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This is a Bill, not an Act. For current law, see the Acts databases.
2002-2003-2004
The Parliament
of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Family
and Community Services and Veterans’ Affairs Legislation Amendment (Sugar
Reform) Bill 2004
No. ,
2004
(Family and Community
Services)
A Bill for an Act to amend the
law relating to social security and veterans’ entitlements, and for
related purposes
Contents
Social Security Act
1991 3
Social Security (Administration) Act
1999 26
Veterans’ Entitlements Act
1986 27
A Bill for an Act to amend the law relating to social
security and veterans’ entitlements, and for related
purposes
The Parliament of Australia enacts:
This Act may be cited as the Family and Community Services and
Veterans’ Affairs Legislation Amendment (Sugar Reform) Act
2004.
This Act commences on the day on which it receives the Royal
Assent.
Each Act that is specified in a Schedule to this Act is amended or
repealed as set out in the applicable items in the Schedule concerned, and any
other item in a Schedule to this Act has effect according to its
terms.
1 Reader’s Guide (eighth dot-point under the
heading “4. The other Chapters deal with general
topics.”)
Omit “Part 3.14A”, substitute “Parts 3.14A and
3.14B”.
2 After subsection 12A(2A)
Insert:
(2B) Subsection (2) does not apply:
(a) to a person to whom Part 3.14B applies because the person has
transferred his or her eligible interest in a sugarcane farm in accordance with
paragraph 1185R(1)(a) or (2)(a); or
(b) if the person’s partner has transferred by way of
gift:
(i) to an eligible descendant of the person; or
(ii) jointly to an eligible descendant of the person and to the
descendant’s partner;
his or her eligible interest in a sugarcane farm—to the
person’s partner;
if the person or the person’s partner (as the case may be), on so
transferring his or her eligible interest in the farm, has retained a life
interest in the dwelling house on the farm, and in the adjacent private land,
that constitute his or her principal home.
3 After section 17A
Insert:
(1) In this Act, unless the contrary intention appears:
eligible former partner of a qualifying sugarcane farmer has
the meaning given by subsection (2).
eligible interest has the meaning given by
subsections (5) and (6).
qualifying sugarcane farmer has the meaning given by
subsections (3) and (4).
RASF closing day has the meaning given by
section 1185N.
RASF commencement day has the meaning given by
section 1185N.
relevant sugarcane farm asset means any relevant farm asset
that is a produce of, or is used for the purposes of, a sugarcane farm
enterprise.
Note: For relevant farm asset see subsection
17A(1).
sugarcane farm means a farm that is used predominantly for
the purposes of a sugarcane farm enterprise.
Note: For farm see subsection
17A(1).
sugarcane farm enterprise means a farm enterprise
where:
(a) a majority of the enterprise is undertaken for the purposes of growing
commercial quantities of sugar cane; or
(b) if paragraph (a) does not apply—a significant proportion of
the enterprise is undertaken for the purposes of growing commercial quantities
of sugar cane and the Secretary has determined, in accordance with any
guidelines made by the Secretary for the purposes of this paragraph, that there
are special circumstances that mean that the farm enterprise should be treated
as an enterprise to which paragraph (a) applies.
Note: For farm enterprise see subsection
17A(1).
total net value has the meaning given by
section 1185S.
transfer:
(a) in relation to an eligible interest in a sugarcane farm—has the
meaning given by subsections (7), (8), (10), (11) and (12); or
(b) in relation to an eligible interest in a relevant sugarcane farm
asset—has the meaning given by subsections (9), (11) and
(12).
Note: Subsection 17A(1) also contains other definitions
relevant to the operation of Part 3.14B.
(2) A person is an eligible former partner of a qualifying sugarcane
farmer if:
(a) the person was, but no longer is (whether because of death or any
other reason), the partner of another person; and
(b) on the day on which the person ceased to be the partner of the other
person, the other person was a qualifying sugarcane farmer; and
(c) after ceasing to be the partner of the other person, the person has
not again become a member of a couple; and
(d) the person has an eligible interest in a sugarcane farm or sugarcane
farms in which the other person had an eligible interest.
Note: For eligible interest see
subsection (5).
(3) A person is a qualifying sugarcane farmer if:
(a) the person has, has not ceased to have, and has continuously had for a
period of at least 15 years, an eligible interest in a farm; and
(b) the farm is a sugarcane farm and has been a sugarcane farm:
(i) for at least the last 2 years; and
(ii) at all times since 29 April 2004; and
(c) during a period of 15 years, the person or the person’s
partner:
(i) has contributed a significant part of his or her labour and capital to
the development of a farm or farms; and
(ii) has derived a significant part of his or her income from that farm or
those farms; and
(d) during at least the last 2 years:
(i) that contribution of labour and capital has been to the development of
a sugarcane farm or sugarcane farms; and
(ii) that derivation of income has been from that sugarcane farm or those
sugarcane farms.
