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Social Security Act 1991

  • - C2013C00081
  • In force - Superseded Version
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Act No. 46 of 1991 as amended, taking into account amendments up to Fair Work Amendment Act 2012
An Act to provide for the payment of certain pensions, benefits and allowances, and for related purposes
Administered by: Education, Employment and Workplace Relations; Families, Housing, Community Services and Indigenous Affairs; Attorney-General's; Industry, Innovation, Climate Change, Science, Research and Tertiary Education
General Comments: This compilation is affected by retrospective amendments. Please see the Family Assistance and Other Legislation Amendment Act 2013(Act No. 70, 2013) for details.
Registered 04 Feb 2013
Start Date 22 Jan 2013
End Date 04 Mar 2013
Table of contents.

Social Security Act 1991

Act No. 46 of 1991 as amended

This compilation was prepared on 22 January 2013
taking into account amendments up to Act No. 174 of 2012

Volume 3 includes:     Table of Contents
                                    Sections 1068 – 1361A
                                    Schedule 1A

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 3—General provisions relating to payability and rates              1

Part 3.6—Benefit Rate Calculator B                                                                          1

1068...... Rate of widow allowance, Newstart allowance (18 or over) sickness allowance (18 or over) partner allowance, and mature age allowance under Part 2.12B.............................................. 1

Benefit Rate Calculator B                                                                                          2

Module A—Overall rate calculation process                                                  2

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]            4

Module BA—Pension supplement                                                                        10

Module D—Pharmaceutical allowance [see Appendix for CPI adjusted figures]               11

Module G—Income test                                                                                             15

Module J—Remote area allowance                                                                    29

Part 3.6AParenting Payment Rate Calculator                                             32

1068A... Rate of parenting payment—pension PP (single).............................. 32

Pension PP (Single) Rate Calculator                                                                  32

Module AOverall rate calculation process                                                32

Module B—Maximum basic rate [see Appendix for CPI adjusted figures]            34

Module BA—Pension supplement                                                                        34

Module CPharmaceutical allowance [see Appendix for CPI adjusted figures]               35

Module EOrdinary income test                                                                        37

Module FRemote area allowance                                                                    44

1068B... Rate of parenting payment—PP (partnered)...................................... 45

Benefit PP (Partnered) Rate Calculator                                                           45

Module A—Overall rate calculation process                                                45

Module CMaximum basic rate [see Appendix for CPI adjusted figures]           48

Module DIncome test                                                                                             49

Module DA—Pension supplement                                                                        57

Module EPharmaceutical allowance [see Appendix for CPI adjusted figures]               59

Module GRemote area allowance                                                                   62

Part 3.7—Rent assistance                                                                                                65

Division 1—Operation of this Part                                                                      65

1070...... When this Part applies....................................................................... 65

1070A... Effect of this Part.............................................................................. 65

Division 2—Qualification for rent assistance                                                66

1070B... Qualification—general rule............................................................... 66

1070C... Common requirements (about aged care residence, home ownership and rent)        66

1070D... Specific requirement (carer payments and certain age, disability support and wife pensions)  66

1070E.... Specific requirement (bereavement allowance, widow B pension and certain parenting payments)         67

1070F.... Specific requirement (certain disability support pensions)................ 68

1070G... Specific requirement (youth allowance)............................................ 70

1070H... Specific requirement (austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance or widow allowance).......................................... 71

1070J.... Specific requirement (certain parenting payments)............................ 73

Division 3—Rate of rent assistance                                                                    74

1070K... Rate depends on social security payment and family situation.......... 74

1070L.... Rate for carer payments and certain age, disability support and wife pensions         74

1070M.. Rate for bereavement allowance, widow B pension and certain parenting payments                77

1070N... Rate for disability support pension (person aged under 18).............. 78

1070P.... Rate for disability support pension (person aged between 18 and 21) 81

1070Q... Rate for youth allowance, austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance and widow allowance....................... 84

1070R... Rate for certain parenting payments.................................................. 86

Division 4—Certain concepts used in this Part                                             88

1070S.... Division has effect for purposes of Part............................................ 88

1070T.... Rent threshold amount...................................................................... 88

1070U... Fortnightly rent................................................................................. 88

1070V... Rent paid by a member of certain couples......................................... 89

1070W.. Partner with a rent increased pension................................................ 89

1070X... Partner with a rent increased benefit.................................................. 89

Division 5—Transitional indexation of rent assistance and rent threshold amounts     92

1070Y... Indexation of certain amounts for CPI increases before commencement  92

Part 3.9—Seniors Health Card Taxable Income Test Calculator          93

1071...... Seniors Health Card Taxable Income Test Calculator....................... 93

Seniors Health Card Taxable Income Test Calculator                            93

Part 3.9A—Health Care Card Income Test Calculator                               98

1071A... Health care card income test.............................................................. 98

Health Care Card Income Test Calculator                                                    98

Part 3.10—General provisions relating to the ordinary income test   102

Division 1—Ordinary income concept                                                            102

1072...... General meaning of ordinary income.............................................. 102

1073...... Certain amounts taken to be received over 12 months..................... 102

Division 1AAA—Work bonus                                                                              104

1073AA Work bonus.................................................................................... 104

1073AB Unused concession balance............................................................. 107

Division 1AA—Employment income attribution rules                            108

1073A... Employment income attribution over a period for social security pensioners           108

1073B... Daily attribution of employment income......................................... 108

1073C... Fortnightly or yearly expression of attributed employment income. 109

Division 1AB—Working credit accrual and depletion rules and their consequences    110

1073D... To whom do working credit accrual and depletion rules apply?...... 110

1073E.... Opening balance.............................................................................. 110

1073F.... Working out accruals and depletions of working credit for social security beneficiaries          114

1073G... Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary....................................................................................... 116

1073H... Working out accruals and depletions of working credit for social security pensioners             116

1073I..... Working out the effect of a working credit depletion on the yearly rate of ordinary income for a social security pensioner........................................................................................................ 118

1073J.... Working credit balance prevents loss of qualification in certain cases 118

Division 1A—Business income                                                                             120

1074...... Ordinary income from a business—treatment of trading stock....... 120

1075...... Permissible reductions of business income..................................... 120

Division 1B—Deemed income from financial assets                                122

1076...... Deemed income from financial assets—persons other than members of couples     122

1077...... Deemed income from financial assets—members of pensioner couples.. 123

1078...... Deemed income from financial assets—members of non‑pensioner couples           124

1081...... Deeming threshold.......................................................................... 125

1082...... Below threshold rate, above threshold rate...................................... 126

1083...... Actual return on financial assets not treated as ordinary income..... 126

1084...... Certain money and financial investments not taken into account..... 127

1084A... Valuation and revaluation of certain financial investments.............. 127

Division 1C—Income from income streams                                                 128

Subdivision B—Income streams that are not family law affected income streams      128

1097A... Scope of Subdivision...................................................................... 128

1098...... Income from asset‑test exempt income stream................................ 128

1099...... Income—income stream not a defined benefit income stream......... 128

1099A... Income—income stream is a defined benefit income stream........... 129

1099AA Income from market‑linked asset‑test exempt income stream.......... 129

1099B... Income from asset‑tested income stream (long term)...................... 131

1099C... Income—income stream not a defined benefit income stream......... 131

1099D... Income—income stream is a defined benefit income stream........... 132

1099DAA  Income from certain low‑payment asset‑tested income streams.. 133

Subdivision C—Family law affected income streams                                  134

1099DA Scope of Subdivision...................................................................... 134

1099DB Income from asset‑test exempt income streams............................... 135

1099DC Income from asset‑tested income stream (long term)...................... 135

1099DD Decision‑making principles............................................................. 135

Division 1D—Aged care accommodation bonds: certain transactions before 6 November 1997           136

1099E.... Scope of Division........................................................................... 136

1099F.... Exempt bond amount does not count as income.............................. 137

1099G... Person’s ordinary income reduced using financial asset rules......... 137

1099H... Meaning of exempt bond amount.................................................... 137

Division 1E—Refunds to charge exempt residents                                   139

1099J.... Scope of Division........................................................................... 139

1099K... Refunded amount does not count as income................................... 139

1099L.... Person’s ordinary income reduced using financial asset rules......... 139

1099M.. Application of Division................................................................... 140

Division 2—Conversion of foreign currency amounts                           141

1100...... How value of a payment received in a foreign currency is to be determined            141

1100A... Determining value of a payment originally denominated in a foreign currency but made in Australian currency     142

Division 3—Disposal of ordinary income                                                      144

1106...... Disposal of ordinary income........................................................... 144

1107...... Amount of disposition.................................................................... 145

1108...... Disposal of ordinary income—individuals...................................... 145

1109...... Disposal of ordinary income—members of couples....................... 146

1111...... Dispositions more than 5 years old to be disregarded..................... 147

Part 3.12—General provisions relating to the assets test                           149

Division 1—Value of person’s assets                                                                149

1118...... Certain assets to be disregarded in calculating the value of a person’s assets           149

1118B... Value of superannuation investments determined by Minister to be disregarded     156

1118AA Value of assets reduced by amounts received from Mark Fitzpatrick Trust             157

1118AB Value of person’s assets reduced: certain transactions to do with aged care accommodation bonds        158

1118AC Value of person’s assets reduced: refunds to charge exempt residents 158

1119...... Value of asset‑tested income streams that are not defined benefit income streams   158

1120...... Value of asset‑tested income streams that are defined benefit income streams         159

1120A... Value of asset‑tested FLA income streams..................................... 160

1120B... Value of partially asset‑test exempt income streams........................ 160

1120C... Value of superannuation reserves for superannuation funds of 4 members or less  161

1121...... Effect of charge or encumbrance on value of assets........................ 161

1121A... Effect of certain liabilities on value of assets used in primary production 162

1122...... Loans.............................................................................................. 163

Division 2—Disposal of assets                                                                              164

1123...... Disposal of assets........................................................................... 164

1124...... Amount of disposal or disposition.................................................. 165

1124A... Disposal of assets in pre‑pension years—individuals..................... 166

1125...... Disposal of assets in pension years—individuals........................... 167

1125A... Disposal of assets in pre‑pension years—members of couples....... 167

1126...... Disposal of assets in pension years—members of couples............. 170

1126AA Disposal of assets in income year—individuals.............................. 172

1126AB Disposals of assets in 5 year period—individuals........................... 172

1126AC Disposal of assets in income year—members of couples................ 173

1126AD Disposal of assets in 5 year period—members of couples.............. 175

1126A... Disposal of assets in pre‑pension year—family members............... 176

1126B... Disposal of assets in pension year—family members..................... 178

1126C... Disposal of assets in income year—family members...................... 179

1126D... Disposals of assets in 5 year period—family members................... 180

1126E.... Modification of this Division in respect of certain assets................ 181

1127...... Disposition more than 5 years old to be disregarded....................... 183

1127A... Division does not apply for purposes of care receiver assets test.... 183

Division 3—Financial hardship                                                                           184

1129...... Access to financial hardship rules—pensions................................. 184

1130...... Application of financial hardship rules—pensions.......................... 185

1130A... Division does not apply for purposes of care receiver assets test.... 188

1130B... Access to financial hardship rules—pension PP (single)................ 188

1130C... Application of financial hardship rules—pension PP (single)......... 189

1131...... Access to financial hardship rules—benefits................................... 191

1132...... Application of financial hardship rules—benefits........................... 192

Division 4—Pension loans scheme                                                                     195

1133AA Pension loans scheme definitions................................................... 195

1133...... Qualification for participation in pension loans scheme.................. 195

1134...... Effect of participation in pension loans scheme—pension or allowance rate            197

1135...... Effect of participation in pension loans scheme—creation of debt.. 198

1135A... Effect of participation in pension loans scheme—maximum loan available              199

1136...... Need for a request to participate...................................................... 201

1137...... Need for a request to later nominate or change guaranteed amount or rate of pension or allowance         202

1138...... Existence of debt results in charge over real assets......................... 203

1139...... Debt not to be recovered until after death [see Note 6].................... 204

1140...... Enforcement of charge.................................................................... 205

1141...... Person ceases to participate in pension loans scheme if debt exceeds maximum loan available                205

1142...... Person withdraws from pension loans scheme............................... 206

1142A... Repayment or recovery of debt after pension loans scheme ceases to operate because debt exceeds maximum loan available or person withdraws......................................................... 206

1143...... Registration of charge..................................................................... 207

1144...... Manner of enforcement of charge................................................... 207

1144A... Division does not apply for purposes of care receiver assets test.... 208

Division 5—Provisions relating to special residences and special residents        209

Subdivision A—General                                                                                       209

1145A... Application of Division to granny flat residents.............................. 209

1146...... Basis for different treatment............................................................ 209

1147...... Entry contribution........................................................................... 209

1148...... Extra allowable amount................................................................... 211

1149...... Renegotiation of retirement village agreement................................. 213

Subdivision B—Residents who are not members of a couple                      213

1150...... Residents who are not members of a couple................................... 213

Subdivision C—Residents who are members of couple and share principal home       214

1151...... Members of couples........................................................................ 214

Subdivision D—Residents who are members of illness separated couple 215

1152...... Members of illness separated couples (both in special residences) [see Appendix for CPI adjusted figures]          215

1153...... Members of illness separated couples (partner not in special residence and partner homeowner)            218

1154...... Members of illness separated couples (partner not in special residence and partner not homeowner) [see Appendix for CPI adjusted figures]...................................................................... 219

Subdivision E—Residents who are members of ordinary couple with different principal homes            221

1155...... Members of ordinary couple with different principal homes (both in special residences)        221

1156...... Members of ordinary couple with different principal homes (partner not in special residence and partner homeowner)........................................................................................................ 222

1157...... Members of ordinary couple with different principal homes (partner not in special residence and partner not homeowner)........................................................................................................ 223

Part 3.12A—Provisions for Seniors Health Card taxable income test 225

Division 1—Purpose of this Part                                                                        225

1157A... Purpose of Part............................................................................... 225

Division 2—Benefits that may be assessable fringe benefits                226

1157B... Benefits received in or outside Australia......................................... 226

1157C... Car benefits..................................................................................... 226

1157D... Exempt car benefits......................................................................... 228

1157E.... School fees benefits........................................................................ 228

1157F.... Health insurance benefits................................................................ 230

1157G... Loan benefits................................................................................... 231

1157H... Exempt loan benefit......................................................................... 233

1157I..... Housing benefits............................................................................. 233

1157J.... Exempt housing benefits—live‑in residential care workers............. 235

1157JA. Expense benefits............................................................................. 236

1157JB.. Exempt expense benefit................................................................... 237

1157JC.. Financial investment benefit............................................................ 237

Division 3—Value of car fringe benefits                                                        238

1157K... Method of valuing car fringe benefits............................................. 238

1157L.... Value of car fringe benefits............................................................. 238

1157M.. Minister may determine alternative method of valuing car fringe benefits                240

Division 4—Value of school fees fringe benefits                                        241

1157N... Value of school fees fringe benefits................................................ 241

Division 5—Value of health insurance fringe benefits                            242

1157O... Value of health insurance fringe benefits........................................ 242

Division 6—Value of loan fringe benefits                                                      243

1157P.... Method of valuing loan fringe benefits........................................... 243

1157Q... Value of loan fringe benefits........................................................... 243

1157R... Minister may determine alternative method of valuing loan fringe benefits              245

Division 7—Value of housing fringe benefits                                               247

Subdivision A—Grants of housing rights                                                         247

1157S.... Methods of valuing housing fringe benefits—grants of housing rights 247

1157T.... Value of grants of housing rights—general.................................... 247

1157TA. Value of grants of housing rights—employees of the Defence Force 249

Subdivision B—Payments associated with loans                                            251

1157TB. Method of valuing housing fringe benefits—payments associated with loans         251

1157TC. Value of payments associated with loans........................................ 252

Subdivision C—Payments associated with enjoying housing rights          252

1157TD. Methods of valuing housing fringe benefits—payments associated with enjoying housing rights           252

1157TE. Value of payments associated with enjoying housing rights—general 253

1157TF. Value of payments associated with enjoying housing rights—employees of the Defence Force              255

Subdivision D—Alternative methods of valuing housing fringe benefits 257

1157U... Minister may determine alternative method of valuing housing fringe benefits        257

Division 8—Value of expense fringe benefit                                                 258

1157UA Value of expense fringe benefits..................................................... 258

Division 9—Value of financial investment fringe benefit                      259

1157UB Value of financial investment fringe benefit.................................... 259

Division 8—Foreign currency rates                                                                 260

1157V... Foreign currency rates..................................................................... 260

Part 3.13—Imprisonment                                                                                              261

1158...... Some social security payments not payable during period in gaol or in psychiatric confinement following criminal charge........................................................................................................ 261

1159...... Payment may be redirected to dependent partner or child................ 261

1159A... Person not qualified for some concession cards when in gaol or in psychiatric confinement following criminal charge........................................................................................................ 262

Part 3.14—Compensation recovery                                                                        263

Division 1—General                                                                                                  263

1160...... General effect of Part...................................................................... 263

1161...... Application of Part.......................................................................... 263

1161A... Application of Part to supplementary compensation affected payments 265

1162...... Part to bind Crown.......................................................................... 268

1163...... Interpretation................................................................................... 268

1164...... Certain lump sums to be treated as though they were received as periodic compensation payments        268

1165...... Effect of certain State and Territory laws........................................ 269

Division 2—Enforcement of compensation rights                                     270

1166...... Secretary may require person to take action to obtain compensation 270

1167...... Failure to comply with a requirement to take action to obtain compensation            271

Division 3—Receipt of compensation                                                               272

1168...... Application...................................................................................... 272

1169...... Compensation affected payment not payable during lump sum preclusion period    272

1170...... Lump sum preclusion period........................................................... 272

1171...... Deemed lump sum payment arising from separate payments.......... 273

1172...... Lump sum compensation not counted as ordinary income.............. 274

1173...... Effect of periodic compensation payments on rate of person’s compensation affected payment              274

1174...... Effect of periodic compensation payments on rate of partner’s compensation affected payment              275

1175...... Rate reduction under both income/assets test and this Part.............. 276

1176...... Periodic compensation not counted as ordinary income.................. 276

Division 4—Recoverable amounts                                                                     277

Subdivision A—Preliminary                                                                               277

1177...... Interpretation................................................................................... 277

Subdivision B—Recovery from recipient of compensation affected payment               277

1178...... Repayment of amount where both lump sum and payments of compensation affected payment have been received........................................................................................................ 277

1179...... The section 1178 recoverable amount............................................. 278

1180...... Repayment where both periodic compensation payments and payments of compensation affected payment have been received........................................................................................... 278

1181...... The section 1180 recoverable amount............................................. 278

Subdivision C—Recovery from compensation payers and insurers         279

1182...... Secretary may send preliminary notice to potential compensation payer or insurer  279

1183...... Potential compensation payer or insurer must notify Secretary of liability               280

1184...... Secretary may send recovery notice to compensation payer or insurer 281

1184A... The section 1184 recoverable amount............................................. 282

1184B... Preliminary notice or recovery notice suspends liability to pay compensation          285

1184C... Compensation payer’s or insurer’s payment to Commonwealth discharges liability to compensation claimant       285

1184D... Offence to make compensation payment after receiving preliminary notice or recovery notice                286

1184E.... Liability of compensation payer or insurer to pay the Commonwealth if there is a contravention of section 1184D........................................................................................................ 287

Division 5—Recoverable debts                                                                            288

1184F.... Debts resulting from notices under section 1178 or 1180............... 288

1184G... Debts resulting from notices under section 1184............................ 288

1184H... Debts resulting from contravention of section 1184D..................... 288

1184I..... Compensation arrears debts............................................................ 288

Division 6—Miscellaneous                                                                                     289

1184J.... Secretary may give recovery notice either to compensation payer or to insurer but not to both                289

1184K... Secretary may disregard some payments......................................... 289

1184L.... Application to review compensation decision—disability support pension              290

1185...... Special provision for certain recipients of dependency‑based payments.. 290

Part 3.14A—Retirement assistance for farmers                                             292

Division 1—General                                                                                                  292

1185A... Purpose of Part............................................................................... 292

1185AA Applicable cut‑off date.................................................................... 292

1185AB Pre‑assessment request................................................................... 293

1185B... Part to apply to certain transfers of estates in farms etc................... 294

1185C... How to assess the value of farms etc. subject to a transfer.............. 297

Division 2—Modification of provisions relating to assets test            299

1185D... Transfer of estate in farm etc. not disposal of an asset.................... 299

Division 3—Claims for social security payment                                        300

Division 4—Requests for increase in rate of social security payment 301

1185F.... Application...................................................................................... 301

1185G... Request for increase........................................................................ 301

1185H... Form of request............................................................................... 301

1185J.... Determination of request................................................................. 301

Division 5—Farmers’ income test                                                                      303

1185K... Does a person satisfy the farmers’ income test?.............................. 303

Division 6—Transitional: ex gratia payments                                            308

1185L.... Ex gratia payments.......................................................................... 308

Part 3.14B—Retirement assistance for sugarcane farmers                     309

Division 1—General                                                                                                  309

1185M.. Purpose of Part............................................................................... 309

1185N... RASF commencement and closing days......................................... 309

1185P.... Applicable cut‑off date.................................................................... 309

1185Q... Pre‑assessment request................................................................... 310

1185R... Part to apply to certain transfers of estates in sugarcane farms etc.. 311

1185S.... How to assess the total net value of sugarcane farms etc. subject to a transfer         315

Division 2—Modification of provisions relating to assets test            318

1185T.... Transfer of estate in sugarcane farm etc. not disposal of an asset.... 318

Division 3—Requests for increase in rate of social security payment 320

1185U... Application...................................................................................... 320

1185V... Request for increase........................................................................ 320

1185W.. Form of request............................................................................... 320

1185X... Determination of request................................................................. 320

Division 4—Sugarcane farmers’ income test                                               322

1185Y... Does a person satisfy the sugarcane farmers’ income test?............. 322

Part 3.15—New Enterprise Incentive Scheme                                                 327

1186...... General effect of Part...................................................................... 327

1187...... Reduction in rate of payments under this Act if recipient or partner also receiving payments under New Enterprise Incentive Scheme (NEIS)................................................................ 327

1188...... Rate reduction under this Part......................................................... 328

Part 3.15A—Community Development Employment Projects Scheme 330

Division 1—Preliminary                                                                                          330

1188A... General effect of Part...................................................................... 330

1188B... CDEP Scheme participants............................................................. 330

1188BA Approval of Northern Territory CDEP transitional activities.......... 330

1188BB. Effect of undertaking Northern Territory CDEP transitional activities 331

Division 2—Reduction in rate of pension or allowance                         332

1188C... Reductions in rate of payments under this Act if recipient or partner also receiving payments under CDEP Scheme........................................................................................................ 332

Division 3—CDEP Scheme Participant Supplement                                343

1188D... Entitlement to Supplement: people receiving pension‑type payments on or after 20 March 1999            343

1188E.... Entitlement to Supplement between 20 March 1999 and 19 March 2000: people not covered by section 1188D    344

1188F.... Entitlement to Supplement on or after 20 March 2000: people not covered by section 1188D 347

1188G... Notification of periods in respect of which a CDEP Scheme payment is not payable              351

1188H... Person receiving CDEP Scheme Participant Supplement to be taken to be in receipt of social security benefit or pension........................................................................................................ 352

1188J.... CDEP Scheme participant may accumulate supplement.................. 352

1188K... Need for a claim.............................................................................. 353

1188KA CDEP Scheme Participant Supplement not payable in certain circumstances           353

Division 4—Transitional                                                                                         354

1188L.... Existing CDEP Scheme participants to be treated as long‑term social security recipients         354

1188M.. Certain people receiving CDEP Scheme Participant Supplement to be taken to have been receiving social security benefit for 9 months.................................................................................... 354

Part 3.16—Indexation and adjustment of amounts                                      355

Division 1—Preliminary                                                                                          355

1189...... Analysis of Part.............................................................................. 355

1190...... Indexed and adjusted amounts [see Note 3].................................... 355

Division 2—CPI indexation                                                                                   377

1191...... CPI Indexation Table...................................................................... 377

1192...... Indexation of amounts..................................................................... 393

1193...... Indexation factor............................................................................. 395

1194...... Rounding off indexed amounts....................................................... 396

1195...... Certain indexed amounts to be increased in line with increases in Male Total Average Weekly Earnings                397

Division 3—Social security pension indexation using Pensioner and Beneficiary Living Cost Index   400

1196...... Social security pension indexation using Pensioner and Beneficiary Living Cost Index          400

1197...... Living cost indexation factor........................................................... 401

1198...... Rounding off amounts.................................................................... 402

Division 4—Adjustment of other rates                                                            403

1198A... Adjustment of single pension rate MBR amounts........................... 403

1198B... Adjustment of disability support pension (under 21) MBRs.......... 403

1198C... Adjustment of youth disability supplement..................................... 404

1203...... Adjustment of pension “single non‑homeowner” AVL.................. 404

1204...... Adjustment of benefit AVLs........................................................... 405

1205...... Adjustment of special illness separated special resident AVL......... 406

1206A... Adjustment of certain pharmaceutical allowance rates..................... 406

1206B... Adjustment of certain telephone allowance rates............................. 408

Division 5—One‑off adjustments of certain amounts                              411

1206D... Rent assistance threshold for social security pensions increased on 20 March 1996                411

1206E.... Rent assistance threshold for some social security payments increased on 20 March 1996     411

1206F.... Rent assistance for family allowance increased on 20 March 1996. 411

1206G... Increased rent assistance for pensioners with service pensioner partners with children           412

Division 6—One‑off adjustments on 1 July 2000 relating to the introduction of the goods and services tax                                                                                                             413

1206GA 1 July 2000 increase in certain indexed and adjusted amounts........ 413

1206GAA  1 July 2000 increase in rent assistance amounts.......................... 415

1206GB Adjustment of amounts following 1 July 2000 increase................. 416

1206GC 1 July 2000 increase in income and assets test free areas................ 420

1206GD Rounding off provisional replacement amounts.............................. 424

Division 7—Increase in maximum basic rate of some pensions on 20 September 2009               425

1206GE. Maximum basic rate of some single pensions increased on 20 September 2009      425

Part 3.16A—Advance payment deductions                                                       426

1206H... Advance payment deduction........................................................... 426

1206J.... Amount of advance payment deduction—basic calculation............. 426

1206K... Person may request larger advance payment deduction................... 426

1206L.... Reduction of advance payment deduction in cases of severe financial hardship       427

1206M.. The final advance payment deduction.............................................. 428

1206N... Provisional payment rate insufficient to cover advance payment deduction              428

1206P.... Rounding of amounts...................................................................... 429

Part 3.16B—Special employment advance deductions                               430

1206Q... Special employment advance deduction.......................................... 430

1206R... Amount of special employment advance deduction—basic calculation 430

1206S.... Person may request larger special employment advance deduction. 430

1206T.... Reduction of special employment advance deduction in cases of severe financial hardship     431

1206U... The final special employment advance deduction............................ 432

1206V... Provisional payment rate insufficient to cover special employment advance deduction            432

1206W.. Rounding of amounts...................................................................... 433

Part 3.18—Means test treatment of private companies and private trusts             434

Division 1—Introduction                                                                                        434

1207...... Simplified outline............................................................................ 434

1207A... Definitions...................................................................................... 435

1207B... Relatives.......................................................................................... 438

1207C... Associates....................................................................................... 439

1207D... When a company is sufficiently influenced by an entity.................. 441

1207E.... Majority voting interest in a company............................................. 441

1207F.... Entitled to acquire............................................................................ 441

1207G... Transfer of property or services...................................................... 441

1207H... Constructive transfers of property or services to an entity.............. 442

1207J.... Active involvement with a primary production enterprise............... 443

1207K... Power to veto decisions of a trustee................................................ 443

1207L.... Extra‑territorial operation................................................................ 443

1207M.. Application to things happening before commencement................. 444

Division 2—Designated private companies                                                   445

1207N... Designated private companies......................................................... 445

Division 3—Designated private trusts                                                             447

1207P.... Designated private trusts................................................................. 447

Division 4—Controlled private companies                                                   449

1207Q... Controlled private companies.......................................................... 449

1207R... Direct voting interest in a company................................................. 450

1207S.... Voting power.................................................................................. 451

1207T.... Direct control interest in a company................................................ 451

1207U... Interest in a share............................................................................ 452

Division 5—Controlled private trusts                                                              454

1207V... Controlled private trusts.................................................................. 454

1207W.. Interest in a trust.............................................................................. 457

Division 6—Attributable stakeholders and attribution percentages 458

1207X... Attributable stakeholder, asset attribution percentage and income attribution percentage          458

Division 7—Attribution of income of controlled private companies and controlled private trusts        460

1207Y... Attribution of income...................................................................... 460

1207Z.... No double counting of attributed income........................................ 461

1208...... Ordinary income of a company or trust........................................... 462

1208A... Ordinary income from a business—treatment of trading stock....... 462

1208B... Permissible reductions of business and investment income............ 463

1208C... Derivation periods........................................................................... 464

1208D... Attribution periods.......................................................................... 465

Division 8—Attribution of assets of controlled private companies and controlled private trusts           466

1208E.... Attribution of assets........................................................................ 466

1208F.... When attributed asset is unrealisable............................................... 466

1208G... Effect of charge or encumbrance on value of assets........................ 467

1208H... Effect of unsecured loan on value of assets..................................... 469

1208J.... Value of company’s or trust’s assets etc......................................... 469

Division 9—Modification of asset deprivation rules                                470

1208K... Individual disposes of asset to company or trust............................. 470

1208L.... Disposal of asset by company or trust............................................ 470

1208M.. Individual ceases to be an attributable stakeholder of a company or trust 473

1208N... Individual disposes of asset to company or trust before 1 January 2002—individual is attributable stakeholder     474

1208P.... Individual disposes of asset to company or trust before 1 January 2002—individual’s spouse is attributable stakeholder........................................................................................................ 475

Division 10—Modification of income deprivation rules                         477

1208Q... Individual disposes of ordinary income to company or trust........... 477

1208R... Disposal of income by company or trust......................................... 477

1208S.... Individual disposes of income to company or trust before 1 January 2002—individual is attributable stakeholder 480

1208T.... Individual disposes of income to company or trust before 1 January 2002—individual’s spouse is attributable stakeholder...................................................................................... 481

Division 11—Concessional primary production trusts                           483

1208U... Concessional primary production trusts.......................................... 483

1208V... Individual ceases to be an attributable stakeholder of trust—receipt of remuneration or other benefits from trust during asset deprivation period................................................................... 487

1208W.. Net value of asset............................................................................ 489

1208X... Value of entity’s assets................................................................... 489

1208Y... When asset is controlled by an individual....................................... 489

1208Z.... Adjusted net value of asset.............................................................. 490

1209...... Adjusted net primary production income........................................ 491

1209A... Net income of a primary production enterprise............................... 492

