a)  the amount of a person’s accumulated FS debt at 1 June immediately before the assessment is made; and

                     (b)  the amount required to be paid to reduce that debt under Division 5.

1061ZZFH(2)    To make an assessment, the Commissioner may use any information in his or her possession, whether or not it came from a return.

1061ZZFI  Notice of assessment may be served

                   If:

                     (a)  the Commissioner of Taxation is required to serve on a person a notice of assessment in respect of the person’s income of a year of income under section 174 of the Income Tax Assessment Act 1936; and

                     (b)  an assessment (the relevant assessment) has been made in respect of the person of the amounts referred to in section 1061ZZFH but notice of the relevant assessment has not been served on the person;

notice of the relevant assessment may be served by setting out the amounts concerned in the notice referred to in paragraph (a).


 

Division 8Commissioner of Taxation may delay assessment

1061ZZFJ  Commissioner of Taxation may delay assessment

1061ZZFJ(1)     The Commissioner of Taxation may, on written application by a person who has an accumulated FS debt, delay the making of an assessment under section 1061ZZFH.

1061ZZFJ(2)     An assessment may be delayed if the Commissioner considers that:

                     (a)  were the assessment to be made, payment of the assessed amount would cause serious hardship to the person; or

                     (b)  there are other special reasons that make it fair and reasonable to delay the assessment.

1061ZZFJ(3)     The Commissioner may delay the assessment for a period that he or she considers appropriate.

1061ZZFK  Commissioner of Taxation may amend assessment

1061ZZFK(1)    The Commissioner of Taxation may, on written application by a person who has an accumulated FS debt, amend an assessment made under section 1061ZZFH so that no amount is payable under the assessment.

1061ZZFK(2)    The Commissioner may amend the assessment if he or she considers that:

                     (a)  payment of the assessed amount has caused or would cause serious hardship to the person; or

                     (b)  there are other special reasons that make it fair and reasonable to make the amendment.

1061ZZFL  When Commissioner of Taxation must make decision to delay or amend assessment

1061ZZFL(1)    If an application referred to in section 1061ZZFJ or 1061ZZFK is made, the Commissioner of Taxation must, as soon as practicable:

                     (a)  consider it; and

                     (b)  give to the applicant written notice of his or her decision on the application.

1061ZZFL(2)    A notice of the decision must:

                     (a)  include a statement that, if the applicant is dissatisfied with the decision of the Commissioner on the application, an application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for review of the decision; and

                     (b)  except if subsection 28(4) of that Act applies, also include a statement to the effect that the applicant may ask for a statement under section 28 of that Act.

1061ZZFL(3)    A failure to comply with subsection (2) does not affect the validity of the notice or of the decision to which the notice relates.


 

Division 9Review of Commissioner of Taxation’s decision

1061ZZFM  Application to Administrative Appeals Tribunal

                   An applicant under section 1061ZZFJ or 1061ZZFK may apply to the Administrative Appeals Tribunal for review of:

                     (a)  a decision of the Commissioner of Taxation on the application referred to in section 1061ZZFJ; or

                     (b)  a decision by the Commissioner refusing to amend an assessment after receiving the application referred to in section 1061ZZFK.


 

Division 10Treatment of payments under financial supplement scheme

1061ZZFN  Payments not subject to taxation

1061ZZFN(1)    An amount paid, or other benefit given, to a person under this Chapter is not subject to taxation under a law of the Commonwealth unless a provision of such a law expressly provides to the contrary.

1061ZZFN(2)    However, subsection (1) does not affect the liability to taxation of a participating corporation for a subsidy or other amount paid to the corporation under this Chapter.

1061ZZFO  Application of payments

                   An amount paid by a person to reduce the person’s debt to the Commonwealth under this Part must be applied in accordance with the person’s direction or, if there is no direction or the direction does not adequately deal with the matter:

                     (a)  first, to discharge or reduce the person’s FS assessment debts; and

                     (b)  then, to discharge or reduce the person’s accumulated FS debt.

1061ZZFP  Debt discharged by death

                   If a person dies owing a debt owing to the Commonwealth under this Part, other than an FS assessment debt, the debt is discharged by force of this section.


 

Part 2B.4Miscellaneous

Division 1Application of the Bankruptcy Act 1966

1061ZZFQ  Application of Division

                   This Division applies if, after a person makes a financial supplement contract with a participating corporation, whether before or after the termination date:

                     (a)  the person becomes bankrupt; or

                     (b)  the person enters into a personal insolvency agreement under Part X of the Bankruptcy Act 1966.

1061ZZFR  Treatment of debt

1061ZZFR(1)    A debt arising under or out of the contract is not a provable debt in the bankruptcy or for the purposes of the personal insolvency agreement.

1061ZZFR(2)    A right of the Commonwealth or of the corporation to bring an action or other proceeding against the person in respect of the debt is not affected by the bankruptcy or personal insolvency agreement.

1061ZZFR(3)    The trustee of the estate of the bankrupt person or the trustee of the personal insolvency agreement is not entitled to recover under the Bankruptcy Act 1966 a payment made by the person to the Commonwealth or to the corporation in respect of the debt.

1061ZZFR(4)    In this section:

debt arising under or out of the contract:

                     (a)  includes, but is not limited to:

                              (i)  an amount outstanding under the contract; and

                             (ii)  an amount that the person is liable to pay under section 1061ZZDE, 1061ZZDL, 1061ZZDV or 1061ZZEE; and

                            (iii)  an accumulated FS debt that discharges, or discharges the unpaid part of, an FS debt; but

                     (b)  does not include:

                              (i)  a debt constituted by an obligation to repay the amount of a payment that, because of paragraph 1061ZZCV(2)(a), 1061ZZCX(3)(a), 1061ZZDO(3)(a) or 1061ZZDY(3)(a), is not a payment of financial supplement; or

                             (ii)  an FS assessment debt that is required to be paid to reduce an accumulated FS debt.


 

Division 2Review of decisions

1061ZZFS  What happens if a decision of the Secretary is set aside

1061ZZFS(1)    Subject to subsection (2), if a decision of the Secretary under this Chapter is set aside after a review under Chapter 6, this Chapter has effect, and is taken to have always had effect, as if the decision had not been made.

1061ZZFS(2)    If the decision is set aside after a review under Chapter 6 and another decision is substituted for the original decision, this Chapter has effect, and is taken to have always had effect, as if the substituted decision had been the original decision.

1061ZZFT  What happens if a decision of the Secretary is varied

                   If a decision of the Secretary under this Chapter is varied after a review under Chapter 6, this Chapter has effect, and is taken to have always had effect, as if the decision as varied had been the original decision.


 

Division 3Transfer of rights under this Chapter

1061ZZFU  Notices of transfer

                   If any rights of a participating corporation to receive a payment from a person under this Chapter are transferred to the Commonwealth, the Secretary must, as soon as practicable, arrange for a written notice to be given to the person:

                     (a)  stating that the rights have been transferred; and

                     (b)  identifying any future payments that, because of the transfer, are required to be made to the Commonwealth.

1061ZZFV  Transfers not subject to State or Territory taxes

                   A transfer to the Commonwealth under this Chapter of any of the corporation’s rights under a financial supplement contract, or any other act or thing done or transaction entered into under this Chapter, is not subject to taxation under a law of a State or Territory.


 

Chapter 2CAssurances of support

Part 2C.1Giving assurances

  

1061ZZGA  What is an assurance of support?

                   In this Chapter:

assurance of support means an undertaking by a person under this Chapter that the person will pay the Commonwealth an amount equal to the amount of social security payments that are:

                     (a)  received in respect of a period by another person who:

                              (i)  is identified in the undertaking; and

                             (ii)  becomes the holder under the Migration Act 1958 of a visa granted in connection with the undertaking (whether or not the person continues to hold the visa throughout the period); and

                     (b)  specified in a determination in force under section 1061ZZGH when the payments are received.

Note:          An assurance of support may relate to social security payments received by 2 or more persons. See paragraph 23(b) of the Acts Interpretation Act 1901.

1061ZZGB  Who may give an assurance of support?

                   A person may give an assurance of support only if the requirements specified for the purposes of this section in a determination under section 1061ZZGH are met in relation to the person.

Note 1:       If a person who does not meet the requirements gives an undertaking purporting to be an assurance of support, the undertaking is not an assurance of support (because it is not under this Chapter) and the Secretary is not required either to accept or to reject the purported assurance.

Note 2:       This section lets 2 or more persons give an assurance of support if they all meet the requirements specified in a determination under section 1061ZZGH. See paragraph 23(b) of the Acts Interpretation Act 1901.

1061ZZGC  How to give an assurance of support

1061ZZGC(1)   A person gives an assurance of support by:

                     (a)  delivering the assurance in writing in accordance with a form approved by the Secretary:

                              (i)  to a person apparently performing duties at a place approved for the purpose by the Secretary; or

                             (ii)  to a person approved for the purpose by the Secretary; or

                            (iii)  in a manner, and to a place, approved for the purpose by the Secretary; or

                     (b)  giving the assurance in a manner approved by the Secretary for the purposes of this paragraph.

Note:          If an undertaking purporting to be an assurance of support is given in some other way, the undertaking is not an assurance of support (because it is not under this Chapter) and the Secretary is not required either to accept or to reject the purported assurance.

1061ZZGC(2)   A form approved for the purposes of paragraph (1)(a) may include other undertakings as well as the assurance of support.