Note: For eligible interest see
subsection (5).
(4) A person is also a qualifying sugarcane farmer
if:
(a) the person has an eligible interest in one or more than one sugarcane
farm; and
(b) the eligible interest in the farm, or each of the farms, was acquired
by the person before 29 April 2004; and
(c) the person or the person’s partner or former partner has been
involved in farming in Australia for a continuous period of 20 years, or for
periods that together add up to 20 years, by:
(i) contributing a significant part of his or her labour to farm
enterprises; and
(ii) deriving a significant part of his or her income from farm
enterprises; and
(d) during at least the last 2 years:
(i) that contribution of labour has been to sugarcane farm enterprises;
and
(ii) that derivation of income has been from sugarcane farm
enterprises.
Note: For eligible interest see
subsection (5).
(5) A person has an eligible interest in a sugarcane farm
if:
(a) the person has a legal estate or interest in the farm; or
(b) the person has a transferable legal right or a transferable licence to
occupy the farm for a particular purpose of the farm enterprise; or
(c) as the mortgagor of a legal estate or interest in the farm (being an
estate or interest that is not registered under a relevant State land law), the
person has an equitable estate or interest in the farm; or
(d) the person is a shareholder in a proprietary company that has a legal
estate or interest in the farm; or
(e) the value of the person’s assets includes an amount calculated
(in accordance with section 1208E) by reference to the value of the
farm.
Note: The eligible interest in a sugarcane farm that is
relevant for the operation of Part 3.14B is the interest held by a person
immediately before that interest is transferred to an eligible descendant. So,
for example, to find out whether an interest is covered by paragraph (e),
the provisions of Part 3.18 must be applied in relation to the
person’s circumstances as they were immediately before the
transfer.
(6) A person has an eligible interest in a relevant
sugarcane farm asset if:
(a) the person has a legal interest in the relevant farm asset;
or
(b) the person is a shareholder in a proprietary company that has a legal
estate or interest in the relevant farm asset; or
(c) the value of the person’s assets includes an amount calculated
(in accordance with section 1208E) by reference to the value of the
relevant farm asset.
Note: The eligible interest in a relevant sugarcane farm
asset that is relevant for the operation of Part 3.14B is the interest held
by a person immediately before that interest is transferred to an eligible
descendant. So, for example, to find out whether an interest is covered by
paragraph (c), the provisions of Part 3.18 must be applied in relation
to the person’s circumstances as they were immediately before the
transfer.
(7) Subject to subsections (8), (10), (11) and (12), an eligible
interest that a person has in a sugarcane farm is transferred to
another person if, and only if, the eligible interest:
(a) ceases to be vested in the person; and
(b) becomes vested in the other person.
(8) To avoid any doubt, it is stated that if a person who transfers a
legal estate or interest in a sugarcane farm to another person is, under a
relevant State land law, registered as being the proprietor (whether that word
or any other word is used) of that estate or interest, the legal estate or
interest in the farm is taken not to have become vested in the other person
unless and until the transfer is registered in accordance with that
law.
Note: For relevant State land law see
subsection 17A(1).
(9) Subject to subsections (11) and (12), an eligible interest that a
person has in a relevant sugarcane farm asset is transferred to
another person if, and only if, the eligible interest:
(a) ceases to be vested in the person; and
(b) becomes vested in the other person.
(10) If, as the mortgagor of a legal estate or interest in a sugarcane
farm (see paragraph (5)(c)), a person has an eligible interest in the farm,
the person is taken to have transferred that eligible interest in
the farm to another person only if the person:
(a) has, under a relevant State land law, become registered as the
proprietor (whether that word or any other word is used) of the legal estate or
interest in the farm; and
(b) has then transferred that legal estate or interest to the other
person.
(11) If a person has an eligible interest in a sugarcane farm or a
relevant sugarcane farm asset because (see paragraphs (5)(d) and (6)(b))
the person is a shareholder in a proprietary company that has a legal estate or
interest in the farm, or a legal interest in the relevant farm asset (as the
case may be), the person is taken to have transferred to another
person his or her eligible interest in the farm or relevant farm asset only if
the person:
(a) has acquired the company’s legal estate or interest in the farm
or the company’s legal interest in the relevant farm asset; and
(b) has then transferred it to the other person.