1209B... Net income from a primary production enterprise—treatment of trading stock        492

1209C... Permissible reductions of income from carrying on a primary production enterprise               493

Division 12—Anti‑avoidance                                                                                494

1209D... Anti‑avoidance................................................................................ 494

Division 13—Decision‑making principles                                                       496

1209E.... Decision‑making principles............................................................. 496

Division 14—Information management                                                          497

1209F.... Transitional period.......................................................................... 497

1209G... Information‑gathering powers......................................................... 497

1209H... Secretary may obtain tax information.............................................. 498

1209J.... Disclosure of tax information.......................................................... 499

1209K... Disclosure of tax file number information....................................... 500

Part 3.18A—Private financial provision for certain people with disabilities         502

Division 1—Special disability trusts                                                                  502

1209L.... What is a special disability trust?.................................................... 502

1209M.. Beneficiary requirements................................................................. 502

1209N... Trust purpose requirements............................................................. 504

1209P.... Trust deed requirements.................................................................. 505

1209Q... Trustee requirements....................................................................... 506

1209R... Trust property requirements............................................................ 506

1209RA Trust expenditure requirements....................................................... 507

1209S.... Reporting requirements................................................................... 508

1209T.... Audit requirements.......................................................................... 508

1209U... Waiver of contravention of this Division........................................ 510

Division 2—Income of special disability trusts                                           511

1209V... Attribution of income...................................................................... 511

1209X... Income amounts from special disability trusts................................. 511

Division 3—Assets of special disability trusts                                              512

1209Y... Attribution of assets........................................................................ 512

Division 4—Transfers to special disability trusts                                      513

1209Z.... Effect of certain transfers to special disability trusts........................ 513

1209ZA. The effect of exceeding the $500,000 limit...................................... 514

1209ZB. Transfers by the immediate family members prior to reaching pension age etc.       515

1209ZC. Transfers by principal beneficiaries or partners............................... 516

1209ZD. Cessation of special disability trusts................................................ 516

1209ZE. Effect of this Division..................................................................... 517

Part 3.19—Miscellaneous                                                                                              518

1210...... Application of income and assets test reductions and of compensation reductions for income tax purposes            518

1210A... Effect of nil rate of pension etc........................................................ 520

Chapter 4—International agreements and portability                                521

Part 4.2—Overseas portability                                                                                   521

Division 1—Preliminary                                                                                          521

1211...... Social Security (International Agreements) Act overrides Part....... 521

1212...... Meaning of terms used in this Part.................................................. 521

1212A... Meaning of acute family crisis........................................................ 522

1212B... Meaning of humanitarian purpose................................................. 522

1212C... Meaning of temporary absence...................................................... 523

1212D... Part does not affect need for qualification....................................... 523

Division 2—Portability of social security payments                                524

Subdivision A—Basic portability provisions                                                  524

1213...... Persons to whom Division applies.................................................. 524

1214...... Some payments generally portable with no time limit..................... 524

1215...... Some payments generally portable with time limit.......................... 524

1216...... Amounts added to rate.................................................................... 525

1217...... Meaning of maximum portability period, allowable absence and portability period               525

Subdivision B—Exceptions to Subdivision A rules                                        530

1218AAA  Unlimited portability period for disability support pension—severely impaired disability support pensioner      530

1218AA Unlimited portability period for disability support pension—terminally ill overseas disability support pensioner   531

1218AB Extended portability period for disability support pension.............. 532

1218...... Exception—full‑time students outside Australia for purposes of Australian course 533

1218A... Exception—Reserve service............................................................ 533

1218B... Exception—waiting period in Australia before parenting payment is portable         534

1218C... Extension of person’s portability period—general.......................... 534

1218D... Extension of person’s portability period—life‑saving medical treatment overseas   535

1220...... No portability where claim based on short residence...................... 535

Division 3—Rate of portable pensions                                                            538

1220A... Proportionality—age pension rate................................................... 538

1220B... Proportionality—disability support pension rate for a severely disabled person      538

1221...... Proportionality—wife pension and widow B pension rate for entitled persons        539

Pension Portability Rate Calculator                                                                 539

Module A—Overall rate calculation process                                                  539

Module B—Australian working life residence                                               540

Module C—Residence factor                                                                               541

Chapter 5—Overpayments and debt recovery                                                542

Part 5.1—Effect of Chapter                                                                                        542

1222...... General effect of Chapter................................................................ 542

Part 5.2—Amounts recoverable under this Act                                              546

1222A... Debts due to the Commonwealth.................................................... 546

1223...... Debts arising from lack of qualification, overpayment etc. [see Note 4].. 546

1223A... Debt resulting from commutation of asset‑test exempt income stream contrary to subsection 9A(2), 9B(2) or 9BA(2)........................................................................................................ 551

1223AA Debts arising from prepayments and certain other payments.......... 555

1223AB Debts arising from AAT stay orders............................................... 557

1223ABAA  Debts arising in respect of one‑off payments to older Australians 557

1223ABA  Debts arising in respect of one‑off payments to carers................ 559

1223ABAAA  Debts arising in respect of economic security strategy payments 566

1223ABAAB  Debts arising in respect of training and learning bonuses etc. 568

1223ABB  Debts in respect of child disability assistance.............................. 570

1223ABC  Debts in respect of carer supplement for 2009............................. 571

1223ABD  Debts in respect of carer supplement for 2010 and later years..... 572

1223ABE  Debts in respect of scholarship payments.................................... 573

1224...... Debts relating to clean energy advances.......................................... 575

1224A... Debts relating to low income supplements or essential medical equipment payments              576

1224AA Person other than payee obtaining payment of a cheque................. 576

1224AB Joint and several liability for persons involved in contravention of Act 577

1224B... Education entry payment debt......................................................... 577

1224C... Data‑matching Program (Assistance and Tax) Acts debts.............. 578

1224D... Mobility allowance advance debts................................................... 578

1224E.... Debts arising from advance payments of social security entitlements 579

1224EA. Debts arising from special employment advances of special employment advance qualifying entitlements              580

1227...... Assurance of support debt.............................................................. 580

1227A... Certain debts arising under Farm Household Support Act.............. 581

1227B... Debts arising under Part 8 of the Student Assistance Act 1973 as in force before 1 July 1998 582

1228...... Overpayments arising under other Acts and schemes..................... 582

1228A... Comparable foreign payment debt recovery.................................... 584

1228B... Additional 10% penalty for understatement etc. of income............. 584

1229...... Notices in respect of debt................................................................ 585

1229A... Interest on debt................................................................................ 586

1229AA Determination that interest not to be payable................................... 588

1229AB Administrative charge..................................................................... 589

1229B... Penalty interest rate......................................................................... 589

1229C... Guidelines on the penalty interest provisions.................................. 590

1230...... Debt from failure to comply with garnishee notice.......................... 590

1230A... Debt from failure before 1 July 1991 to comply with garnishee notice under the 1947 Act     591

1230B... Overseas application of provisions................................................. 593

1230C... Methods of recovery of debt........................................................... 593

Part 5.3—Methods of recovery                                                                                  595

1231AA Application of sections dealing with deductions............................. 595

1231...... Deductions from debtor’s pension, benefit or allowance................ 595

1231A... Deductions from debtor’s farm household payments or support.... 598

1232...... Legal proceedings........................................................................... 599

1233...... Garnishee notice.............................................................................. 600

1234...... Arrangement for payment of debt................................................... 603

1234AA Recovery of amounts from financial institutions............................. 604

1234A... Deductions by consent from social security payment of person who is not a debtor                605

Part 5.4—Non‑recovery of debts                                                                              607

1235...... Meaning of debt.............................................................................. 607

1236...... Secretary may write off debt........................................................... 607

1236A... Application...................................................................................... 608

1237...... Power to waive Commonwealth’s right to recover debt.................. 609

1237A... Waiver of debt arising from error.................................................... 609

1237AA Waiver of debt relating to an offence............................................... 610

1237AAA  Waiver of small debt................................................................... 610

1237AAB  Waiver in relation to settlements.................................................. 611

1237AAC  Waiver where debtor or debtor’s partner would have been entitled to an allowance             613

1237AAD  Waiver in special circumstances.................................................. 616

1237AAE  Extra rules for waiver of assurance of support debts................... 616

1237AB Secretary may waive debts of a particular class............................... 617

1361A... [see Note 4]..................................................................................... 617

Schedule 1A—Savings and transitional provisions                                       618

Part 1—General                                                                                                                  618

1............ Correspondence of pensions, benefits and allowances.................... 618

2............ Correspondence of provisions........................................................ 619

2A......... References in other Acts and instruments to provisions of the 1947 Act 620

Part 2—Savings and Transitional Provisions Applicable on the Transition from the 1947 Act to this Act                                                                                                                                    621

Division 4—Continuation of earlier savings provisions                         621

21.......... Widow’s pension—mental hospital patient partners (changes introduced on 1 November 1980)            621

22.......... Benevolent homes (changes introduced on 1 January 1981)........... 622

27.......... Rent assistance—boarders and lodgers (changes introduced on 13 June 1989)       623

28.......... Rent assistance—retirement village residents (changes introduced on 13 June 1989)              626

Part 3—Saving and Transitional Provisions Applicable after the Commencement of this Act 629

36.......... Incentive allowance (changes introduced on 12 November 1991).. 629

41.......... Members of couples (changes made on 12 March 1992)................ 630

42.......... Modifications of Pension Rate Calculator A (changes made on 12 March 1992)    631

43.......... Modifications of Pension Rate Calculator B (changes made on 12 March 1992)     632

44.......... Modifications of Pension Rate Calculator C (changes made on 12 March 1992)     633

45.......... Modifications of Pension Rate Calculator D (changes made on 12 March 1992)    634

46.......... Modifications of Pension Rate Calculator E (changes made on 12 March 1992)     634

48.......... Modifications of Benefit Rate Calculator B (changes made on 12 March 1992)      635

49.......... Modifications of pharmaceutical allowance rates (changes made on 12 March 1992)              638

63.......... Rent assistance (changes introduced on 20 March 1993)................ 641

67.......... Sickness allowance for people on rehabilitation programs (changes introduced on 20 March 1994)       644

69B....... Saving of job search allowance and newstart allowance deferment determinations  645

74.......... Partner allowance for persons born on or before 1 July 1955 (changes made on 1 July 1995)                645

80.......... Income determinations (changes made on 1 January 1996)............ 645

86.......... Transitional and saving provisions applicable to the amendments relating to the pension loans scheme  646

88.......... Saving: Determinations under repealed sections 1099E and 1099L 647

96.......... Application and saving provisions: advance payment provisions... 647

96A....... Application of revised Schedule 1B................................................ 648

98.......... Application and transitional provisions: amendments relating to tightening the activity test administration and simplifying the penalty periods that apply to youth training allowance.............. 649

99.......... Application provision: amendments relating to unemployment due to industrial action            650

100........ Application provision: amendments relating to the abolition of the minimum rate of payment to under 18 year old sickness allowance and newstart allowance recipients.................... 650

101........ Application provision: abolition of the earnings credit scheme....... 650

102........ Application provision: amendments relating to the application of the below threshold deeming rate        651

102A..... Application and transitional provisions: amendments relating to simplifying the penalty periods that apply to newstart allowance........................................................................................ 652

102AA.. Review of decisions under section 5 of the Aged Care Income Testing Act 1997    653

102B..... Applications for review of decisions made under section 5 of the Aged Care Income Testing Act 1997 654

102C..... Review by SSAT of decisions relating to determinations under section 5 of the Aged Care Income Testing Act 1997........................................................................................................ 655

102D..... Review by AAT of decisions relating to determinations under section 5 of the Aged Care Income Testing Act 1997........................................................................................................ 655

102E...... Application provision—abolition of residential care allowance and amendments relating to rent assistance            656

103........ Application provision: income maintenance periods....................... 656

104........ Application provision: amendments relating to the liquid assets test waiting period 656

104A..... Application provision: amendments relating to means test exemption for superannuation assets             657

105........ Application and saving provisions: debts due to the Commonwealth and their recovery         657

105A..... Parenting payment (changes introduced 20 March 1998)............... 658

106........ Determinations etc. relating to family payment continue in force as determinations etc. relating to family allowance........................................................................................................ 664

107........ Pending claims for family payment................................................. 664

108........ Savings—Disabled child (changes made on 1 July 1998).............. 664

108A..... Disabled child (changes made on 1 July 1999)............................... 665

109........ Application of liquid assets test waiting period for sickness allowance 666

109A..... Application provision: amendments relating to the consistent treatment of lump sums            666

110........ Youth allowance in place of newstart allowance (under 21 years), sickness allowance (under 21 years), youth training allowance and AUSTUDY living allowance (youth allowance age) 667

111........ Austudy payment in place of AUSTUDY living allowance........... 669

111A..... $3,000 opening balance for student income bank for students transferring from AUSTUDY 670

112........ Pensioner education supplement under the Social Security Act in place of pensioner education supplement under the Austudy Regulations....................................................................... 670

113........ Certain persons receiving benefit PP (partnered) and pensioner education supplement immediately before 1 July 1998........................................................................................................ 671

114........ Claims for newstart allowance (under 21 years) or sickness allowance (under 21 years) made on or after 1 July 1998 in respect of period before that date..................................................... 672

115........ Persons under 21 receiving newstart allowance or sickness allowance on 17 June 1997         672

116........ Newstart or sickness allowance bereavement payment in respect of death of partner               673

117........ Youth training allowance bereavement payment in respect of death of partner         673

118........ Qualification for double orphan pension for certain young persons who were qualified to receive payments under the AUSTUDY scheme immediately before 1 July 1998..................... 674

119........ Payment of family allowance—young person ceasing to be a FA child on becoming youth allowance recipient     674

120........ Application—income maintenance period rules.............................. 675

120A..... Amendments relating to treatment of income streams..................... 677

122........ Issue of notice before 1 July 1999 to person to whom domiciliary nursing care benefit is being paid requiring notification of events affecting the payment of carer allowance on and after that day  678

123........ Carer payment provisions (changes to “severely handicapped person” category with effect from 1 July 1999)      679

124........ Carer allowance (changes introduced on 1 July 1999).................... 679

125........ Transitional regulations arising out of carer allowance changes introduced on 1 July 1999     683

121........ Changes to newly arrived resident’s waiting period........................ 683

126........ Application and transitional provisions relating to fares allowance. 684

127........ Seasonal work carried out in what would have been a seasonal work non‑benefit period extending beyond 30 June 2000........................................................................................................ 684

128........ Saving provision—portability rules relating to rates of pension...... 685

128A..... Saving of certain pensions payable under 1986 Agreement between Australia and Italy         686

129........ Application of amendments relating to short residence................... 687

130........ Saving provision—other portability rules....................................... 687

131........ Certain payments not recoverable.................................................... 688

132........ Saving—ABSTUDY recipients...................................................... 688

133........ Meaning of Australian resident...................................................... 689

134........ Transitional and saving provisions—substitution of Part 3.14........ 689

135........ Unlimited maximum portability period for disability support pension 693

136........ Transitional definition of deductible amount (commencing 1 July 2007) 694

137........ Application—general...................................................................... 696

138........ Application—subsections 198AA(1) and (3)................................. 696

139........ Application—subsection 955(2)..................................................... 696

139A..... Application—general...................................................................... 696

139B..... Application—sections 198AAA and 198AB.................................. 697

139C..... Application—subsections 731J(2) and (6)...................................... 697

139D..... Saving—principal beneficiary of a special disability trust............... 697

140........ Person whose carer payment was cancelled on or after 1 July 2008 and before 1 July 2010   698

141........ Saving—profoundly disabled child and disabled child................... 698

142........ Person whose special benefit was cancelled on or after 1 July 2008 and before 1 July 2010   700

143........ Saving—profoundly disabled child and disabled child................... 701

144........ Saving and transitional provisions for section 93H......................... 702

145........ Saving provision for income test taper rate for disability support pensioners under 21 without dependent children........................................................................................................ 702

146........ Transitional provision for rates of certain social security pensions on and after 20 September 2009       703

147........ Amounts for subparagraph 146(4)(a)(i).......................................... 707

148........ Rate of social security payments to partners of persons affected by clause 146       712

149........ Payment and income tax consequences of receiving social security pension at rate affected by clause 146              712

150........ Persons exempt from requirement to be Australian residents to qualify for disability support pension    713


Chapter 3General provisions relating to payability and rates

Part 3.6Benefit Rate Calculator B

  

1068  Rate of widow allowance, Newstart allowance (18 or over) sickness allowance (18 or over) partner allowance, and mature age allowance under Part 2.12B

             (1)  The rate of:

                     (a)  newstart allowance; or

                     (b)  sickness allowance; or

                     (c)  partner allowance; or

                    (ca)  mature age allowance under Part 2.12B; or

                     (d)  widow allowance;

is to be calculated in accordance with the Rate Calculator at the end of this section.

Note:          Module A of the Rate Calculator establishes the overall rate calculation process and the remaining Modules provide for the calculation of the component amounts used in the overall rate calculation.

             (2)  If:

                     (a)  a person has a relationship with another person, whether of the same sex or a different sex (other person); and

                     (b)  the relationship between them is a de facto relationship in the Secretary’s opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A));

                     (c)  the other person is under the age of consent applicable in the State or Territory in which the person is living;

the person’s benefit rate is not to exceed the rate at which it would be payable to the person if the other person were the person’s partner.

Note:          this provision has the effect of taking into account the ordinary income and assets of the partner in applying the ordinary income test and assets test respectively.

Rate of benefit limited for certain armed services widows

             (3)  If:

                     (a)  an armed services widow is receiving a pension under Part II or IV of the Veterans’ Entitlements Act at a rate determined under or by reference to subsection 30(1) of that Act; and

                     (b)  the widow has been receiving a payment referred to in paragraph (a) continuously since before 1 November 1986; and

                     (c)  before 1 November 1986 the widow was also receiving a social security benefit;

the rate of benefit payable to the widow is not to be increased:

                     (d)  if, immediately before 1 November 1986, the widow was receiving a social security benefit at a rate less than $124.90 per fortnight—to a rate greater than $124.90 per fortnight; or

                     (e)  if, immediately before 1 November 1986, the widow was receiving a social security benefit at a rate equal to or greater than $124.90 per fortnight—to a rate greater than the rate at which it was payable immediately before 1 November 1986.

Note 1:       a benefit is not payable to a widow who starts to get a payment referred to in subsection (3) after 1 November 1986—see sections 408CF, 532, 614, 660YCF, 675 and 771HI.

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

Benefit Rate Calculator B

Module AOverall rate calculation process

Method of calculating rate

   1068‑A1  The rate of benefit is a daily rate. That rate is worked out by dividing the fortnightly rate calculated according to this Rate Calculator by 14.

Method statement

Step 1.   Work out the person’s maximum basic rate using MODULE B below.

Step 1A. Work out the pension supplement amount (if any) using Module BA below.

Step 2.   Work out the amount per year (if any) of pharmaceutical allowance using MODULE D below.

Step 3.   Work out the applicable amount per fortnight (if any) for rent assistance in accordance with paragraph 1070A(a).

Step 4.   Add up the amounts obtained in Steps 1 to 4: the result is called the maximum payment rate.

Step 5.   Apply the income test using MODULE G below to work out the income reduction.

Step 6.   Take the income reduction away from the maximum payment rate: the result is called the provisional fortnightly payment rate.

Step 7.   The rate of benefit is the amount obtained by:

               (a)     subtracting from the provisional fortnightly payment rate any special employment advance deduction (see Part 3.16B); and

              (b)     if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and

               (c)     except where the person is a CDEP Scheme participant in respect of the whole or a part of the period for which the rate of benefit is being worked out, adding any amount payable by way of remote area allowance (see Module J).

Note 1:       if a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210 (maximum basic rate first, then rent assistance).

Note 2:       in some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.

Note 3:       an amount of remote area allowance is to be added under paragraph (c) of step 7 only if the conditions in point 1068‑J1 are satisfied.

Module BMaximum basic rate
[see Appendix for CPI adjusted figures]

Maximum basic rate

   1068‑B1  The maximum basic rate of a person other than a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is worked out using Table B. Work out the person’s family situation and whether the person has a dependent child or not. The maximum basic rate is the corresponding amount in the rate column. The maximum basic rate of a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is nil (see sections 408CG, 614A, 660YCH and 771HK).

 

Table B—Maximum basic rates

Column 1

Column 2

Column 3

Rate

Item

Person’s family situation

Column 3A

Person with dependent child

Column 3B

Person without dependent child

3.

Not member of couple and person:

(a) receives sickness allowance; and

(b) has not turned 60

$326.10

$301.50

4.

Not member of couple and person:

(a) receives sickness allowance; and

(b) has turned 60; and

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

$326.10

$301.50

4A.

Not member of couple and person:

(a) receives newstart allowance or widow allowance; and

(b) has not turned 60

$326.10

$301.50

4B.

Not member of couple and person:

(a) receives newstart allowance or widow allowance; and

(b) has turned 60; and

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

$326.10

$301.50

5.

Not member of couple and person:

(a) has turned 60; and

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

$326.10

$326.10

5A.

Not member of a couple and person receives mature age allowance under Part 2.12B

$326.10

$326.10

7.

Partnered

$272.00

$272.00

9.

Member of illness separated couple

$326.10

$326.10

11.

Partnered (partner in gaol)

$326.10

$326.10

Note 1:       For member of couple, partnered, illness separated couple and partnered (partner in gaol) see section 4.

Note 2:       for dependent child see section 5.

Note 5:       the rates in column 3 are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

Note 7:       some dependent children will not be taken into account in working out a person’s maximum basic rate (see point 1068‑B2).

Note 8:       Some recipients of newstart allowance have a maximum basic rate based on the maximum basic rate under the Pension PP (Single) Rate Calculator (see point 1068‑B5).

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

1068‑B1A  If:

                     (a)  a person is not a member of a couple; and

                     (b)  the person has at least one natural child, adopted child or relationship child who has turned 16 but has not turned 18; and

                     (c)  either:

                              (i)  a social security benefit is payable to the child; or

                             (ii)  if the person is receiving newstart allowance—a disability support pension is payable to the child; and

                     (d)  the child is substantially dependent on the person;

the person’s maximum basic rate is worked out as if the person had a dependent child.

Certain children treated as dependent children if in recipient’s care for at least minimum period

1068‑B1B  The maximum basic rate for a person receiving newstart allowance, mature age allowance under Part 2.12B or sickness allowance is worked out as if the person had a dependent child if:

                     (a)  either:

                              (i)  the person is legally responsible (whether alone or jointly with another person) for the day‑to‑day care, welfare and development of a child under 16; or

                             (ii)  under a family law order, registered parenting plan or parenting plan that is in force, a child under 16 is supposed to live or spend time with the person; and

                     (b)  the child is in the person’s care for at least 14% of:

                              (i)  the instalment period in relation to which the maximum basic rate is being worked out; or

                             (ii)  if the Secretary, under point 1068‑B1C, determines another period for the person for the purposes of this subparagraph—that other period; and

                     (c)  none of subsections 5(3), (6) and (7) prevents the child from being a dependent child of the person; and

                     (d)  the person is not a member of a couple.

Note:          For family law order, registered parenting plan and parenting plan see subsection 23(1).

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

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

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

Certain dependent children to be disregarded

   1068‑B2  For the purposes of items 3, 4, 4A and 4B of Table B in point 1068‑B1, if:

                     (a)  a person has a dependent child; and

                     (b)  the child has turned 18; and

                     (c)  the child is a prescribed student child;

the child is to be disregarded in working out the person’s maximum basic rate under that point.

Note:          For prescribed student child see section 5.

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

   1068‑B4  The amounts in items 3, 4, 4A and 4B in columns 3A and 3B of Table B in point 1068‑B1 are to be indexed on 20 September 1993 and 20 March 1994 under section 1192 as if Part 2 of the Social Security Amendment Act (No. 2) 1993 had commenced on 1 September 1993.

Maximum basic rate for certain newstart allowance recipients

   1068‑B5  Despite point 1068‑B1, if a person:

                     (a)  is not a member of a couple; and

                     (b)  receives newstart allowance; and

                     (c)  is not required to satisfy the activity test because of a determination in relation to the person under subsection 602C(3) or (3A);

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

where:

pension PP (Single) maximum basic amount is the sum of:

                     (a)  the amount that would have been the person’s maximum basic rate under Module B of the Pension PP (Single) Rate Calculator if the person was receiving parenting payment; and

                     (b)  the amount that would have been the person’s pension supplement under Module BA of the Pension PP (Single) Rate Calculator if the person was receiving parenting payment.

Note:          A person’s maximum basic rate under Module B of the Pension PP (Single) Rate Calculator is indexed 6 monthly in line with increases in Male Total Average Weekly Earnings (see section 1195).

Module BAPension supplement

Pension supplement

1068‑BA1  A pension supplement amount is to be added to the person’s maximum basic rate if the person is residing in Australia, has reached pension age and:

                     (a)  is in Australia; or

                     (b)  is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.

1068‑BA2  The person’s pension supplement amount is:

                     (a)  if an election by the person under subsection 1061VA(1) is in force—the amount worked out under point 1068‑BA4; and

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

Amount if no election in force

1068‑BA3  The person’s pension supplement amount is the amount worked out by:

                     (a)  applying the applicable percentage in the following table to the combined couple rate of pension supplement; and

                     (b)  dividing the result by 26; and

                     (c)  if:

                              (i)  the person is not partnered; and

                             (ii)  the amount resulting from paragraph (b) is not a multiple of 10 cents;

                            rounding the amount up or down to the nearest multiple of 10 cents (rounding up if the amount is not a multiple of 10 cents but is a multiple of 5 cents).

 

Item

Person’s family situation

Use this %

1

Not member of couple

66.33%

2

Partnered

50%

3

Member of illness separated couple

66.33%

4

Member of respite care couple

66.33%

5

Partnered (partner in gaol)

66.33%

Note:          For combined couple rate of pension supplement, see subsection 20A(1).

Amount if election in force

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

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

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

Module DPharmaceutical allowance
[see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

   1068‑D1  Subject to points 1068‑D3A, 1068‑D4, 1068‑D5, 1068‑D6 and 1068‑D8, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate if:

                     (c)  one of the following subparagraphs applies:

                              (i)  the person is receiving sickness allowance;

                            (ia)  the person is receiving mature age allowance under Part 2.12B;

                             (ii)  the person is receiving widow allowance, newstart allowance or partner allowance and point 1068‑D2, 1068‑D2A, 1068‑D2B or 1068‑D3 applies to the person.

Incapacity for work—job search allowance and newstart allowance

   1068‑D2  This point applies to a person if:

                     (c)  if the person is receiving job search allowance—the person is, under Subdivision BAA of Division 1 of Part 2.11, exempt from the activity test; and

                     (d)  if the person is receiving newstart allowance—the person is, under Subdivision BA of Division 1 of Part 2.12, exempt from the activity test.

Incapacity for work—widow allowance and partner allowance recipients

1068‑D2A  This point applies to a person who is receiving widow allowance or partner allowance if the person is incapacitated for work.

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

1068‑D2B  This point applies to a person who is receiving newstart allowance if the person:

                     (a)  has a partial capacity to work; or

                     (b)  is the principal carer of at least one child and is not a member of a couple.

Note 1:       For partial capacity to work see section 16B.

Note 2:       For principal carer see subsections 5(15) to (24).

Long term recipients over 60

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

                     (a)  has turned 60; and

                     (b)  has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph).

Note 1:       For income support payment see subsection 23(1).

Note 2:       For the determination of the continuous period in respect of which a person received income support payments see section 38B.

No pharmaceutical allowance if person receiving pension supplement

1068‑D3A  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if a pension supplement amount has been added to that rate.

No pharmaceutical allowance if person receiving veterans supplement or MRCA supplement

   1068‑D4  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving:

                     (a)  veterans supplement under section 118A of the Veterans’ Entitlements Act; or

                     (b)  MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act.

No pharmaceutical allowance if partner receiving veterans supplement or MRCA supplement and not a service pensioner

   1068‑D5  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

                     (a)  the person is a member of a couple; and

                     (b)  the person’s partner is receiving:

                              (i)  veterans supplement under section 118A of the Veterans’ Entitlements Act; or

                             (ii)  MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; and

                     (c)  the person’s partner is not receiving a service pension.

No pharmaceutical allowance before advance payment period ends

   1068‑D6  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and

                     (b)  the person’s advance payment period has not ended.

Note:          for advance payment period see point 1068‑D7.

Advance payment period

   1068‑D7  A person’s advance payment period:

                     (a)  starts on the day on which the advance pharmaceutical allowance is paid to the person; and

                     (b)  ends after the number of paydays worked out using the following formula have passed:

where:

amount of advance is the amount of the advance paid to the person;

pharmaceutical allowance rate is the fortnightly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the social security benefit instalment for the day on which the advance is paid if a social security benefit were payable to the person and pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.

Note:          the person may have come on social security benefit after having been a pension recipient and have received an advance while a pension recipient.

No pharmaceutical allowance if annual limit reached

   1068‑D8  Pharmaceutical allowance is not be added to a person’s maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance during the current calendar year; and

                     (b)  the total amount paid to the person for that year by way of:

                              (i)  pharmaceutical allowance; and

                             (ii)  advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1:       for the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (6).

Note 2:       the annual limit is affected by:

·         how long during the calendar year the person was on pension or benefit;

·         the rate of pharmaceutical allowance the person attracts at various times depending on the person’s family situation.

Amount of pharmaceutical allowance

1068‑D10  The amount of pharmaceutical allowance is the amount per fortnight worked out using the following Table:

 

Pharmaceutical allowance amount table

Column 1

Item

Column 2

Person’s family situation

Column 3

Amount per fortnight

1.

Not member of couple

$5.20

2.

Partnered

$2.60

4.

Member of illness separated couple

$5.20

5.

Member of respite care couple

$5.20

6.

Partnered (partner getting service pension)

$2.60

7.

Partnered (partner in gaol)

$5.20

Note 1:       For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Note 2:       The amounts in column 3 are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1206A).

Module GIncome test

Effect of ordinary income on maximum payment rate

   1068‑G1  This is how to work out the effect of a person’s ordinary income, and the ordinary income of a partner of the person, on the person’s maximum payment rate:

Method statement

Step 1.   Work out the amount of the person’s ordinary income on a fortnightly basis.

                   Note 2:          for the treatment of amounts received from friendly societies see point 1068‑G4.

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

                   Note:             The partner income free area is the maximum amount of ordinary income the person’s partner may have without affecting the person’s benefit.

Step 3.   Use paragraphs 1068‑G10(a), (b) and (c) to work out whether the person has a partner income excess.

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

Step 5.   If the requirements of paragraphs 1068‑G10(a), (b) and (c) are satisfied, the person’s partner income excess is the partner’s ordinary income less the partner income free area.

Step 6.   Use the person’s partner income excess to work
out the person’s partner income reduction using point 1068‑G11.