1061ZZGC(3)   A place or person approved for the purposes of paragraph (1)(a) may be in or out of Australia.

1061ZZGC(4)   The Secretary’s power to approve for the purposes of paragraph (1)(b) is not limited by any other provision of this section.

Material to accompany assurance of support

1061ZZGC(5)   When a person is giving an assurance of support, the person must also give the following material in a way in which an assurance of support may be given under subsection (1):

                     (a)  information specified in a form approved by the Secretary;

                     (b)  documents specified by the Secretary.

1061ZZGC(6)   If the person giving the assurance of support contravenes subsection (5), the assurance is taken not to have been given.


 

Part 2C.2Acceptance of assurances

  

1061ZZGD  Accepting or rejecting an assurance of support

1061ZZGD(1)   If an assurance of support is given under this Chapter, the Secretary must accept or reject the assurance.

Accepting the assurance

1061ZZGD(2)   The Secretary may accept the assurance, but only if:

                     (a)  he or she is satisfied that the requirements that are specified for the purposes of this paragraph in a determination under section 1061ZZGH and relate to the person who gave the assurance are met; and

                     (b)  the requirements in subsection (3) are met, if the assurance is in respect of:

                              (i)  a visa of a kind that can be granted under the Migration Act 1958 only if an assurance of support is accepted; and

                             (ii)  another person who was at least 18 at the time of the application for the visa;

                            (whether or not the assurance is also in respect of someone else who was under 18 at the time of the application for the visa).

Note 1:       The Secretary may accept an assurance given by 2 or more persons only if satisfied that the requirements specified in a determination under item 3 of the table in subsection 1061ZZGH(1) and relating to all of them are met. See paragraph 23(b) of the Acts Interpretation Act 1901.

Note 2:       Subparagraph (2)(b)(i) does not apply to a visa of a kind in relation to which there is a discretion to request an assurance of support, because a visa of that kind can be granted without accepting an assurance if one is not requested (even if, in a case in which an assurance is requested, acceptance of the assurance is a condition for the grant of the visa).

1061ZZGD(3)   At least one person who gave the assurance must have given the Secretary a single security for the liability that may be incurred, under section 1061ZZGG in connection with the assurance and a social security payment received by anyone identified in the assurance, by everyone who gave the assurance. The security must:

                     (a)  be in a form approved by the Secretary; and

                     (b)  be of a value specified for the purposes of this paragraph in a determination under section 1061ZZGH.

Rejecting the assurance

1061ZZGD(4)   The Secretary may reject the assurance.

1061ZZGD(5)   The circumstances in which the Secretary may reject the assurance include failure of the person giving the assurance to attend an interview relating to the assurance as requested by the Secretary. This subsection does not limit subsection (4).

1061ZZGE  Notices relating to an assurance of support

1061ZZGE(1)    If the Secretary accepts or rejects an assurance of support, he or she must give written notice of the acceptance or rejection to:

                     (a)  the person who gave the assurance; and

                     (b)  the Minister administering section 65 of the Migration Act 1958.

The notice must name the person in respect of whom the assurance was given.

1061ZZGE(2)    If:

                     (a)  the Secretary has accepted an assurance of support given by a person (the assurer) in respect of another person and a visa; and

                     (b)  the Secretary is informed that the other person:

                              (i)  is a holder under the Migration Act 1958 of the visa; and

                             (ii)  has entered the migration zone (as defined in that Act) before, on or after becoming the holder of the visa;

the Secretary must give the assurer written notice of the period for which the assurance is in force in respect of the other person.

Note:          Section 1061ZZGF explains when an assurance of support is in force in respect of the other person.

1061ZZGE(3)    If the assurance of support ceases to be in force in respect of the other person at the time described in subparagraph 1061ZZGF(1)(b)(ii), the Secretary must give the assurer written notice of the fact.

Note:          That subparagraph is about an assurance ceasing to be in force in respect of the other person when another assurance of support comes into force in respect of him or her.


 

Part 2C.3Effect of accepted assurances

  

1061ZZGF  When an accepted assurance is in force

1061ZZGF(1)    For the purposes of this Act, an assurance of support that has been given in respect of a person identified in the assurance and has been accepted under this Chapter:

                     (a)  comes into force in respect of the person at the later of the following times:

                              (i)  the time at which the person becomes under the Migration Act 1958 the holder of the visa that was granted under that Act in connection with the assurance;

                             (ii)  the time at which the person enters the migration zone (as defined in that Act) as the holder of the visa; and

                     (b)  remains in force in respect of the person until the earlier of the following times:

                              (i)  the end of the period specified for the purposes of this subparagraph in a determination under section 1061ZZGH;

                             (ii)  the time (if any) determined by the Secretary under subsection (2).

Note:          An assurance of support given in respect of 2 or more persons may be in force at different times in respect of each of those persons.

1061ZZGF(2)    The Secretary may determine that the assurance of support ceases to be in force in respect of the person at the time (which may be before the determination is made) another assurance of support comes into force in respect of the person.

1061ZZGF(3)    For the purposes of this Act, an assurance of support (as defined in section 1061ZZGA) is in force in respect of a person only for the period for which it is in force in respect of the person under subsection (1) of this section.

1061ZZGF(4)    An assurance of support that is in force in respect of a person under subsection (1) remains in force in respect of the person under that subsection in spite of any change in circumstances whatsoever (including the withdrawal, however described, of the assurance).

1061ZZGG  Liability to pay for social security payments

1061ZZGG(1)   This section has effect if:

                     (a)  a person (the assurer) has given an assurance of support that has been accepted under this Chapter; and

                     (b)  a social security payment is received, by another person who is identified in the assurance, in respect of all or part of the period for which the assurance is in force in respect of the other person; and

                     (c)  the social security payment is specified for the purposes of this section in a determination in force under section 1061ZZGH when the payment is received.

1061ZZGG(2)   The assurer is liable to pay the Commonwealth the amount of the social security payment.

1061ZZGG(3)   If the assurance was given by more than one person, all of the persons who gave it are jointly and severally liable to pay the Commonwealth the amount of the social security payment.


 

Part 2C.4Determinations

  

1061ZZGH  Determinations

1061ZZGH(1)   The Minister must make a written determination specifying, for the purposes of the provisions mentioned in the table, the things in the table.

 

Determinations

 

Provision(s)

Things to be specified

1

Definition of assurance of support in section 1061ZZGA and section 1061ZZGG

Social security payments

2

Section 1061ZZGB

Requirements to be met in relation to persons for them to be permitted by section 1061ZZGB to give assurances of support

3

Paragraph 1061ZZGD(2)(a)

Requirements to be met in relation to persons giving assurances of support for the Secretary to be permitted by subsection 1061ZZGD(2) to accept such assurances

4

Paragraph 1061ZZGD(3)(b)

Values of securities to be given for the Secretary to be permitted to accept assurances of support

5

Subparagraph 1061ZZGF(1)(b)(i)

Periods for which assurances of support accepted under this Chapter remain in force in respect of persons under section 1061ZZGF

Note 1:       A determination may specify matters and things by reference to classes and may make different provision with respect to different matters or classes of matters. See the Acts Interpretation Act 1901.

Note 2:       The Minister may amend a determination by another written determination. See the Acts Interpretation Act 1901.

1061ZZGH(2)   A determination may specify, as a requirement to be met in relation to a person (the assurer) giving an assurance of support for the Secretary to be permitted by subsection 1061ZZGD(2) to accept the assurance, a requirement that relates to:

                     (a)  the members of a couple consisting of the assurer and the assurer’s partner; or

                     (b)  the assurer’s partner.

This subsection does not limit the requirements that may be specified under item 3 of the table in subsection (1) of this section.

1061ZZGH(3)   Before making a determination specifying a thing described in item 4 or 5 of the table in subsection (1), the Minister must ask the Minister administering section 65 of the Migration Act 1958 for comments on the things that should be specified and consider the comments (if any) received.

1061ZZGH(4)   A determination under this section is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.


 

Part 2C.5Assurances by unincorporated bodies

  

1061ZZGI  Application of social security law to unincorporated bodies

1061ZZGI(1)     This Chapter, and the rest of the social security law so far as it relates to this Chapter, apply to an unincorporated body or association (the body) as if it were a person other than an individual, but they apply with the following changes.

Acts of certain persons treated as acts of the body

1061ZZGI(2)     One change is that anything done or omitted by or in relation to:

                     (a)  if the body is a partnership—a partner; or

                     (b)  in any other case—a member of the committee of management of the body;

on behalf of the body is taken to have been done or omitted by the body.

Imposition of obligations and liabilities

1061ZZGI(3)     Another change is that obligations, or liabilities under section 1061ZZGG, that would be imposed on the body are imposed instead on:

                     (a)  if the body is a partnership—each partner; or

                     (b)  in any other case—each member of the committee of management of the body;

but they may be discharged by any of the partners or any of those members.

The body cannot commit an offence

1061ZZGI(4)     Another change is that if, apart from this subsection, the body would commit an offence, the body does not commit the offence.

Example:    Subsection (1) applies section 217 of the Social Security (Administration) Act 1999 to the body as if it were a person. That section provides that a person who contravenes certain provisions of that Act about false or misleading statements is guilty of an offence. The body does not commit an offence if it contravenes those provisions by making a false or misleading statement.