(12) An eligible interest that a person (the first person)
has in a sugarcane farm or a relevant sugarcane farm asset because (see
paragraphs (5)(e) and (6)(c)) the value of the first person’s assets
includes an amount calculated (in accordance with section 1208E) by
reference to the value of the farm or relevant farm asset is
transferred to another person if:
(a) the first person is divested of that eligible interest; and
(b) as a result, the other person gains an eligible interest in the farm
or relevant farm asset of a value that is referrable to the full value of the
eligible interest divested.
(13) To avoid doubt, if:
(a) a person is able to transfer an eligible interest under either
subsection (11) or (12); and
(b) the person transfers that interest under
subsection (12);
the person is not required to meet the requirements of subsection (11)
in relation to the transfer.
4 Section 23 (definition of pension
age)
After “Part 3.14A”, insert “or
3.14B”.
5 Subsection 1074(2) (note)
Repeal the note, substitute:
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)).
6 Subsection 1075(1) (note)
Repeal the note, substitute:
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)).
7 Subsection 1076(1) (note)
Repeal the note, substitute:
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)).
8 Subsection 1077(1) (note)
Repeal the note, substitute:
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)).
9 Subsection 1078(1) (note)
Repeal the note, substitute:
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)).
10 Subsection 1083(1) (note)
Repeal the note, substitute:
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)).
11 Subsection 1123(1) (note)
Repeal the note, substitute:
Note: 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).
12 After Part 3.14A
Insert:
This Part deals with the transfer of sugarcane farming interests to
family members of a younger generation. The purpose of the Part is to provide
that, if the conditions set out in the Part are met, the value of any such
interests transferred by a qualifying sugarcane farmer, his or her partner, or
an eligible former partner of a qualifying sugarcane farmer, will
be disregarded in determining:
(a) whether a social security payment is payable; or
(b) at what rate a social security payment is payable.
(1) For the purposes of this Part:
(a) the RASF commencement day is the day on which this Part
commences; and
(b) the RASF closing day is (subject to any determination
under subsection (2)) the day that is 3 years after the RASF commencement
day.
(2) The Minister may, by written determination, specify a day that is
later than the day mentioned in paragraph (1)(b) as the RASF closing
day.
(3) A determination under subsection (2) is a disallowable instrument
for the purposes of section 46A of the Acts Interpretation Act
1901.
In this Part:
applicable cut-off date means:
(a) in relation to a transfer, where:
(i) the transfer was not completed before the RASF closing day;
and
(ii) a pre-assessment request in relation to the transfer was lodged with
the Department or the Agency within the period of 28 days immediately after the
RASF closing day; and
(iii) the Department or Agency responded affirmatively to the
request;
the first day after the end of the period of 13 weeks beginning on the
day on which the Department or Agency responded to the request; and
(b) in relation to any other transfer—the RASF closing
day.
Pre-assessment request
(1) For the purposes of this Part, a pre-assessment request
is a written request by a person:
(a) for advice about whether this Part would apply to the person, or to
the person’s partner, in the event that a proposed transfer were to take
place; and
(b) that sets out sufficient information to enable the advice to be
given.
(2) For the purposes of subsection (1), a written request does not
include a request made by e-mail.
Contact by telephone etc.—timing of request
(3) For the purposes of this Part, if:
(a) a person contacted the Department or the Agency:
(i) by telephone; or
(ii) by fax; or
(iii) by e-mail; or
(iv) in person;
for advice about whether this Part would apply to the person, or to the
person’s partner, in the event that a proposed transfer were to take
place; and
(b) the person followed up that contact by lodging a pre-assessment
request with the Department or Agency within 21 days after the day on which the
person contacted the Department or Agency;
the person is taken to have lodged the pre-assessment request on the day on
which the person contacted the Department or Agency.
Affirmative response to pre-assessment request
(4) For the purposes of this Part, if a person lodges a pre-assessment
request, the Department or the Agency is taken to have responded affirmatively
to that request if, and only if, the Secretary, or an officer of the Agency,
gives the person a written notice:
(a) that contains advice to the effect that this Part would apply to the
person, or to the person’s partner, in the event that the proposed
transfer were to take place; and
(b) that specifies the date on which the notice was issued.
Timing of response
(5) The Department or the Agency is taken to have responded to a
pre-assessment request on the date specified in the notice as the date on which
the notice was issued.