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

                   Note:             A person’s ordinary income free area is the maximum amount of ordinary income the person may have without affecting the person’s benefit rate.

Step 8.   If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.

Step 9.   If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Step 10. Use the person’s ordinary income excess to work
out the person’s ordinary income reduction using points 1068‑G14, 1068‑G15, 1068‑G16 and 1068‑G17.

Step 11. Add the person’s partner income reduction and ordinary income reduction: the result is the person’s income reduction referred to in Step 5 of point 1068‑A1.

Note 1:       for ordinary income see section 8.

Note 2:       see point 1068‑A1 (Steps 6 to 9) for the significance of the person’s income reduction.

Note 3:       the application of the ordinary income test is affected by provisions concerning:

·         the general concept of ordinary income (sections 1072 and 1073);

·         business income (sections 1074 and 1075);

·         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 income of members of certain couples

   1068‑G2  Subject to point 1068‑G3, if a person is a member of a couple and the person’s partner is receiving a social security pension, a service pension or income support supplement, the person’s ordinary income is taken to be one half of the sum of:

                     (a)  the amount that would be the person’s ordinary income if he or she were not a member of a couple; and

                     (b)  the amount that would be the ordinary income of the person’s partner if the partner were not a member of a couple.

Friendly society amounts

   1068‑G4  The ordinary income of a person:

                     (a)  to whom, or to whose partner, sickness allowance is payable; or

                     (c)  to whom, or to whose partner, newstart allowance is payable and who, or whose partner, under Subdivision BA of Division 1 of Part 2.12, is not required to satisfy the activity test;

is not to include any amount received by the person or partner from an approved friendly society in respect of the incapacity because of which the person or partner is qualified for the sickness allowance or is not required to satisfy the activity test, as the case may be.

Ordinary income includes certain periodical payments from relatives

   1068‑G5  Subject to point 1068‑G6, in this Module, a person’s ordinary income includes a periodical payment or benefit by way of gift or allowance from a parent, child, brother or sister of the person.

Note:          point 1068‑G5 reverses paragraph 8(8)(z) which excludes these amounts.

Board and lodging

   1068‑G6  A person’s ordinary income is not to include a payment to the person for board or lodging provided by the person to a parent, child, brother or sister of the person.

Lump sum payments arising from termination of employment

   1068‑G7  Subject to points 1068‑G7AF to 1068‑G7AR (inclusive), if:

                     (a)  a person’s employment has been terminated; and

                     (b)  as a result the person is entitled to a lump sum payment from the person’s former employer;

the person is taken to have received the lump sum payment on the day on which the person’s employment was terminated.

Ordinary income to include certain sick leave entitlements

1068‑G7AA     If a person is a person who is qualified for sickness allowance, the person’s ordinary income is taken to include an amount equal to the amount in respect of sick leave worked out under points 1068‑G7AB, 1068‑G7AC and 1068‑G7AD.

1068‑G7AB     If:

                     (a)  a person has sick leave entitlements on a day that the person is incapacitated for work; and

                     (b)  the person has the right to claim payment from the person’s employer by way of sick leave payment in respect of that day; and

                     (c)  the person’s employer is able to pay the person the person’s sick leave payment in respect of that day;

                     (d)  the person is not receiving a leave payment (other than a sick leave payment) in respect of that day;

the person is, for the purposes of this point, taken to have received a sick leave payment equal to the person’s sick leave entitlements in respect of that day, assuming that the person does not exercise any rights the person may have in relation to the amount to be paid in respect of that day.

1068‑G7AC     If point 1068‑G7AB has applied to a person in respect of a day, then, for the purposes of any subsequent consecutive applications of the point, the person’s sick leave entitlements are to be taken to be reduced by a day.

1068‑G7AD     A person’s ordinary income is not to include a payment received by the person in respect of sick leave to the extent that an amount equal to the payment has been included in the person’s ordinary income under point 1068‑G7AA.

1068‑G7AE     If:

                     (a)  point 1068‑G7AA has applied to a person while the person was qualified for sickness allowance; and

                     (b)  that allowance has been cancelled; and

                     (c)  at least 6 weeks after the day on which the sickness allowance was cancelled, the person is granted sickness allowance again;

point 1068‑G7AA applies to the person in respect of the person’s sick leave entitlements.

Directed termination payments excluded

1068‑G7AF     If:

                     (a)  a person’s employment has been terminated; and

                     (b)  as a result the person is entitled to a lump sum payment from the person’s former employer; and

                     (c)  the payment, or part of the payment, is a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997;

the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of Module G of section 1068.

Certain leave payments taken to be ordinary income—employment continuing

1068‑G7AG     If:

                     (a)  a person is employed; and

                     (b)  the person is on leave for a period; and

                     (c)  the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of a leave period;

the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates.

Certain termination payments taken to be ordinary income

1068‑G7AH     If:

                     (a)  a person’s employment has been terminated; and

                     (b)  the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);

the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.

More than one termination payment on a day

1068‑G7AJ If:

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

                     (b)  the person receives more than one termination payment on a day;

the income maintenance period is worked out by adding the periods to which the payments relate.

Start of income maintenance period—employment continuing

1068‑G7AK     If the person is covered by point 1068‑G7AG, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.

Start of income maintenance period—employment terminated

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

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

1068‑G7AKB  If a person who is covered by point 1068‑G7AH is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences the day after the end of the first period.

Start of income maintenance period where liquid assets test waiting period applies

1068‑G7AKC  If a person to whom point 1068‑G7AKA applies is subject to a liquid assets test waiting period, the income maintenance period is taken to have started on the day on which the liquid assets test waiting period started.

Leave payments or termination payments in respect of periods longer than a fortnight

1068‑G7AL     Subject to points 1068‑G7AA to 1068‑G7AE (inclusive), if:

                     (a)  a person receives a leave payment or termination payment; and

                     (b)  the payment is in respect of a period greater than a fortnight;

the person is taken to receive in a payment fortnight or part of a payment fortnight an amount calculated by:

                     (c)  dividing the amount received by the number of days in the period to which the payment relates (the daily rate); and

                     (d)  multiplying the daily rate by the number of days in the payment fortnight that are also in the period.

1068‑G7AM    If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.

Note 1:       For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple) and 19C(3) (person who is a member of a couple).

Note 2:       For unavoidable or reasonable expenditure see subsection 19C(4).

Note 3:       If an income maintenance period applies to a person, then, during that period:

(a)     the allowance claimed may not be payable to the person; or

(b)     the amount of the allowance payable to the person may be reduced.

When a person receives a leave payment or a termination payment

1068‑G7AN     For the purposes of points 1068‑G7AB and 1068‑G7AD to 1068‑G7AM (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person:

                     (a)  at the direction of the first person or a court; or

                     (b)  on behalf of the first person; or

                     (c)  for the benefit of the first person; or

                     (d)  the first person waives or assigns the first person’s right to receive the payment.

Single payment in respect of different kinds of termination payments

1068‑G7AP     If a person who is covered by point 1068‑G7AH receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068‑G7AG to 1068‑G7AN (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.

Definitions

1068‑G7AQ     In points 1068‑G7AG to 1068‑G7AP (inclusive):

payment fortnight means a fortnight in respect of which a sickness allowance or a newstart allowance, as the case requires, is paid, or would be paid, apart from the application of an income maintenance period, to a person.

period to which the payment relates means:

                     (a)  if the payment is a leave payment—the leave period to which the payment relates; or

                     (b)  if the payment is a termination payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the termination) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or

                     (c)  if the payment is a termination payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the termination payment if:

                              (i)  the person’s employment had continued; and

                             (ii)  the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.

redundancy payment includes a payment in lieu of notice, but does not include a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.

termination payment includes:

                     (a)  a redundancy payment; and

                     (b)  a leave payment relating to a person’s employment that has been terminated; and

                     (c)  any other payment that is connected with the termination of a person’s employment.

1068‑G7AR     In points 1068‑G7AA to 1068‑G7AQ (inclusive):

leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include:

                     (a)  an instalment of parental leave pay; or

                     (b)  dad and partner pay.

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

1068‑G7A  Subject to points 1068‑G7B, 1068‑G7C, 1068‑G8 and 1068‑G8A and section 1073, ordinary income is to be taken into account in the fortnight in which it is first earned, derived or received.

Claimant or recipient receives lump sum amount for remunerative work

1068‑G7B  If a person whose claim for an allowance has been granted receives a lump sum amount after the claim was made that:

                     (a)  is paid to him or her in relation to remunerative work; and

                     (b)  is not a payment to which point 1068‑G8 applies; and

                     (c)  is not an exempt lump sum;

the person is, for the purposes of this Module, taken to receive one fifty‑second of that amount as ordinary income during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.

Partner of claimant or recipient receives lump sum amount for remunerative work

1068‑G7C  If:

                     (a)  a person whose claim for an allowance has been granted is a member of a couple; and

                     (b)  after the person has made the claim, the person’s partner receives a lump sum amount that:

                              (i)  is paid to him or her in relation to remunerative work; and

                             (ii)  is not a payment to which point 1068‑G8 applies; and

                            (iii)  is not an exempt lump sum;

the partner is, for the purposes of this Module, taken to receive one fifty‑second of that amount as ordinary income during each week in the 12 months commencing on the day on which the partner becomes entitled to receive that amount.

Reference to allowance

1068‑G7D  A reference in point 1068‑G7B or 1068‑G7C to an allowance is a reference to an allowance the rate of which is calculated under this Rate Calculator.

Operation of points 1068‑G7B and 1068‑G7C

1068‑G7E  Points 1068‑G7B and 1068‑G7C have effect even if the person who has made the claim:

                     (a)  has to serve an ordinary waiting period or a liquid assets test waiting period in respect of the allowance claimed; or

                     (b)  is subject to an income maintenance period in respect of the allowance claimed; or

                     (c)  is subject to a seasonal work preclusion period;

during the period of 12 months referred to in those points.

Ordinary income received at intervals longer than one fortnight

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

                     (a)  a person receives a number of ordinary income payments; and

                     (b)  each payment is in respect of a period (in this point called the work period) that is greater than a fortnight; and

                     (c)  there is reasonable predictability or regularity as to the timing of the payments; and

                     (d)  there is reasonable predictability as to the quantum of the payments;

the person is taken to receive in a fortnight falling within, or overlapping with, a work period an amount calculated by:

                     (e)  dividing the amount received by the number of days in the work period (the result is called the daily rate); and

                      (f)  multiplying the daily rate by the number of days in the fortnight that are also within the work period.

EXAMPLE OF HOW ORDINARY INCOME RECEIVED AT INTERVALS LONGER THAN A FORTNIGHT IS ALLOCATED TO FORTNIGHTLY PERIODS       

Facts:           Fred receives $600 each 25 days from remunerative work. The social security benefit becomes payable to Fred such that the first 25 days of his earnings that are counted as ordinary income for the purposes of the ordinary income test are spread over 3 social security benefit payment fortnights as follows:

·         5 days of the first fortnight;

·         all of the second fortnight;

·         6 days of the third fortnight.

                     In this example, it is assumed that Fred remains qualified for the social security benefit during the three fortnights and that nothing prevents it from being payable to him. The problem is then to work out what proportion of Fred’s earnings to allocate to each fortnight for ordinary income testing purposes.

Application:  To work out the amount that Fred is taken to receive in the first fortnight first divide the total amount received for the 25 day work period ($600) by the number of days in the work period (25). This gives a daily rate. The daily rate is:

                     Then multiply the daily rate ($24) by the number of days in the fortnight that are also within the work period. The result is:

                     For the second fortnight the calculation is:

                     For the third fortnight the calculation is:

                     plus

                     Note that the amount of $192 added for the third fortnight comes from the given fact that Fred receives $600 each 25 days. So, for as long as there is reasonable predictability as to the timing and quantum of Fred’s ordinary income from remunerative work where receipt is at intervals longer than a fortnight, then this provision should be used to allocate that income to fortnightly periods for the purposes of the ordinary income test.

Payment of arrears of periodic compensation payments

1068‑G8A  If:

                     (a)  at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving newstart allowance, sickness allowance, or mature age allowance under Part 2.12B; and

                     (b)  in relation to that entitlement, the person receives a payment of arrears of periodic compensation;

the person is taken to receive in a fortnight falling within, or overlapping with, the periodic payments period, an amount calculated by:

                     (c)  dividing the amount received by the number of days in the periodic payments period (the result is called the daily rate); and

                     (d)  multiplying the daily rate by the number of days in the fortnight that are also within the periodic payments period.

Note:          for periodic payments period see section 17.

Partner income free area

   1068‑G9  The partner income free area for a person is:

                     (a)  if the person’s partner is not receiving a social security benefit and has not turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which youth allowance would not be payable to the partner if the partner were qualified for a youth allowance and were not undertaking full‑time study (see section 541B); or

                     (b)  if the person’s partner is not receiving a social security benefit and has turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which newstart allowance would not be payable to the partner if the partner were qualified for a newstart allowance; or

                     (c)  if the person’s partner is receiving a social security benefit—the amount of income of the partner (rounded up to the nearest dollar) beyond which that benefit would not be payable to the partner.

Partner income excess

1068‑G10  If:

                     (a)  a person is a member of a couple; and

                     (b)  the person’s partner is not receiving a social security pension, a service pension or income support supplement; and

                     (c)  the partner’s ordinary income exceeds the partner income free area for the partner;

then:

                     (d)  the person has a partner income excess; and

                     (e)  the person’s partner income excess is the amount by which the partner’s ordinary income exceeds the partner income free area.

Partner income reduction

1068‑G11  If a person has a partner income excess, the person’s partner income reduction is an amount equal to 60% of the part of the partner’s ordinary income that exceeds the partner income free area.

Example:   

Facts:           Susan’s partner Colin has an ordinary income of $800. Assume that the partner income free area under point 1068‑G9 is $640.

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

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

Ordinary income free area

1068‑G12  A person’s ordinary income free area is $62.

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

Ordinary income excess

1068‑G13  If a person’s ordinary income exceeds the person’s ordinary income free area:

                     (a)  the person has an ordinary income excess; and

                     (b)  the person’s ordinary income excess is the amount by which the person’s ordinary income exceeds the person’s ordinary income free area.

Ordinary income reduction—general

1068‑G14  Subject to point 1068‑G17, if a person has an ordinary income excess, the person’s ordinary income reduction is the sum of:

                     (a)  the person’s lower range reduction (see point 1068‑G15); and

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

Lower range reduction

1068‑G15  The person’s lower range reduction is an amount equal to 50% of the part of the person’s ordinary income excess that does not exceed $188.

Upper range reduction

1068‑G16  The person’s upper range reduction is an amount equal to 60% of the part (if any) of the person’s ordinary income excess that exceeds $188.

Ordinary income reduction for certain recipients of newstart allowance

1068‑G17  If:

                     (a)  a person has an ordinary income excess; and

                     (b)  the person is receiving newstart allowance; and

                     (c)  the person is not a member of a couple; and

                     (d)  the person is the principal carer of a child;

the person’s ordinary income reduction is an amount equal to 40% of the person’s ordinary income excess.

Module JRemote area allowance

Remote area allowance—person physically in remote area

    1068‑J1  An amount by way of remote area allowance is to be added to a person’s rate if:

                    (aa)  any of the following subparagraphs applies:

                              (i)  apart from this point, the person’s rate would be greater than nil;

                             (ii)  apart from this point, the person’s rate would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act;

                            (iii)  apart from this point, the person’s rate would be nil merely because an election by the person under subsection 1061VA(1) is in force;

                            (iv)  apart from this point, the person’s rate would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and

                     (a)  the person’s usual place of residence is situated in the remote area; and

                     (b)  the person is physically present in the remote area.

Note 1:       for remote area see subsection 14(1).

Note 2:       a person may be considered to be physically present in a remote area during temporary absences—see subsection 14(2).

Rate of remote area allowance

    1068‑J3  The rate of remote area allowance payable to a person is worked out using Table J. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each FTB child, and regular care child, of the person.

 

Table J

Remote area allowance

Column 1

Item

Column 2

Person’s family situation

Column 3

Basic allowance

Column 4

Additional allowance for each FTB child and regular care child

1.

Not member of couple

$18.20

$7.30

2.

Partnered

$15.60

$7.30

3.

Member of illness separated couple

$18.20

$7.30

5.

Partnered (partner in gaol)

$18.20

$7.30

Meaning of remote area allowance

    1068‑J4  In Table J, remote area allowance means:

                     (a)  an amount added to a person’s social security pension or benefit by way of remote area allowance; or

                     (b)  a remote area allowance payable under point SCH6‑G1 of the VEA.

In remote area

    1068‑J5  For the purposes of Table J in point 1068‑J3, a person is in the remote area if:

                     (a)  the person’s usual place of residence is in the remote area; and

                     (b)  the person is physically present in the remote area.

Special rule where partner has an FTB or regular care child but is not receiving a pension

    1068‑J7  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of additional allowance; and

                     (b)  the person’s partner is not receiving a pension or benefit; and

                     (c)  the person’s partner has an FTB child or a regular care child;

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child

    1068‑J8  If:

                     (a)  a person who is a member of a couple is qualified for an amount by way of remote area allowance; and

                     (b)  the person’s partner has an FTB child or a regular care child; and

                     (c)  the person’s partner is not receiving additional allowance for the child;

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule dealing with the death of an FTB or regular care child

    1068‑J9  If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.

Note:          This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.


 

Part 3.6AParenting Payment Rate Calculator

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

             (1)  If a person is not a member of a couple, the person’s rate of parenting payment is the pension PP (single) rate.

             (2)  The pension PP (single) rate is worked out in accordance with the rate calculator at the end of this section.

Note:          For rate of a person who is a member of a couple see section 1068B.

             (3)  If:

                     (a)  a person has a relationship with another person, whether of the same sex or a different sex (the other person); and

                     (b)  the relationship between them is a de facto relationship in the Secretary’s opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A)); and

                     (c)  either or both of them are under the age of consent applicable in the State or Territory in which they are living;

the person’s pension PP (single) rate is not to exceed the benefit PP (partnered) rate which would be payable to the person if the other person were the person’s partner.

Pension PP (Single) Rate Calculator

Module AOverall rate calculation process

Method of calculating rate

1068A‑A1  The rate of pension PP (single) is a daily rate. That rate is worked out by dividing the annual rate calculated according to this Rate Calculator by 364 (fortnightly rates are provided for information only).

Method statement

Step 1.   Work out the person’s maximum basic rate using Module B below.

Step 1A. Work out the amount of pension supplement using Module BA below.

Step 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 6.   Take the income reduction away from the maximum payment rate: the result is called the provisional annual payment rate.

Step 7.   The rate of pension PP (single) is the amount obtained by:

               (a)     subtracting from the provisional annual payment rate any special employment advance deduction (see Part 3.16B); and

              (b)     if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and

               (c)     adding any amount payable by way of remote area allowance (see Module F).

Note 1:       If a person’s rate is reduced under Step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210 (maximum basic rate first, then rent assistance, then pharmaceutical allowance).

Note 2:       In some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22.

Note 3:       An amount of remote area allowance is to be added under Step 7 only if the person’s provisional payment rate under Step 6 is greater than nil.

Module BMaximum basic rate
[see Appendix for CPI adjusted figures]

Maximum basic rate

1068A‑B1  A person’s maximum basic rate is $9,042.80 per year ($347.80 per fortnight).

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

Module BAPension supplement

Pension supplement

1068A‑BA1     A pension supplement amount is to be added to the person’s maximum basic rate.

Residents of pension age who are in Australia etc.

1068A‑BA2     If the person is residing in Australia, has reached pension age and:

                     (a)  is in Australia; or

                     (b)  is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks;

the person’s pension supplement amount is:

                     (c)  if an election by the person under subsection 1061VA(1) is in force—the amount worked out under point 1068A‑BA4; and

                     (d)  otherwise—the amount worked out under point 1068A‑BA3.

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

1068A‑BA3     The person’s pension supplement amount is the amount worked out by:

                     (a)  working out 66.33% of the combined couple rate of pension supplement; and

                     (b)  if the result is not a multiple of $2.60, rounding the result up or down to the nearest multiple of $2.60 (rounding up if the result is not a multiple of $2.60 but is a multiple of $1.30).

Note:          For combined couple rate of pension supplement, see subsection 20A(1).

Residents of pension age in Australia etc.—election in force

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

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

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

Other persons

1068A‑BA5     If the person is not covered by point 1068A‑BA2, the person’s pension supplement amount is the person’s pension supplement basic amount.

Module CPharmaceutical allowance
[see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

1068A‑C1  Subject to points 1068A‑C1A, 1068A‑C2, 1068A‑C3 and 1068A‑C5, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate if the person is an Australian resident.

No pharmaceutical allowance if person has reached pension age

1068A‑C1A     Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person has reached pension age.

No pharmaceutical allowance if person receiving veterans supplement or MRCA supplement

1068A‑C2  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving:

                     (a)  veterans supplement under section 118A of the Veterans’ Entitlements Act; or

                     (b)  MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act.

No pharmaceutical allowance before advance payment period ends

1068A‑C3  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and

                     (b)  the person’s advance payment period has not ended.

Note:          For advance payment period see point 1068A‑C4.

Advance payment period

1068A‑C4(1)   A person’s advance payment period starts on the day on which the advance pharmaceutical allowance is paid to the person.

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

where:

amount of advance is the amount of the advance paid to the person.

pharmaceutical allowance rate is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the person’s rate of pension PP (single) on the day on which the advance is paid if pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.

No pharmaceutical allowance if annual limit reached

1068A‑C5  Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

                     (a)  the person has received an advance pharmaceutical allowance during the current calendar year; and

                     (b)  the total amount paid to the person for that year by way of:

                              (i)  pharmaceutical allowance; and

                             (ii)  advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1:       For the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (7).

Note 2:       The annual limit is affected by the following:

(a)    how long during the calendar year the person was on pension or benefit;

(b)   the rate of pharmaceutical allowance the person attracts at various times depending on the person’s family situation.

Amount of pharmaceutical allowance

1068A‑C7  The amount of pharmaceutical allowance is $140.40 per year ($5.40 per fortnight).

Note:          The annual amount is adjusted annually in line with CPI increases (see section 1206A).

Module EOrdinary income test

Effect of income on maximum payment rate

1068A‑E1  This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:

Method statement

Step 1.   Work out the amount of the person’s ordinary income on a yearly basis.

Step 2.   Work out the person’s ordinary income free area (see points 1068A‑E14 to 1068A‑E18 below).

                   Note:             A person’s ordinary income free area is the amount of ordinary income that the person can have without any deduction being made from the person’s maximum payment rate.

Step 3.   Work out whether the person’s ordinary income exceeds the person’s ordinary income free area.

Step 4.   If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.

Step 5.   If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Step 6.   Use the person’s ordinary income excess to work out the person’s reduction for ordinary income using points 1068A‑E19 and 1068A‑E20 below.

Note 1:       See point 1068A‑A1 (Steps 5 and 6) for the significance of the person’s reduction for ordinary income.

Note 2:       The application of the ordinary income test is affected by provisions concerning the following:

(a)    the general concept of ordinary income (sections 1072 and 1073);

(b)    business income (sections 1074 and 1075);

(c)    deemed income from financial assets (sections 1076 to 1084);

(d)    income from income streams (sections 1095 to 1099DAA);

(e)    disposal of income (sections 1106 to 1112).

Directed termination payments excluded

1068A‑E2  If:

                     (a)  a person’s employment has been terminated; and

                     (b)  as a result the person is entitled to a lump sum payment from the person’s former employer; and

                     (c)  the payment, or part of the payment, is a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997;

the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of this Module.

Certain leave payments taken to be ordinary income—employment continuing

1068A‑E3  If:

                     (a)  a person is employed; and

                     (b)  the person is on leave for a period; and

                     (c)  the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of the leave period;

the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates.

Certain termination payments taken to be ordinary income

1068A‑E4  If:

                     (a)  a person’s employment has been terminated; and

                     (b)  the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);

the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.

More than one termination payment on a day

1068A‑E5  If:

                     (a)  the person is covered by point 1068A‑E4; and

                     (b)  the person receives more than one termination payment on a day;

the income maintenance period is worked out by adding the periods to which the payments relate.

Start of income maintenance period—employment continuing

1068A‑E6  If the person is covered by point 1068A‑E3, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.

Start of income maintenance period—employment terminated

1068A‑E7  If the person is covered by point 1068A‑E4, the income maintenance period starts, subject to point 1068A‑E8, on the day the person is paid the termination payment.

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

1068A‑E8  If a person who is covered by point 1068A‑E4 is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences on the day after the end of the first period.

1068A‑E9  If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.

Note 1:       For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple).

Note 2:       For unavoidable or reasonable expenditure see subsection 19C(4).

Note 3:       If an income maintenance period applies to a person, then, during that period:

(a)    the pension PP (single) claimed may not be payable to the person; or

(b)    the amount of the pension PP (single) payable to the person may be reduced.

When a person receives a leave payment or a termination payment

1068A‑E10 For the purposes of points 1068A‑E2 to 1068A‑E9 (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person:

                     (a)  at the direction of the first person or a court; or

                     (b)  on behalf of the first person; or

                     (c)  for the benefit of the first person; or

the first person waives or assigns the first person’s right to receive the payment.

Single payment in respect of different kinds of termination payments

1068A‑E11 If a person who is covered by point 1068A‑E4 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068A‑E3 to 1068A‑E10 (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.

Definitions

1068A‑E12 In points 1068A‑E3 to 1068A‑E12 (inclusive):

leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include:

                     (a)  an instalment of parental leave pay; or

                     (b)  dad and partner pay.

period to which the payment relates means:

                     (a)  if the payment is a leave payment—the leave period to which the payment relates; or

                     (b)  if the payment is a termination payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the termination) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or

                     (c)  if the payment is a termination payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the termination payment if:

                              (i)  the person’s employment had continued; and

                             (ii)  the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.

redundancy payment includes a payment in lieu of notice, but does not include a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.

termination payment includes:

                     (a)  a redundancy payment; and

                     (b)  a leave payment relating to a person’s employment that has been terminated; and

                     (c)  any other payment that is connected with the termination of a person’s employment.

Payment of arrears of periodic compensation payments

1068A‑E13 If:

                     (a)  at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected payment; and

                     (b)  in relation to that entitlement, the person receives a payment of arrears of periodic compensation;

the person is taken to receive, on each day in the periodic payments period, an amount calculated by dividing the amount received by the number of days in the periodic payments period.

Note:          For compensation affected payment and periodic payments period see section 17.

How to calculate a person’s ordinary income free area

1068A‑E14 A person’s ordinary income free area is worked out using Table E. The ordinary income free area is the amount in Column 2 plus the additional amount in Column 4 for each dependent child of the person.

 

Table E—Ordinary income free area

Column 1

Item

Column 2

Basic free area per year

Column 3

Basic free area per fortnight

Column 4

Additional free area per year

Column 5

Additional free area per fortnight

1

$2,600

$100

$639.60

$24.60

Note 1:       For dependent child see section 5 and point 1068A‑E21.

Note 2:       The basic free area per year is indexed annually in line with CPI increases (see sections 1191 to 1194).

No additional free area for certain prescribed student children

1068A‑E15 No additional free area is to be added for a dependent child who:

                     (a)  has turned 18; and

                     (b)  is a prescribed student child;

unless the person whose rate is being calculated receives carer allowance for the child.

Reduction of additional free area for dependent children

1068A‑E16 The additional free area for a dependent child is reduced by the annual amount of any payment received by the person for or in respect of that particular child. The payments referred to in point 1068A‑E17 do not result in a reduction.

Payments that do not reduce additional free area

1068A‑E17 No reduction is to be made under point 1068A‑E16 for a payment:

                     (a)  under this Act; or

                     (b)  of maintenance income; or

                     (c)  under the Veterans’ Entitlements Act; or

                     (d)  under an Aboriginal study assistance scheme; or

                     (e)  under the Assistance for Isolated Children Scheme.

Note:          For Aboriginal study assistance scheme see subsection 23(1).

Examples of payments reducing additional free area

1068A‑E18 Examples of the kinds of payments that result in a reduction under point 1068A‑E16 are:

                     (a)  amounts received from State authorities or registered public benevolent institutions in respect of the boarding out of the child; or

                     (b)  amounts of superannuation or compensation paid in respect of the child; or

                     (c)  amounts (other than amounts covered by point 1068A‑E17) paid in respect of the child under educational schemes; or

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

Ordinary income excess

1068A‑E19 A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Reduction for ordinary income

1068A‑E20 A person’s reduction for ordinary income is:

1068A‑E21 In this Module:

dependent child, in relation to a person, includes any child of the person who is under 18 and is receiving a youth allowance.

Module FRemote area allowance

Remote area allowance

1068A‑F1  An amount by way of remote area allowance is to be added to a person’s rate if:

                     (a)  any of the following subparagraphs applies:

                              (i)  apart from this point, the person’s rate would be greater than nil;

                             (ii)  apart from this point, the person’s rate would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act;

                            (iii)  apart from this point, the person’s rate would be nil merely because an election by the person under subsection 1061VA(1) is in force;

                            (iv)  apart from this point, the person’s rate would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and

                     (b)  the person’s usual place of residence is situated in a remote area; and

                     (c)  the person is physically present in the remote area.

Note:          For remote area and physically present in the remote area see section 14.

Rate of remote area allowance

1068A‑F2  The rate of remote area allowance payable to a person is worked out using Table F. The rate of remote area allowance is the amount in Column 2 plus the additional corresponding amount in Column 4 for each FTB child, and each regular care child, of the person.

 

Table F—Remote area allowance

Column 1

Item

Column 2

Basic allowance per year

Column 3

Basic allowance per fortnight

Column 4

Additional allowance per year

Column 5

Additional allowance per fortnight

1

$473.20

$18.20

$189.80

$7.30

1068B  Rate of parenting payment—PP (partnered)

             (1)  If a person is a member of a couple, the person’s rate of parenting payment is the benefit PP (partnered) rate.

             (2)  The benefit PP (partnered) rate is worked out in accordance with the rate calculator at the end of this section.

Note:          For member of a couple see section 4.

Benefit PP (Partnered) Rate Calculator

Module AOverall rate calculation process

Method of calculating rate—general

1068B‑A1  The rate of benefit PP (partnered) is a daily rate. That rate is worked out by dividing the fortnightly rate calculated according to this Rate Calculator by 14. There are 2 ways of working out the fortnightly rate:

                     (a)  one for a person who is not a partner of a non‑independent YA recipient (see point 1068B‑A2); and

                     (b)  one for a person who is a partner of a non‑independent YA recipient (see point 1068B‑A3).

Note:          For partner of a non‑independent YA recipient see subsection 23(1).

Method of calculating rate for person who is not a partner of a non‑independent YA recipient

1068B‑A2  If a person is not the partner of a non‑independent YA recipient, the fortnightly rate of benefit PP (partnered) for the person is worked out as follows:

Method statement

Step 1.   Work out the person’s maximum basic rate using Module C below.