Limit on scope of changes

1061ZZGI(5)     Subsections (2) and (3) do not affect:

                     (a)  whether, for the purposes of section 1061ZZGB (about giving an assurance of support), the requirements specified in a determination under section 1061ZZGH are met in relation to the body; or

                     (b)  whether, for the purposes of paragraph 1061ZZGD(2)(a) (about accepting an assurance of support), the requirements specified in a determination under section 1061ZZGH are met in relation to the body.

Note:          Whether the body may give an assurance of support and whether such an assurance may be accepted depend on whether the requirements specified in relation to the body are met, rather than whether requirements relating to a person who is a partner or member of the body’s management committee are met in relation to that partner or member.

1061ZZGI(6)     A determination under section 1061ZZGH (applying in accordance with this section) may specify, for the purposes of section 1061ZZGB or paragraph 1061ZZGD(2)(a) (as so applying in relation to the body), a requirement that relates to:

                     (a)  one or more of the partners, if the body is a partnership; or

                     (b)  some or all of the members of the body or of its committee of management, if the body is not a partnership.

This subsection does not limit the requirements relating to the body that may be specified.


 

Chapter 3General provisions relating to payability and rates

Part 3.1Rate Calculators (General)

  

1062  Steps in rate calculation

      1062(1)  The following are the usual steps in the rate calculation process:

                     (a)  start with a maximum basic rate;

                     (b)  add any additional amounts that are subject to income or assets testing;

                     (c)  apply the income and assets tests;

                     (d)  add any additional amounts that are not subject to income or assets testing.

      1062(2)  The overall rate calculation process is usually described in an early Module of the relevant Rate Calculator.

1063  Standard categories of family situations

      1063(1)  The Rate Calculators use the following standard categories of family situations:

–   not member of a couple;

–   member of a couple (or partnered);

–   partnered (partner getting neither pension nor benefit);

–   partnered (partner getting pension or benefit);

–   partnered (partner getting pension);

–   partnered (partner getting benefit);

–   partnered (partner in gaol).

Note:          see section 4 for definitions of those terms.

      1063(2)  If it is necessary to distinguish between the members of sub-categories of these standard categories further words of description are added to the standard category label.


 

Part 3.2Pension Rate Calculator A

  

1064  Rate of age, disability support, wife pensions and carer payment and of disability wage supplement (people who are not blind)

      1064(1)  The rate of:

                     (a)  age pension; and

                     (b)  disability support pension or disability wage supplement of a person who has turned 21; and

                     (c)  wife pension; and

                     (d)  carer payment; and

                      (f)  mature age allowance under Part 2.12A; and

                     (g)  mature age partner allowance;

is, subject to subsection (2), to be calculated in accordance with the Rate Calculator at the end of this section.

Note 1:       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.

Note 2:       the rate obtained by applying the Rate Calculator may be reduced because of:

·         the receipt of compensation (see Part 3.14); or

·         overseas portability (see Part 4.2—Division 3); or

·         the receipt of payments under the New Enterprise Incentive Scheme (see Part 3.15).

      1064(2)  Subsection (1) does not apply to a person’s age or disability support pension or to a person’s disability wage supplement if the person is permanently blind.

Note:          the rate for an age pension or disability support pension payable to a person who is permanently blind is dealt with in section 1065.

      1064(4)  If:

                     (a)  a person has a relationship with a person of the opposite sex (other person); and

                     (b)  the relationship between them is a marriage-like 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)  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 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, maintenance income and assets of the partner in applying the ordinary income test, maintenance income test and assets test respectively.

Rate limited for armed service widow

      1064(5)  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)  one of the following is payable to the widow:

                              (i)  an age pension;

                             (ii)  a disability support pension;

                            (iii)  a wife pension;

                            (iv)  a carer payment;

                             (v)  a mature age allowance under Part 2.12A;

                            (vi)  disability wage supplement;

the widow’s pension rate is not to exceed:

                     (c)  if:

                              (i)  the widow has been receiving the payment referred to in paragraph (a) continuously since before 1 November 1986; and

                             (ii)  immediately before 1 November 1986, the widow was receiving a payment referred to in paragraph (b) at a rate exceeding $3,247.40; and

                            (iii)  the pension referred to in paragraph (b) is of the same type as the one which was payable to the person before 1 November 1986;

                            the rate of pension received by the widow immediately before 1 November 1986; and

                     (d)  in any other case—$3,247.40.

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

Rate limited for armed services widower

      1064(6)  If:

                     (a)  an armed services widower 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)  one of the following is payable to the widower:

                              (i)  an age pension;

                             (ii)  a disability support pension;

                            (iii)  a carer payment;

                            (iv)  disability wage supplement;

the rate of pension payable to the widower is not to exceed $3,247.40.

Note:          for armed services widower see subsection 4(1).

      1064(7)  If:

                     (a)  an armed services widow or an armed services widower has received a lump sum, or is receiving a weekly amount, mentioned in paragraph 234(1)(b) of the Military Rehabilitation and Compensation Act; and

                     (b)  one of the following is payable to the widow or widower:

                              (i)  an age pension;

                             (ii)  a disability support pension;

                            (iii)  a wife pension;

                            (iv)  a carer payment;

                             (v)  a mature age allowance under Part 2.12B;

                            (vi)  disability wage supplement;

the rate of pension payable to the widow or widower is not to exceed $3,247.40.

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

Pension Rate Calculator A

Module AOverall rate calculation process

Method of calculating rate

1064-A1      The rate of pension 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 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, 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 8.   Take the income reduction away from the maximum payment rate: the result is called the income reduced rate.

Step 9.   Apply the assets test using MODULE G below to work out the reduction for assets.

Step 10. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.

Step 11. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.

Step 12. The rate of pension 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 H).

Note 1:       if a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 1129 and 1130).

Note 1A:    If a person’s rate is, or is to be, an income reduced rate or an assets reduced rate, and at least one of those reduced rates is not a nil rate, the person may be able to take advantage of provisions dealing with the pension loans scheme (sections 1133AA to 1144).

Note 2:       if a person’s rate is reduced under Step 11 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).

Note 3:       the rate calculation for a member of a couple is affected by the operation of points 1064-A2 and 1064-A3.

Note 4:       in some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.

Note 5:       a person’s rate may also be reduced because the person or the person’s partner receives compensation (see section 1168) or because the person or the person’s partner is receiving a foreign pension (see scheduled international social security agreements at section 1208).

Note 6:       An amount of remote area allowance is to be added under Step 11 only if the person’s rate of pension after Step 10 is greater than nil.

Members of a couple

1064-A2      Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 1064-E2, 1064-F2 and 1064-G2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see section 1070V).

Module BMaximum basic rate
[see Appendix for CPI adjusted figures]

Maximum basic rate

1064-B1       A person’s maximum basic rate depends on the person’s family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3.

 

Table B—Maximum basic rates

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate per year

Column 4

Rate per fortnight

1.

Not member of couple

$8,114.60

$312.10

2.

Partnered

$6,767.80

$260.30

3.

Member of illness separated couple

$8,114.60

$312.10

4.

Member of respite care couple

$8,114.60

$312.10

5.

Partnered (partner in gaol)

$8,114.60

$312.10

Note 1:       For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Note 2:       the maximum basic rates are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

Module BAPension supplement

Pension supplement

  1064-BA1  The amount of a person’s pension supplement depends on the person’s maximum basic rate. There is a pension supplement amount for each maximum basic rate listed in the table in point 1064-B1.

Amount of pension supplement

  1064-BA2  The amount of a person’s pension supplement is worked out by:

                     (a)  calculating the amount (the provisional supplement amount) that is 4% of the person’s 1 July 2000 maximum basic rate; and

                     (b)  rounding off the provisional supplement amount in accordance with points 1064-BA4 to 1064-BA6.

Note:          The pension supplement amounts are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

  1064-BA3  A person’s 1 July 2000 maximum basic rate is the maximum basic rate that would have been the person’s maximum basic rate if the rate had not changed since 1 July 2000.

Rounding off of provisional supplement amount

  1064-BA4  If a provisional supplement amount is a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount.

  1064-BA5  If a provisional supplement amount is not a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount rounded up or down to the nearest multiple of $2.60.

  1064-BA6  If a provisional supplement amount is not a multiple of $2.60, but is a multiple of $1.30, the amount of the pension supplement is the provisional supplement amount rounded up to the nearest multiple of $2.60.

Module CPharmaceutical allowance
[see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

     1064-C1  Subject to points 1064-C2, 1064-C3, 1064-C4 and 1064-C6, 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 receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act

     1064-C2  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

No pharmaceutical allowance if partner receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act and not a service pensioner

     1064-C3  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 pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act; and

                     (c)  the person’s partner is not receiving a service pension.

Note:          if paragraphs (a), (b) and (c) apply to the person’s partner, the partner is receiving pharmaceutical allowance under the VEA at the higher rate (rather than the person and the person’s partner each receiving pharmaceutical allowance at the lower rate) or is receiving pharmaceutical allowance under the MRCA.

No pharmaceutical allowance before advance payment period ends

     1064-C4  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:

                              (i)  Part 2.23 of this Act; or

                             (ii)  Division 2 of Part VIIA of the Veterans’ Entitlements Act; and

                     (b)  the person’s advance payment period has not ended.

Note:          advance payment period see point 1064-C5.