(1) Subject to subsections (3) and (4), this Part applies to a person
if:
(a) at any time after the RASF commencement day but before the applicable
cut-off date, the person, being then a qualifying sugarcane farmer, transferred
by way of gift to one, or more than one, eligible descendant (either solely to
the eligible descendant or jointly to him or her and his or her
partner):
(i) his or her eligible interest in the sugarcane farm or sugarcane farms
in which he or she had such an interest; and
(ii) all the eligible interests that he or she had in relevant sugarcane
farm assets; and
(b) the person, or (if the person is a member of a couple) the person or
his or her partner:
(i) has reached pension age; or
(ii) will reach pension age before the RASF closing day; and
(c) the total net value (calculated in accordance with section 1185S)
of the sugarcane farm or sugarcane farms, and the relevant sugarcane farm
assets, in which the person had eligible interests does not exceed $500,000;
and
(d) during the last 3 years before the transfer was completed, the
eligible descendant or each of the eligible descendants:
(i) had been actively involved with the sugarcane farm or any of the
sugarcane farms; or
(ii) would, in the opinion of the Secretary, have been so involved but for
exceptional circumstances beyond his or her control; and
(e) if the person is a member of a couple—the person’s partner
does not have an eligible interest in any sugarcane farm or relevant sugarcane
farm asset; and
(f) the person satisfies the sugarcane farmers’ income test for the
purposes of this Part.
Note 1: For eligible descendant see subsection
17A(1).
Note 2: For eligible interest,
qualifying sugarcane farmer, relevant sugarcane farm
asset, sugarcane farm and transfer, see
subsection 17B(1).
Note 3: For pension age see subsection
23(1).
Note 4: For actively involved with a sugarcane
farm see subsection (5).
Note 5: For the total net value of a sugarcane
farm, or sugarcane farms, and relevant sugarcane farm assets see
section 1185S.
Note 6: For the sugarcane farmers’ income test see
section 1185Y.
(2) Subject to subsections (3) and (4), this Part also applies to a
person if:
(a) at any time after the RASF commencement day but before the applicable
cut-off date, the person, being then an eligible former partner of a qualifying
sugarcane farmer, transferred by way of gift to one, or more than one, eligible
descendant of the farmer (either solely to the eligible descendant or jointly to
him or her and his or her partner):
(i) his or her eligible interest in the sugarcane farm or sugarcane farms
in which he or she had such an interest; and
(ii) all the eligible interests that he or she had in relevant sugarcane
farm assets; and
(b) the person has reached pension age or will reach pension age before
the RASF closing day; and
(c) the total net value (calculated in accordance with section 1185S)
of the sugarcane farm or sugarcane farms, and the relevant sugarcane farm
assets, in which the person had eligible interests does not exceed $500,000;
and
(d) during the last 3 years before the transfer was completed, the
eligible descendant or each of the eligible descendants:
(i) had been actively involved with the sugarcane farm or any of the
sugarcane farms; or
(ii) would, in the opinion of the Secretary, have been so involved but for
exceptional circumstances beyond his or her control; and
(e) the person satisfies the sugarcane farmers’ income test for the
purposes of this Part.
Note 1: For eligible descendant see subsection
17A(1).
Note 2: For eligible former partner of a
qualifying sugarcane farmer, eligible interest,
relevant sugarcane farm asset, sugarcane farm and
transfer see subsection 17B(1).
Note 3: For pension age see subsection
23(1).
Note 4: For actively involved with a sugarcane
farm see subsection (5).
Note 5: For the total net value of a sugarcane
farm, or sugarcane farms, and relevant sugarcane farm assets see
section 1185S.
Note 6: For the sugarcane farmers’ income test see
section 1185Y.
(3) This Part does not apply to the person if:
(a) immediately before the transfer, the eligible descendant, or one of
the eligible descendants, referred to in paragraph (1)(a) or (2)(a) (as the
case may be) had an eligible interest in:
(i) the sugarcane farm or one of the sugarcane farms referred to in
subparagraph (1)(a)(i) or (2)(a)(i); or
(ii) any relevant sugarcane farm asset; and
(b) the eligible descendant had acquired the eligible interest in the
farm, or in the relevant farm asset, after 29 April 2004; and
(c) the consideration, or part of the consideration, for the interest so
acquired was the wages forgone by the eligible descendant while he or she was
working as an employee on the farm or any of the farms.
Note 1: For eligible descendant see subsection
17A(1).
Note 2: For eligible interest, relevant
sugarcane farm asset, sugarcane farm and
transfer see subsection 17B(1).