Step 2.   Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a).

Step 2A. Work out the pension supplement amount (if any) using Module DA below.

Step 3.   Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below.

Step 4.   Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate.

Step 5.   Apply the income test using Module D below to work out the person’s income reduction.

Step 6.   Take the income reduction away from the maximum payment rate: the result is called the provisional payment rate.

Step 7.   The rate of benefit PP (partnered) is the difference between:

               (a)     the provisional payment rate; and

              (b)     any advance payment deduction (see Part 3.16A);

              plus, except where the person is a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, any amount by way of remote area allowance that, under Module G, is to be added to the person’s rate of benefit PP (partnered).

Note 1:       For partner of a non‑independent YA recipient see subsection 23(1).

Note 2:       If a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1207 (maximum basic rate first, then rent assistance).

Method of calculating rate for partner of a non‑independent YA recipient

1068B‑A3  If a person is the partner of a non‑independent YA recipient, the fortnightly rate of benefit PP (partnered) for the person is worked out as follows:

Method statement

Step 1.   Work out the person’s maximum basic rate using Module C below.

Step 2.   Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a).

Step 2A. Work out the pension supplement amount (if any) using Module DA below.

Step 3.   Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below.

Step 4.   Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate.

Step 5.   Apply the income test using Module E of the Rate Calculator in section 1068A to work out the person’s income reduction.

Step 6.   Take the income reduction away from the maximum payment rate: the rate is called the provisional payment rate.

Step 7.   The rate of benefit is the difference between:

               (a)     the provisional payment rate; and

              (b)     any advance payment deduction (see Part 3.16A);

              plus, except where the person is a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, any amount by way of remote area allowance that, under Module G, is to be added to the person’s rate of benefit PP (partnered).

Note 1:       For partner of a non‑independent YA recipient see subsection 23(1).

Note 2:       If a person’s rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1207 (maximum basic rate first, then rent assistance).

Module CMaximum basic rate
[see Appendix for CPI adjusted figures]

Maximum basic rate

1068B‑C2  If a person is not a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, the person’s maximum basic rate is worked out using Table C. Work out the person’s family situation. The maximum basic rate is the corresponding amount in Column 3.

 

Table C—Maximum basic rates

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate

1

Person not covered by item 2, 3 or 4

$290.10

2

Member of illness separated couple

$347.80

3

Member of respite care couple

$347.80

4

Partnered (partner in gaol)

$347.80

Note 1:       For illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Note 2:       The rates are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194).

Maximum basic rate—CDEP Scheme participant

1068B‑C3  The maximum basic rate of a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is nil (see section 500W).

Module DIncome test

Effect of income on maximum payment rate

1068B‑D1  This is how to work out the effect of a person’s ordinary income, and the ordinary income of the person’s partner, on the person’s maximum payment rate:

Method statement

Step 1.   Work out the amount of the person’s ordinary income on a fortnightly basis.

                   Note:             The amount of the person’s ordinary income is affected by points 1068B‑D2 to 1068B‑D21.

Step 2.   Work out the partner income free area using point 1068B‑D22.

                   Note:             The partner income free area is the maximum amount of ordinary income the person’s partner can have without affecting the person’s rate.

Step 3.   Use point 1068B‑D23 to work out the person’s partner income excess.

Step 4.   Use the person’s partner income excess to work out the person’s partner income reduction using point 1068B‑D24.

Step 5.   Work out whether the person’s ordinary income exceeds the person’s ordinary income free area (see point 1068B‑D27).

                   Note:             A person’s ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person’s rate.

Step 6.   If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.

Step 7.   If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Step 8.   Use the person’s ordinary income excess to work out the person’s ordinary income reduction using points 1068B‑D29 to 1068B‑D31.

Step 9.   Add the person’s ordinary income reduction and partner income reduction: the result is the person’s income reduction referred to in step 5 of the method statement in point 1068B‑A2.

Note 1:       For ordinary income see section 8.

Note 2:       See point 1068B‑A2 (step 6) for the significance of the person’s income reduction.

Note 3:       The application of the ordinary income test is affected by provisions concerning the following:

(a)    the general concept of ordinary income (sections 1072 and 1073);

(b)    business income (sections 1074 and 1075);

(c)    deemed income from financial assets (sections 1076 to 1084);

(d)    income from income streams (sections 1095 to 1099DAA);

(e)    disposal of income (sections 1106 to 1112).

Ordinary income of members of certain couples

1068B‑D2  If a person’s partner is receiving a social security pension, a service pension or income support supplement, the person’s ordinary income is taken to be one half of the sum of:

                     (a)  the amount that would be the person’s ordinary income if he or she were not a member of a couple; and

                     (b)  the amount that would be the ordinary income of the person’s partner if the partner were not a member of a couple.

Friendly society amounts

1068B‑D4  The ordinary income of a person to whose partner a sickness allowance is payable is not to include any amount received by the person from an approved friendly society in respect of the incapacity because of which the partner is qualified for the sickness allowance.

Note:          For approved friendly society see subsection 23(1).

Ordinary income includes certain periodical payments from relatives

1068B‑D5  Subject to point 1068B‑D6, in this Module, a person’s ordinary income includes a periodical payment or benefit by way of gift or allowance from a parent, child, brother or sister of the person.

Note:          Point 1068B‑D5 reverses paragraph 8(8)(z) which excludes these amounts.

Board and lodging

1068B‑D6  A person’s ordinary income is not to include a payment to the person for board or lodging provided by the person to a parent, child, brother or sister of the person.

Lump sum payments arising from termination of employment

1068B‑D7  Subject to points 1068B‑D8 to 1068B‑D18 (inclusive), if:

                     (a)  a person’s employment has been terminated; and

                     (b)  as a result, the person is entitled to a lump sum payment from the person’s former employer;

the person is taken to have received the lump sum payment on the day on which the person’s employment was terminated.

Directed termination payments excluded

1068B‑D8  If:

                     (a)  a person’s employment has been terminated; and

                     (b)  as a result the person is entitled to a lump sum payment from the person’s former employer; and

                     (c)  the payment, or part of the payment, is a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997;

the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of this Module.

Certain leave payments taken to be ordinary income—employment continuing

1068B‑D9  If:

                     (a)  a person is employed; and

                     (b)  the person is on leave for a period; and

                     (c)  the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of the leave period;

the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates.

Certain termination payments taken to be ordinary income

1068B‑D10 If:

                     (a)  a person’s employment has been terminated; and

                     (b)  the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);

the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates.

More than one termination payment on a day

1068B‑D11 If:

                     (a)  the person is covered by point 1068B‑D10; and

                     (b)  the person receives more than one termination payment on a day;

the income maintenance period is worked out by adding the periods to which the payments relate.

Start of income maintenance period—employment continuing

1068B‑D12 If the person is covered by point 1068B‑D9, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.

Start of income maintenance period—employment terminated

1068B‑D13 If the person is covered by point 1068B‑D10, the income maintenance period starts, subject to point 1068B‑D14, on the day the person is paid the termination payment.

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

1068B‑D14 If a person who is covered by point 1068B‑D10 is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences the day after the end of the first period.

1068B‑D15 If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person.

Note 1:       For in severe financial hardship see subsection 19C(3) (person who is a member of a couple).

Note 2:       For unavoidable or reasonable expenditure see subsection 19C(4).

Note 3:       If an income maintenance period applies to a person, then, during that period:

(a)    the PP (partnered) claimed may not be payable to the person; or

(b)    the amount of the PP (partnered) payable to the person may be reduced.

When a person receives a leave payment or a termination payment

1068B‑D16 For the purposes of points 1068B‑D8 to 1068B‑D15 (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person:

                     (a)  at the direction of the first person or a court; or

                     (b)  on behalf of the first person; or

                     (c)  for the benefit of the first person; or

the first person waives or assigns the first person’s right to receive the payment.

Single payment in respect of different kinds of termination payments

1068B‑D17 If a person who is covered by point 1068B‑D10 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068B‑D9 to 1068B‑D16 (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate.

Definitions

1068B‑D18 In points 1068B‑D9 to 1068B‑D18 (inclusive):

leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave, but does not include:

                     (a)  an instalment of parental leave pay; or

                     (b)  dad and partner pay.

period to which the payment relates means:

                     (a)  if the payment is a leave payment—the leave period to which the payment relates; or

                     (b)  if the payment is a termination payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the termination) have received from the employment that was terminated—the period for which the person would have received that amount of ordinary income; or

                     (c)  if the payment is a termination payment and paragraph (b) does not apply—the period of weeks (rounded down to the nearest whole number) in respect of which the person would have received ordinary income, from the employment that was terminated, of an amount equal to the amount of the termination payment if:

                              (i)  the person’s employment had continued; and

                             (ii)  the person received ordinary income from the employment at the rate per week at which the person usually received ordinary income from the employment prior to the termination.

redundancy payment includes a payment in lieu of notice, but does not include a directed termination payment within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997.

termination payment includes:

                     (a)  a redundancy payment; and

                     (b)  a leave payment relating to a person’s employment that has been terminated; and

                     (c)  any other payment that is connected with the termination of a person’s employment.

Period over which ordinary income taken into account

1068B‑D19 Subject to points 1068B‑D8 to 1068B‑D18 (inclusive), a person’s ordinary income is to be taken into account over such period, not exceeding 52 weeks, as the Secretary determines.

Note:          This point, in conjunction with point 1068B‑D20, enables the Secretary to determine the person’s fortnightly income amount that best represents the person’s income situation.

Fortnightly rate of ordinary income

1068B‑D20 For the purposes of this Module, the person’s ordinary income for such a period is to be reduced to a fortnightly rate rounded to the nearest cent (rounding 0.5 cents downwards).

Payment of arrears of periodic compensation payments

1068B‑D21 If:

                     (a)  at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected payment; and

                     (b)  in relation to that entitlement, the person receives a payment of arrears of periodic compensation;

the person is taken to receive, on each day in the periodic payments period, an amount calculated by dividing the amount received by the number of days in the periodic payments period.

Note:          For compensation affected payment and periodic payments period see section 17.

Partner income free area

1068B‑D22 The partner income free area for a person is:

                     (a)  if the person’s partner is not receiving a social security benefit and has not turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which youth allowance would not be payable to the partner if the partner were qualified for a youth allowance and were not undertaking full‑time study (see section 541B); or

                     (b)  if the person’s partner is not receiving a social security benefit and has turned 22—the amount of income of the partner (rounded up to the nearest dollar) beyond which newstart allowance would not be payable to the partner if the partner were qualified for a newstart allowance; or

                     (c)  if the person’s partner is receiving a social security benefit—the amount of income of the partner (rounded up to the nearest dollar) beyond which that benefit would not be payable to the partner.

Partner income excess

1068B‑D23 If:

                     (b)  the person’s partner is not receiving a social security pension, a service pension or income support supplement; and

                     (c)  the partner’s ordinary income exceeds the partner income free area for the partner;

the person’s partner income excess is the amount by which the partner’s ordinary income exceeds the partner income free area. Otherwise, the person’s partner income excess is nil.

Partner income reduction

1068B‑D24 If a person has a partner income excess, the person’s partner income reduction is an amount equal to 60% of the part of the partner’s ordinary income that exceeds the partner income free area.

Ordinary income free area

1068B‑D27 A person’s ordinary income free area is $62.

Ordinary income excess

1068B‑D28 If a person’s ordinary income exceeds the person’s ordinary income free area:

                     (a)  the person has an ordinary income excess; and

                     (b)  the person’s ordinary income excess is the amount by which the person’s ordinary income exceeds the person’s ordinary income free area.

Ordinary income reduction

1068B‑D29 If a person has an ordinary income excess, the person’s ordinary income reduction is the sum of:

                     (a)  the person’s lower range reduction (see point 1068B‑D30); and

                     (b)  the person’s upper range reduction (if any) (see point 1068B‑D31).

Lower range reduction

1068B‑D30 The person’s lower range reduction is an amount equal to 50% of the part of the person’s ordinary income excess that does not exceed $188.

Upper range reduction

1068B‑D31 The person’s upper range reduction is an amount equal to 60% of the part (if any) of the person’s ordinary income excess that exceeds $188.

Module DAPension supplement

Pension supplement

1068B‑DA1     A pension supplement amount is to be added to the person’s maximum basic rate if the person is residing in Australia, has reached pension age and:

                     (a)  is in Australia; or

                     (b)  is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.

1068B‑DA2     The person’s pension supplement amount is:

                     (a)  if an election by the person under subsection 1061VA(1) is in force—the amount worked out under point 1068B‑DA4; and

                     (b)  otherwise—the amount worked out under point 1068B‑DA3.

Amount if no election in force

1068B‑DA3     The person’s pension supplement amount is the amount worked out by:

                     (a)  applying the applicable percentage in the following table to the combined couple rate of pension supplement; and

                     (b)  dividing the result by 26; and

                     (c)  if:

                              (i)  the person is not partnered; and

                             (ii)  the amount resulting from paragraph (b) is not a multiple of 10 cents;

                            rounding the amount up or down to the nearest multiple of 10 cents (rounding up if the amount is not a multiple of 10 cents but is a multiple of 5 cents).

 

Item

Person’s family situation

Use this %

1

Partnered

50%

2

Member of illness separated couple

66.33%

3

Member of respite care couple

66.33%

4

Partnered (partner in gaol)

66.33%

Note:          For combined couple rate of pension supplement, see subsection 20A(1).

Amount if election in force

1068B‑DA4     The person’s pension supplement amount is the amount worked out as follows:

                     (a)  work out the amount for the person under point 1068B‑DA3 as if the election were not in force;

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

Module EPharmaceutical allowance
[see Appendix for CPI adjusted figures]

Qualification for pharmaceutical allowance

1068B‑E1  Subject to points 1068B‑E1A, 1068B‑E2, 1068B‑E3, 1068B‑E4 and 1068B‑E6, an additional amount by way of pharmaceutical allowance is to be included in a person’s maximum payment rate in points 1068B‑A2 and 1068B‑A3 if:

                     (b)  the person is an Australian resident, or has a qualifying residence exemption for parenting payment; and

                     (d)  one or more of the following applies:

                              (i)  the person has turned 60, and has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph);

                             (ii)  under section 502H, the person is covered by a participation exemption under Division 3A of Part 2.10;

                            (iii)  the person has a partial capacity to work.

Note 1:       For income support payment see subsection 23(1).

Note 2:       For the determination of the continuous period in respect of which a person received income support payments see section 38B.

Note 3:       For Australian resident and qualifying residence exemption see section 7.

Note 4:       For partial capacity to work see section 16B.

No pharmaceutical allowance if person receiving pension supplement

1068B‑E1A     Pharmaceutical allowance is not to be added to a person’s maximum basic rate if a pension supplement amount has been added to that rate.

No pharmaceutical allowance if person receiving veterans supplement or MRCA supplement

1068B‑E2  Pharmaceutical allowance is not to be included in a person’s maximum basic rate if the person is receiving:

                     (a)  veterans supplement under section 118A of the Veterans’ Entitlements Act; or

                     (b)  MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act.

No pharmaceutical allowance if partner receiving veterans supplement or MRCA supplement and not a service pensioner

1068B‑E3  Pharmaceutical allowance is not to be included in a person’s maximum basic rate if:

                     (a)  the person is a member of a couple; and

                     (b)  the person’s partner is receiving:

                              (i)  veterans supplement under section 118A of the Veterans’ Entitlements Act; or

                             (ii)  MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; and

                     (c)  the person’s partner is not receiving a service pension.

No pharmaceutical allowance before advance payment period ends

1068B‑E4  Pharmaceutical allowance is not to be included in a person’s provisional payment rate if:

                     (a)  the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and

                     (b)  the person’s advance payment period has not ended.

Note:          For advance payment period see point 1068B‑E5.

Advance payment period

1068B‑E5(1)    A person’s advance payment period starts on the day on which the advance pharmaceutical allowance is paid to the person.

1068B‑E5(2)    The period ends after the number of paydays worked out using the following formula have passed:

where:

amount of advance is the amount of the advance paid to the person.

pharmaceutical allowance rate is the fortnightly amount of pharmaceutical allowance which would be included in the person’s maximum payment rate in working out the benefit PP (partnered) instalment for the day on which the advance is paid if parenting payment were payable to the person and pharmaceutical allowance were to be included in the person’s maximum payment rate. (The person’s maximum payment rate is the maximum payment rate at step 4 of whichever of the method statements in points 1068B‑A2 and 1068B‑A3 is applicable to the person.)

Note:          The person may have commenced receiving parenting payment after having been a pension recipient and have received an advance while a pension recipient.

No pharmaceutical allowance if annual limit reached

1068B‑E6  Pharmaceutical allowance is not to be included in a person’s provisional payment rate if:

                     (a)  the person has received an advance pharmaceutical allowance during the current calendar year; and

                     (b)  the total amount paid to the person for that year by way of:

                              (i)  pharmaceutical allowance; and

                             (ii)  advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1:       For the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (7).

Note 2:       The annual limit is affected by:

(a)    how long during the calendar year the person was on pension or benefit; and

(b)    whether the person’s rate of pharmaceutical allowance varies during the calendar year.

Amount of pharmaceutical allowance

1068B‑E8  The amount of pharmaceutical allowance is the amount per fortnight worked out using Table E.

 

Table E—Pharmaceutical allowance amounts

Column 1

Item

Column 2

Person’s family situation

Column 3

Amount per fortnight

1

Person not covered by item 2, 3, 4 or 5

$2.70

2

Member of illness separated couple

$5.40

3

Member of respite care couple

$5.40

4

Partnered (partner getting service pension)

$2.70

5

Partnered (partner in gaol)

$5.40

Note 1:       For illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Note 2:       The amounts in Column 3 are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1206A).

Module GRemote area allowance

Remote area allowanceperson physically in remote area

1068B‑G1  An amount by way of remote area allowance is to be added in step 7 of the method statements in points 1068B‑A2 and 1068B‑A3 to a person’s rate of benefit PP (partnered) if:

                     (b)  any of the following subparagraphs applies:

                              (i)  apart from this point, the person’s rate of benefit PP (partnered) would be greater than nil;

                             (ii)  apart from this point, the person’s rate of benefit PP (partnered) would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act;

                            (iii)  apart from this point, the person’s rate of benefit PP (partnered) would be nil merely because an election by the person under subsection 1061VA(1) is in force;

                            (iv)  apart from this point, the person’s rate of benefit PP (partnered) would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and

                     (c)  the person’s usual place of residence is in a remote area; and

                     (d)  the person is physically present in the remote area.

Note 1:       For remote area see subsection 14(1).

Note 2:       A person may be considered to be physically present in a remote area during temporary absencessee subsection 14(2).

Rate of remote area allowance

1068B‑G2  The rate of remote area allowance payable to a person is worked out using Table G. Work out which family situation in the table applies to the person. The rate of remote area allowance is the corresponding amount in Column 3 plus the additional corresponding amount in Column 4 for each FTB child, and each regular care child, of the person.

 

Table G—Remote area allowance

Column 1

Item

Column 2

Person’s family situation

Column 3

Basic allowance

Column 4

Additional allowance for each FTB child and regular care child

1

Person not covered by item 2, 3 or 4

$15.60

$7.30

2

Member of illness separated couple

$18.20

$7.30

3

Member of respite care couple

$18.20

$7.30

4

Partnered (partner in gaol)

$18.20

$7.30

Note:          For illness separated couple, respite care couple and partnered (partner in gaol) see section 4.

Meaning of remote area allowance

1068B‑G3  In point 1068B‑G2, remote area allowance means:

                     (a)  an amount added to a person’s social security pension or benefit by way of remote area allowance; or

                     (b)  a remote area allowance payable under point SCH6‑G1 of the VEA.

FTB or regular care child must be present in Australia

1068B‑G4  Additional allowance is not payable for an FTB child, or a regular care child, unless the child is physically present in Australia.

Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child

1068B‑G5  If:

                     (a)  an amount of remote area allowance is to be added to the person’s rate; and

                     (b)  the person’s partner has an FTB child or a regular care child; and

                     (c)  the person’s partner is not receiving an additional amount of remote area allowance for the child;

the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person.

Special rule dealing with the death of an FTB or regular care child

1068B‑G6  If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died.

Note:          This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks.


 

Part 3.7Rent assistance

Division 1Operation of this Part

1070  When this Part applies

                   This Part applies if the rate of a person’s social security payment is to be calculated in accordance with any of the following Rate Calculators:

                     (a)  Pension Rate Calculator A (carer payments and certain age, disability support and wife pensions);

                     (b)  Pension Rate Calculator C (bereavement allowance and widow B pension);

                     (c)  Pension Rate Calculator D (certain disability support pensions);

                     (d)  Youth Allowance Rate Calculator;

                   (da)  Austudy Payment Rate Calculator;

                     (e)  Benefit Rate Calculator B (mature age allowance under Part 2.12B and newstart, partner, sickness and widow allowance);

                      (f)  Pension PP (Single) Rate Calculator or Benefit PP (Partnered) Rate Calculator (parenting payments).

1070A  Effect of this Part

                   If a person to whom this Part applies qualifies for rent assistance in accordance with Division 2, to help cover the cost of rent:

                     (a)  if paragraph (b) does not apply—the amount per fortnight worked out in accordance with Division 3 is added to the person’s maximum basic rate for the social security payment; or

                     (b)  if the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A, C or D, or the Pension PP (Single) Rate Calculator—the amount per fortnight worked out in accordance with Division 3 is multiplied by 26 to calculate an amount per year and the amount per year is added to the person’s maximum basic rate for the social security payment.


 

Division 2Qualification for rent assistance

1070B  Qualification—general rule

                   A person qualifies for rent assistance if the person satisfies:

                     (a)  the common requirements set out in section 1070C; and

                     (b)  any specific requirement, set out in a later section of this Division, applicable to the person’s social security payment.

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

                   The common requirements are that:

                     (a)  the person is not an aged care resident, and is not taken to be an aged care resident for the purposes of the Rate Calculator concerned; and

                     (b)  the person is not an ineligible homeowner; and

                     (c)  the person pays, or is liable to pay, rent, other than Government rent, in respect of a period in respect of premises in Australia; and

                     (d)  the person’s fortnightly rent is more than the rent threshold amount (see section 1070T).

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

             (1)  If the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A and subsection (2) applies, the specific requirement applicable to the person’s social security payment is that set out in subsection (3).

             (2)  This subsection applies if:

                     (a)  the following conditions are satisfied:

                              (i)  the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple;

                             (ii)  the person is entitled to be paid family tax benefit; or

                     (b)  the following conditions are satisfied:

                              (i)  the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple;

                             (ii)  the person, or the person’s partner, is entitled to be paid family tax benefit.

             (3)  The specific requirement is that:

                     (a)  in a paragraph (2)(a) case, either of the following is satisfied:

                              (i)  the person’s maximum Part A rate of family tax benefit does not include rent assistance;

                             (ii)  the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and

                     (b)  in a paragraph (2)(b) case, either of the following is satisfied:

                              (i)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;

                             (ii)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance and clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.

             (4)  Subsections (1), (2) and (3) do not apply if:

                     (a)  the person’s social security payment is disability support pension; and

                     (b)  the person has not turned 21.

Note:          The specific requirement for a person who is receiving disability support pension and has not turned 21 is in section 1070F.

1070E  Specific requirement (bereavement allowance, widow B pension and certain parenting payments)

                   If:

                     (a)  the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator C or the Pension PP (Single) Rate Calculator; and

                     (b)  the person is entitled to be paid family tax benefit;

the specific requirement applicable to the social security payment is that either of the following is satisfied:

                     (c)  the person’s maximum Part A rate of family tax benefit does not include rent assistance;

                     (d)  the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit.

1070F  Specific requirement (certain disability support pensions)

             (1)  If:

                     (a)  the person’s social security payment is disability support pension; and

                     (b)  the person has not turned 21; and

                     (c)  the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D;

the specific requirement applicable to the social security payment is that the person comply with subsection (2) or (3).

Person who has not turned 18

             (2)  The person complies with this subsection if:

                     (a)  the person has not turned 18; and

                     (b)  one of the following applies:

                              (i)  the person is a member of a couple and, if the person’s partner is living with the person in their home, the person’s partner is not receiving incentive allowance;

                             (ii)  the person is in disability accommodation;

                            (iii)  the person is independent;

                            (iv)  the person is living away from the person’s parental home because of a medical condition of the person; and

                     (c)  if:

                              (i)  the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and

                     (d)  if:

                              (i)  the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person, or the person’s partner, is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.

Person who has turned 18

             (3)  The person complies with this subsection if:

                     (a)  the person has turned 18; and

                     (b)  one of the following applies:

                              (i)  the person is a member of a couple and, if the person’s partner is living with the person in their home, the person’s partner is not receiving incentive allowance;

                             (ii)  the person is in disability accommodation;

                            (iii)  the person is living away from the person’s parental home permanently or indefinitely; and

                     (c)  if:

                              (i)  the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and

                     (d)  if:

                              (i)  the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person, or the person’s partner, is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.

             (4)  For the purposes of applying the definition of living away from the person’s parental home in subsection (3), a step‑parent or guardian is taken to be a parent.

1070G  Specific requirement (youth allowance)

             (1)  If the rate of the person’s social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the specific requirement applicable to the social security payment is that:

                     (a)  the person:

                              (i)  is independent but is not an accommodated independent person; or

                             (ii)  is not independent and is required to live away from home; and

                     (b)  the person does not have a partner with a rent increased pension; and

                     (c)  if:

                              (i)  the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and

                     (d)  if:

                              (i)  the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person, or the person’s partner, is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.

             (2)  In this section, accommodated independent person and required to live away from home have the same meanings as in Part 3.5.

1070H  Specific requirement (austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance or widow allowance)

             (1)  If the rate of the person’s social security payment is to be calculated in accordance with the Austudy Payment Rate Calculator or Benefit Rate Calculator B, the specific requirement applicable to the social security payment is that set out in subsection (2).

             (2)  The specific requirement is that:

                     (a)  if the person:

                              (i)  is not a member of a couple; and

                             (ii)  is not living away from the principal home of a parent permanently or indefinitely;

                            the person has turned 25; and

                     (b)  the person does not have a partner with a rent increased pension; and

                     (c)  if:

                              (i)  the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and

                     (d)  if:

                              (i)  the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person, or the person’s partner, is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.

             (3)  For the purposes of subparagraph (2)(a)(ii), a step‑parent or guardian is taken to be a parent.

1070J  Specific requirement (certain parenting payments)

                   If the rate of the person’s social security payment is to be calculated in accordance with the Benefit PP (Partnered) Rate Calculator, the specific requirement applicable to the social security payment is that:

                     (a)  the person’s partner is not receiving a rent increased pension; and

                     (b)  if:

                              (i)  the person is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person’s Part A rate of family tax benefit; and

                     (c)  if:

                              (i)  the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and

                             (ii)  the person, or the person’s partner, is entitled to be paid family tax benefit;

                            either of the following is satisfied:

                            (iii)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit does not include rent assistance;

                            (iv)  the person’s, or the person’s partner’s, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person’s, or the person’s partner’s, Part A rate of family tax benefit.


 

Division 3Rate of rent assistance

1070K  Rate depends on social security payment and family situation

                   A person’s rate of rent assistance depends on the person’s social security payment and the person’s family situation.

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

             (1)  The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator A.

             (2)  Using the following table, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. If the person is not a single person sharing accommodation, the person’s maximum rent assistance rate is rate B worked out using column 4 of the table. If the person is a single person sharing accommodation, the person’s maximum rent assistance rate is two‑thirds of rate B.

 

Rate of rent assistance

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate A

Column 4

Rate B

1

Not a member of a couple

$93.20

2

Partnered and partner does not have rent increased pension

$88.00

3

Partnered and partner:

(a) is receiving a social security pension; and

(b) has rent increased pension

Half the rate specified in column 4 of item 2

4

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c)  does not have a dependent child or dependent children

Half the rate specified in column 4 of item 2

5

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c)  has 1 or 2 dependent children

$54.80

6

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c)  has 3 or more dependent children

$62.00

7

Partnered—member of an illness separated couple

$93.20

8

Partnered—member of a respite care couple

$93.20

9

Partnered—member of a temporarily separated couple

$88.00

10

Partnered (partner in gaol)

$93.20

             (3)  Subsections (1) and (2) do not apply if:

                     (a)  the person’s social security payment is disability support pension; and

                     (b)  the person has not turned 21.

Note:          The rate of rent assistance for a person who is receiving disability support pension and has not turned 21 is worked out:

(a)    under section 1070N if the person has not turned 18; and

(b)    under section 1070P if the person has turned 18.

1070M  Rate for bereavement allowance, widow B pension and certain parenting payments

             (1)  The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with Pension Rate Calculator C or the Pension PP (Single) Rate Calculator.

             (2)  Using the following table, calculate rate A for the person using the formula in column 2. This will be the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. If the person is not a single person sharing accommodation, the person’s maximum rent assistance rate is rate B worked out using column 3 of the table. If the person is a single person sharing accommodation, the person’s maximum rent assistance rate is two‑thirds of rate B.

 

Rate of rent assistance

Column 1

Item

Column 2

Rate A

Column 3

Rate B

1

$93.20

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

             (1)  The person’s rate of rent assistance is worked out under this section if:

                     (a)  the person is receiving disability support pension; and

                     (b)  the person has not turned 18; and

                     (c)  the rate of the person’s pension is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D.

             (2)  Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. The person’s maximum rent assistance rate is rate B worked out using column 4 of the table.

 

Rate of rent assistance

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate A

Column 4

Rate B

1

Not a member of a couple and:

(a) in disability accommodation; or

(b) independent

$93.20

2

Partnered and partner does not have rent increased pension

$88.00

3

Partnered and partner:

(a) is receiving a social security pension; and

(b) has rent increased pension

Half the rate specified in column 4 of item 2

4

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c) does not have a dependent child or dependent children

Half the rate specified in column 4 of item 2

5

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c) has 1 or 2 dependent children

$54.80

6

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c) has 3 or more dependent children

$62.00

7

Partnered—member of an illness separated couple

$93.20

8

Partnered—member of a respite care couple

$93.20

9

Partnered—member of a temporarily separated couple

$88.00

10

Partnered (partner in gaol)

$93.20

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

             (1)  The person’s rate of rent assistance is worked out under this section if:

                     (a)  the person is receiving disability support pension; and

                     (b)  the person has turned 18 but has not turned 21; and

                     (c)  the rate of the person’s pension is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D.

             (2)  Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. The person’s maximum rent assistance rate is rate B worked out using column 4 of the table.