Advance payment period

     1064-C5  A person’s advance payment period:

                     (a)  starts on the day on which the advance pharmaceutical allowance is paid to the person; and

                     (b)  ends after the number of paydays worked out using the following formula have passed:

where:

amount of advance is the amount of the advance paid to the person.

pharmaceutical allowance rate is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for 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

     1064-C6  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.

VEA and MRCA payments taken into account

     1064-C7  In points 1064-C5 and 1064-C6:

advance pharmaceutical allowance includes advance pharmaceutical allowance under the Veterans’ Entitlements Act; and

pharmaceutical allowance includes pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

Amount of pharmaceutical allowance

     1064-C8  The amount of pharmaceutical allowance is the amount per year worked out using the following Table:

 

Pharmaceutical allowance amount table

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate per year

Column 4

rate per fortnight

1.

Not member of couple

$135.20

$5.20

2.

Partnered

$67.60

$2.60

3.

Member of illness separated couple

$135.20

$5.20

4.

Member of respite care couple

$135.20

$5.20

5.

Partnered (partner getting service pension)

$67.60

$2.60

6.

Partnered (partner in gaol)

$135.20

$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 adjusted annually in line with CPI increases (see section 1206A).

Module EOrdinary income test
[see Appendix for CPI adjusted figures]

Effect of income on maximum payment rate

     1064-E1  This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:

Method statement

Step 1.   Work out the amount of the person’s ordinary income on a yearly basis.

                   Note:             for the treatment of the ordinary income of members of a couple see point 1064-E2.

Step 2.   Work out the person’s ordinary income free area (see points 1064-E4 to 1064-E9 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 1064-E10 to 1064-E12 below.

Note 1:       see point 1064-A1 (Steps 5 to 8) 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 general concept of ordinary income (sections 1072 and 1073);

·         business income (sections 1074 and 1075);

·         deemed income from financial assets (sections 1076 to 1084);

·         income from income streams (sections 1095 to 1099DAA);

·         disposal of income (sections 1106 to 1112);

Ordinary incomes of members of couples

     1064-E2  If a person is a member of a couple, add the couple’s ordinary incomes (on a yearly basis) and divide by 2 to work out the amount of the person’s ordinary income for the purposes of this Module.

Payment of arrears of periodic compensation payments

     1064-E3  If:

                     (a)  at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving age pension, disability support pension, wife pension, carer pension, mature age allowance under Part 2.12A or mature age partner allowance; 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 periodic payments period see section 17.

How to calculate a person’s ordinary income free area

     1064-E4  A person’s ordinary income free area is worked out using Table E-1. Work out which family situation in Table E-1 applies to the person. The ordinary income free area is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each dependent child of the person.

 

Table E-1—Ordinary free area limits

Column 1

Item

Column 2

Category of person

Column 3

Basic free area per year

Column 4

Basic free area per fortnight

Column 5

Additional free area per year

Column 6

Additional free area per fortnight

1.

Not member of a couple

$2,080

$80

$639.60

$24.60

2.

Partnered (partner getting neither pension nor benefit)

$1,820

$70

$639.60

$24.60

3.

Partnered (partner getting benefit)

$1,820

$70

$639.60

$24.60

4.

Partnered (partner getting pension)

$1,820

$70

$319.80

$12.30

Note 1:       for member of a couple, partnered (partner getting neither pension nor benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 4.

Note 2:       for dependent child see section 5 and point 1064-E12.

Note 3:       items 2, 3 and 4 of Table E-1 apply to members of illness separated and respite care couples.

Note 4:       the basic free area limits are indexed annually in line with CPI increases (see sections 1191 to 1194).

No additional free area for certain prescribed student children

     1064-E5  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, or the person’s partner, receives carer allowance for the child.

Note:          this point may not apply to a person who has been receiving additional free area since 1 January 1990: see clause 29 in Schedule 1A.

Reduction of additional free area for dependent children

     1064-E6  The additional free area for a dependent child of a person to whom item 1, 2 or 3 of Table E-1 applies is reduced by the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 1064-E8 do not result in a reduction.

     1064-E7  The additional free area for a dependent child of a person to whom item 4 of Table E-1 applies is reduced by 50% of the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 1064-E8 do not result in a reduction.

     1064-E8  No reduction is to be made under point 1064-E6 or 1064-E7 for a payment:

                     (a)  under this Act; or

                     (b)  of maintenance income; or

                     (c)  under the VEA; 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).

     1064-E9  Examples of the kinds of payments that result in a reduction under points 1064-E6 and 1064-E7 are:

                     (a)  amounts received from State authorities or benevolent societies 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 1064-E8 above) paid in respect of the child under educational schemes; or

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

ORDINARY INCOME FREE AREA EXAMPLES (using rates to 30.6.91)            

Example 1: 

Facts             Wayne and Mary are members of a couple. They both receive pensions. They have 2 dependent children—Max and Angela. Angela is being fostered by Wayne and Mary and they receive $15 per week from the NSW Government by way of a foster care payment in respect of Angela.

Application    The foster care payment calculated on a yearly basis is
$15 ´ 52 = $780. As point 1064-E7 applies to Wayne and Mary (they are covered by item 4 of Table E-1 in point 1064-E4), the reduction is at the 50% rate (i.e. $390 per year). The possible additional amount for Angela ($312) is therefore reduced to nil.

                      The amount that Wayne gets for Max is not subject to reduction and is $312 per year. Mary gets $312 for Max as well.

                      Wayne’s ordinary income free area is $1,820 + $312 = $2,132. Mary’s ordinary income free area is the same.

Example 2: 

Facts             The same facts as in example 1 except that Wayne and Mary receive only $10 a week ($520 a year) foster care payment for Angela.

Application    The amount that each person would be allowed for Angela is:

                      Then each would have an ordinary income free area of
$1,820 + $312 + $52 = $2,184

Pension reduction for ordinary income in excess of ordinary income free area

   1064-E10  A person’s reduction for ordinary income is:

Ordinary income excess

   1064-E11  A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

   1064-E12  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 GAssets test
[see Appendix for CPI adjusted figures]

Effect of assets on maximum payment rate

     1064-G1  This is how to work out the effect of a person’s assets on the person’s maximum payment rate:

Method statement

Step 1.   Work out the value of the person’s assets.

                   Note 1:          for the treatment of the assets of members of a couple see point 1064-G2.

                   Note 2:          for the assets that are to be disregarded in valuing a person’s assets see section 1118.

                   Note 3:          for the valuation of an asset that is subject to a charge or encumbrance see section 1121.

Step 2.   Work out the person’s assets value limit (see point 1064-G3 below).

                   Note:             a person’s assets value limit is the maximum value of assets the person can have without affecting the person’s pension rate.

Step 3.   Work out whether the value of the person’s assets exceeds the person’s assets value limit.

Step 4.   If the value of the person’s assets does not exceed the person’s assets value limit, the person’s assets excess is nil.

Step 5.   If the value of the person’s assets exceeds the person’s assets value limit, the person’s assets excess is the value of the person’s assets less the person’s assets value limit.

Step 6.   Use the person’s assets excess to work out the person’s reduction for assets using points 1064-G4 to 1064-G7 below.

Note 1:       see point 1064-A1 (steps 9 and 10) for the significance of the person’s reduction for assets.

Note 2:       the application of the assets test is affected by provisions concerning:

·         disposal of assets (sections 1123 to 1128);

·         retirement villages (sections 1145 to 1157);

·         financial hardship (sections 1129 and 1130);

·         the pensions loans scheme (sections 1133 to 1144).

Value of assets of members of couples

     1064-G2  For the purposes of this Module:

                     (a)  the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person’s assets; and

                             (ii)  the value of the person’s partner’s assets; and

                     (b)  the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person’s assets of that kind; and

                             (ii)  the value of the person’s partner’s assets of that kind.

Assets value limit

     1064-G3  A person’s assets value limit is worked out using Table G-1. Work out the person’s family situation and home ownership situation. The assets value limit is the corresponding amount in column 3.

 

Table G-1—Assets value limit

Column 1

Column 2

Column 3

Assets value limit

Item

Person’s family situation

Column 3A

Either person or partner homeowner

column 3B

Neither person nor partner homeowner

1.

Not member of a couple

$110,750

$190,250

2.

Partnered (partner getting neither pension nor benefit)

$78,750

$118,500

3.

Partnered (partner getting pension or benefit)

$78,750

$118,500

Note 1:       for member of a couple, partnered (partner getting neither pension nor benefit) and partnered (partner getting pension or benefit) see section 4.

Note 2:       for homeowner see section 11.

Note 3:       items 2 and 3 apply to members of illness separated and respite care couples.

Note 4:       the assets value limits are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1203).

Pension reduction for assets in excess of assets value limit

     1064-G4  A person’s reduction for assets is worked out using Table G-2. Work out which family situation applies to the person. The reduction for assets is the amount per year worked out using the corresponding calculation in column 3.

 

Table G-2—Reduction for assets

Column 1

Item

Column 2

Person’s family situation

Column 3

Reduction

1.

Not member of a couple

2.

Partnered (partner getting neither pension nor benefit)

3.

Partner (partner getting pension or benefit)

Note 1:       for member of a couple, partnered (partner getting neither pension nor benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 4.

Note 4:       for assets excess see point 1064-G5 below.

Assets excess

     1064-G5  A person’s assets excess is the value of the person’s assets less the person’s assets value limit.

     1064-G7  In calculating a person’s assets excess under point 1064-G5 disregard any part of the excess that is not a multiple of $250.