(4) This Part does not apply to the person (the transferor)
if:
(a) the eligible interest, or any part of the eligible interest, that was
transferred is an interest that the transferor had in a sugarcane farm, or
sugarcane farms, or any relevant sugarcane farm asset because the value of the
transferor’s assets included an amount calculated by reference to the
value of the farm, or farms, or relevant farm asset (see paragraphs 17B(5)(e)
and (6)(c)); and
(b) immediately after the transfer to the eligible descendant, or eligible
descendants, referred to in paragraph (1)(a) or (2)(a) (as the case may
be), the eligible interest, or any part of the eligible interest, transferred
was held by a trust that was a concessional primary production trust in relation
to the transferor.
Note 1: For eligible descendant see subsection
17A(1).
Note 2: For eligible interest, relevant
sugarcane farm asset and sugarcane farm see subsection
17B(1).
Note 3: For the transfer of eligible interests
that are such interests because of paragraphs 17B(5)(e) and (6)(c) see
subsection 17B(12).
Note 4: For concessional primary production trust
see section 1208U.
(5) For the purposes of paragraphs (1)(d) and (2)(d), a person is
taken to have been actively involved with a sugarcane farm during
a particular period if, during that period, the person:
(a) has contributed a significant part of his or her labour to the
development of the sugarcane farm; or
(b) has undertaken educational studies or training in a field that, in the
opinion of the Secretary, is relevant to the development or management of the
sugarcane farm enterprise.
Meaning of total net value
(1) For the purposes of subsections 1185R(1) and (2), the total net
value of a sugarcane farm, or sugarcane farms, and relevant sugarcane
farm assets, the eligible interests in which have been transferred, is to be
calculated as follows:
where:
market value of sugarcane farm assets means the total of the
market values of the sugarcane farm, or sugarcane farms, and relevant sugarcane
farm assets immediately before the transfer of the eligible interests.
sugarcane farm debts means the total of any amounts of money
that:
(a) had been borrowed for the purposes of undertaking one or more
sugarcane farm enterprises on the sugarcane farm or sugarcane farms;
and
(b) had not been repaid before the transfer of the eligible
interests.
Note: The total net value of a sugarcane farm, or sugarcane
farms, and relevant sugarcane farm assets is not affected by the number of
persons who have interests in them.
(2) Subsection (1) has effect subject to subsections (3), (4)
and (5).
Value of farm reduced by value of transferee’s
interest
(3) If:
(a) a person transfers eligible interests that the person has in a
sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets;
and
(b) immediately before the transfer by the person of his or her eligible
interests in the farm, or farms, and relevant farm assets, the transferee had an
eligible interest in the farm, or one of those farms, or a relevant farm
asset;
then, the total net value of the farm, or farms, and relevant
farm assets is the amount worked out under subsection (1) reduced by the
value of the transferee’s eligible interest in the farm or relevant farm
asset at that time.
Value of farm affected by previous transaction
(4) If:
(a) a person transfers his or her eligible interests in a sugarcane farm,
or sugarcane farms, and relevant sugarcane farm assets; and
(b) at any time after 29 April 2004 the person making the transfer
entered into a transaction or transactions; and
(c) the result of the transaction or transactions was that the total net
value (worked out in accordance with subsection (1)) of the farm, or farms,
and relevant farm assets immediately before the transfer is less than the total
net value that that farm, or those farms, and relevant farm assets would have
had immediately before the transfer if the person had not entered into the
transaction or transactions (the unreduced value);
then, the total net value of the farm, or farms, and relevant
farm assets is taken to be an amount equal to the unreduced value.
Life interest retained in principal home on farm
(5) If:
(a) a person transfers eligible interests that the person has in a farm by
way of gift; and
(b) the person retains a freehold estate, a leasehold interest or a life
interest in the dwelling-house on the farm, and the adjacent private land, that
constitute the person’s principal home;
then:
(c) for the purposes of subsections 1185R(1) and (2), the person is taken
to have transferred the whole of his or her eligible interest in the farm by way
of gift; and
(d) in assessing the market value of the farm for the purposes of
subsection (1), the value of the dwelling-house and the adjacent private
land is not to be included.
Note: For eligible interest, relevant sugarcane farm
asset, sugarcane farm and transfer see
subsection 17B(1).
(1) If this Part applies to a person because of subsection 1185R(1), then,
subject to subsections (4) and (6):
(a) the transfer by the person of his or her eligible interest in a
sugarcane farm or in a relevant sugarcane farm asset is taken not to be a
disposal of an asset (within the meaning of section 1123); and
(b) if the person’s partner has also transferred by way of gift to
an eligible descendant of the person any eligible interest in a sugarcane farm
or in a relevant sugarcane farm asset, that transfer is taken not to be a
disposal of an asset (within the meaning of section 1123).