 

Rate of rent assistance

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate A

Column 4

Rate B

1

Not a member of a couple and:

(a) in disability accommodation; or

(b) living away from the person’s parental home permanently or indefinitely

$93.20

2

Partnered and partner does not have rent increased pension

$88.00

3

Partnered and partner:

(a) is receiving a social security pension; and

(b) has rent increased pension

Half the rate specified in column 4 of item 2

4

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c) does not have a dependent child or dependent children

Half the rate specified in column 4 of item 2

5

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c) has 1 or 2 dependent children

$54.80

6

Partnered and partner:

(a) is receiving a service pension or income support supplement; and

(b) has rent increased pension; and

(c) has 3 or more dependent children

$62.00

7

Partnered—member of an illness separated couple

$93.20

8

Partnered—member of a respite care couple

$93.20

9

Partnered—member of a temporarily separated couple

$88.00

10

Partnered (partner in gaol)

$93.20

1070Q  Rate for youth allowance, austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance and widow allowance

             (1)  The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the Austudy Payment Rate Calculator or Benefit Rate Calculator B.

             (2)  Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. If the person is not a single person sharing accommodation, the person’s maximum rent assistance rate is rate B worked out using column 4 of the table. If the person is a single person sharing accommodation, the person’s maximum rent assistance rate is two‑thirds of rate B.

 

Rate of rent assistance

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate A

Column 4

Rate B

1

Not a member of a couple

$93.20

2

Partnered—partner does not have rent increased benefit

$88.00

3

Partnered—partner has rent increased benefit

Half the rate specified in column 4 of item 2

4

Partnered—member of an illness separated couple

$93.20

5

Partnered—member of a respite care couple

$93.20

6

Partnered—member of a temporarily separated couple

$88.00

7

Partnered (partner in gaol)

$93.20

1070R  Rate for certain parenting payments

             (1)  The person’s rate of rent assistance is worked out under this section if the rate of the person’s social security payment is to be calculated in accordance with Benefit PP (Partnered) Rate Calculator.

             (2)  Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person’s rate of rent assistance per fortnight but only up to the person’s maximum rent assistance rate. The person’s maximum rent assistance rate is rate B worked out using column 4 of the table.

 

Rate of rent assistance

Column 1

Item

Column 2

Person’s family situation

Column 3

Rate of rent assistance

Column 4

Maximum rate

1

Partnered—partner does not have rent increased benefit

$88.00

2

Partnered—partner has rent increased benefit

Half the rate specified in column 4 of item 1

3

Partnered—member of an illness separated couple

$93.20

4

Partnered—member of a respite care couple

$93.20

5

Partnered—member of a temporarily separated couple

$88.00

6

Partnered (partner in gaol)

$93.20


 

Division 4Certain concepts used in this Part

1070S  Division has effect for purposes of Part

                   This Division has effect for the purposes of this Part.

1070T  Rent threshold amount

             (1)  If the rate of a person’s social security payment is to be calculated in accordance with Pension Rate Calculator C or the Pension PP (Single) Rate Calculator, the person’s rent threshold amount is $82.80.

             (2)  In any other case, a person’s rent threshold amount is worked out in accordance with subsection (3).

             (3)  First, identify which of sections 1070L, 1070N, 1070P, 1070Q and 1070R applies to work out the rate of rent assistance for the person’s social security payment. Next, identify which family situation in the table in that section applies to the person. The person’s rent threshold amount is the amount in the formula in column 3 of the table, in relation to the family situation, that is deducted from fortnightly rent.

Example:    If a person who is not a member of a couple receives an age pension, the person’s rent threshold amount is worked out as follows. First, identify section 1070L as the section applicable to an age pension. Then identify the family situation in item 1 of the table in that section as applicable to the person. Finally, the person’s rent threshold amount is $82.80, being the amount that, in the formula in column 3 of that table, is deducted from the person’s fortnightly rent. Indexation of the $82.80 has been ignored for the purposes of this example.

1070U  Fortnightly rent

                   Fortnightly rent is the fortnightly rent paid or payable by the person whose rate of social security payment is being calculated.

1070V  Rent paid by a member of certain couples

Rent paid by a member of a couple where person’s partner is living with the person in their home

             (1)  If a person is a member of a couple and the person’s partner is living with the person in their home, any rent that the person’s partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person.

Rent paid by a member of an illness separated, respite care couple or temporarily separated couple

             (2)  If a person is a member of an illness separated couple, respite care couple or temporarily separated couple, any rent that the person’s partner pays or is liable to pay in respect of the premises or lodgings occupied by the person is to be treated as paid or payable by the person.

1070W  Partner with a rent increased pension

                   A person has a partner with a rent increased pension if:

                     (a)  the partner is living with the person in their home; and

                     (b)  the partner receives a social security pension, service pension or income support supplement; and

                     (c)  the rate of the pension or supplement is increased to take account of rent paid or payable by the person.

1070X  Partner with a rent increased benefit

Youth Allowance Rate Calculator

             (1)  If the rate of a person’s social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the person’s partner has a rent increased benefit if the partner:

                     (a)  is living with the person in their home; and

                     (b)  either:

                              (i)  is receiving a social security benefit the rate of which is increased to take account of rent; or

                             (ii)  is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.

Note 1:       See also subsections 23(4A) and (4AA).

Note 2:       For designated ABSTUDY payment, see subsection (5).

Benefit Rate Calculator B

             (2)  If the rate of a person’s social security payment is to be calculated in accordance with Benefit Rate Calculator B, the person’s partner has a rent increased benefit if the partner:

                     (a)  is living with the person in their home; and

                     (b)  either:

                              (i)  is receiving a social security benefit the rate of which is increased to take account of rent; or

                             (ii)  is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.

Note 1:       See also subsections 23(4A) and (4AA).

Note 2:       For designated ABSTUDY payment, see subsection (5).

Benefit PP (Partnered) Rate Calculator

             (3)  If the rate of a person’s social security payment is to be calculated in accordance with the Benefit PP (Partnered) Rate Calculator, the person’s partner has a rent increased benefit if the partner:

                     (a)  is living with the person in their home; and

                     (b)  either:

                              (i)  is receiving a social security benefit the rate of which is increased to take account of rent; or

                             (ii)  is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.

Note 1:       See also subsections 23(4A) and (4AA).

Note 2:       For designated ABSTUDY payment, see subsection (5).

Austudy Payment Rate Calculator

             (4)  If the rate of a person’s social security payment is to be calculated in accordance with the Austudy Payment Rate Calculator, the person’s partner has a rent increased benefit if the partner:

                     (a)  is living with the person in their home; and

                     (b)  either:

                              (i)  is receiving a social security benefit the rate of which is increased to take account of rent; or

                             (ii)  is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner’s income.

Note 1:       See also subsections 23(4A) and (4AA).

Note 2:       For designated ABSTUDY payment, see subsection (5).

Designated ABSTUDY payment

             (5)  For the purposes of this section, a designated ABSTUDY payment is a payment under the scheme known as the ABSTUDY scheme:

                     (a)  the rate of which is increased to take account of rent; and

                     (b)  that includes an amount identified as living allowance.


 

Division 5Transitional indexation of rent assistance and rent threshold amounts

1070Y  Indexation of certain amounts for CPI increases before commencement

             (1)  If any of the following (the pre‑indexation amount):

                     (a)  an amount in the table in any of sections 1070L to 1070R as inserted by the Social Security Amendment (Further Simplification) Act 2004 (ignoring this section);

                     (b)  the rent threshold amount in subsection 1070T(1) as so inserted;

would have been different, assuming the pre‑indexation amount had (ignoring subsection 1192(5)) been indexed on 20 September 2003 and 20 March 2004 under Division 2 of Part 3.16 of this Act as amended by that Act, then, for the purposes of this Act, the different amount is taken to have been substituted for the pre‑indexation amount in the table or subsection inserted by that Act.

Note:          As a result of the normal operation of Division 2 of Part 3.16, the amounts will then continue to be indexed in line with CPI increases each 20 September and 20 March.

             (2)  The Minister must arrange for a copy of the tables in sections 1070L to 1070R, and a statement of the rent threshold amount in subsection 1070T(1), as affected by subsection (1) of this section to be published in the Gazette as soon as reasonably practicable after the commencement of this Part.


 

Part 3.9Seniors Health Card Taxable Income Test Calculator

  

1071  Seniors Health Card Taxable Income Test Calculator

                   The Seniors Health Card Taxable Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the seniors health card taxable income test for the purposes of this Act.

Seniors Health Card Taxable Income Test Calculator

Satisfying the seniors health card taxable income test

      1071‑1  This is how to work out whether a person satisfies the seniors health card taxable income test at a particular time (the test time).

Method statement

Step 1.   Work out the amount of the person’s adjusted taxable income for the reference tax year.

Step 2.   Work out the person’s seniors health card taxable income limit using point 1071‑12.

Step 3.   Work out whether the person’s adjusted taxable income for the reference tax year exceeds the seniors health card taxable income limit.

Step 4.   If the person’s adjusted taxable income for the reference tax year is less than the person’s seniors health card taxable income limit, the person satisfies the seniors health card taxable income test.

Step 5.   If the person’s adjusted taxable income for the reference tax year is equal to or exceeds the person’s seniors health card taxable income limit, the person does not satisfy the seniors health card taxable income test.

Reference tax year

1071‑2(1)  In the ordinary case, a person’s reference tax year is:

                     (a)  if the person has received a notice of assessment of his or her taxable income for the tax year immediately preceding the tax year in which the test time occurred—that immediately preceding tax year; or

                     (b)  otherwise—the tax year immediately preceding the tax year applicable under paragraph (a).

             (2)  However, if the person has informed the Secretary in writing that the person wishes to have his or her entitlement to a seniors health card determined by reference to his or her adjusted taxable income for the tax year in which the test time occurred (the current tax year), the person’s reference tax year is the current tax year.

Adjusted taxable income

      1071‑3  For the purposes of this Part, a person’s adjusted taxable income for a particular tax year is the sum of the following amounts (income components):

                     (a)  the person’s taxable income for that year;

                     (b)  the person’s fringe benefits value for that year;

                     (c)  the person’s target foreign income for that year;

                     (d)  the person’s total net investment loss (within the meaning of the Income Tax Assessment Act 1997) for that year;

                     (e)  the person’s reportable superannuation contributions (within the meaning of the Income Tax Assessment Act 1997) for that year.

Note 1:       For taxable income see subsection 23(1) and point 1071‑4.

Note 2:       For fringe benefits value see point 1071‑6.

Note 3:       For target foreign income see subsection 10A(2) and point 1071‑7.

Taxable income

      1071‑4  For the purposes of this Part, a person’s taxable income for a particular tax year is:

                     (a)  the person’s assessed taxable income for that year; or

                     (b)  if the person does not have an assessed taxable income for that year—the person’s accepted estimate of taxable income for that year.

Assessed taxable income

      1071‑5  For the purposes of this Part, a person’s assessed taxable income for a particular tax year at a particular time is the most recent of:

                     (a)  if, at that time, the Commissioner of Taxation has made an assessment or an amended assessment of that taxable income—that taxable income according to the assessment or amended assessment; or

                     (b)  if, at that time, a tribunal has amended an assessment or an amended assessment made by the Commissioner—that taxable income according to the amendment made by the tribunal; or

                     (c)  if, at that time, a court has amended an assessment or an amended assessment made by the Commissioner or an amended assessment made by a tribunal—that taxable income according to the amendment made by the court.

Fringe benefits value

      1071‑6  For the purposes of this Part, a person’s fringe benefits value for a particular tax year is the person’s accepted estimate of the amount by which the total of the assessable fringe benefits received or to be received by the person in the tax year exceeds $1,000.

Note:          For assessable fringe benefit see subsection 10A(2) and Part 3.12A.

Target foreign income

      1071‑7  For the purposes of this Part, a person’s target foreign income for a particular tax year is the person’s accepted estimate of the amount of that income for that year.

Total net investment loss

      1071‑8  For the purposes of this Part, a person’s total net investment loss for a particular tax year is the person’s accepted estimate of the amount of that loss for that year.

Accepted estimate

      1071‑9  For the purposes of this Part, a person’s accepted estimate of an income component for a particular tax year is that income component according to the most recent notice given by the person to the Secretary under point 1071‑10 and accepted by the Secretary for the purposes of this Part.

Notice estimating income component

1071‑10(1) A person may give the Secretary a notice, in a form approved by the Secretary, setting out the person’s estimate of an income component of the person for a tax year.

             (2)  The notice is to contain, or be accompanied by, such information as is required by the form to be contained in it or to accompany it, as the case may be.

             (3)  The Secretary is to accept a notice only if the Secretary is satisfied that the estimate is reasonable.

Adjusted taxable income of members of couples

    1071‑11  If a person is a member of a couple, add the couple’s adjusted taxable incomes for the reference tax year and divide by 2 to work out the amount of the person’s adjusted taxable income for the reference tax year.

Seniors health card taxable income limit

    1071‑12  A person’s seniors health card taxable income limit is worked out using the Seniors Health Card Taxable Income Limit Table. Work out which family situation in the table applies to the person. The person’s seniors health card taxable income limit is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each dependent child of the person.

 

Seniors Health Card Taxable Income Limit Table

Column 1

Item

Column 2

Person’s family situation

Column 3

Amount per year

Column 4

Additional dependent child

Amount per year

1

Not member of couple

$50,000

$639.60

2

Partnered

$40,000

$639.60

3

Member of illness separated couple

$50,000

$639.60

4

Member of respite care couple

$50,000

$639.60

5

Partnered (partner in gaol)

$50,000

$639.60


 

Part 3.9AHealth Care Card Income Test Calculator

  

1071A  Health care card income test

                   The Health Care Card Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the health care card income test for the purposes of Division 3 of Part 2A.1.

Health Care Card Income Test Calculator

Satisfying the health care card income test: persons claiming a card

   1071A‑1  This is how to work out whether a person claiming a health care card satisfies the health care card income test on the day on which the person claims the card, whether or not the person is the holder of a health care card at that time.

Method statement

Step 1.   Work out the amount of the person’s ascertained income for the period of 8 weeks ending on the day on which the person lodged the claim.

Step 2.   Work out the amount of the person’s allowable income for the period.

Step 3.   If the person’s ascertained income for the period is less than the person’s allowable income for the period, the person satisfies the health care card income test.

Step 4.   If the person’s ascertained income for the period equals or exceeds the person’s allowable income for the period, the person does not satisfy the health care card income test.

Satisfying the health care card income test: cardholders

   1071A‑2  This is how to work out whether a person who holds a health care card satisfies the health care card income test at a particular time where there has been a change in circumstances.

Method statement

Step 1.   Work out the amount of the person’s ascertained income for the period of 8 weeks ending on the day on which the change of circumstances occurred.

Step 2.   Work out the amount of the person’s allowable income for the period.

Step 3.   If the person’s ascertained income for the period is less than 125% of the person’s allowable income for that period, the person satisfies the health care card income test.

Step 4.   If the person’s ascertained income for the period is 125% or more of the person’s allowable income for that period, the person does not satisfy the health care card income test.

Cessation of dependency

   1071A‑3  For the purposes of point 1071A‑2, if a person (the first person) ceases to be a dependant of another person who is the holder of a health care card:

                     (a)  the fact that the first person has so ceased is to be disregarded for a period of 4 weeks commencing on the day on which the first person so ceased; and

                     (b)  if, at the end of the period, the first person has not become again a dependant of that other person, the first person is taken to have ceased to be a dependant of the other person at the expiration of that period of 4 weeks.

Definitions

   1071A‑4  In this Part:

allowable income, in relation to any period of 8 weeks, means:

                     (a)  in relation to a person who had a dependant or dependants on the last day of the period—the amount worked out by multiplying by 8, or such other number as is prescribed, the aggregate of:

                              (i)  the amount of the weekly rate of income that would, on the last day of the period, be sufficient to prevent both members of a one‑income couple from receiving newstart allowance; and

                             (ii)  $20, or such other amount as is prescribed; and

                            (iii)  an amount worked out by multiplying $34, or such higher amount as is prescribed, by the number of the dependants of the person on the last day of the period; or

                     (b)  in relation to a person who had no dependants on the last day of the period—the amount worked out by multiplying by 8, or such other number as is prescribed, an amount equal to 60%, or such other percentage as is prescribed, of the aggregate of the amount worked out under subparagraph (a)(i) and the amount referred to in subparagraph (a)(ii) if paragraph (a) had applied to the person.

ascertained income, in relation to a period, means:

                     (a)  in relation to a person who is not a member of a couple—the income of the person in respect of that period; and

                     (b)  in relation to a person who is a member of a couple—the income of the person and his or her partner in respect of that period.

exceptional circumstances relief payment means exceptional circumstances relief payment under the Farm Household Support Act 1992.

farm help income support means farm help income support under the Farm Household Support Act 1992.

income, in relation to a person, means ordinary income and, to the extent that they are not ordinary income, includes:

                    (aa)  payments of a social security pension or a social security benefit; and

                     (a)  if the person is receiving a social security pension or benefit—the person’s maintenance income (if any) within the meaning of the Family Assistance Act; and

                     (b)  payments of a pension under the Veterans’ Entitlements Act; and

                     (c)  payments of a pension payable by a foreign country, being a pension that, in the opinion of the Secretary, is similar in character to a pension referred to in paragraph (b); and

                    (ca)  payments of income support supplement; and

                   (cb)  a payment under Part VIIAB (DFISA) of the Veterans’ Entitlements Act (including a payment made under regulations made under that Part); and

                     (d)  payments under the scheme known as the New Enterprise Incentive Scheme; and

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

                      (f)  instalments of parental leave pay; and

                     (g)  dad and partner pay.

   1071A‑5  If a weekly rate of income referred to in subparagraph (a)(i) of the definition of allowable income in point 1071A‑4 or an amount worked out under paragraph (b) of that definition includes an amount of cents, the amount of that weekly rate is, for the purposes of that definition, increased to the nearest whole dollar.

   1071A‑6  A couple is a one‑income couple for the purposes of point 1071A‑4 if only one member of the couple is receiving income.


 

Part 3.10General provisions relating to the ordinary income test

Division 1Ordinary income concept

1072  General meaning of ordinary income

                   A reference in this Act to a person’s ordinary income for a period is a reference to the person’s gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A.

Note 1:       For ordinary income see subsection 8(1).

Note 2:       For other provisions affecting the amount of a person’s ordinary income see section 1073AA (work bonus), sections 1074 and 1075 (business income), sections 1076 to 1084 (deemed income from financial assets) and sections 1095 to 1099DAA (income from income streams).

1073  Certain amounts taken to be received over 12 months

             (1)  Subject to points 1067G‑H5 to 1067G‑H20 (inclusive), 1067L‑D4 to 1067L‑D16 (inclusive), 1068‑G7AA to 1068‑G7AR (inclusive), 1068A‑E2 to 1068A‑E12 (inclusive) and 1068B‑D7 to 1068B‑D18 (inclusive), if a person receives, whether before or after the commencement of this section, an amount that:

                     (a)  is not income within the meaning of Division 1B or 1C of this Part; and

                     (b)  is not:

                              (i)  income in the form of periodic payments; or

                             (ii)  ordinary income from remunerative work undertaken by the person; or

                            (iii)  an exempt lump sum.

the person is, for the purposes of this Act, taken to receive one fifty‑second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.

             (2)  Subsection (1) applies to a person who has claimed one of the following allowances:

                     (a)  newstart allowance;

                     (b)  sickness allowance;

                     (c)  youth allowance;

                     (d)  widow allowance;

                     (e)  partner allowance;

                      (f)  mature age allowance under Part 2.12B;

even if the person:

                     (g)  has to serve an ordinary waiting period or a liquid assets test waiting period in respect of the allowance claimed; or

                     (h)  is subject to an income maintenance period in respect of the allowance claimed; or

                      (i)  is subject to a seasonal work preclusion period;

during the period of 12 months referred to in subsection (1).


 

Division 1AAAWork bonus

1073AA  Work bonus

             (1)  This section applies to a person if:

                     (a)  the person’s rate of social security pension is calculated in accordance with Pension Rate Calculator A at the end of section 1064 or Pension Rate Calculator C at the end of section 1066; and

                     (b)  the person has reached pension age.

Note:          For pension age see subsections 23(5A), (5B), (5C) and (5D).

Employment income greater than or equal to income concession amount

             (2)  If the person’s employment income for an instalment period is greater than or equal to the income concession amount for that period, then, for the purposes of Module E of that Rate Calculator, the amount of the person’s employment income for that period is reduced by an amount equal to the income concession amount.

Example 1: David earns $2,250 of employment income in an instalment period of 14 days. David’s rate of social security pension for that period is greater than nil.

                   David’s employment income for that period is reduced by $250, leaving David $2,000 of employment income for that period.

Example 2: Amy earns $1,000 of employment income in an instalment period of 14 days. Amy’s rate of social security pension for that period is greater than nil.

                   Amy’s employment income for that period is reduced by $250, leaving Amy $750 of employment income for that period.

             (3)  If the person’s unused concession balance (see section 1073AB) is greater than or equal to the amount (the current amount) of the person’s employment income that remains after applying subsection (2) of this section in relation to an instalment period:

                     (a)  for the purposes of Module E of that Rate Calculator, the person’s employment income for that period is further reduced to nil; and

                     (b)  if the person’s rate of social security pension for that period is greater than nil—the person’s unused concession balance is reduced by an amount equal to the current amount.

Example 1: To continue example 1 in subsection (2), assume David’s unused concession balance is $2,000. The current amount is $2,000.

                   David’s employment income for that period is further reduced to nil.

                   David’s unused concession balance is now nil.

Example 2: To continue example 2 in subsection (2), assume Amy’s unused concession balance is $1,600. The current amount is $750.

                   Amy’s employment income for that period is further reduced to nil.

                   Amy’s unused concession balance is now $850.

             (4)  If the person’s unused concession balance (see section 1073AB) is greater than nil but less than the amount of the person’s employment income that remains after applying subsection (2) of this section in relation to an instalment period:

                     (a)  for the purposes of Module E of that Rate Calculator, the person’s employment income for that period is further reduced by an amount equal to that unused concession balance; and

                     (b)  if the person’s rate of social security pension for that period is greater than nil—the person’s unused concession balance is reduced to nil.

Example:    Bill earns $1,250 of employment income in an instalment period of 14 days. Bill’s rate of social security pension for that period is greater than nil.

                   Under subsection (2), Bill’s employment income for that period is reduced by $250, leaving Bill $1,000 of employment income for that period.

                   Assume Bill’s unused concession balance is $800.

                   Under subsection (4), Bill’s employment income for that period is further reduced by $800 leaving Bill $200 of employment income for that period.

                   Bill’s unused concession balance is now nil.

Employment income less than income concession amount

          (4A)  If the person has employment income for an instalment period but that income is less than the income concession amount for that period:

                     (a)  for the purposes of Module E of that Rate Calculator, the person’s employment income for that period is reduced to nil; and

                     (b)  if the person’s rate of social security pension for that period is greater than nil—the person’s unused concession balance (see section 1073AB) is increased, subject to subsection 1073AB(2), by an amount equal to the difference between that income concession amount and that employment income (before it was reduced).

Example:    Emma earns $100 of employment income in an instalment period of 14 days. Emma’s rate of social security pension for that period is greater than nil.

                   Emma’s employment income for that period is reduced to nil.

                   Emma’s unused concession balance is increased by $150.

No employment income

          (4B)  If:

                     (a)  the person has no employment income for an instalment period; and

                     (b)  the person’s rate of social security pension for that period is greater than nil;

the person’s unused concession balance (see section 1073AB) is increased, subject to subsection 1073AB(2), by an amount equal to the income concession amount for that period.

Definition

          (4C)  The income concession amount is:

                     (a)  for an instalment period of 14 days—$250; and

                     (b)  for an instalment period of less than 14 days—the amount worked out using the following formula:

Interpretation

             (5)  For the purposes of this section, a person’s employment income for an instalment period includes an amount that is taken to have been earned, derived or received over that period because of subsection 1073A(1).

             (6)  If the person is a member of a couple, apply this section in relation to the person, and to the person’s partner, before applying point 1064‑E2 or point 1066‑E2 (whichever is relevant).

             (7)  In working out a person’s employment income for the purposes of this section, disregard subsection 8(1B).

             (8)  If:

                     (a)  the person is a member of a couple; and

                     (b)  the person’s partner’s employment income (within the meaning of section 46AB of the Veterans’ Entitlements Act 1986) is reduced by one or more amounts (each of which is a reduction amount) under section 46AA of that Act;

then, in applying point 1064‑E2 or point 1066‑E2 (whichever is relevant), the ordinary income of the person’s partner is to be reduced by an amount equal to the total of the reduction amounts.

1073AB  Unused concession balance

Initial unused concession balance of nil

             (1)  A person has an unused concession balance of nil on the first day that is after 30 June 2011 and is a day on which section 1073AA applies to the person.

Maximum unused concession balance

             (2)  If, apart from this subsection, the person’s unused concession balance would exceed $6,500, that balance is instead taken to be $6,500.

Example:    John has an unused concession balance of $6,400. John earns $50 of employment income in an instalment period of 14 days.

Instead of John’s unused concession balance increasing to $6,600 under subsection 1073AA(4A), John’s unused concession balance increases to $6,500.

Effect of ceasing to receive social security pension

             (3)  If the person ceases to receive the social security pension referred to in paragraph 1073AA(1)(a), the person retains the person’s unused concession balance immediately before that cessation.

Note:          If section 1073AA applies to the person again, the person’s unused concession balance will be that retained balance.


 

Division 1AAEmployment income attribution rules

1073A  Employment income attribution over a period for social security pensioners

             (1)  Employment income:

                     (a)  that is a lump sum amount either:

                              (i)  in respect of a period greater than a fortnight; or

                             (ii)  resulting from remunerative work although not in respect of any particular period; and

                     (b)  that is earned, derived or received, or is taken to have been earned, derived or received, by a person:

                              (i)  who is receiving a social security pension; and

                             (ii)  whose rate of payment of that pension is worked out with regard to the income test module of a rate calculator in this Chapter;

is to be taken to have been earned, derived or received over such period, not exceeding 52 weeks, as the Secretary determines.

             (2)  The person’s employment income for the period determined by the Secretary is to be reduced to a fortnightly rate rounded to the nearest cent (rounding 0.5 cents downwards).

1073B  Daily attribution of employment income

             (1)  If:

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

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

                     (d)  the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person;

the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period.

             (2)  If a person has reached pension age and is receiving a social security benefit, subsection (1) does not apply to the person, to the extent that it relates to that benefit.

Note 1:       Subsection (1) applies to a person who has not reached pension age and is receiving a social security benefit.

Note 2:       For pension age see subsections 23(5A), (5B), (5C) and (5D).

1073C  Fortnightly or yearly expression of attributed employment income

                   If, in accordance with the operation of section 1073B, a person is taken to earn, derive or receive a particular amount of employment income on each day in an instalment period:

                     (a)  the rate of the person’s employment income on a fortnightly basis for that day may be worked out by multiplying that amount by 14; and

                     (b)  the rate of the person’s employment income on a yearly basis for that day may be worked out by multiplying that amount by 364.


 

Division 1ABWorking credit accrual and depletion rules and their consequences

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

                   The rules in this Division apply to a person (a working credit participant):

                     (a)  who is receiving a social security pension or a social security benefit; and

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

                     (c)  who has not reached pension age; and

                     (d)  to whom the student income bank does not apply.

1073E  Opening balance

Basic opening balance rule

             (1)  Subject to this section, each working credit participant has, on becoming a working credit participant, a working credit opening balance of nil.

Opening balance following cancellation of social security pension or benefit

             (2)  If:

                     (a)  a person ceases to be a working credit participant or a person to whom the student income bank applies because of a determination to cancel, or an automatic cancellation of, the person’s social security pension or social security benefit; and

                     (b)  the person had a working credit balance or a student income bank balance greater than nil immediately before the date of effect of the determination or cancellation; and

                     (c)  the person makes, or is taken to have made, a new claim for a social security pension or social security benefit; and

                     (d)  the Secretary determines that the new claim is to be granted with effect from a day within 12 months after the date of effect mentioned in paragraph (b); and

                     (e)  the person becomes a working credit participant on a day (the participation day), being either the day with effect from which the new claim is granted or a day following that day;

the working credit balance mentioned in paragraph (b), or the student income bank balance mentioned in that paragraph to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.

Opening balance following suspension of social security pension or benefit

             (3)  If:

                     (a)  a person ceases to be a working credit participant because of a determination to suspend the person’s social security pension or social security benefit; and

                     (b)  the person had a working credit balance greater than nil immediately before the date of effect of the determination; and

                     (c)  within 12 months after the date of effect of the determination, the payment of the person’s pension or benefit is resumed; and

                     (d)  the person becomes a working credit participant on the day with effect from which the person’s pension or benefit is resumed;

the working credit balance mentioned in paragraph (b) becomes the opening balance of the working credit applicable to the person on the day mentioned in paragraph (d).

Opening balance following suspension and subsequent cancellation of social security pension or benefit

             (4)  If:

                     (a)  a person ceases to be a working credit participant or a person to whom the student income bank applies because of a determination to suspend the person’s social security pension or social security benefit; and

                     (b)  while the person’s pension or benefit is suspended there is a determination to cancel the person’s pension or benefit; and

                     (c)  the person had a working credit balance or a student income bank balance greater than nil immediately before the date of effect of the suspension determination; and

                     (d)  the person makes, or is taken to have made, a new claim for a social security pension or social security benefit; and

                     (e)  the Secretary determines that the new claim is to be granted with effect from a day within 12 months after the date of effect mentioned in paragraph (c); and

                      (f)  the person becomes a working credit participant on a day (the participation day), being either the day with effect from which the new claim is granted or a day following that day;

the working credit balance mentioned in paragraph (c), or the student income bank balance mentioned in that paragraph to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.

Opening balance following cessation of full‑time study by youth allowance recipient

             (5)  If:

                     (a)  a person is receiving youth allowance and is undertaking full‑time study; and

                     (b)  the person ceases to undertake full‑time study; and

                     (c)  either because of a determination made as a result of that cessation or, if no determination is necessary, because of the cessation itself, the person, on a day (the participation day):

                              (i)  ceases to be a person to whom the student income bank set out in Module J of the Youth Allowance Rate Calculator applies; and

                             (ii)  becomes a working credit participant; and

                     (d)  the person had a student income bank balance greater than nil immediately before the participation day;

the student income bank balance mentioned in paragraph (d), to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.

Opening balance following cessation as a new apprentice by youth allowance recipient

          (5A)  If:

                     (a)  a person is receiving youth allowance and is a new apprentice; and

                     (b)  the person ceases to be a new apprentice; and

                     (c)  either because of a determination made as a result of that cessation or, if no determination is necessary, because of the cessation itself, the person, on a day (the participation day):

                              (i)  ceases to be a person to whom the student income bank set out in Module J of the Youth Allowance Rate Calculator applies; and

                             (ii)  becomes a working credit participant; and

                     (d)  the person had a student income bank balance greater than nil immediately before the participation day;

the student income bank balance mentioned in paragraph (d), to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.