Module HRemote area allowance

Remote area allowance

    1064-H1  An amount by way of remote area allowance is to be added to a person’s rate of pension if:

                    (aa)  either:

                              (i)  the person’s rate of pension apart from this point is greater than nil; or

                             (ii)  apart from this point the person’s rate of pension would be nil merely because an advance pharmaceutical allowance has been paid to the person under:

                                        (A)  Part 2.23 of this Act; or

                                        (B)  Division 2 of Part VIIA of the Veterans’ Entitlements Act; 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:          for remote area and physically present in the remote area see section 14.

Rate of remote area allowance

    1064-H2  The rate of remote area allowance payable to a person is worked out using Table H. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each FTB child of the person.

 

Table H—Remote area allowance

Column 1

Item

Column 2

Person’s family situation

Column 3

Basic allowance per year

Column 4

Basic allowance per fortnight

Column 5

Additional allowance per year

Column 6

Additional allowance per fortnight

1.

Not member of couple

$473.20

$18.20

$189.80

$7.30

2.

Partnered

$405.60

$15.60

$189.80

$7.30

3.

Member of illness separated couple

$473.20

$18.20

$189.80

$7.30

4.

Member of respite care couple

$473.20

$18.20

$189.80

$7.30

5.

Partnered (partner in gaol)

$473.20

$18.20

$189.80

$7.30

Note 1:       For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Special rule where partner has an FTB child but is not receiving a pension

    1064-H5  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

                     (b)  the person’s partner is not receiving a pension or benefit; and

                     (c)  the person’s partner has an FTB child;

the child is taken, for the purposes of this Module, to be an FTB child of the person.

Special rule where partner has an FTB child but is not receiving additional allowance for the FTB child

    1064-H6  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; and

                     (c)  the person’s partner is not receiving additional allowance for the FTB child;

the child is taken, for the purposes of this Module, to be an FTB child of the person.

Special rule dealing with the death of an FTB child

    1064-H7  If an FTB 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 during that 14 weeks.


 

Part 3.3Pension Rate Calculator B

  

1065  Rate of age and disability support pension and of disability wage supplement (blind people)

      1065(1)  The rate of:

                     (a)  age pension payable to a person who is permanently blind; and

                     (b)  disability support pension payable to a person who:

                              (i)  is permanently blind; and

                             (ii)  has turned 21;

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.

      1065(3)  Where:

                     (a)  a person who is permanently blind has a relationship with a person of the opposite sex (other person); and

                     (b)  the relationship between them is a marriage-like 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)  either or both of them are under the age of consent applicable in the State or Territory in which they are living;

the rate of pension payable to the person who is permanently blind 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, maintenance income and assets of the partner in applying the ordinary income test, maintenance income test and assets test respectively.

Rate limited for certain armed services widows

      1065(4)  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)  an age or disability support pension is payable to the widow;

the rate of pension payable to the widow is not to exceed:

                     (c)  if:

                              (i)  the widow has been receiving the payment referred to in paragraph (a) continuously since before 1 November 1986; and

                             (ii)  immediately before 1 November 1986, the widow was receiving a payment referred to in paragraph (b) at a rate exceeding $3,247.40; and

                            (iii)  the pension referred to in paragraph (b) is of the same type as the one which was payable to the person before 1 November 1986;

                            the rate of pension received by the widow immediately before 1 November 1986; and

                     (d)  in any other case—$3,247.40.

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

Rate limited for certain armed services widowers

      1065(5)  If:

                     (a)  an armed services widower 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)  an age or disability support pension is payable to the widower;

the rate of pension payable to the widower is not to exceed $3,247.40.

Note:          for armed services widower see subsection 4(1).

Rate limited for certain armed services widows and widowers

      1065(6)  If:

                     (a)  an armed services widow or an armed services widower has received a lump sum, or is receiving a weekly amount, mentioned in paragraph 234(1)(b) of the Military Rehabilitation and Compensation Act; and

                     (b)  an age or disability support pension is payable to the widow or widower;

the rate of pension payable to the widow or widower is not to exceed $3,247.40.

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

Pension Rate Calculator B

Module AOverall rate calculation process

Method of calculating rate

    1065-A1  The rate of pension 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 what would be the person’s rate of pension if Pension Rate Calculator A applied to the person: the result is called the notional income/assets tested rate.

Step 2.   Work out the person’s maximum basic rate using MODULE B below.

Step 2A. Work out the amount of pension supplement using Module BA below.

Step 3.   Work out the amount per year (if any) of pharmaceutical allowance using MODULE C below.

Step 4.   Add up the amounts obtained in Steps 2, 2A and 3: the result is called the maximum payment rate.

Step 5.   Work out the non-income/assets tested rate by:

               (a)     subtracting from the maximum 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 E).

Step 6.   Compare the notional income/assets tested rate and the non-income/assets tested rate: whichever is the greater is the person’s rate of pension.

Note 1:       the person will also be qualified for a pharmaceutical allowance under Part 2.22.

Note 2:       an amount of remote area allowance is to be added under Step 5 only if the person’s rate of pension after Step 4 is greater than nil.

Module BMaximum basic rate
[see Appendix for CPI adjusted figures]

Maximum basic rate

     1065-B1  A person’s maximum basic rate depends on the person’s family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3 of the Table.

 

Table B—Maximum basic rates

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate per year

Column 4

Rate per fortnight

1.

Not member of couple

$8,114.60

$312.10

2.

Partnered

$6,767.80

$260.30

3.

Member of illness separated couple

$8,114.60

$312.10

4.

Member of respite care couple

$8,114.60

$312.10

5.

Partnered (partner in gaol)

$8,114.60

$312.10

Note 1:       For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Note 2:       the maximum basic rates are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

Module BAPension supplement

Pension supplement

  1065-BA1  The amount of a person’s pension supplement depends on the person’s maximum basic rate. There is a pension supplement amount for each maximum basic rate listed in the table in point 1065-B1.

Amount of pension supplement

  1065-BA2  The amount of a person’s pension supplement is worked out by:

                     (a)  calculating the amount (the provisional supplement amount) that is 4% of the person’s 1 July 2000 maximum basic rate; and

                     (b)  rounding off the provisional supplement amount in accordance with points 1065-BA4 to 1065-BA6.

Note:          The pension supplement amounts are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

  1065-BA3  A person’s 1 July 2000 maximum basic rate is the maximum basic rate that would have been the person’s maximum basic rate if the rate had not changed since 1 July 2000.

Rounding off of provisional supplement amount

  1065-BA4  If a provisional supplement amount is a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount.

  1065-BA5  If a provisional supplement amount is not a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount rounded up or down to the nearest multiple of $2.60.

  1065-BA6  If a provisional supplement amount is not a multiple of $2.60, but is a multiple of $1.30, the amount of the pension supplement is the provisional supplement amount rounded up to the nearest multiple of $2.60.

Module CPharmaceutical allowance
[see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

     1065-C1  Subject to points 1065-C2, 1065-C3, 1065-C4 and 1065-C6, 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 receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act

     1065-C2  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

No pharmaceutical allowance if partner receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act and not a service pensioner

     1065-C3  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 pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act; and

                     (c)  the person’s partner is not receiving a service pension.

Note:          if paragraphs (a), (b) and (c) apply to the person’s partner, the partner is receiving pharmaceutical allowance under the VEA at the higher rate (rather than the person and the person’s partner each receiving pharmaceutical allowance at the lower rate) or is receiving pharmaceutical allowance under the MRCA.

No pharmaceutical allowance before advance payment period ends

     1065-C4  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:

                              (i)  Part 2.23 of this Act; or

                             (ii)  Division 2 of Part VIIA of the Veterans’ Entitlements Act; and

                     (b)  the person’s advance payment period has not ended.

Note:          for advance payment period see point 1065-C5.

Advance payment period

     1065-C5  A person’s advance payment period:

                     (a)  starts on the day on which the advance pharmaceutical allowance is paid to the person; and

                     (b)  ends after the number of paydays worked out using the following formula have passed:

where:

amount of advance is the amount of the advance paid to the person.

pharmaceutical allowance rate is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for 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

     1065-C6  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.

VEA and MRCA payments taken into account

     1065-C7  In points 1065-C5 and 1065-C6:

advance pharmaceutical allowance includes advance pharmaceutical allowance under the Veterans’ Entitlements Act.

pharmaceutical allowance includes pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

Amount of pharmaceutical allowance

     1065-C8  The amount of pharmaceutical allowance is the amount per year worked out using the following Table:

 

Pharmaceutical allowance amount table

Column 1

Item

Column 2

Person’s family situation

Column 3

Amount per year

Column 4

Amount per fortnight

1.

Not member of couple

$135.20

$5.20

2.

Partnered

$67.60

$2.60

3.

Member of illness separated couple

$135.20

$5.20

4.

Member of respite care couple

$135.20

$5.20

5.

Partnered (partner getting service pension)

$67.60

$2.60

6.

Partnered (partner in gaol)

$135.20

$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 adjusted annually in line with CPI increases (see section 1206A).

Module ERemote area allowance

Remote area allowance

     1065-E1  An amount by way of remote area allowance is to be added to a person’s rate of pension if:

                    (aa)  either:

                              (i)  the person’s rate of pension apart from this point is greater than nil; or

                             (ii)  apart from this point the person’s rate of pension would be nil merely because an advance pharmaceutical allowance has been paid to the person under:

                                        (A)  Part 2.23 of this Act; or

                                        (B)  Division 2 of Part VIIA of the Veterans’ Entitlements Act; 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:          for remote area and physically present in the remote area see section 14.