(2) If this Part applies to a person because of subsection 1185R(2), then,
subject to subsections (5) and (6), the transfer by the person of his or
her eligible interest in a sugarcane farm or in a relevant sugarcane farm asset
is taken not to be a disposal of an asset (within the meaning of
section 1123).
(3) To avoid doubt, subsections (1) and (2) have effect despite
sections 1208L and 1208M.
(4) If:
(a) the applicable cut-off date in relation to the transfer referred to in
paragraph (1)(a) was the RASF closing day; and
(b) when the transfer was completed neither the person making the transfer
nor his or her partner had reached pension age;
subsection (1) only applies after one of them reaches that
age.
(5) If:
(a) the applicable cut-off date in relation to the transfer referred to in
subsection (2) was the RASF closing day; and
(b) when the transfer was completed the person making the transfer had not
reached pension age;
subsection (2) only applies after the person reaches that
age.
Note 1: For eligible descendant see subsection
17A(1).
Note 2: For eligible interest, RASF
closing day, relevant sugarcane farm asset,
sugarcane farm and transfer see subsection
17B(1).
Note 3: For pension age see subsection
23(1).
(6) Disregard subsections (1) and (2) when working out a rate for the
purposes of Division 6 of Part 2.2A.
Note: Part 2.2A provides for the payment of a pension
bonus to a person who qualifies for an age pension if the person has deferred
claiming that pension for a period of at least one year and the person, or the
person’s partner, has worked gainfully during that
period.
This Division applies if:
(a) a person, or a person’s partner, has reached pension age;
and
(b) this Part applies because of a transfer of eligible interests by the
person or the person’s partner; and
(c) the person is receiving a social security payment under this Act;
and
(d) the value of the eligible interests has been included in the value of
the person’s assets, or the partner’s assets, when calculating the
rate of the person’s social security payment.
If:
(a) the rate at which a social security payment is being, or has been,
paid to a person is less than the rate (the increased rate) at
which it would be, or would have been, paid if the value of the eligible
interests transferred by the person or the person’s partner had not been
included in the value of the person’s assets, or of the partner’s
assets, in calculating the rate of the person’s social security payment;
and
(b) the person wants the social security payment to be paid at the
increased rate;
the person must make a request to that effect.
A request under section 1185V must be made in writing and must be in
accordance with a form approved by the Secretary.
(1) If:
(a) a person makes a request under section 1185V in respect of a
social security payment; and
(b) the Secretary is satisfied that the rate at which the social security
payment is being, or has been, paid to the person is less than the rate at which
it would be, or would have been, paid if the value of the eligible interests
transferred by the person or the person’s partner had not been included in
the value of the person’s assets, or the partner’s assets, when
calculating the rate of the person’s social security payment;
the Secretary must determine that the request is to be granted.
(2) The determination takes effect:
(a) if the person makes the request during the period of 13 weeks that
starts on the day on which the transfer was completed—on the day on which
the transfer was completed; or
(b) in any other case—on the day on which the request is
made.
How to work out whether the sugarcane farmers’ income test is
satisfied
(1) This is how to work out whether a person who has transferred his or
her eligible interest in a sugarcane farm or sugarcane farms satisfies the
sugarcane farmers’ income test for the purposes of this Part:
Method statement
Step 1. Work out under subsection (2) the amount of the
person’s ordinary income (other than ordinary income from farming) for
each of the last 3 financial years before the applicable completion day (the
income test years).
If the person was a member of a couple on the applicable completion day,
work out also under subsection (2) the amount of his or her partner’s
ordinary income (other than ordinary income from farming) for the 3 income test
years.
Add up all the amounts so obtained. The result is called the
person’s total non-farm income.
Step 2. Work out under subsection (3) the amount of the
person’s ordinary income from farming for each of the 3 income test
years.
If the person was a member of a couple on the applicable completion day,
work out also under subsection (3) the amount of his or her partner’s
ordinary income from farming for the 3 income test years.
Add up all the amounts of positive income for both the person and the
person’s partner and deduct from that total the amounts of negative income
(if any) for both the person and the person’s partner. The result is
called the person’s total farm income (which may be either
positive or negative).
Step 3. Work out the person’s total income for the 3
income test years:
(a) if the person’s total farm income is a positive amount—by
adding that amount to the amount of the person’s total non-farm income;
or
(b) if the person’s total farm income is a negative amount—by
deducting that amount from the amount of the person’s total non-farm
income.