Opening balance following cessation of ABSTUDY payment

             (6)  If:

                     (a)  a person to whom the income bank under the ABSTUDY scheme applies stops being such a person; and

                     (b)  the person becomes a working credit participant on a day (the participation day) within 12 months after so stopping; and

                     (c)  immediately before so stopping, the person had a credit balance greater than nil under the scheme;

the credit balance, to the extent that it does not exceed the threshold amount (see subsection (7)), becomes the opening balance of the working credit applicable to the person on the participation day.

Threshold amount

             (7)  In this section:

threshold amount means:

                     (a)  if, on the participation day, the person is receiving youth allowance, the person is not undertaking full‑time study and the person is not a new apprentice—$3,500; or

                     (b)  in any other case—$1,000.

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

                   This section determines, in respect of each working credit participant who is receiving a social security benefit, whether, for each day in an instalment period:

                     (a)  there is an accrual to the participant’s working credit balance; or

                     (b)  the participant’s working credit balance is unaffected; or

                     (c)  the participant’s working credit balance is depleted;

and, if there is an accrual to, or a depletion from, the participant’s working credit balance, the amount of that accrual or depletion.

Method statement

Step 1.   Work out the amount of the participant’s employment income earned, derived or received on the day. This could be a nil amount or it could be an amount that is taken, under section 1073B, to have been earned, derived or received on the day.

Step 2.   Multiply the amount determined under step 1 by 14. This is the participant’s rate of employment income on a fortnightly basis for the day.

Step 3.   Add to the participant’s rate of employment income on a fortnightly basis for the day the participant’s rate of any other ordinary income on a fortnightly basis for the day. This is the participant’s rate of total ordinary income on a fortnightly basis for the day.

Step 4.   If the participant’s rate of total ordinary income on a fortnightly basis for the day is less than $48, there is an accrual to the participant’s working credit balance for the day of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is:

               (a)     if the participant became a working credit participant on a day under subsection 1073E(2), (3), (4), (5), (5A) or (6) and on that day the participant was receiving youth allowance, the participant was not undertaking full‑time study and the participant was not a new apprentice—$3,500; or

              (b)     in any other case—$1,000.

Step 5.   If the participant’s rate of total ordinary income on a fortnightly basis for the day is at least $48 but does not exceed the ordinary income free area applicable to the participant for the day under the income test module of the appropriate rate calculator, the participant’s working credit balance for the day is neither increased nor reduced.

Step 6.   If the participant’s rate of total ordinary income on a fortnightly basis for the day is at least $48 and exceeds the participant’s applicable ordinary income free area for the day, the participant’s working credit balance, if it is greater than nil on the day, is depleted on that day by the least of:

               (a)     the amount of employment income determined under step 1; or

              (b)     one fourteenth of the amount by which the participant’s rate of total ordinary income on a fortnightly basis exceeds the participant’s applicable ordinary income free area; or

               (c)     the participant’s available working credit balance.

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

                   If, under section 1073F, the working credit balance of a working credit participant is depleted on a particular day, the participant’s rate of ordinary income on a fortnightly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 6 of the method statement, multiplied by 14.

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

                   This section determines, in respect of each working credit participant who is receiving a social security pension, whether, for each day in an instalment period:

                     (a)  there is an accrual to the participant’s working credit balance; or

                     (b)  the participant’s working credit balance is unaffected; or

                     (c)  the participant’s working credit balance is depleted;

and, if there is an accrual to, or a depletion from, the participant’s working credit balance, the amount of that accrual or depletion.

Method statement

Step 1.   Work out the amount of the participant’s employment income earned, derived or received on the day. This could be a nil amount or it could be an amount that is taken, under section 1073B, to have been earned, derived or received on the day.

Step 2.   Multiply the amount determined under step 1 by 364. This is the participant’s rate of employment income on a yearly basis for the day.

Step 3.   Add to the participant’s rate of employment income on a yearly basis for the day the participant’s rate of any other ordinary income on a yearly basis for the day. This is the participant’s rate of total ordinary income on a yearly basis for the day.

Step 4.   Divide the participant’s rate of total ordinary income on a yearly basis for the day by 26. This is the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day.

Step 5.   Divide the yearly ordinary income free area applicable to the participant for the day under the ordinary income test module of the appropriate rate calculator by 26. This is the participant’s applicable ordinary income free area, expressed on a fortnightly basis, for the day.

Step 6.   If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is less than $48, there is an accrual to the participant’s working credit balance, for the day, of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is $1,000.

Step 7.   If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 but does not exceed the participant’s applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant’s working credit balance for the day is neither increased nor reduced.

Step 8.   If the participant’s rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 and exceeds the participant’s applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant’s working credit balance, if it is greater than nil on the day, is depleted on that day by the least of:

               (a)     the amount of employment income determined under step 1; or

              (b)     one fourteenth of the amount by which the participant’s rate of total ordinary income, expressed on a fortnightly basis, exceeds the participant’s applicable ordinary income free area, expressed on that basis; or

               (c)     the participant’s available working credit balance.

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

                   If, under section 1073H, the working credit balance of a working credit participant is depleted on a particular day, the participant’s rate of ordinary income on a yearly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 8 of the method statement, multiplied by 364.

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

             (1)  If:

                     (a)  a person receiving disability support pension, carer payment, youth allowance, newstart allowance or sickness allowance is a working credit participant; and

                     (b)  either:

                              (i)  the participant commences to earn, derive or receive, or to be taken to earn, derive or receive, employment income; or

                             (ii)  there is an increase in the employment income that is earned, derived or received, or taken to be earned, derived or received, by the participant; and

                     (c)  the participant has a working credit balance greater than nil at the start of the instalment period of the participant in which the commencement or increase occurs; and

                     (d)  but for the commencement or increase, the participant would have continued to be qualified for the payment mentioned in paragraph (a) until the earlier of:

                              (i)  a day determined under Division 8 or 9 of Part 3 of the Administration Act; or

                             (ii)  the day on which the participant’s working credit balance is reduced to nil;

the participant is to be treated as if he or she had continued to be so qualified until the earlier of the days determined as referred to in subparagraphs (d)(i) and (ii).

             (2)  If:

                     (a)  a woman receiving wife pension is a working credit participant; and

                     (b)  the partner of the participant ceases to receive age pension or disability support pension on and from a day (the cessation day); and

                     (c)  the partner ceases to receive that pension:

                              (i)  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

                             (ii)  after any working credit balance of the partner is reduced to nil; and

                     (d)  as a result of the partner’s so ceasing to receive that pension, the participant ceases to be qualified for wife pension on and from the cessation day; and

                     (e)  the participant has a working credit balance greater than nil at the start of the instalment period of the participant in which the cessation day occurs; and

                      (f)  but for the employment income, or combined income, referred to in paragraph (c), the participant would have continued to be qualified for wife pension until the earlier of:

                              (i)  a day determined under Division 8 or 9 of Part 3 of the Administration Act; or

                             (ii)  the day on which the participant’s working credit balance is reduced to nil;

the participant is to be treated as if she had continued to be so qualified until the earlier of the days referred to in subparagraphs (f)(i) and (ii).


 

Division 1ABusiness income

1074  Ordinary income from a business—treatment of trading stock

             (1)  If:

                     (a)  a person carries on a business; and

                     (b)  the value of all the trading stock on hand at the end of a tax year is greater than the value of all the trading stock on hand at the beginning of that tax year;

the person’s ordinary income for that tax year in the form of profits from the business is to include the amount of the difference in values.

             (2)  If:

                     (a)  a person carries on a business; and

                     (b)  the value of all the trading stock on hand at the end of a tax year is less than the value of all the trading stock on hand at the beginning of that tax year;

the person’s ordinary income for that tax year in the form of profits from the business is to be reduced by the amount of the difference in values.

Note:          Different provisions apply when working out a person’s ordinary income from a farm to find whether:

(a)    the person satisfies the farmers’ income test for the purposes of Part 3.14A (see subparagraph 1185K(3)(a)(ii) and paragraph 1185K(3)(c)); or

(b)    the person satisfies the sugarcane farmers’ income test for the purposes of Part 3.14B (see subparagraph 1185Y(3)(a)(ii) and paragraph 1185Y(3)(c)).

1075  Permissible reductions of business income

             (1)  Subject to subsection (2), if a person carries on a business, the person’s ordinary income from the business is to be reduced by:

                     (a)  losses and outgoings that relate to the business and are allowable deductions for the purposes of section 8‑1 of the Income Tax Assessment Act 1997; and

                     (b)  amounts that relate to the business and can be deducted in respect of plant (within the meaning of the Income Tax Assessment Act 1997) under Division 40 of that Act; and

                     (c)  amounts that relate to the business and are allowable deductions under section 290‑60 of the Income Tax Assessment Act 1997.

Note:          Different provisions apply when working out a person’s ordinary income from a farm to find whether:

(a)    the person satisfies the farmers’ income test for the purposes of Part 3.14A (see subparagraph 1185K(3)(a)(ii) and paragraph 1185K(3)(c)); or

(b)    the person satisfies the sugarcane farmers’ income test for the purposes of Part 3.14B (see subparagraph 1185Y(3)(a)(ii) and paragraph 1185Y(3)(c)).

             (2)  If, under Division 1B, a person is taken to receive ordinary income on a financial investment, that ordinary income is not to be reduced by the amount of any expenses incurred by the person because of that investment.

Note:          For financial investment see subsection 9(1).

             (3)  If a person’s ordinary income for a period includes rental income from a property that is not business income, the person’s ordinary income from that property is to be reduced by losses and outgoings that relate to the property and are allowable deductions for the purposes of section 8‑1 of the Income Tax Assessment Act 1997 for that period.

             (4)  If the amount of the allowable deductions relating to a property for a period under section 8‑1 of the Income Tax Assessment Act 1997 exceeds the amount of the rental income from the property for that period, the amount of the ordinary income from the property for that period is taken to be nil.


 

Division 1BDeemed income from financial assets

1076  Deemed income from financial assets—persons other than members of couples

             (1)  This section applies to a person who is not a member of a couple.

Note:          The whole of Division 1B does not apply when working out a person’s ordinary income to find whether:

(a)    the person satisfies the farmers’ income test for the purposes of Part 3.14A (see paragraphs 1185K(2)(a) and (3)(a)); or

(b)    the person satisfies the sugarcane farmers’ income test for the purposes of Part 3.14B (see paragraphs 1185Y(2)(a) and (3)(a)).

             (2)  A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.

             (3)  If the total value of the person’s financial assets is equal to or less than the person’s deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.

          (3A)  If the total value of the person’s financial assets exceeds the person’s deeming threshold, the ordinary income that the person is taken to receive is worked out as follows:

Method statement

Step 1.   Multiply the person’s deeming threshold by the below threshold rate.

                   Note 1:          For deeming threshold see subsection 1081(1).

                   Note 2:          For below threshold rate see subsection 1082(1).

Step 2.   Subtract the deeming threshold from the total value of the person’s financial assets.

                   Note:             For deeming threshold see subsection 1081(1).

Step 3.   Multiply the remainder worked out at Step 2 by the above threshold rate.

                   Note:             For above threshold rate see subsection 1082(2).

Step 4.   The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the person is taken to receive per year on the financial assets.

             (4)  The person is taken, for the purposes of this Act, to receive one fifty‑second of the amount calculated under subsection (3) or (3A) as ordinary income of the person during each week.

1077  Deemed income from financial assets—members of pensioner couples

             (1)  This section applies to the members of a pensioner couple.

Note:          The whole of Division 1B does not apply when working out a person’s ordinary income to find whether:

(a)    the person satisfies the farmers’ income test for the purposes of Part 3.14A (see paragraphs 1185K(2)(a) and (3)(a)); or

(b)    the person satisfies the sugarcane farmers’ income test for the purposes of Part 3.14B (see paragraphs 1185Y(2)(a) and (3)(a)).

             (2)  If one or both of the members of a couple have financial assets, the members of the couple are taken, for the purposes of this Act, to receive together ordinary income on those assets in accordance with this section.

             (3)  If the total value of the couple’s financial assets is equal to or less than the couple’s deeming threshold, the ordinary income the couple is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.

          (3A)  If the total value of the couple’s financial assets exceeds the couple’s deeming threshold, the ordinary income that the couple is taken to receive is worked out as follows:

Method statement

Step 1.   Multiply the couple’s deeming threshold by the below threshold rate.

                   Note 1:          For deeming threshold see subsection 1081(2).

                   Note 2:          For below threshold rate see subsection 1082(1).

Step 2.   Subtract the deeming threshold from the total value of the couple’s financial assets.

                   Note:             For deeming threshold see subsection 1081(2).

Step 3.   Multiply the remainder worked out at Step 2 by the above threshold rate.

                   Note:             For above threshold rate see subsection 1082(2).

Step 4.   The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the couple is taken to receive per year on the financial assets.

             (4)  Each member of the couple is taken, for the purposes of this Act, to receive, as ordinary income during each week, an amount worked out under the following formula:

1078  Deemed income from financial assets—members of non‑pensioner couples

             (1)  This section applies to a person who is a member of a couple, other than a pensioner couple.

Note:          The whole of Division 1B does not apply when working out a person’s ordinary income to find whether:

(a)    the person satisfies the farmers’ income test for the purposes of Part 3.14A (see paragraphs 1185K(2)(a) and (3)(a)); or

(b)    the person satisfies the sugarcane farmers’ income test for the purposes of Part 3.14B (see paragraphs 1185Y(2)(a) and (3)(a)).

             (2)  A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section.

             (3)  If the total value of the person’s financial assets is equal to or less than the person’s deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate.

          (3A)  If the total value of the person’s financial assets exceeds the person’s deeming threshold, the ordinary income that the person is taken to receive is worked out as follows:

Method statement

Step 1.   Multiply the person’s deeming threshold by the below threshold rate.

                   Note 1:          For deeming threshold see subsection 1081(3).

                   Note 2:          For below threshold rate see subsection 1082(1).

Step 2.   Subtract the deeming threshold from the total value of the person’s financial assets.

                   Note:             For deeming threshold see subsection 1081(3).

Step 3.   Multiply the remainder worked out at Step 2 by the above threshold rate.

                   Note:             For above threshold rate see subsection 1082(2).

Step 4.   The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the person is taken to receive per year on the financial assets.

             (4)  The person is taken, for the purposes of this Act, to receive one fifty‑second of the amount calculated under subsection (3) or (3A) as ordinary income of the person during each week.

1081  Deeming threshold

             (1)  The deeming threshold for a person who is not a member of a couple is $30,000.

             (2)  The deeming threshold for a pensioner couple is $50,000.

             (3)  The deeming threshold for a member of a couple, other than a pensioner couple, is an amount equal to one‑half of the amount fixed by subsection (2).

Note:          The amounts fixed by subsections (1) and (2) are indexed every 1 July. See sections 1190‑1192.

1082  Below threshold rate, above threshold rate

             (1)  For the purposes of this Division, the below threshold rate is the rate determined, by legislative instrument, by the Minister to be the below threshold rate for the purposes of this Division.

             (2)  For the purposes of this Division, the above threshold rate is the rate determined, by legislative instrument, by the Minister to be the above threshold rate for the purposes of this Division.

             (3)  A rate determined under this section must be in the form of a specified percentage.

1083  Actual return on financial assets not treated as ordinary income

             (1)  Subject to subsection (2), any return on a financial asset that a person actually earns, derives or receives is taken, for the purposes of this Act, not to be ordinary income of the person.

Note:          When working out a person’s ordinary income to find whether the person satisfies the farmers’ income test for the purposes of Part 3.14A or the sugarcane farmers’ income test for the purposes of Part 3.14B, actual returns on financial assets are taken to be ordinary income (see paragraphs 1185K(2)(b) and (3)(b) and 1185Y(2)(b) and (3)(b)).

             (2)  If, because of:

                     (a)  a determination under subsection 1084(1); or

                     (b)  the operation of subsection 1084(2);

a financial investment is not to be regarded as a financial asset for the purposes of section 1076, 1077 or 1078, subsection (1) does not apply to any return on the investment that the person actually earns, derives or receives.

1084  Certain money and financial investments not taken into account

             (1)  The Minister may determine that:

                     (a)  specified financial investments; or

                     (b)  a specified class of financial investments;

are not to be regarded as financial assets for the purposes of section 1076, 1077 or 1078.

             (2)  If a financial investment is an unrealisable asset for the purposes of section 1129, 1130B or 1131, the financial asset is not to be regarded as a financial asset for the purposes of section 1076, 1077 or 1078.

             (3)  A determination under subsection (1):

                     (a)  must be in writing; and

                     (b)  takes effect on the day on which it is made or on such other day (whether earlier or later) as is specified in the determination.

1084A  Valuation and revaluation of certain financial investments

                   The total value of a person’s listed securities and managed investments (being listed securities and managed investments that fluctuate depending on the market) (the relevant investments) is determined in accordance with the following:

                     (a)  an initial total valuation is to be given to the relevant investments on 1 July 1996, or when a new claim is determined, by the method set out in departmental guidelines;

                     (b)  that total valuation continues in effect until the relevant investments are revalued by the method set out in departmental guidelines, and that revaluation must occur:

                              (i)  on 20 March in each calendar year after 1996; and

                             (ii)  on 20 September in each calendar year after 1996; and

                            (iii)  when the person requests a revaluation of one or more of the person’s listed securities and managed investments; and

                            (iv)  following an event that affects the relevant investments and is the subject of a notice given under section 68 of the Administration Act.


 

Division 1CIncome from income streams

Subdivision BIncome streams that are not family law affected income streams

1097A  Scope of Subdivision

                   This Subdivision applies to income streams that are not family law affected income streams.

1098  Income from asset‑test exempt income stream

             (1)  For the purpose of working out the annual rate of ordinary income of a person from an asset‑test exempt income stream to which this Subdivision applies, the person is taken to receive from that income stream each year the amount worked out under section 1099 or 1099A.

Note:          For asset‑test exempt income stream see sections 9A, 9B and 9BA.

             (2)  Sections 1099 and 1099A do not apply if:

                     (a)  the income stream is covered by subsection 9BA(1); or

                     (b)  on the income stream’s commencement day, there was a reasonable likelihood that the income stream would have been covered by subsection 9BA(1), but the income stream is no longer covered by that subsection.

Note:          See section 1099AA.

1099  Income—income stream not a defined benefit income stream

                   If the asset‑test exempt income stream to which this Subdivision applies is not a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:

where:

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

purchase price has the meaning given by subsection 9(1).

relevant number has the meaning given by subsection 9(1).

Example:    Mark is 65 years old and single. He purchases an annuity for $100,000 with a term based on life expectancy (i.e. 15.41 years, which he chooses to round up to 16 years). The annuity has all the revised characteristics listed in the legislation. His annual payment from the annuity totals $9,895. Mark’s assessable income from this income stream is:

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

                   If the asset‑test exempt income stream to which this Subdivision applies is a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:

where:

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

deductible amount has the meaning given by subsection 9(1).

1099AA  Income from market‑linked asset‑test exempt income stream

             (1)  If either of the following conditions is satisfied in relation to the asset‑test exempt income stream to which this Subdivision applies:

                     (a)  the income stream is covered by subsection 9BA(1);

                     (b)  on the income stream’s commencement day, there was a reasonable likelihood that the income stream would have been covered by subsection 9BA(1), but the income stream is no longer covered by that subsection;

the annual rate of ordinary income of a person from the income stream is worked out under whichever of subsections (2) and (3) is applicable.

Recipient makes election

             (2)  If:

                     (a)  the person has elected that a particular amount is to be the payment, or the total of the payments, to be made under the income stream in respect of a period (the payment period) that:

                              (i)  consists of the whole or a part of a particular financial year; and

                             (ii)  begins on or after the income stream’s commencement day; and

                     (b)  the election is in force on a particular day in the payment period;

the annual rate of ordinary income of the person from the income stream on that day is worked out using the following formula:

where:

purchase price has the meaning given by subsection 9(1).

relevant number has the meaning given by subsection 9(1).

total payments means the payment, or the total of the payments, to be made under the income stream in respect of the payment period.

Recipient does not make election

             (3)  If the person has not elected that a particular amount is to be the payment, or the total of the payments, to be made under the income stream in respect of a period (the payment period) that:

                     (a)  consists of the whole or a part of a particular financial year; and

                     (b)  begins on or after the income stream’s commencement day;

the annual rate of ordinary income of the person from the income stream on each day during the payment period is worked out using the following formula:

where:

default amount means 100% of the amount worked out for the financial year using the formula in subsection 9BA(5) (for pro‑rating, see subsection (4)).

purchase price has the meaning given by subsection 9(1).

relevant number has the meaning given by subsection 9(1).

             (4)  If the income stream’s commencement day is not a 1 July, the default amount (within the meaning of subsection (3)) for the financial year starting on the preceding 1 July must be reduced on a pro‑rata basis by reference to the number of days in the financial year that are on and after the commencement day.

Exception—income stream’s commencement day happens in June

             (5)  If:

                     (a)  the income stream’s commencement day happens in June; and

                     (b)  no payment is made under the income stream for the financial year in which the commencement day happens;

subsections (2), (3) and (4) do not apply in working out the annual rate of ordinary income of the person from the income stream on a day in that financial year.

1099B  Income from asset‑tested income stream (long term)

             (1)  For the purpose of working out the annual rate of ordinary income of a person from an asset‑tested income stream (long term) to which this Subdivision applies, the person is taken to receive from that income stream each year the amount worked out under section 1099C or 1099D.

             (2)  Sections 1099C and 1099D do not apply to an income stream if section 1099DAA applies to the income stream.

1099C  Income—income stream not a defined benefit income stream

                   If the asset‑tested income stream (long term) to which this Subdivision applies is not a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:

where:

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

purchase price has the meaning given by subsection 9(1).

relevant number has the meaning given by subsection 9(1).

residual capital value has the meaning given by subsection 9(1).

Note:          For treatment of asset‑tested income streams (short term) see Division 1B of Part 3.10.

Example:    Sally is 65 years old and single. She purchases a 10 year annuity for $150,000, with a residual capital value of $20,000. Her total annual annuity payment is $18,337. Sally’s assessable income from her 10 year annuity is:

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

                   If the asset‑tested income stream (long term) to which this Subdivision applies is a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows:

where:

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

deductible amount has the meaning given by subsection 9(1).

1099DAA  Income from certain low‑payment asset‑tested income streams

             (1)  If:

                     (a)  an income stream is an asset‑tested income stream (long term) to which this Subdivision applies; and

                     (b)  either:

                              (i)  the income stream is an allocated pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994, or is any other pension determined, by legislative instrument, by the Minister; or

                             (ii)  the income stream is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the standards determined, by legislative instrument, by the Minister; and

                     (c)  one or more payments have been, or are to be, made under the income stream in respect of a period (the payment period) that:

                              (i)  consists of the whole or a part of a financial year; and

                             (ii)  begins on or after the income stream’s commencement day; and

                     (d)  on a day in the payment period, the amount worked out using the formula in subsection (2) is less than the amount worked out using the formula in subsection (3);

the annual rate of ordinary income of a person from the income stream on that day is worked out under subsection (3).

Annual rate based on total payments

             (2)  For the purposes of paragraph (1)(d), the formula in this subsection is:

where:

purchase price has the meaning given by subsection 9(1).

relevant number has the meaning given by subsection 9(1).

total payments means the payment, or the total of the payments, made, or to be made, under the income stream in respect of the payment period.

Annual rate based on minimum amount

             (3)  For the purposes of paragraph (1)(d), the formula in this subsection is:

where:

minimum amount means the minimum amount calculated in accordance with the method determined, by legislative instrument, by the Minister for the purposes of this definition.

purchase price has the meaning given by subsection 9(1).

relevant number has the meaning given by subsection 9(1).

Exception—income stream’s commencement day happens in June

             (4)  If:

                     (a)  the income stream’s commencement day happens in June; and

                     (b)  no payment is made under the income stream for the financial year in which the commencement day happens;

subsections (2) and (3) do not apply in working out the annual rate of ordinary income of the person from the income stream on a day in that financial year.

Subdivision CFamily law affected income streams

1099DA  Scope of Subdivision

                   This Subdivision applies to family law affected income streams.

1099DB  Income from asset‑test exempt income streams

             (1)  For the purpose of working out the annual rate of ordinary income of a person from an asset‑test exempt income stream to which this Subdivision applies, the person is taken to receive from that income stream each year:

                     (a)  if the income stream is not a defined benefit income stream—the amount determined by the Secretary under this paragraph; or

                     (b)  if the income stream is a defined benefit income stream—the amount determined by the Secretary under this paragraph.

             (2)  In making a determination under paragraph (1)(a) or (b), the Secretary must comply with any relevant decision‑making principles in force under section 1099DD.

1099DC  Income from asset‑tested income stream (long term)

             (1)  For the purpose of working out the annual rate of ordinary income of a person from an asset‑tested income stream (long term) to which this Subdivision applies, the person is taken to receive from that income stream each year:

                     (a)  if the income stream is not a defined benefit income stream—the amount determined by the Secretary under this paragraph; or

                     (b)  if the income stream is a defined benefit income stream—the amount determined by the Secretary under this paragraph.

             (2)  In making a determination under paragraph (1)(a) or (b), the Secretary must comply with any relevant decision‑making principles in force under section 1099DD.

1099DD  Decision‑making principles

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

                     (a)  paragraph 1099DB(1)(a); or

                     (b)  paragraph 1099DB(1)(b); or

                     (c)  paragraph 1099DC(1)(a); or

                     (d)  paragraph 1099DC(1)(b).


 

Division 1DAged care accommodation bonds: certain transactions before 6 November 1997

1099E  Scope of Division

             (1)  This Division applies to a person if:

                     (a)  at any time from the beginning of 1 October 1997 until the end of 5 November 1997, the person became liable to pay an accommodation bond for entry to a residential care service; and

                     (b)  either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44‑8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry; and

                     (c)  the person later made an agreement (a refund agreement) with the provider of the service that the person’s liability to pay an accommodation bond for the entry was to be replaced with a liability to pay an accommodation charge for the entry, and that any payment of any of the bond was to be refunded to the person.

Note:          For accommodation bond, accommodation charge and charge exempt resident, see subsection 11(1).

             (2)  This Division also applies to a person if the Secretary is satisfied that:

                     (a)  on or before 5 November 1997, the person sold his or her principal home for the sole or principal purpose of raising money to pay an accommodation bond for entry to a residential care service; and

                     (b)  either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44‑8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry.

Note:          For accommodation bond, accommodation charge and charge exempt resident, see subsection 11(1).

             (3)  This Division also applies to the partner of a person covered by subsection (1) or (2) (even if the person so covered is now deceased).

             (4)  For the purposes of subsection (2), the time at which a person sells his or her home is the time when he or she comes under a legal obligation to transfer the home to the buyer.

1099F  Exempt bond amount does not count as income

                   The person’s exempt bond amount (see section 1099H) does not count as income of the person for the purposes of this Act.

Note:          Income is otherwise defined in section 8.

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

             (1)  For the purposes of this section, assume that the person’s exempt bond amount (see section 1099H) were a financial asset of the person.

             (2)  The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (Deemed income from financial assets).

             (3)  In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold (deeming threshold is a term used in Division 1B).

1099H  Meaning of exempt bond amount

             (1)  The following is how to work out a person’s exempt bond amount.

             (2)  If the person is covered by subsection 1099E(1) (but not subsection 1099E(2)), the person’s exempt bond amount is any amount of accommodation bond payment refunded to the person under the refund agreement mentioned in that subsection.

             (3)  If the person is covered by subsection 1099E(2) (but not subsection 1099E(1)), the person’s exempt bond amount is the gross proceeds of the sale mentioned in that subsection, less:

                     (a)  any costs incurred in the course of the sale; and

                     (b)  the amount of any debt the person or the person’s partner owed immediately before the sale, so far as the debt was secured by the home at that time.

             (4)  If the person is covered by both subsections 1099E(1) and (2), the person’s exempt bond amount is the greater of the 2 amounts worked out under subsections (2) and (3) of this section.

             (5)  If the person is covered by subsection 1099E(3), the person’s exempt bond amount is equal to the exempt bond amount of the person’s partner, as worked out under subsection (2), (3) or (4) of this section.

             (6)  But in all of the above cases, if the person currently has a partner (who is not deceased), the person’s exempt bond amount is half of what it would otherwise be.


 

Division 1ERefunds to charge exempt residents

1099J  Scope of Division

             (1)  This Division applies to an amount (the refunded amount) that is refunded as mentioned in paragraph 56‑1(kc) or 56‑3(ic) of the Aged Care Act 1997 to a person because the person is or was a charge exempt resident.

Note:          For charge exempt resident, see subsection 11(1).

             (2)  This Division also applies to an amount (also called the refunded amount) that is paid to a person under paragraph 44‑8A(6)(b) of that Act because the person is or was a charge exempt resident.

Note:          For charge exempt resident, see subsection 11(1).

             (3)  To avoid doubt, this Division does not apply if the amount is paid to the person’s estate or to any other person.

1099K  Refunded amount does not count as income

                   The refunded amount does not count as income of the person for the purposes of this Act.

Note:          Income is otherwise defined in section 8.

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

             (1)  For the purposes of this section, assume that the refunded amount were a financial asset of the person.

             (2)  The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (Deemed income from financial assets).

             (3)  In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold (deeming threshold is a term used in Division 1B).

1099M  Application of Division

                   This Division applies in relation to a person who is a charge exempt resident at any time, whether before or after the commencement of the Division.


 

Division 2Conversion of foreign currency amounts

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

             (1)  If:

                     (a)  the rate of a payment to be made to a person under this Act is being worked out for a calculation day; and

                     (b)  an amount received by the person in a foreign currency needs to be taken into account in working out the rate;

the value in Australian currency of the amount received is to be determined in accordance with this section.

             (2)  Except in the case of:

                     (a)  amounts received in a foreign currency in respect of which the Secretary determines that it is not appropriate for this subsection to apply; or

                     (b)  a payment, or class or kind of payments, received in a foreign currency, being a payment or a class or kind of payments in respect of which the Secretary determines that it is not appropriate for this subsection to apply;

the value in Australian currency of the amount received is to be calculated using the appropriate market exchange rate for the foreign currency on the fifth business day before the calculation day.

             (3)  For the purposes of subsection (2), the appropriate market exchange rate on a particular day for a foreign currency to which subsection (2) applies is:

                     (a)  if there is an on‑demand airmail buying rate for the currency available at the Commonwealth Bank of Australia at the start of business in Sydney on that day and the Secretary determines it is appropriate to use that rate—that rate; or

                     (b)  in any other case:

                              (i)  if there is another rate of exchange for the currency, or there are other rates of exchange for the currency, available at the Commonwealth Bank of Australia at the start of business in Sydney on that day and the Secretary determines it is appropriate to use the other rate or one of the other rates—the rate so determined; or

                             (ii)  otherwise—a rate of exchange for the currency available from another source at the start of business in Sydney on that day that the Secretary determines it is appropriate to use.