Rate of remote area allowance

     1065-E2  The rate of remote area allowance payable to a person is worked out using Table E. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each FTB child of the person.

Table E—Remote area allowance

Column 1

Item

Column 2

Person’s family situation

Column 3

Basic allowance per year

Column 4

Basic allowance per fortnight

Column 5

Additional allowance per year

Column 6

Additional allowance per fortnight

1.

Not member of couple

$473.20

$18.20

$189.80

$7.30

2.

Partnered

$405.60

$15.60

$189.80

$7.30

3.

Member of illness separated couple

$473.20

$18.20

$189.80

$7.30

4.

Member of respite care couple

$473.20

$18.20

$189.80

$7.30

5.

Partnered (partner in gaol)

$473.20

$18.20

$189.80

$7.30

Note 1:       For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Note 2:       for dependent child see section 5.

Special rule where partner has an FTB child but is not receiving a pension

     1065-E4  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

                     (b)  the person’s partner is not receiving a pension or benefit; and

                     (c)  the person’s partner has an FTB child;

the child is taken, for the purposes of this Module, to be an FTB child of the person.

Special rule where partner has an FTB child but is not receiving additional allowance for the FTB child

     1065-E5  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; and

                     (c)  the person’s partner is not receiving additional allowance for the FTB child;

the child is taken, for the purposes of this Module, to be an FTB child of the person.

Special rule dealing with the death of an FTB child

     1065-E6  If an FTB 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 during that 14 weeks.


 

Part 3.4Pension Rate Calculator C

  

1066  Rate of sole parent pension, bereavement allowance and widow B pension

      1066(1)  The rate of:

                     (b)  bereavement allowance; and

                     (c)  widow B pension;

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.

      1066(3)  If:

                     (a)  a person has a relationship with a person of the opposite sex (other person); and

                     (b)  the relationship between them is a marriage-like 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)  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 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 1:       although there is only 1 maximum basic rate specified in point 1066-B1 of Pension Rate Calculator C, the ordinary income test (Module E) and assets test (Module G) do depend on whether the recipient is a member of a couple or not.

Pension Rate Calculator C

Module AOverall rate calculation process

Method of calculating rate

    1066-A1  The rate of pension 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 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, 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 8.   Take the income reduction away from the maximum payment rate: the result is called the income reduced rate.

Step 9.   Apply the assets test using MODULE G below to work out the reduction for assets.

Step 10. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.

Step 11. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.

Step 12. The rate of pension 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 H).

Note 1:       if a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 1129 and 1130).

Note 1A:    If a person’s rate is, or is to be, an income reduced rate or an assets reduced rate, and at least one of those reduced rates is not a nil rate, the person may be able to take advantage of provisions dealing with the pension loans scheme (sections 1133AA to 1144).

Note 2:       if a person’s rate is reduced under Step 11, 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).

Note 3:       although most of the categories of person whose rate is to be worked out using this Rate Calculator will not be members of a couple, some categories are persons who are members of a couple (see subparagraphs 249(1)(a)(ii) and (iii)).

Note 4:       in some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.

Note 5:       an amount of remote area allowance is to be added under Step 11 only if the person’s rate of pension after Step 10 is greater than nil.

Members of a couple

    1066-A2  If 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 1066-E2, 1066-F2 and 1066-G2).

Module BMaximum basic rate
[see Appendix for CPI adjusted figures]

Maximum basic rate

     1066-B1  A person’s maximum basic rate is $8,114.60 per year ($312.10 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

  1066-BA1  The amount of a person’s pension supplement depends on the person’s maximum basic rate.

Amount of pension supplement

  1066-BA2  The amount of a person’s pension supplement is worked out by:

                     (a)  calculating the amount (the provisional supplement amount) that is 4% of the person’s 1 July 2000 maximum basic rate; and

                     (b)  rounding off the provisional supplement amount in accordance with points 1066-BA4 to 1066-BA6.

Note:          The pension supplement amount is indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

  1066-BA3  A person’s 1 July 2000 maximum basic rate is the maximum basic rate that would have been the person’s maximum basic rate if the rate had not changed since 1 July 2000.

Rounding off of provisional supplement amount

  1066-BA4  If a provisional supplement amount is a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount.

  1066-BA5  If a provisional supplement amount is not a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount rounded up or down to the nearest multiple of $2.60.

  1066-BA6  If a provisional supplement amount is not a multiple of $2.60, but is a multiple of $1.30, the amount of the pension supplement is the provisional supplement amount rounded up to the nearest multiple of $2.60.

Module CPharmaceutical allowance
[see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

     1066-C1  Subject to points 1066-C2, 1066-C3 and 1066-C5, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate if the person is an Australian resident.

No pharmaceutical allowance if person receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act

     1066-C2  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

Note:          a person can receive both:

(a)     a disability pension under the VEA; and

(b)     a pension under this Act;

                   and pharmaceutical allowance might be built into the disability pension rate.

No pharmaceutical allowance before advance payment period ends

     1066-C3  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance under:

                              (i)  Part 2.23 of this Act; or

                             (ii)  Division 2 of Part VIIA of the Veterans’ Entitlements Act; and

                     (b)  the person’s advance payment period has not ended.

Note:          for advance payment period see point 1066-C4.

Advance payment period

     1066-C4  A person’s advance payment period:

                     (a)  starts on the day on which the advance pharmaceutical allowance is paid to the person; and

                     (b)  ends after the number of paydays worked out using the following formula have passed:

where:

amount of advance is the amount of the advance paid to the person.

pharmaceutical allowance rate is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for 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

     1066-C5  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance during the current calendar year; and

                     (b)  the total amount paid to the person for that year by way of:

                              (i)  pharmaceutical allowance; and

                             (ii)  advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1:       for the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (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.

VEA and MRCA payments taken into account

     1066-C6  In points 1066-C4 and 1066-C5:

advance pharmaceutical allowance includes advance pharmaceutical allowance under the Veterans’ Entitlements Act.

pharmaceutical allowance includes pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

Amount of pharmaceutical allowance

     1066-C7  The amount of pharmaceutical allowance is $135.20 per year ($5.20 per fortnight).

Note:          the annual amount is adjusted annually in line with CPI increases (see section 1206A).

Module EOrdinary income test
[see Appendix for CPI adjusted figures]

Effect of income on maximum payment rate

     1066-E1  This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:

Method statement

Step 1.   Work out the amount of the person’s ordinary income on a yearly basis.

                   Note:             for the treatment of the ordinary income of members of a couple see point 1066-E2.

Step 2.   Work out the person’s ordinary income free area (see points 1066-E4 to 1066-E7 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 1066-E8 to 1066-E9 below.

Note 1:       see point 1066-A1 (Steps 5 to 8) 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 general concept of ordinary income (sections 1072 and 1073);

·         business income (sections 1074 and 1075);

·         deemed income from financial assets (sections 1076 to 1084);

·         income from income streams (sections 1095 to 1099DAA);

·         disposal of income (sections 1106 to 1112);

Ordinary incomes of members of couples

     1066-E2  If a person is a member of a couple, add the couple’s ordinary incomes (on a yearly basis) and divide by 2 to work out the amount of the person’s ordinary income for the purposes of this Module.

How to calculate a person’s ordinary income free area

     1066-E4  A person’s ordinary income free area is worked out using Table E. The ordinary income free area is the amount in column 1 plus an additional amount in column 3 for each dependent child of the person.

 

Table E—Ordinary income free area

Column 1

Basic free area per year

Column 2

Basic free area per fortnight

Column 3

Additional free area per year

Column 4

Additional free area per fortnight

$2,080

$80

$639.60

$24.60

Note 1:       for dependent child see section 5 and point 1066-E10.

Note 2:       the basic free area per year is indexed annually in line with CPI increases (see sections 1191 to 1194).

Reduction of additional free area for dependent children

     1066-E5  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 1066-E6 do not result in a reduction.

     1066-E6  No reduction is to be made under point 1066-E5 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).

     1066-E7  Examples of the kinds of payments that result in a reduction under point 1066-E5 are:

                     (a)  amounts received from State authorities or benevolent societies 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 1066-E5 above) paid in respect of the child under educational schemes; or

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

ORDINARY INCOME FREE AREA EXAMPLE (using rates to 30.6.91)              

Example     

Facts             Mary is a sole parent with 2 dependent children, Jim and Susan. Mary is getting a family allowance payment from another country for Jim at the rate of $40 a month. On a yearly basis, this amounts to $480.

Application    Point 1066-E4 applies to Mary (see paragraph 1066-E7(d)). As a result, the possible additional free area per year for Jim ($624) must be reduced by $480.

                      Mary’s ordinary income free area per year is therefore:

Reduction for ordinary income

     1066-E8  A person’s reduction for ordinary income is:

Ordinary income excess

     1066-E9  A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

   1066-E10  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 GAssets test
[see Appendix for CPI adjusted figures]

Effect of assets on maximum payment rate

     1066-G1  This is how to work out the effect of a person’s assets on the person’s maximum payment rate:

 Method statement

Step 1.   Work out the value of the person’s assets.

                   Note 1:          for the treatment of the assets of members of a couple see point 1066-G2.