Step 4. Work out under subsection (4) the maximum basic rate
for age pension applicable to the person. Multiply that rate by 3. The result is
called the person’s maximum basic entitlement.
Step 5. If the person’s total income for the 3 income test
years is less than the person’s maximum basic entitlement, the person
satisfies the sugarcane farmers’ income test for the purposes of this
Part.
If the person’s total income for the 3 income test years equals or
exceeds the person’s maximum basic entitlement, the person does not
satisfy the sugarcane farmers’ income test for the purposes of this
Part.
Person’s ordinary income from all sources other than
farming
(2) For the purpose of working out a person’s ordinary income from
all sources other than farming during a financial year, the following provisions
have effect:
(a) the provisions of Part 3.10 other than Division 1B apply to
the person and so apply as if any reference in Division 1A to a tax year
were a reference to that financial year;
(b) any return on a financial asset that the person has actually received
during the financial year is taken to be ordinary income of the
person.
Person’s ordinary income from farming
(3) For the purpose of working out a person’s ordinary income from
farming during a financial year, the following provisions have effect:
(a) the provisions of Part 3.10 other than Division 1B apply to
the person and so apply as if:
(i) any reference in subsection 1074(1) to a tax year were a reference to
that financial year; and
(ii) subsection 1074(2) and section 1075 were omitted;
(b) any return on a financial asset that the person has actually received
during the financial year and that relates to a farm or a relevant farm asset is
taken to be ordinary income of the person from farming;
(c) if, at the end of the financial year, the value of all trading stock
on hand that relates to a farm is less than the value of all such trading stock
on hand at the beginning of that financial year—the amount of the
difference is to be deducted from that part of the person’s ordinary
income from farming for that financial year that is income in the form of
profits;
(d) there is also to be deducted from the person’s ordinary
income from farming:
(i) losses and outgoings that relate to a business of primary production
and are allowable deductions under section 8-1 of the Income Tax
Assessment Act 1997; and
(ii) deductions for the cost of depreciating assets that are used in a
business of primary production and are allowable deductions under
Subdivisions 40-A to 40-E (inclusive), or Division 328, of the
Income Tax Assessment Act 1997; and
(iii) contributions that are allowable deductions under
sections 82AAC, 82AAD, 82AADA and 82AAF of the Income Tax Assessment Act
1936;
(e) if a negative result is obtained after applying paragraphs (c)
and (d)—the person’s ordinary income from farming for the financial
year is a negative income;
(f) if paragraph (e) does not apply—the person’s ordinary
income from farming for the financial year is a positive income.
Person’s maximum basic rate for age pension
(4) For the purposes of Step 4 in the Method statement in
subsection (1), the maximum basic rate for age pension applicable to the
person is:
(a) if the person was a member of a couple at any time during the 3 years
immediately before the applicable completion day—an amount
equal to twice the sum of:
(i) the amount that was, on the applicable completion day,
the maximum basic rate for a partnered person under Module B of Pension Rate
Calculator A in section 1064; and
(ii) the amount that was, on the applicable completion day,
the person’s pension supplement worked out under point 1064-BA2;
or
(b) if paragraph (a) does not apply—an amount equal to the sum
of:
(i) the amount that was, on the applicable completion day,
the maximum basic rate for a person who is not a member of a couple under Module
B of Pension Rate Calculator A in section 1064; and
(ii) the amount that was, on the applicable completion day,
the person’s pension supplement worked out under point 1064-BA2.
Definitions
(5) In this section:
applicable completion day, in relation to a transfer, means
the earlier of:
(a) the day on which the transfer was completed; and
(b) the RASF closing day.
income, in relation to a person, has the same meaning as in
subsection 8(1), except that, in addition to any amount that is not income of
the person because of subsection 8(4), (5), (7A) or (8), any payment to the
person under:
(a) the Veterans’ Entitlements Act; or
(b) the Farm Household Support Act 1992;
is not income of the person for the purposes of this section.
ordinary income from farming, in relation to a person who has
an eligible interest in a sugarcane farm or sugarcane farms, means the ordinary
income of the person from:
(a) the sugarcane farm, or sugarcane farms, and any relevant sugarcane
farm assets; and
(b) any other farm, or farms, or relevant farm assets in which the person
has an interest.