             (4)  In the case of a foreign currency or a payment in a foreign currency in respect of which the Secretary has determined that it is not appropriate for subsection (2) to apply, the value in Australian currency of the amount received is to be calculated using a rate of exchange that the Secretary determines to be appropriate.

             (5)  The Secretary may make written determinations for the purposes of this section.

             (6)  In this section:

business day means a day other than:

                     (a)  a Saturday; or

                     (b)  a Sunday; or

                     (c)  a day that is a public holiday or bank holiday in Canberra or Sydney.

calculation day means the first business day for each month.

month means one of the 12 months of the calendar year.

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

             (1)  This section applies if, for the purposes of working out for a calculation day the rate of a payment to be made to a person under this Act, it is necessary to take account of a payment (the foreign payment):

                     (a)  that the person received from a source overseas; and

                     (b)  that was originally denominated in a foreign currency but was received by the person in Australian currency.

             (2)  For those purposes, the value in Australian currency of the foreign payment is taken to be the value that would have been determined under section 1100 had the person received the foreign payment in the foreign currency.

             (3)  Subsection (2) has effect regardless of the amount of the foreign payment actually received by the person in Australian currency.

             (4)  In this section:

calculation day has the same meaning as in section 1100.


 

Division 3Disposal of ordinary income

1106  Disposal of ordinary income

             (1)  For the purposes of this Act, a person disposes of ordinary income of the person if:

                     (a)  the person engages in a course of conduct that directly or indirectly:

                              (i)  destroys the source of the income; or

                             (ii)  disposes of the income or the source of the income; or

                            (iii)  diminishes the income; and

                     (b)  one of the following subparagraphs is satisfied:

                              (i)  the person receives no consideration in money or money’s worth for the destruction, disposal or diminution;

                             (ii)  the person receives inadequate consideration in money or money’s worth for the destruction, disposal or diminution;

                            (iii)  the Secretary is satisfied that the person’s purpose, or the person’s dominant purpose, in engaging in that course of conduct was to obtain a social security advantage.

             (2)  For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of:

                     (a)  obtaining, or enabling the person’s partner to obtain, a social security pension a social security benefit, a youth training allowance, a service pension or income support supplement; or

                     (b)  obtaining, or enabling the person’s partner to obtain, a social security pension a social security benefit, a youth training allowance, a service pension or income support supplement at a higher rate than that which would otherwise have been payable; or

                     (c)  ensuring that the person or the person’s partner would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.

             (3)  Paragraph (1)(a) does not apply if:

                     (a)  the source of the income is a deprived asset, or

                     (b)  the income is earned, derived or received from a transaction involving a deprived asset.

Note:          for amount of disposition see section 1107.

1107  Amount of disposition

                   If a person disposes of ordinary income, the amount of the disposition is the amount that, in the Secretary’s opinion, is:

                     (a)  if the person receives no consideration for the destruction, disposal or diminution—the annual rate of the diminution of the income because of the destruction, disposal or diminution; or

                     (b)  if the person receives consideration for the destruction, disposal or diminution—the annual rate of the diminution of the income because of the destruction, disposal or diminution less the part (if any) of the consideration that the Secretary considers to be fair and reasonable in all the circumstances of the case.

1108  Disposal of ordinary income—individuals

                   If a person who is not a member of a couple has disposed of ordinary income of the person, the amount of that disposition is to be included in the person’s ordinary income for the purposes of this Act.

Note 1:       for disposes of ordinary income see section 1106.

Note 2:       for amount of disposition see section 1107.

Note 3:       for ordinary income see subsection 8(1): ordinary income includes investment income but does not include maintenance income.

1109  Disposal of ordinary income—members of couples

             (1)  Subject to subsections (1A), (1B), (2), (3) and (4), if a person who is a member of a couple has disposed of ordinary income of the person:

                     (a)  50% of the amount of the disposition is to be included in the person’s ordinary income; and

                     (b)  50% of the amount of the disposition is to be included in the person’s partner’s ordinary income.

Note 1:       for disposes of ordinary income see section 1106.

Note 2:       for amount of disposition see section 1107.

          (1A)  Subject to subsection (3), for the purposes of the application of this Act in relation to a person’s rate of social security benefit, if:

                     (a)  a person who is a member of a couple has disposed of ordinary income of the person; and

                     (b)  the amount of the disposition is not greater than the least amount that, if added to the person’s ordinary income (disregarding this section), would cause the person’s rate of benefit to be reduced to nil;

the amount of the disposition is to be included in the person’s ordinary income.

          (1B)  Subject to subsection (3), for the purposes of the application of this Act in relation to a person’s rate of social security benefit, if:

                     (a)  a person who is a member of a couple has disposed of ordinary income of the person; and

                     (b)  the amount of the disposition is greater than the least amount that, if added to the person’s ordinary income (disregarding this section), would cause the person’s rate of benefit to be reduced to nil;

then:

                     (c)  the second of the amounts referred to in paragraph (b) is to be included in the person’s ordinary income; and

                     (d)  the difference between the 2 amounts referred to in paragraph (b) is to be included in the person’s partner’s ordinary income.

             (2)  If:

                     (a)  amounts are included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and

                     (b)  the person and the person’s partner cease to be members of the same couple;

any amount that was included in the ordinary income of the person’s former partner because of the disposition is to be included in the person’s ordinary income.

             (3)  If:

                     (a)  amounts are included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and

                     (b)  the person dies;

no amount is to be included in the ordinary income of the person’s partner because of the disposition.

             (4)  If:

                     (a)  an amount is included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and

                     (b)  the person’s partner dies;

any amount that would, if the person’s partner had not died, be included in the ordinary income of the person’s partner because of the disposition is to be included in the person’s ordinary income.

Note:          for ordinary income see subsection 8(1): ordinary income includes investment income but does not include maintenance income.

1111  Dispositions more than 5 years old to be disregarded

                   This Division does not apply to a disposition of ordinary income that took place:

                     (a)  more than 5 years before the time when:

                              (i)  the person who disposed of the ordinary income; or

                             (ii)  if the person who disposed of the ordinary income was, at the time of disposition, a member of a couple—the person’s partner;

                            became qualified for a social security pension; or

                     (b)  less than 5 years before the time referred to in paragraph (a) and before the time when the Secretary is satisfied that the person who disposed of the ordinary income could reasonably have expected that the person or the person’s partner would become qualified for such a pension.


 

Part 3.12General provisions relating to the assets test

Division 1Value of person’s assets

1118  Certain assets to be disregarded in calculating the value of a person’s assets

             (1)  In calculating the value of a person’s assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following:

                     (a)  if the person is not a member of a couple—the value of any right or interest of the person in the person’s principal home that is a right or interest that gives the person reasonable security of tenure in the home;

                     (b)  if the person is a member of a couple—the value of any right or interest of the person in one residence that is the principal home of the person, of the person’s partner or of both of them that is a right or interest that gives the person or the person’s partner reasonable security of tenure in the home;

                     (c)  the value of any life interest of the person other than:

                              (i)  a life interest in the principal home of the person, of the person’s partner or of both of them; or

                             (ii)  a life interest created by the person, by the person’s partner or by both of them; or

                            (iii)  a life interest created on the death of the person’s partner;

                     (d)  the value of any asset‑test exempt income stream of the person, other than a partially asset‑test exempt income stream;

                   (da)  half of the value of any partially asset‑test exempt income stream of the person;

                     (e)  any amount that is:

                              (i)  received by the person within the immediately preceding period of 90 days; and

                             (ii)  is excluded from the definition of income in subsection 8(1) by subsection 8(4) or (5);

                      (f)  the value of the person’s investment in:

                              (i)  a superannuation fund; or

                             (ii)  an approved deposit fund; or

                            (iii)  a deferred annuity; or

                            (iv)  an ATO small superannuation account;

                            until the person:

                             (v)  reaches pension age; or

                            (vi)  starts to receive a pension or annuity out of the fund;

                    (fa)  the value of the person’s investment in an FHSA (within the meaning of the First Home Saver Accounts Act 2008);

                     (g)  if:

                              (i)  the person has a granny flat interest in the person’s principal home; and

                             (ii)  the granny flat interest gives the person reasonable security of tenure in the home; and

                            (iii)  the person acquired or retained the granny flat interest before 22 August 1990;

                            the value of the granny flat interest;

                    (ga)  if:

                              (i)  the person has a granny flat interest in the person’s principal home; and

                             (ii)  the person is a person to whom subsection 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2) or 1157(2) applies;

                            the value of the granny flat interest;

Note:       a person described in subparagraph (ii) will have acquired or retained the granny flat interest on or after 22 August 1990 (see section 1145A).

                   (gb)  if:

                              (i)  the person is a sale leaseback resident; and

                             (ii)  the person is a person to whom subsection 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2) or 1157(2) applies;

                            the value of any right or interest of the person in the sale leaseback home;

                     (h)  the value of any contingent, remainder or reversionary interest of the person (other than an interest created by the person, by the person’s partner or by both of them);

                      (j)  the value of any assets (other than a contingent, remainder or reversionary interest) to which the person is entitled from the estate of a deceased person but which has not been, and is not able to be, received;

                     (k)  the value of any medal or other decoration awarded (whether to the person or another person) for valour that is owned by the person otherwise than for the purposes of investment or a hobby;

                    (m)  the value of:

                              (i)  any cemetery plot acquired by the person for the burial of the person or the person’s partner; and

                             (ii)  any funeral expenses paid in advance by the person in respect of the funeral of the person or the person’s partner;

                  (ma)  an amount invested in an exempt funeral investment and any return on the investment;

                     (n)  if:

                              (i)  personal property of the person is designed for use by a disabled person; and

                             (ii)  the person, the person’s partner, a dependent child of the person or a dependent child of the person’s partner is disabled;

                            the value of the property;

                     (p)  if:

                              (i)  personal property of the person is modified so that it can be used by a disabled person; and

                             (ii)  the person, the person’s partner, a dependent child of the person or a dependent child of the person’s partner is disabled;

                            the part of the value of the property that is attributable to the modifications;

                     (q)  if the person is provided with a motor vehicle under the scheme administered by the Commonwealth known as the gift car scheme—the value of that motor vehicle;

                      (r)  if the person has sold a residence that was the principal home of the person on terms and has purchased, also on terms, another residence that is the principal home of the person—so much of the balance due to the person in respect of the sale as will be applied by the person in respect of the purchase of the other residence;

                      (s)  the amount of any insurance or compensation payments received by the person because of the loss of or damage to buildings, plant or personal effects within the immediately preceding 12 months or such longer period as the Secretary determines for any special reason for a particular payment;

                    (sa)  if subsection (1AB) applies (application of insurance etc. payments to rebuilding etc.)—the amount worked out under that subsection, during the period mentioned in subsection (1AC);

                      (t)  the value of any native title rights and interests of the person, or of a community or group of which the person is a member;

                     (u)  the amount of any accommodation bond balance in respect of an accommodation bond paid by the person.

Note 1:       for granny flat interest see subsection 12A(2).

Note 2:       for principal home see section 11A.

Note 3:       for reasonable security of tenure see subsection 11A(10).

Note 4:       for exempt funeral investment see section 19E.

Application of insurance etc. payments to rebuilding etc.

       (1AA)  Subsection (1AB) applies if:

                     (a)  a person receives any insurance or compensation payments because of loss of or damage to a building (including the person’s principal home) or plant; and

                     (b)  either:

                              (i)  if the building or plant was lost—the person applies the whole or a part of those payments to build another building or plant to replace the building or plant that was lost; or

                             (ii)  if the building or plant was damaged—the person applies the whole or a part of those payments to rebuild, repair or renovate the building or plant.

       (1AB)  For the purposes of paragraph (1)(sa), the amount that may be disregarded is:

                     (a)  the value of the building or plant that is being built, rebuilt, repaired or renovated, to the extent that those payments are so applied; and

                     (b)  if a building whose value is being disregarded under paragraph (a) of this subsection is to be the person’s principal home:

                              (i)  the value of the land on which the building is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person’s principal home, the land will, under section 11A, be included in a reference to the principal home; and

                             (ii)  the value of any other structure, on that land, that is to be the person’s principal home to the extent that the structure was built before the person began applying the payments.

       (1AC)  For the purposes of paragraph (1)(sa), the amount worked out under subsection (1AB) may be disregarded during the period:

                     (a)  beginning when the payments are received; and

                     (b)  ending at the earlier of the following times:

                              (i)  12 months, or such longer period as the Secretary determines for any special reason, after that time;

                             (ii)  when the building, rebuilding, repair or renovation of the building or plant is complete.

Definitions

          (1A)  In this section:

native title rights and interests means:

                     (a)  native title rights and interests within the meaning of section 223 of the Native Title Act 1993;

                     (b)  any rights and interests of a similar nature under any law of a State, a Territory or a foreign country (whether or not the rights and interests relate to land or waters outside Australia);

but, to avoid any doubt, does not include any right or interest in a lease or licence, or in a freehold estate.

partially asset‑test exempt income stream means:

                     (a)  an asset‑test exempt income stream that:

                              (i)  is an income stream (other than a defined benefit income stream) covered by subsection 9A(1) or (1A), 9B(1) or 9BA(1); and

                             (ii)  has a commencement day during the period from 20 September 2004 to 19 September 2007 (both dates inclusive); and

                            (iii)  is not covered by principles (if any) determined for the purposes of this subparagraph, by legislative instrument, by the Secretary; or

                     (b)  an income stream that:

                              (i)  has a commencement day happening on or after 20 September 2007; and

                             (ii)  is covered by principles determined for the purposes of this subparagraph, by legislative instrument, by the Secretary.

Application of proceeds of sale of principal home

          (1B)  Subsection (2) applies if:

                     (a)  a person sells the person’s principal home; and

                     (b)  either:

                              (i)  the person does not have a right or interest in a principal home; or

                             (ii)  the person has a right or interest in a principal home that the Secretary is satisfied does not give the person reasonable security of tenure in the home; and

                     (c)  before the end of 12 months, or any longer period determined under subsection (2B), after the sale, one or more of the following applies:

                              (i)  the person intends to apply the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home;

                             (ii)  the person applies the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person’s principal home;

                            (iii)  the person intends to apply the whole or a part of the proceeds of the sale to purchase another residence that is to be the person’s principal home.

             (2)  For the purposes of this Act (other than Division 1B of Part 3.10):

                     (a)  if subparagraph (1B)(c)(i) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to build, rebuild, repair or renovate the other residence, until the earlier of the following times:

                              (i)  the period mentioned in paragraph (1B)(c) ends;

                             (ii)  the Secretary becomes satisfied that the person has ceased to have that intention; or

                     (b)  if subparagraph (1B)(c)(ii) applies—disregard the value of the following, until the end of the period mentioned in paragraph (1B)(c), to the extent that the person applies those proceeds to build, rebuild, repair or renovate that other residence:

                              (i)  the value of the other residence;

                             (ii)  the value of the land on which the other residence is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person’s principal home, the land will, under section 11A, be included in a reference to the principal home;

                            (iii)  the value of any other structure, on that land, that is to be the person’s principal home to the extent that the structure was built before the person began applying those proceeds; or

                     (c)  if subparagraph (1B)(c)(iii) applies—disregard the proceeds, to the extent that the person intends to apply those proceeds to purchase the other residence, until the earlier of the following times:

                              (i)  the period mentioned in paragraph (1B)(c) ends;

                             (ii)  the Secretary becomes satisfied that the person has ceased to have that intention.

          (2A)  Subsection (2) does not apply to the calculation of the value of a person’s assets for the purposes of sections 198F to 198MA or 1123 to 1128 (disposal of assets).

          (2B)  For the purposes of subsection (1B), the Secretary may determine, in writing, a period of up to 24 months if:

                     (a)  a person who has sold his or her principal home is making reasonable attempts to purchase, build, repair or renovate another residence; and

                     (b)  the person has been making those attempts within a reasonable period after selling the principal home; and

                     (c)  the person has experienced delays beyond his or her control in purchasing, building, repairing or renovating the other residence.

Value of certain personal effects of less than $10,000

             (3)  For the purposes of this section, if:

                     (a)  the value of any assets of a person or, if the person is a member of a couple, of the person and the person’s partner, that consists of the contents of a principal home and of other personal effects that are used primarily within the principal home does not exceed $10,000; and

                     (b)  the assets are used primarily for private or domestic purposes;

the value of the assets is to be taken to be $10,000 unless the person satisfies the Secretary that the value of the assets is less than $10,000.

This section subject to sections 1145A to 1157

             (4)  This section has effect subject to sections 1145A to 1157 (special residences).

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

             (1)  The value of a person’s investment in a superannuation fund, an approved deposit fund, a deferred annuity or an ATO small superannuation account is to be disregarded in calculating the value of the person’s assets for the purposes of this Act (other than section 198H, 198HA, 198HB, 198J, 198JA, 198JB, 198K or 198L, subparagraph 263(1)(d)(iv), Division 1B of Part 3.10, or section 1124A, 1125, 1125A, 1126, 1133 or 1135A) if the investment is specified in a determination made under subsection (2).

             (2)  The Minister may specify:

                     (a)  a specified investment in a superannuation fund, an approved deposit fund, a deferred annuity or an ATO small superannuation account; or

                     (b)  a specified class of investments in a superannuation fund, an approved deposit fund, a deferred annuity or an ATO small superannuation account;

in a determination for the purpose of subsection (1).

             (3)  A determination under subsection (2) must be in writing.

             (4)  A determination under subsection (2) takes effect on the day on which it is made or on such other day (whether earlier or later) as is specified in the determination.

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

             (1)  In this section:

application day, in relation to a person who was a recipient of a social security payment immediately before 28 September 1995, means the day, on or after that date, on which the person applied or applies for review of the rate of that social security payment because of the expected enactment, or the operation, of this section.

             (2)  Subject to subsection (3), the value of a person’s assets for the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126) is reduced by the sum of any amounts received by the person from the Mark Fitzpatrick Trust.

             (3)  Subsection (2) has effect, or is taken to have had effect, as the case may be:

                     (a)  for a person who was a recipient of a social security pension immediately before 28 September 1995—on the first pension payday after the application day; or

                     (b)  for a person who was a recipient of a social security payment other than a social security pension immediately before 28 September 1995—on the next day, after the application day, on which the person received or receives an instalment of the payment; or

                     (c)  for a person who became or becomes a recipient of a social security payment on or after 28 September 1995—on the day on which the person received or receives the first instalment of the payment.

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

             (1)  This section applies to a person if Division 1D of Part 3.10 applies to the person.

             (2)  For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person’s assets is reduced by the person’s exempt bond amount (as defined by section 1099H).

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

             (1)  This section applies to a person if Division 1E of Part 3.10 applies to the person.

             (2)  For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person’s assets is reduced by the refunded amount (as defined by section 1099J).

1119  Value of asset‑tested income streams that are not defined benefit income streams

             (1)  This section applies to a person’s asset‑tested income stream if it is not a defined benefit income stream and it is not a family law affected income stream.

Note:          For defined benefit income streams see section 1120.

             (2)  The value of the income stream is, for the purposes of the assets test, worked out:

                     (a)  if the person receives payments from the income stream 2 or more times a year—in relation to each 6 month period of the income stream’s term; and

                     (b)  if the person receives a payment from the income stream only once a year—in relation to each 12 month period of the income stream’s term.

             (3)  If the income stream has an account balance, the value of the income stream, for the purposes of the assets test, is the value of the account balance at the beginning of the 6 month or 12 month period (as the case requires) referred to in subsection (2).

             (4)  If the income stream does not have an account balance, the value of the income stream is, for the purposes of the assets test, worked out as follows:

where:

purchase price has the meaning given by subsection 9(1).

relevant number has the meaning given by subsection 9(1).

residual capital value has the meaning given by subsection 9(1).

term elapsed is the number of years of the term that have elapsed since the commencement day of the income stream, rounded down:

                     (a)  in the case of an income stream referred to in paragraph (2)(a)—to the nearest half‑year; and

                     (b)  in the case of an income stream referred to in paragraph (2)(b)—to the nearest whole year.

Example:    Sally is 65 years old and single. She purchases a 10 year annuity for $150,000 with a residual capital value of $20,000. Her total annual annuity payment is $18,337. Monthly payments commence on 1 January. Her assessable asset for the first six months will be:

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

1120  Value of asset‑tested income streams that are defined benefit income streams

             (1)  This section applies to a person’s asset‑tested income stream if it is a defined benefit income stream and it is not a family law affected income stream.

             (2)  The value of the income stream is, for the purposes of the assets test, worked out in relation to each 12 month period of the income stream’s term.

             (3)  The value of the income stream is, for the purposes of the assets test, worked out as follows:

where:

annual payment means the amount payable to the person for the relevant 12 month period under the income stream.

pension valuation factor means the pension valuation factor that applies to the person in accordance with the determination made, by legislative instrument, by the Minister for the purposes of this section.

1120A  Value of asset‑tested FLA income streams

             (1)  This section applies to family law affected income streams.

             (2)  The value of an income stream that is not a defined benefit income stream is, for the purposes of the assets test, determined by the Secretary.

             (3)  The value of an income stream that is a defined benefit income stream is, for the purposes of the assets test, determined by the Secretary.

             (4)  In making a determination under subsection (2) or (3), the Secretary must comply with any relevant decision‑making principles in force under subsection (5).

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

                     (a)  subsection (2); or

                     (b)  subsection (3).

1120B  Value of partially asset‑test exempt income streams

             (1)  This section applies to income streams covered by paragraph 1118(1)(da).

             (2)  The value of such an income stream is, for the purposes of paragraph 1118(1)(da), worked out as follows:

                     (a)  if the income stream is a family law affected income stream—under section 1120A;

                     (b)  otherwise—under section 1119;

as if the income stream were an asset‑tested income stream to which that section applied.

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

             (1)  This section applies in calculating the value of a person’s investment in a superannuation fund if:

                     (a)  the fund has 4 or fewer members; and

                     (b)  the fund has reserves (within the meaning of section 115 of the Superannuation Industry (Supervision) Act 1993).

Note:          The value of a person’s investment in a superannuation fund is only included in the value of the person’s assets after the person reaches pension age or starts to receive a pension or annuity out of the fund (see paragraph 1118(1)(f)).

             (2)  Despite paragraph 1118(1)(h), the value of the person’s investment in the superannuation fund includes the following amount:

             (3)  However, if it is not possible to work out the person’s interest in the superannuation fund, the value of the person’s investment in the fund includes the following amount:

1121  Effect of charge or encumbrance on value of assets

             (1)  If there is a charge or encumbrance over a particular asset of the person, the value of the asset, for the purposes of calculating the value of the person’s assets for the purposes of this Act (other than Division 1B of Part 3.10), is to be reduced by the value of that charge or encumbrance.

Note:          this section does not apply to an asset to which section 1121A (primary production assets) applies.

             (2)  Subsection (1) does not apply to a charge or encumbrance over an asset of a person to the extent that:

                     (a)  the charge or encumbrance is a collateral security; or

                     (b)  the charge or encumbrance was given for the benefit of a person other than the person or the person’s partner.

             (3)  Subsection (1) does not apply to a charge or encumbrance over assets that are to be disregarded under section 1118.

          (3A)  Subsection (1) does not apply to an asset that is an asset‑tested income stream (long‑term).

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

             (4)  If:

                     (a)  there is a charge or encumbrance over assets; and

                     (b)  the charge does not arise under section 1138; and

                     (c)  the assets consist of assets whose value is to be disregarded under section 1118 and other assets;

the amount to be deducted under subsection (1) is:

             (6)  This section has effect subject to sections 1145A to 1157 (special residences).

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

             (1)  For the purposes of working out the value of a person’s assets under this Act, if:

                     (a)  the person is:

                              (i)  a primary producer; or

                             (ii)  a family member of a primary producer; and

                     (b)  the person has assets (including real property) that are, in the Secretary’s opinion, used for the purposes of carrying on that primary production; and

                     (c)  the person also has liabilities that are, in the Secretary’s opinion, related to the carrying on of the primary production;

then:

                     (d)  section 1121 does not apply in relation to the assets referred to in paragraph (b); and

                     (e)  those assets are taken to be a single asset (in this section called the primary production asset); and

                      (f)  the value of that single asset is worked out under subsection (2).

Note:          for family member see subsection 23(1).

             (2)  The value of a person’s primary production asset is worked out in the following way:

Method statement

Step 1.   Add together the value of the assets referred to in paragraph (1)(b): the result is called the unencumbered value.

Step 2.   Add together the value of the liabilities referred to in paragraph (1)(c): the result is called the total liability.

Step 3.   Take the total liability away from the unencumbered value: the result is the value of the person’s primary production asset.

             (3)  If the result under Step 3 of the Method statement is less than nil, the value of the primary production asset is taken to be nil.

1122  Loans

                   If a person lends an amount after 27 October 1986, the value of the assets of the person for the purposes of this Act includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan.


 

Division 2Disposal of assets

1123  Disposal of assets

             (1)  For the purposes of this Act, a person disposes of assets of the person if:

                     (a)  the person engages in a course of conduct that directly or indirectly:

                              (i)  destroys all or some of the person’s assets; or

                             (ii)  disposes of all or some of the person’s assets; or

                            (iii)  diminishes the value of all or some of the person’s assets; and

                     (b)  one of the following subparagraphs is satisfied:

                              (i)  the person receives no consideration in money or money’s worth for the destruction, disposal or diminution;

                             (ii)  the person receives inadequate consideration in money or money’s worth for the destruction, disposal or diminution;

                            (iii)  the Secretary is satisfied that the person’s purpose, or the dominant purpose, in engaging in that course of conduct was to obtain a social security advantage.

Note 1:       If Part 3.14A or 3.14B applies in relation to the transfer by a person of a qualifying interest or an eligible interest in a farm or relevant farm asset, that transfer and certain transfers by the person’s partner are taken not to be disposal of assets (see sections 1185D and 1185T).

Note 2:       Under Division 4 of Part 3.18A, certain transfers of assets to special disability trusts can be taken not to be disposals of the assets (but this can be subject to a limit on the aggregate value of the transfers).

             (2)  For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of:

                     (a)  obtaining a social security pension, a social security benefit, a parenting allowance, a service pension or an income support supplement or enabling the person’s partner or someone else of whom the person is a family member to obtain such a pension, benefit, allowance or supplement, or a youth training allowance; or

                     (b)  obtaining a social security pension, a social security benefit, a parenting allowance, a service pension or an income support supplement, or enabling the person’s partner to obtain such a pension, benefit, allowance or supplement, or a youth training allowance, at a higher rate than would have otherwise been payable; or

                     (c)  ensuring that the person or the person’s partner would be qualified for fringe benefits for the purposes of this Act or the Veterans’ Entitlements Act.

             (3)  For the purposes of subsection (1), the value of a person’s granny flat interest is to be taken not to be consideration received by the person if the interest was acquired or retained before 22 August 1990.

Note:          for granny flat interest see subsection 11(9).

             (4)  If, under subsection 1147(1A), the value of a granny flat interest is less than the amount paid, or agreed to be paid, for the interest, then, for the purposes of this section, so much of the amount paid, or agreed to be paid, as exceeds the value of the interest is not consideration for the interest.

Note:          for granny flat interest see subsection 11(9).

1124  Amount of disposal or disposition

                   If a person disposes of assets, the amount of the disposal or disposition is:

                     (a)  if the person receives no consideration for the destruction, disposal or diminution—an amount equal to:

                              (i)  the value of the assets that are destroyed; or

                             (ii)  the value of the assets that are disposed of; or

                            (iii)  the amount of the diminution in the value of the assets whose value is diminished; or

                     (b)  if the person receives consideration for the destruction, disposal or diminution—an amount equal to:

                              (i)  the value of the assets that are destroyed; or

                             (ii)  the value of the assets that are disposed of; or

                            (iii)  the amount of the diminution in the value of the assets whose value is diminished;

                            less the amount of the consideration received by the person in respect of the destruction, disposal or diminution.

Note:          If subsection 1209ZA(2) applies in relation to the transfer of an asset to a special disability trust, that subsection has the effect of reducing the amount of the disposal or disposition.

1124A  Disposal of assets in pre‑pension years—individuals

          (1A)  This section applies only to disposals of assets that took place before 1 July 2002.

             (1)  If:

                     (a)  a person is not a member of a couple when the person claims a pension, benefit or payment of a kind referred to in subsection 11(10A); and

                     (b)  the person has, during a pre‑pension year of the person, disposed of an asset of the person; and

                     (c)  the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pre‑pension year, exceeds the disposal limit;

then, for the purposes of determining whether a pension, benefit or payment is payable to the person, there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition took place:

                     (d)  the amount by which the sum of the amount of the first‑mentioned disposition of assets and of the amounts (if any) of other dispositions of assets previously made by the person during that pre‑pension year exceeds the disposal limit; or

                     (e)  the amount of the first‑mentioned disposition;

whichever is the lesser amount.

Note 1:       for disposes of assets see section 1123.

Note 2:       for amount of disposition see section 1124.

Note 4:       if a pension or benefit is payable to the person, section 1125 operates to determine the rate of payment and section 1124A ceases to apply to the person.

             (3)  In this section:

disposal limit means:

                     (a)  in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991—$2,000; and

                     (b)  in relation to assets disposed of on or after
1 March 1991—$10,000.

1125  Disposal of assets in pension years—individuals

             (1)  If, on or after 1 March 1986 and before 1 July 2002:

                     (a)  a person who is not a member of a couple has, during a pension year of the person, disposed of an asset of the person; and

                     (b)  the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit;

then, for the purposes of this Act, there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition takes place:

                     (c)  the amount by which the sum of the amount of the first‑mentioned disposition of assets, and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit; or

                     (d)  the amount of the first‑mentioned disposition;

whichever is the lesser amount.

Note 1:       for disposes of assets see section 1123.

Note 2:       for amount of disposition see section 1124.

             (3)  In this section:

disposal limit means:

                     (a)  in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991—$2,000; and

                     (b)  in relation to assets disposed of on or after
1 March 1991—$10,000.

1125A  Disposal of assets in pre‑pension years—members of couples

          (1A)  This section applies only to disposals of assets that took place before 1 July 2002.

             (1)  Subject to subsections (3), (4) and (5), if:

                     (a)  a person has disposed of an asset; and

                     (b)  the person is a member of a couple when the person or the person’s partner claims a pension, benefit or payment of a kind referred to in subsection 11(10A) or when the person’s partner claims a youth training allowance; and

                     (c)  the person disposed of the asset:

                              (i)  during a pre‑pension year of the person; or

                             (ii)  if the person has not claimed a pension, benefit or payment of a kind referred to in subsection 11(10A) but the person’s partner has claimed such a pension, benefit or payment or has claimed a youth training allowance—during a pre‑pension year of the person’s partner; and

                     (d)  the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that pre‑pension year, exceeds the disposal limit;

then, for the purposes of determining whether a pension, benefit, payment or allowance is payable to the person:

                     (e)  there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition took place:

                              (i)  50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that pre‑pension year exceeds the disposal limit; or

                             (ii)  50% of the amount of the first‑mentioned disposition;

                            whichever is the lesser amount; and

                      (f)  there is to be included in the value of the assets of the person’s partner for the period of 5 years that starts on the day on which the disposition took place:

                              (i)  50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that
pre‑pension year exceeds the disposal limit; or

                             (ii)  50% of the amount of the first‑mentioned disposition;

                            whichever is the lesser amount.