                   Note 2:          for the assets that are to be disregarded in valuing a person’s assets see section 1118.

                   Note 3:          for the valuation of an asset that is subject to a charge or encumbrance see section 1121.

Step 2.   Work out the person’s assets value limit (see point 1066-G3 below).

                   Note:             a person’s assets value limit is the maximum value of assets the person can have without affecting the person’s pension rate.

Step 3.   Work out whether the value of the person’s assets exceeds the person’s assets value limit.

Step 4.   If the value of the person’s assets does not exceed the person’s assets value limit, the person’s assets excess is nil.

Step 5.   If the value of the person’s assets exceeds the person’s assets value limit, the person’s assets excess is the value of the person’s assets less the person’s assets value limit.

Step 6.   Use the person’s assets excess to work out the person’s reduction for assets using points 1066-G4 to 1066-G6 below.

Note 1:       see point 1066-A1 (Steps 9 and 10) for the significance of the person’s reduction for assets.

Note 2:       the application of the assets test is affected by provisions concerning:

·         disposal of assets (sections 1123 to 1128);

·         retirement villages (sections 1145 to 1157);

·         financial hardship (sections 1129 and 1130);

·         the pension loans scheme (sections 1133 to 1144).

Value of assets of members of couples

     1066-G2  For the purposes of this Module:

                     (a)  the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person’s assets; and

                             (ii)  the value of the person’s partner’s assets; and

                     (b)  the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person’s assets of that kind; and

                             (ii)  the value of the person’s partner’s assets of that kind.

Assets value limit

     1066-G3  A person’s assets value limit is worked out using Table G. Work out which family situation applies to the person. The assets value limit is the corresponding amount in column 3.

 

Table G—Assets value limit

Column 1

Column 2

Column 3

Assets value limit

 

Item

Person’s family situation

Column 3A

Either person or partner homeowner

Column 3B

Neither person nor partner homeowner

 

1.

Not member of a couple

$110,750

$190,250

 

2.

Partnered (partner getting neither pension nor benefit)

$78,750

$118,500

 

3.

Partnered (partner getting pension or benefit)

$78,750

$118,500

 

Note 1:       for member of a couple, partnered (partner getting neither pension nor benefit) and partnered (partner getting pension or benefit) see section 4.

Note 2:       for homeowner see section 11.

Note 3:       the assets value limits are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1203).

Pension reduction for assets in excess of assets value limit

     1066-G4  A person’s reduction for assets is:

Assets excess

     1066-G5  A person’s assets excess is the value of the person’s assets less the person’s assets value limit.

     1066-G6  In calculating a person’s assets excess under points 1066-G4 and 1066-G5 disregard any part of that excess which is not a multiple of $250.

Module HRemote Area Allowance

Remote area allowance

    1066-H1  An amount by way of remote area allowance is to be added to a person’s rate of pension if:

                    (aa)  either:

                              (i)  the person’s rate of pension apart from this point is greater than nil; or

                             (ii)  apart from this point the person’s rate of pension would be nil merely because an advance pharmaceutical allowance has been paid to the person under:

                                        (A)  Part 2.23 of this Act; or

                                        (B)  Division 2 of Part VIIA of the Veterans’ Entitlements Act; 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:          for remote area and physically present in the remote area see section 14.

Rate of remote area allowance

    1066-H2  The rate of remote area allowance payable to a person is worked out using Table H. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each FTB child of the person.

 

Table H—Remote area allowance

Column 1

Item

Column 2

Person’s family situation

Column 3

Basic allowance per year

Column 4

Basic allowance per fortnight

Column 5

Additional allowance per year

Column 6

Additional allowance per fortnight

1.

Not member of couple

$473.20

$18.20

$189.80

$7.30

2.

Partnered

$405.60

$15.60

$189.80

$7.30

3.

Partnered (partner in gaol)

$473.20

$18.20

$189.80

$7.30

Note:          For member of couple, partnered and partnered (partner in gaol) see section 4.

Special rule where partner has an FTB child but is not receiving a pension

    1066-H4  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

                     (b)  the person’s partner is not receiving a pension or benefit; and

                     (c)  the person’s partner has an FTB child;

the child is taken, for the purposes of this Module, to be an FTB child of the person.

Special rule where partner has an FTB child but is not receiving additional allowance for the FTB child

    1066-H5  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; and

                     (c)  the person’s partner is not receiving additional allowance for the FTB child;

the child is taken, for the purposes of this Module, to be an FTB child of the person.

Special rule dealing with the death of an FTB child

    1066-H6  If an FTB 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 during that 14 weeks.


 

Part 3.4APension Rate Calculator D

  

1066A  Rate of disability support pension (people under 21 who are not blind)

   1066A(1)  The rate of disability support pension of a person who has not turned 21 is, subject to subsection (2), 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.

   1066A(2)  Subsection (1) does not apply if the person is permanently blind.

Note:          the rate for a disability support pension payable to a person under 21 who is permanently blind is dealt with in section 1066B.

   1066A(3)  A person’s disability support pension rate is not to exceed the rate at which a disability support pension would be payable to that person if the person’s rate were calculated using Pension Rate Calculator A at the end of section 1064.

   1066A(5)  If:

                     (a)  a person has a relationship with a person of the opposite sex (other person); and

                     (b)  the relationship between them is a marriage-like 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)  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 disability support pension 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, maintenance income and assets of the partner in applying the ordinary income test, maintenance income test and assets test respectively.

Pension Rate Calculator D

Module AOverall rate calculation process

Method of calculating rate

  1066A-A1  The rate of pension 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 2.   Work out the amount per year for youth disability, Supplement using MODULE C below.

Step 3.   Work out the amount per year (if any) of pharmaceutical allowance using MODULE D below.

Step 4.   Work out the amount per year (if any) for rent assistance in accordance with paragraph 1070A(b).

Step 5.   Add up the amounts obtained in Steps 1, 2, 3 and 4: the result is called the maximum payment rate.

Step 6.   Apply the ordinary income test using MODULE F below to work out the income reduction.

Step 9.   Take the income reduction away from the maximum payment rate: the result is called the income reduced rate.

Step 10. Apply the assets test using MODULE H below to work out the reduction for assets.

Step 11. Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.

Step 12. Compare the income reduced rate and the assets reduced rate: the lower of the 2 rates, or the income reduced rate if the rates are equal, is the provisional annual payment rate.

Step 13. The rate of pension 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 I).

Note 1:       if a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with financial hardship (sections 1129 and 1130).

Note 2:       if a person’s rate is reduced under Step 12 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 and youth disability supplement first, then rent assistance).

Note 3:       the rate calculation for a member of a couple is affected by the operation of points 1066A-A2.

Note 5:       an amount of remote area allowance is to be added under Step 12 if the person’s rate of pension after Step 11 is greater than nil.

Members of a couple

  1066A-A2  Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 1066A-F2, 1066A-G3 and 1066A-H2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see section 1070V).

Module BMaximum basic rate
[see Appendix for CPI adjusted figures]

Maximum basic rate

  1066A-B1  A person’s maximum basic rate is to be worked out using Table B. Work out the family situation and whether the person has a dependent child. The maximum basic rate is the corresponding amount in column 3.

 

Table B—Maximum basic rates

Column 1
Item

Column 2
Person’s family situation

Column 3
Rate per year

Column 4
Rate per fortnight

 

 

Column 3A
Person with dependent child

Column 3B
Person without dependent child

Column 4A
Person with dependent child

Column 4B
Person without dependent child

1

Not a member of a couple and person:

(a) is under 18 years of age; and

(b) is not independent; and

(c) is not living away from the person’s parental home because of a medical condition of the person

$9,575.80

$4,001.40

$368.30

$153.90

2

Not a member of a couple and person:

(a) is under 18 years of age; and

(b) either:

(i)   is independent; or

(ii)  is living away from the person’s parental home because of a medical condition of the person

$9,575.80

$7,308.60

$368.30

$281.10

3

Not a member of a couple and person:

(a) has reached 18 years of age; and

(b) is living at home of parent or parents; and

(c) is not independent

$9,575.80

$4,810.00

$368.30

$185.00

4

Not a member of a couple and person:

(a) has reached 18 years of age; and

(b) either:

(i)   is not living at a home of parent or parents; or

 

(ii) is living at a home of parent or parents, but is independent

$9,575.80

$7,308.60

$368.30

$281.10

5

Partnered

$8,026.20

$7,308.60

$308.70

$281.10

6

Member of illness separated couple, member of respite care couple or partnered (partner in gaol)

$9,575.80

$7,308.60

$368.30

$281.10

Note 1:       For member of a couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Note 2:       For dependent child and independent see section 5.

Note 3:       For living away from the person’s parental home see subsection 23(4D).

Note 4:       The rates in columns 3A and 3B are adjusted annually in line with CPI changes (see section 1198B).

Module CYouth disability supplement
[see Appendix for CPI adjusted figures]

Youth disability supplement

  1066A-C1  An amount by way of youth disability supplement is to be added to a person’s rate. The rate of youth disability supplement is $1,557.40 per year ($59.90 per fortnight).

Note 1:       the rate of youth disability supplement is adjusted annually in line with CPI increases (see section 1198C).

Note 2:       on 1 January 1992 the rate of youth disability supplement is to be increased by $111.80 ($4.30 per fortnight), under section 45 of the Social Security Legislation Amendment Act (No. 3) 1991. This is in addition to the annual CPI indexation occurring on 1 January 1992.