Note 1:       for disposes of assets see section 1123.

Note 2:       for amount of disposition see section 1124.

Note 4:       if a pension or benefit is payable to the person, section 1126 operates to determine the rate of payment and section 1125A ceases to apply to the person.

             (3)  If:

                     (a)  amounts are included under subsection (1) in the value of a person’s assets who is a member of a couple and in the assets of the person’s partner because of a disposition of an asset by the person; and

                     (b)  the person and the person’s partner cease to be members of the same couple;

any amount that was included in the value of the person’s former partner’s assets because of that disposition is to be included in the value of the person’s assets.

             (4)  If:

                     (a)  an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and

                     (b)  the person dies;

an amount is not to be included in the value of the assets of the person’s partner because of that disposition.

             (5)  If:

                     (a)  an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and

                     (b)  the partner dies;

any amount that would, if the partner had not died, be included in the value of the partner’s assets because of the disposition is to be included in the value of the person’s assets.

             (6)  In this section:

disposal limit means:

                     (a)  in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991—$4,000; and

                     (b)  in relation to assets disposed of on or after
1 March 1991—$10,000.

1126  Disposal of assets in pension years—members of couples

             (1)  Subject to subsections (3) and (4), if, on or after 1 March 1986 and before 1 July 2002:

                     (a)  a person who is a member of a couple has disposed of an asset of the person:

                              (i)  during a pension year of the person; or

                             (ii)  if the person is not receiving a pension, benefit or payment of a kind referred to in subsection 11(10) but the person’s partner is receiving such a pension, benefit or payment or is receiving a youth training allowance—during a pension year of the person’s partner; and

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

then, for the purposes of this Act:

                     (c)  there is to be included in the value of the person’s assets for the period of 5 years that starts on the day on which the disposition takes effect:

                              (i)  50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during the pension year exceeds disposal limit; or

                             (ii)  50% of the amount of the first‑mentioned disposition;

                            whichever is the lesser amount; and

                     (d)  there is to be included in the value of the assets of the person’s partner for the period of 5 years that starts on the day on which the disposition takes place:

                              (i)  50% of the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during the pension year exceeds disposal limit; or

                             (ii)  50% of the amount of the first‑mentioned disposition;

                            whichever is the lesser amount.

Note 1:       for disposes of assets see section 1123.

Note 2:       for amount of disposition see section 1124.

             (3)  If:

                     (a)  amounts are included under subsection (1) in the value of a person’s assets who is a member of a couple and in the assets of the person’s partner because of a disposition of an asset by the person; and

                     (b)  the person and the person’s partner cease to be members of the same couple;

any amount that was included in the value of the person’s former partner’s assets because of that disposition is to be included in the value of the person’s assets.

             (4)  If:

                     (a)  an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and

                     (b)  the person dies;

no amount is to be included in the value of the assets of the person’s partner because of that disposition.

             (5)  If:

                     (a)  an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because of a disposition of an asset by the person; and

                     (b)  the partner dies;

any amount that would, if the partner had not died, be included in the value of the partner’s assets because of the disposition is to be included in the value of the person’s assets.

             (6)  In this section:

disposal limit means:

                     (a)  in relation to assets disposed on or after 1 March 1986 and before 1 March 1991—$4,000; and

                     (b)  in relation to assets disposed of on or after
1 March 1991—$10,000.

1126AA  Disposal of assets in income year—individuals

Disposals to which section applies

             (1)  This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposal.

Increase in value of assets

             (2)  If the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person during the income year in which the relevant disposal took place, exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:

                     (a)  the amount of the relevant disposal;

                     (b)  the amount by which the sum of the amount of the relevant disposal and the amounts (if any) of other disposals of assets previously made by the person during the income year in which the relevant disposal took place, exceeds $10,000.

Note:          See also section 1126E (about modification of this Division in respect of certain assets).

Previous joint disposals

             (3)  If, during the income year in which the relevant disposal took place but before the time of the relevant disposal, the person was a member of a couple who jointly disposed of an asset, a reference in subsection (2) to the amounts (if any) of other disposals of assets previously made by the person during that income year includes a reference to one‑half of the amount of the joint disposal.

1126AB  Disposals of assets in 5 year period—individuals

Disposal to which section applies

             (1)  This section also applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposal.

Increase in value of assets

             (2)  If:

                     (a)  the sum of the amount of the relevant disposal and the amounts of any previous disposals of assets made during the rolling period by the person;

less

                     (b)  the sum of any amounts included in the value of the person’s assets during the rolling period under section 1126AA, 1126AC or 1126AD or any previous application or applications of this section;

exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:

                     (c)  an amount equal to the excess;

                     (d)  the amount of the relevant disposal.

Note:          See also section 1126E (about modification of this Division in respect of certain assets).

Previous joint disposals

             (3)  If, during the rolling period but before the time of the relevant disposal, the person was a member of a couple who jointly disposed of an asset, the reference in paragraph (2)(a) to the amounts of any previous disposals of assets made during the rolling period by the person includes a reference to one‑half of the amount of the joint disposal.

Rolling period

             (4)  For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002.

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

Disposals to which section applies

             (1)  If there is a disposal (the relevant disposal) on or after 1 July 2002 of an asset by:

                     (a)  a person who, at the time of the relevant disposal, is a member of a couple; or

                     (b)  the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph;

subsection (2) has effect.

Increase in value of assets

             (2)  Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person, the person’s partner, or the person and the person’s partner, during the income year in which the relevant disposal took place (whether before or after they became members of the couple), exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place:

                     (a)  one‑half of the amount of the relevant disposal;

                     (b)  one‑half of the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the person, the partner, or the person and the partner, during the income year in which the relevant disposal took place, exceeds $10,000.

Note:          See also section 1126E (about modification of this Division in respect of certain assets).

Effect of ceasing to be member of couple

             (3)  If, after the disposal referred to in paragraph (1)(a), the person and the person’s partner cease to be members of the same couple:

                     (a)  no amount is to be included after the cessation in the value of the assets of the former partner because of that disposal; and

                     (b)  any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person.

Effect of death of person

             (4)  If, after the disposal referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person’s partner because of that disposal.

Effect of death of partner

             (5)  If, after the disposal referred to in paragraph (1)(a), the person’s partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposal is to be included in the value of the assets of the person.

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

Disposals to which section applies

             (1)  If there is a disposal (the relevant disposal) on or after 1 July 2002 of an asset by:

                     (a)  a person who, at the time of the relevant disposal, is a member of a couple; or

                     (b)  the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph;

subsection (2) has effect.

Increase in value of assets

             (2)  Subject to this section, if:

                     (a)  the sum of the amount of the relevant disposal and the amounts of any previous disposals of assets made during the rolling period by the person, the person’s partner or the person and the person’s partner;

less

                     (b)  the sum of any amounts included in the value of the assets of the person or of the partner during the rolling period under section 1126AA, 1126AB or 1126AC or any previous application or applications of this section;

exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place:

                     (c)  an amount equal to one‑half of the excess;

                     (d)  one‑half of the amount of the relevant disposal.

Note:          See also section 1126E (about modification of this Division in respect of certain assets).

Effect of ceasing to be member of couple

             (3)  If, after the disposal referred to in paragraph (1)(a), the person and the person’s partner cease to be members of the same couple:

                     (a)  no amount is to be included after the cessation in the value of the assets of the former partner because of that disposal; and

                     (b)  any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person.

Effect of death of person

             (4)  If, after the disposal referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person’s partner because of that disposal.

Effect of death of partner

             (5)  If, after the disposal referred to in paragraph (1)(a), the person’s partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposal is to be included in the value of the assets of the person.

Rolling period

             (6)  For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002.

1126A  Disposal of assets in pre‑pension year—family members

          (1A)  This section applies only to disposals of assets that took place before 1 July 2002.

             (1)  Subject to this section, if:

                     (a)  a person (the relevant person) has disposed of an asset; and

                     (b)  the relevant person is a family member of another person (the other person) when the other person claims a youth allowance; and

                     (c)  the relevant person disposed of the asset during a pre‑pension year of the other person; and

                     (d)  the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pre‑pension year, exceeds $10,000;

then, for the purpose of determining whether a youth allowance is payable to the other person, there is to be included in the value of the other person’s assets for the period of 5 years that starts on the day on which the disposition took place:

                     (e)  the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pre‑pension year exceeds $10,000; or

                      (f)  the amount of the first‑mentioned disposition;

whichever is the lesser amount.

Note 1:       For disposes of assets see section 1123.

Note 2:       For amount of disposition see section 1124.

             (2)  If:

                     (a)  amounts are included under subsection (1) in the value of the other person’s assets because of a disposition of an asset by the relevant person; and

                     (b)  the relevant person ceases to be a family member of the other person;

any amount that was included in the value of the other person’s assets because of the disposition ceases to be included in the value of those assets.

             (3)  If:

                     (a)  an amount is included under subsection (1) in the value of the assets of the other person because of a disposition of an asset by the relevant person; and

                     (b)  the relevant person dies;

any amount that was included in the value of those assets because of the disposition ceases to be included in the value of those assets.

1126B  Disposal of assets in pension year—family members

          (1A)  This section applies only to disposals of assets that took place before 1 July 2002.

             (1)  Subject to this section, if:

                     (a)  a person (the relevant person) has disposed of an asset during a pension year of another person (the other person) of whom the relevant person is a family member; and

                     (b)  the other person is receiving youth allowance; and

                     (c)  the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pension year, exceeds $10,000;

then, for the purposes of this Act, there is to be included in the value of the other person’s assets for the period of 5 years that starts on the day on which the disposition took place:

                     (d)  the amount by which the sum of the amount of the first‑mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during the pension year exceeds $10,000; or

                     (e)  the amount of the first‑mentioned disposition;

whichever is the lesser amount.

Note 1:       For disposes of assets see section 1123.

Note 2:       For amount of disposition see section 1124.

             (2)  If:

                     (a)  amounts are included under subsection (1) in the value of the other person’s assets because of a disposition of an asset by the relevant person; and

                     (b)  the relevant person ceases to be a family member of the other person;

any amount that was included in the value of the other person’s assets because of the disposition ceases to be included in the value of those assets.

             (3)  If:

                     (a)  an amount is included under subsection (1) in the value of the assets of the other person because of a disposition of an asset by the relevant person; and

                     (b)  the relevant person dies;

any amount that was included in the value of those assets because of the disposition ceases to be included in the value of those assets.

1126C  Disposal of assets in income year—family members

Disposals to which section applies

             (1)  This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person (the relevant person) who is a family member of another person (the other person) who has claimed or is receiving a youth allowance.

Increase in value of assets

             (2)  Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the relevant person or the other person during the income year in which the relevant disposal took place, exceeds $10,000, then, for the purpose of determining whether a youth allowance is payable to the other person, the lesser of the following amounts is to be included in the value of the other person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:

                     (a)  the amount of the relevant disposal;

                     (b)  the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the relevant person or the other person during the income year in which the relevant disposal took place, exceeds $10,000.

Note:          See also section 1126E (about modification of this Division in respect of certain assets).

Effect of ceasing to be family member

             (3)  If:

                     (a)  an amount is included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and

                     (b)  the relevant person ceases to be a family member of the other person;

any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.

Effect of death

             (4)  If:

                     (a)  an amount is included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and

                     (b)  the relevant person dies;

any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.

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

Disposals to which section applies

             (1)  This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person (the relevant person) who is a family member of another person (the other person) who has claimed or is receiving youth allowance.

Increase in value of assets

             (2)  If:

                     (a)  the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets made during the rolling period by the relevant person or the other person;

less

                     (b)  the sum of any amounts included in the value of the other person’s assets during the rolling period under section 1126C or any previous application or applications of this section;

exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the other person’s assets for the period of 5 years starting on the day on which the relevant disposal took place:

                     (c)  an amount equal to the excess;

                     (d)  the amount of the relevant disposal.

Note:          See also section 1126E (about modification of this Division in respect of certain assets).

Effect of ceasing to be family member

             (3)  If:

                     (a)  amounts are included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and

                     (b)  the relevant person ceases to be a family member of the other person;

any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.

Effect of death

             (4)  If:

                     (a)  an amount is included under subsection (2) in the value of the other person’s assets because of a disposal of an asset by the relevant person; and

                     (b)  the relevant person dies;

any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets.

Rolling period

             (5)  For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002.

1126E  Modification of this Division in respect of certain assets

             (1)  This section applies if:

                     (a)  in respect of a disposal (the relevant disposal) of an asset, an amount (the current amount) is being included under this Division (including because of this section) in the value of the assets of a person (the affected person); and

                     (b)  during the 5‑year period referred to in subsection 1126AA(2), 1126AB(2), 1126AC(2), 1126AD(2), 1126C(2) or 1126D(2), one of the following events happens:

                              (i)  in the case of section 1126AA or 1126AB—the person referred to in subsection 1126AA(1) or 1126AB(1) acquires the asset or receives consideration for the asset;

                             (ii)  in the case of section 1126AC or 1126AD—the person referred to in paragraph 1126AC(1)(a) or 1126AD(1)(a), or the person’s partner, acquires the asset or receives consideration for the asset or they jointly acquire the asset or jointly receive consideration for the asset;

                            (iii)  in the case of section 1126C or 1126D—the relevant person referred to in subsection 1126C(1) or 1126D(1) acquires the asset or receives consideration for the asset; and

                     (c)  during that 5‑year period, the Secretary is notified in writing of the circumstances covered by paragraph (b).

             (2)  The Secretary may, having regard to the event, determine in writing that:

                     (a)  from the start of the day on which the notification occurs, section 1126AA, 1126AB, 1126AC, 1126AD, 1126C or 1126D ceases to apply in respect of the relevant disposal; or

                     (b)  both:

                              (i)  from the start of the day on which the notification occurs, the current amount ceases to be included in the value of the affected person’s assets; and

                             (ii)  from the start of the day on which the notification occurs until the end of that 5‑year period, an amount specified in the determination (being an amount less than the current amount) is to be included in the value of the affected person’s assets in respect of the relevant disposal.

             (3)  The Secretary must give the affected person written notice of the determination.

             (4)  A determination under subsection (2) is not a legislative instrument.

1127  Disposition more than 5 years old to be disregarded

                   This Division does not apply to a disposition of an asset that took place:

                     (a)  more than 5 years before the time when:

                              (i)  the person who disposed of the asset; or

                             (ii)  if that person was, at the time when the disposition took place, a member of a couple—the person’s partner; or

                            (iii)  if that person was, at that time, a family member of another person who is receiving or claiming youth allowance and is not independent—the other person;

                            became qualified for a social security pension or a social security benefit; or

                     (b)  less than 5 years before the time referred to in paragraph (a) and before the time when the Secretary is satisfied that the person who disposed of the asset could reasonably have expected that the person, the person’s partner or the other person, as the case may be, would become qualified for such a pension or benefit.

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

                   This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test).


 

Division 3Financial hardship

1129  Access to financial hardship rules—pensions

             (1)  If:

                     (a)  either:

                              (i)  a social security pension is not payable to a person because of the application of an assets test; or

                             (ii)  a person’s social security pension rate is determined by the application of an assets test; and

                     (b)  either:

                              (i)  sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC, 1126AD and 1126E (so far as section 1126E relates to sections 1126AA, 1126AB, 1126AC and 1126AD) (disposal of assets) do not apply to the person; or

                             (ii)  the Secretary determines that the application of those sections to the person should, for the purposes of this section, be disregarded; and

                     (c)  the person, or the person’s partner, has an unrealisable asset; and

                     (d)  the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and

                     (e)  the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person;

the Secretary must determine that this section applies to the person.

Note 1:       For social security pension see subsection 23(1).

Note 2:       for unrealisable asset see subsections 11(12) and (13).

          (1A)  In subsection (1):

social security pension does not include a pension PP (single).

Note:          Financial hardship rules for pension PP (single) are contained in sections 1130B and 1130C.

             (2)  A decision under subsection (1) takes effect:

                     (a)  on the day on which the request under paragraph (1)(d) was lodged with the Department; or

                     (b)  if the Secretary so decides in the special circumstances of the case—on a day not more than 6 months before the day referred to in paragraph (a).

1130  Application of financial hardship rules—pensions

Value of unrealisable asset to be disregarded

             (1)  If section 1129 applies to a person, the value of:

                     (a)  any unrealisable asset of the person; and

                     (b)  any unrealisable asset of the person’s partner;

is to be disregarded in working out the person’s social security pension rate.

Deduction from social security pension maximum payment rate

             (2)  If section 1129 applies to a person, there is to be deducted from the person’s social security pension maximum payment rate an amount equal to the person’s adjusted annual rate of ordinary income.

Adjusted annual rate of ordinary income

             (3)  A person’s adjusted annual rate of ordinary income is an amount per year equal to the sum of:

                     (a)  the person’s annual rate of ordinary income (other than income from assets); and

                     (b)  the person’s annual rate of ordinary income from assets that are not assets tested; and

                     (c)  either:

                              (i)  the person’s annual rate of ordinary income from unrealisable assets; or

                             (ii)  the person’s notional annual rate of ordinary income from unrealisable assets;

                            whichever is the greater; and

                     (d)  an amount per year equal to $9.75 for each $250 of the value of the person’s assets (other than disregarded assets); and

                     (e)  any amounts that are not income of the person because of paragraph 8(8)(zp).

Assets tested asset

             (4)  For the purposes of subsection (3), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).

Notional annual rate of ordinary income from unrealisable assets

             (5)  A person’s notional annual rate of ordinary income from unrealisable assets is:

                     (a)  the amount per year equal to 2.5% of the value of the person’s and the person’s partner’s unrealisable assets; or

                     (b)  the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person’s and the person’s partner’s unrealisable assets;

whichever is the less.

Family farms

             (6)  If:

                     (a)  an unrealisable asset is a farm; and

                     (b)  the farm is operated by a person who is a family member of the person to whom this section applies; and

                     (c)  it is not reasonable to expect the farm to be used for another purpose;

the Secretary, in working out the amount per year that could reasonably be expected to be obtained from a purely commercial application of the farm, is to have regard to the overall financial situation of the person operating the farm.

          (6A)  If:

                     (a)  section 1129 applies to a person; and

                     (b)  the person, or the person’s partner, owns residential premises; and

                     (c)  the premises are an unrealisable asset; and

                     (d)  a family member of the person, or of the partner, lives at the premises; and

                     (e)  one of the following conditions is satisfied:

                              (i)  the family member previously provided substantial care for the person or the partner at the premises at a time when the premises were the principal home of the person or the partner;

                             (ii)  the family member has resided at the premises for a period of, or periods that add up to, 10 years or more;

                            (iii)  the family member is:

                                        (A)  a child of the person or the partner; and

                                        (B)  disabled;

                                   and the person or the partner is promoting the independent living of the family member; and

                      (f)  it is not reasonable to expect the premises to be sold or otherwise used to provide income support for the person;

the Secretary, in working out the amount per year that could reasonably be expected to be obtained from a purely commercial application of the premises, is to have regard to whether the family member is financially capable of obtaining suitable alternative accommodation.

Note:          for family member see subsection 23(1).

             (7)  Subsections (6) and (6A) do not limit the matters to which the Secretary may have regard in exercising the powers under paragraph (5)(b).

             (8)  Subsection (2) applies:

                     (a)  subject to subsection (10); and

                     (b)  despite sections 1064 and 1066.

             (9)  If:

                     (a)  a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC, 1126AD or 1126E (so far as section 1126E relates to section 1126AA, 1126AB, 1126AC or 1126AD) applies to the disposition; and

                     (b)  the Secretary has made a determination under subparagraph 1129(1)(b)(ii) in relation to the disposition;

this section applies to the person as if the person had not disposed of the assets.

           (10)  If the sum of the rate of pension that would, apart from this subsection, be payable to a person and the annual rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per annum of the excess.

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

                   This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test).

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

             (1)  If:

                     (a)  a pension PP (single) is not payable to a person because of the application of an assets test; and

                     (b)  the person is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and

                     (c)  either:

                              (i)  sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC, 1126AD and 1126E (so far as section 1126E relates to sections 1126AA, 1126AB, 1126AC and 1126AD) (disposal of assets) do not apply to the person; or

                             (ii)  the Secretary decides that the application of those sections to the person should, for the purposes of this section, be disregarded; and

                     (d)  the person has an unrealisable asset; and

                     (e)  the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and

                      (f)  the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person;

the Secretary must determine that this section applies to the person.

Note:          For unrealisable asset see subsections 11(12) and (13).

             (2)  A reference in subsection (1) to acceptable alternative Commonwealth income support in relation to a person is a reference to payments (other than payments under the Farm Household Support Act 1992):

                     (a)  that are made available by the Commonwealth by way of income support; and

                     (b)  the rate of which is not less than the rate of pension PP (single) that would be applicable to the person if pension PP (single) were payable to the person.

             (3)  A decision under subsection (1) takes effect:

                     (a)  on the day on which the request under paragraph (1)(e) was lodged with the Department; or

                     (b)  if the Secretary so decides in the special circumstances of the case—on a day not more than 6 months before the day on which the request under paragraph (1)(e) was lodged with the Department.

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

Value of unrealisable asset to be disregarded

             (1)  If section 1130B applies to a person, the value of any unrealisable asset of the person is to be disregarded in working out whether a pension PP (single) is payable to the person.

Deduction from pension PP (single) maximum payment rate

             (2)  If section 1130B applies to a person, there is to be deducted from the person’s pension PP (single) maximum payment rate an amount equal to the person’s adjusted annual rate of ordinary income.

Note:          For maximum payment rate see Step 4 of the method statement in point 1068A‑A1.

Adjusted annual rate of ordinary income

             (3)  The person’s adjusted annual rate of ordinary income is an amount per year equal to the sum of:

                     (a)  the person’s annual rate of ordinary income (other than income from assets); and

                     (b)  the person’s annual rate of ordinary income from assets that are not assets tested; and

                     (c)  either:

                              (i)  the person’s annual rate of ordinary income from unrealisable assets; or

                             (ii)  the person’s notional annual rate of ordinary income from unrealisable assets;

                            whichever is the greater; and

                     (d)  an amount per year equal to $26.00 for each $250 of the value of the person’s assets (other than disregarded assets); and

                     (e)  any amounts that are not income of the person because of paragraph 8(8)(zp).

Assets tested asset

             (5)  For the purposes of paragraph (3)(b), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).

Notional annual rate of ordinary income from unrealisable assets

             (6)  A person’s notional annual rate of ordinary income from unrealisable assets is:

                     (a)  the amount per year equal to 2.5 per cent of the value of the person’s unrealisable assets; or

                     (b)  the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person’s unrealisable assets;

whichever is the lesser.

             (7)  Subsection (2) applies:

                     (a)  subject to subsection (9); and

                     (b)  despite section 500Q.

             (8)  If:

                     (a)  a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC, 1126AD or 1126E (so far as section 1126E relates to section 1126AA, 1126AB, 1126AC or 1126AD) applies to the disposition; and

                     (b)  the Secretary has made a determination under paragraph 1130B(1)(c) in relation to the disposition;

this section applies to the person as if the person had not disposed of the assets.

             (9)  If the sum of the rate of pension PP (single) that would, apart from this subsection, be payable to a person and the annual rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per year of the excess.

1131  Access to financial hardship rules—benefits

             (1)  If:

                     (a)  a social security benefit is not payable to a person because of the application of an assets test; and

                     (b)  the person is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and

                     (c)  the person’s partner is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and

                     (d)  either:

                              (i)  sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC, 1126AD and 1126E (so far as section 1126E relates to sections 1126AA, 1126AB, 1126AC and 1126AD) (disposal of assets) do not apply to the person; or

                             (ii)  the Secretary decides that the application of those sections to the person should, for the purposes of this section, be disregarded; and

                     (e)  the person, or the person’s partner, has an unrealisable asset; and

                      (f)  the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and

                     (g)  the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person;

the Secretary must determine that this section applies to the person.

Note:          for unrealisable asset see subsections 11(12) and (13).

          (1A)  In subsection (1):

assets test does not include the parental means test in section 1067G (Youth Allowance Rate Calculator).

             (2)  A reference in subsection (1) to acceptable alternative Commonwealth income support in relation to a person is a reference to payments (other than payments under the Farm Household Support Act 1992):

                     (a)  that are made available by the Commonwealth by way of income support; and

                     (b)  the rate of which is not less than the rate of newstart allowance, youth allowance or austudy payment that would be applicable to the person if that allowance were payable to the person.

             (3)  A decision under subsection (1) takes effect:

                     (a)  on the day on which the request under paragraph (1)(f) was lodged with the Department; or

                     (b)  if the Secretary so decides in the special circumstances of the case—on a day not more than 6 months before the day on which the request under paragraph (1)(f) was lodged with the Department.

1132  Application of financial hardship rules—benefits

Value of unrealisable asset to be disregarded

             (1)  If section 1131 applies to a person, the value of:

                     (a)  any unrealisable asset of the person; and

                     (b)  any unrealisable asset of the person’s partner;

is to be disregarded in working out whether a social security benefit is payable to the person.

Deduction from social security benefit maximum payment rate

             (2)  If section 1131 applies to a person, there is to be deducted from the person’s social security benefit maximum payment rate an amount equal to the person’s adjusted fortnightly rate of ordinary income.

Note:          for maximum payment rate, see, for example, Step 4 of the Method statement in point 1068‑A1.

Adjusted fortnightly rate of ordinary income

             (3)  The person’s adjusted fortnightly rate of ordinary income is an amount per fortnight equal to the sum of:

                     (a)  the person’s fortnightly rate of ordinary income (other than income from assets); and

                     (b)  the person’s fortnightly rate of ordinary income from assets that are not assets tested; and

                     (c)  either:

                              (i)  the person’s fortnightly rate of ordinary income from unrealisable assets; or

                             (ii)  the person’s notional fortnightly rate of ordinary income from unrealisable assets;

                            whichever is the greater; and

                     (d)  an amount per fortnight equal to $1 for each $250 of the value of the person’s assets (other than disregarded assets); and

                     (e)  any amounts that are not income of the person because of paragraph 8(8)(zp).

Assets tested asset

             (4)  For the purposes of paragraph (3)(b), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).

Notional fortnightly rate of ordinary income from unrealisable assets

             (5)  A person’s notional fortnightly rate of ordinary income from unrealisable assets is:

                     (a)  the amount per fortnight equal to one twenty‑sixth of 2.5% of the value of the person’s and the person’s partner’s unrealisable assets; or

                     (b)  the amount per fortnight that could reasonably be expected to be obtained from a purely commercial application of the person’s and the person’s partner’s unrealisable assets;

whichever is the less.

             (6)  Subsection (2) applies:

                     (a)  subject to subsection (8); and

                     (b)  despite sections 601, 733, 1067G, 1067L and 1068.

             (7)  If:

                     (a)  a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC, 1126AD or 1126E (so far as section 1126E relates to section 1126AA, 1126AB, 1126AC or 1126AD) applies to the disposition; and

                     (b)  the Secretary has made a determination under paragraph 1131(1)(d) in relation to the disposition;

this section applies to the person as if the person had not disposed of the assets.

             (8)  If the sum of the rate of benefit that would, apart from this subsection, be payable to a person and the fortnightly rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per fortnight of the excess.


 

Division 4Pension loans scheme

1133AA  Pension loans scheme definitions

             (1)  In this Division, unless the contrary intention appears:

assets reduced rate means the rate worked out at Step 10 of the Method statement in Module A of the relevant Pension Rate Calculator.

disposes of real assets has its ordinary meaning.

guaranteed amount means the amount (if any) specified under paragraph 1136(1A)(b) or subsection 1137(1) (as the case may be).

income reduced rate means the rate worked out at Step 8 of the Method statement in Module A of the relevant Pension Rate Calculator.

maximum payment rate means the rate worked out at Step 4 of the Method statement in Module A of the relevant Pension Rate Calculator.

real assets, in relation to a person or couple, means the real property (including the principal home) of the person or couple in Australia, but does not include any real property specified under paragraph 1136(1A)(a).

             (2)  For the purposes of this Division, a reference to a charge under section 1138 includes a reference to a charge continued in force by subsection 1138(3) or paragraph 1139(2A)(b).

1133  Qualification for participation in pension loans scheme

Person not member of a couple

             (1)  A person who is not a member of a couple is qualified to participate in the pension loans scheme if:

                     (a)  the person is receiving or is qualified for:

                              (i)  age pension; or

                             (ii)  disability support pension; or

                            (iii)  carer payment; or

                             (v)  widow B pension; or

                            (vi)  bereavement allowance; and

                     (b)  the rate of that pension or allowance is, or is to be:

                              (i)  an income reduced rate; or

                             (ii)  an assets reduced rate;

                            and at least one of those reduced rates is not a nil rate; and

                     (c)  the person has reached pension age; and

                     (d)  either:

                              (i)  the value of the person’s real assets (after deduction of any guaranteed amount) is sufficient to secure the payment of any debt that may become payable to the Commonwealth under this Division; or

                             (ii)  subsection (3) applies to the person.

Note 1:       For income reduced rate and assets reduced rate see subsection 1133AA(1).

Note 2:       For real assets see subsection 1133AA(1).

Note 3:       For guaranteed amount see subsection 1133AA(1).

Note 4:       For pension age see subsections 23(5A), (5B), (5C) and (5D).

Person member of a couple

             (2)  A person who is a member of a couple is qualified to participate in the pension loans scheme if:

                     (a)  the person is receiving or is qualified for:

                              (i)  an age pension; or

                             (ii)  a disability support pension; or

                            (iii)  a wife pension; or

                            (iv)  a carer payment; and

                     (b)  the rate of that pension is, or is to be:

                              (i)  an income reduced rate; or

                             (ii)  an assets reduced rate;

                            and at least one of those reduced rates is not a nil rate; and

                     (c)  the person:

                              (i)  has reached pension age; or

                             (ii)  is the partner of a person who has reached pension age; and

                     (d)  either:

                              (i)  the value of the couple’s real assets (after deduction of any guaranteed amount) is sufficient to secure the payment of any debt that may become payable to the Commonwealth under this Division; or

                             (ii)  subsection (3) applies to both of the members of the couple.

Note 1:       For income reduced rate and assets reduced rate see subsection 1133AA(1).

Note 2:       For real assets see subsection 1133AA(1).

Note 3:       For guaranteed amount see subsect