Module DPharmaceutical allowance
[see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

  1066A-D1  Subject to points 1066A-D2, 1066A-D3,1066A-D4 and 1066A-D6, 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 receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act

  1066A-D2  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

No pharmaceutical allowance if partner receiving pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act and not a service pensioner

  1066A-D3  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 pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act; and

                     (c)  the person’s partner is not receiving a service pension.

No pharmaceutical allowance before advance payment period ends

  1066A-D4  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:

                              (i)  Part 2.23 of this Act; or

                             (ii)  Division 2 of Part VIIA of the Veterans’ Entitlements Act; and

                     (b)  the person’s advance payment period has not ended.

Note:          for advance payment period see point 1066A-D5.

Advance payment period

  1066A-D5  A person’s advance payment period:

                     (a)  starts on the day on which the advance pharmaceutical allowance is paid to the person; and

                     (b)  ends after the number of paydays worked out using the following formula have passed:

where:

amount of advance is the amount of the advance paid to the person.

pharmaceutical allowance rate is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for 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

  1066A-D6  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance 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.

VEA and MRCA payments taken into account

  1066A-D7  In points 1066A-D5 and 1066A-D6:

advance pharmaceutical allowance includes advance pharmaceutical allowance under the Veterans’ Entitlements Act.

pharmaceutical allowance includes pharmaceutical allowance under the Veterans’ Entitlements Act or the Military Rehabilitation and Compensation Act.

Amount of pharmaceutical allowance

  1066A-D8  The amount of pharmaceutical allowance is the amount per year worked out using the following Table:

 

Pharmaceutical allowance amount table

Column 1

Item

Column 2

Person’s family situation

Column 3

Amount per year

Column 4

Amount per fortnight

1.

Not member of couple

$135.20

$5.20

2.

Partnered

$67.60

$2.60

3.

Member of illness separated couple

$135.20

$5.20

4.

Member of respite care couple

$135.20

$5.20

5.

Partnered (partner getting service pension)

$67.60

$2.60

6.

Partnered (partner in gaol)

$135.20

$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 adjusted annually in line with CPI increases (see section 1206A).

Module FOrdinary income test
[see Appendix for CPI adjusted figures]

Effect of income on maximum payment rate

  1066A-F1  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.

                   Note:             for the treatment of the ordinary income of members of a couple see point 1066A-F2.

Step 2.   Work out the person’s ordinary income free area (see points 1066A-F3 to 1066A-F8 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.

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 1066A-F9 to 1066A-F11 below.

Note 1:       see point 1066A-A1 (Steps 6 to 9) 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 general concept of ordinary income (sections 1072 and 1073);

·         business income (sections 1074 and 1075);

·         deemed income from financial assets (sections 1076 to 1084);

·         income from income streams (sections 1095 to 1099DAA);

·         disposal of income (sections 1106 to 1112);

Ordinary incomes of members of couples

  1066A-F2  If a person is a member of a couple, add the couple’s ordinary incomes (on a yearly basis) and divide by 2 to work out the amount of the person’s ordinary income for the purposes of this Module.

Payment of arrears of periodic compensation payments

1066A-F2A  If:

                     (a)  at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving disability support pension; 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 periodic payments period see section 17.

How to calculate a person’s ordinary income free area

  1066A-F3  A person’s ordinary income free area is worked out using Table F-1. Work out which family situation in Table F-1 applies to the person. The ordinary income free area is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each dependent child of the person.

Table F-1—Ordinary income free area

Column 1

Item

Column 2

Category of person

Column 3

Basic free area per year

Column 4

Basic free area per fortnight

Column 5

Additional free area per year

Column 6

Additional free area per fortnight

1.

Not member of a couple

$2,184

$80

$639.60

$24.60

2.

Partnered (partner getting neither pension nor benefit)

$1,924

$70

$639.60

$24.60

3.

Partnered—(partner getting benefit)

$1,924

$70

$639.60

$24.60

4.

Partnered—(partner getting pension)

$1,924

$70

$319.80

$12.30

Note 1:       for member of a couple, partnered (partner getting neither pension nor benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 4.

Note 2:       for dependent child see section 5 and point 1066A-F11.

Note 3:       items 2, 3 and 4 of Table F-1 apply to members of illness separated couples.

Note 4:       the basic free area limits are indexed annually in line with CPI increases (see sections 1191 to 1194).

No additional free area for certain prescribed student children

  1066A-F4  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, or the person’s partner, receives carer allowance for the child.

Reduction of additional free area for dependent children

  1066A-F5  The additional free area for a dependent child of a person to whom item 1, 2 or 3 of Table F-1 applies is reduced by the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 1064-F7 do not result in a reduction.

  1066A-F6  The additional free area for a dependent child of a person to whom item 4 of Table F-1 applies is reduced by 50% of the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 1066A-F7 do not result in a reduction.

  1066A-F7  No reduction is to be made under point 1066A-F5 or 1066A-F6 for a payment:

                     (a)  under this Act; or

                     (b)  of maintenance income; or

                     (c)  under the VEA; 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).

  1066A-F8  Examples of the kinds of payments that result in a reduction under points 1066A-F5 and 1066A-F6 are:

                     (a)  amounts received from State authorities or benevolent societies 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 1066A-F7 above) paid in respect of the child under educational schemes; or

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

ORDINARY INCOME FREE AREA EXAMPLES (using rates to 30.6.91)            

Example 1: 

Facts             Wayne and Mary are members of a couple. They both receive pensions. They have 2 dependent children—Max and Angela. Angela is being fostered by Wayne and Mary and they receive $15 per week from the NSW Government by way of a foster care payment in respect of Angela.

Application    The foster care payment calculated on a yearly basis is
$15 ´ 52 = $780. As point 1066A-F6 applies to Wayne and Mary (they are covered by item 4 of Table F-1 in point 1066A-F3), the reduction is at the 50% rate (i.e. $390 per year). The possible additional amount for Angela ($312) is therefore reduced to nil.

                      The amount that Wayne gets for Max is not subject to reduction and is $312 per year. Mary gets $312 for Max as well.

                      Wayne’s ordinary free area limit is $1,820 + $312 = $2,132. Mary’s ordinary free area limit is the same.

Example 2: 

Facts             The same facts as in Example 1 except that Wayne and Mary receive only $10 a week ($520 a year) foster care payment for Angela.

Application    The amount that each person would be allowed for Angela is:

                      Then each would have an ordinary free area limit of
$1,820 + $312 + $52 = $2,184.

Pension reduction for ordinary income in excess of ordinary income free area

  1066A-F9  A person’s reduction for ordinary income is worked out using Table F-2. Work out which family situation applies to the person. The reduction for ordinary income is the amount per year worked out using the corresponding calculation in column 3.

 

Table F-2—Reduction for ordinary income

Column 1

Item

Column 2

Person’s family situation

Column 3

Reduction

1.

Not member of a couple

2.

Partnered (partner getting neither pension nor benefit)

3.

Partnered (partner getting benefit or pension)

Note 1:       for member of a couple, partnered (partner getting neither pension not benefit), partnered (partner getting benefit) and partnered (partner getting pension) see section 4.

Note 3:       for ordinary income excess see point 1066A-F10 below.

Ordinary income excess

1066A-F10  A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

1066A-F11  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 HAssets test
[see Appendix for CPI adjusted figures]

Effect of assets on maximum payment rate

  1066A-H1  This is how to work out the effect of a person’s assets on the person’s maximum payment rate:

Method statement

Step 1.   Work out the value of the person’s assets.

                   Note 1:          for the treatment of the assets of members of a couple see point 1066A-H2.

                   Note 2:          for the assets that are to be disregarded in valuing a person’s assets see section 1118.

                   Note 3:          for the valuation of an asset that is subject to a charge or encumbrance see section 1121.

Step 2.   Work out the person’s assets value limit (see point 1066A-H3 below).

                   Note:             a person’s assets value limit is the maximum value of assets the person can have without affecting the person’s pension rate.

Step 3.   Work out whether the value of the person’s assets exceeds the person’s assets value limit.

Step 4.   If the value of the person’s assets does not exceed the person’s assets value limit, the person’s assets excess is nil.

Step 5.   If the value of the person’s assets exceeds the person’s assets value limit, the person’s assets excess is the value of the person’s assets less the person’s assets value limit.

Step 6.   Use the person’s assets excess to work out the person’s reduction for assets using points 1066A-H4 to 1066A-H7 below.

Note 1:       see point 1066A-A1 Steps 10 and 11 for the significance of the person’s reduction for assets.

Note 2:       the application of the assets test is affected by provisions concerning:

·         disposal of assets (sections 1123 to 1128);

·         retirement villages (sections 1145 to 1157);

·         financial hardship (sections 1129 and 1130);

·         the pensions loans scheme (sections 1133 to 1144).

Value of assets of members of couples

  1066A-H2  For the purposes of this Module:

                     (a)  the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person’s assets; and

                             (ii)  the value of the person’s partner’s assets; and

                     (b)  the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

                              (i)  the value of the person’s assets of that kind; and

                             (ii)  the value of the person’s partner’s assets of that kind.

Assets value limit

  1066A-H3  A person’s assets value limit is worked out using Table H-1. Work out the person’s family situation and home ownership situation. The assets value limit is the corresponding amount in column 3.

 

Table H-1—Assets value limit

Column 1

Column 2