Social Security
(Administration) Act 1999
1 At the end of Division 2 of Part 3 of
Schedule 2
Add:
If:
(a) a person, or a person’s partner, has reached pension age;
and
(b) Part 3.14B of the 1991 Act applies to the person or the
person’s partner because of a transfer of eligible interests by the person
or the person’s partner; and
(c) the person makes a claim for a social security payment within the
period of 13 weeks starting on the day on which the transfer was
completed;
the claimant’s start day in relation to the social security payment
is:
(d) the day on which the transfer was completed; or
(e) the day on which the person becomes qualified for the social security
payment;
whichever is later.
Veterans’
Entitlements Act 1986
1 Section 5 (index of
definitions)
Insert in their appropriate alphabetical positions, determined on a
letter-by-letter basis:
|
eligible former partner of a qualifying sugarcane
farmer |
5PAA(1) |
|
eligible interest |
5PAA(1) |
|
qualifying sugarcane farmer |
5PAA(1) |
|
RASF closing day |
5PAA(1) |
|
RASF commencement day |
5PAA(1) |
|
relevant sugarcane farm asset |
5PAA(1) |
|
sugarcane farm |
5PAA(1) |
|
sugarcane farm enterprise |
5PAA(1) |
|
total net value |
5PAA(1) |
|
transfer (of sugarcane farms and sugarcane farm
assets) |
5PAA(1) |
2 After subsection 5MA(2A)
Insert:
(2B) Subsection (2) does not apply:
(a) to a person to whom Division 8A of Part IIIB applies because
the person has transferred his or her eligible interest in a sugarcane farm in
accordance with paragraph 49Q(1)(a) or (2)(a); or
(b) if the person’s partner has transferred by way of
gift:
(i) to an eligible descendant of the person; or
(ii) jointly to an eligible descendant of the person and to the
descendant’s partner;
his or her eligible interest in a sugarcane farm—to the
person’s partner;
if the person or the person’s partner (as the case may be), on so
transferring his or her eligible interest in the farm, has retained a life
interest in the dwelling house on the farm, and in the adjacent private land,
that constitute his or her principal home.
3 After section 5P
Insert:
(1) In this Act, unless the contrary intention appears:
eligible former partner of a qualifying sugarcane farmer has
the meaning given by subsection (2).
eligible interest has the meaning given by
subsections (5) and (6).
qualifying sugarcane farmer has the meaning given by
subsections (3) and (4).
RASF closing day has the meaning given by
section 49M.
RASF commencement day has the meaning given by
section 49M.
relevant sugarcane farm asset means any relevant farm asset
that is a produce of, or is used for the purposes of, a sugarcane farm
enterprise.
Note: For relevant farm asset see subsection
5P(1).
sugarcane farm means a farm that is used predominantly for
the purposes of a sugarcane farm enterprise.
Note: For farm see subsection
5P(1).
sugarcane farm enterprise means a farm enterprise
where:
(a) a majority of the enterprise is undertaken for the purposes of growing
commercial quantities of sugar cane; or
(b) if paragraph (a) does not apply—a significant proportion of
the enterprise is undertaken for the purposes of growing commercial quantities
of sugar cane and the Commission has determined, in accordance with any
guidelines made by the Commission for the purposes of this paragraph, that there
are special circumstances that mean that the farm enterprise should be treated
as an enterprise to which paragraph (a) applies.
Note: For farm enterprise see subsection
5P(1).
total net value has the meaning given by
section 49R.
transfer:
(a) in relation to an eligible interest in a sugarcane farm—has the
meaning given by subsections (7), (8), (10), (11) and (12); or
(b) in relation to an eligible interest in a relevant sugarcane farm
asset—has the meaning given by subsections (9), (11) and
(12).
Note: Subsection 5P(1) also contains other definitions
relevant to the operation of Division 8A of
Part IIIB.
(2) A person is an eligible former partner of a qualifying sugarcane
farmer if:
(a) the person was, but no longer is (whether because of death or any
other reason), the partner of another person; and
(b) on the day on which the person ceased to be the partner of the other
person, the other person was a qualifying sugarcane farmer; and
(c) after ceasing to be the partner of the other person, the person has
not again become a member of a couple; and
(d) the person has an eligible interest in a sugarcane farm or sugarcane
farms in which the other person had an eligible interest.
Note: For eligible interest see
subsection (5).
(3) A person is a qualifying sugarcane farmer if:
(a) the person has, has not ceased to have, and has continuously had for a
period of at least 15 years, an eligible interest in a farm; and
(b) the farm is a sugarcane farm and has been a sugarcane farm:
(i) for at least the last 2 years; and
(ii) at all times since 29 April 2004; and
(c) during a period of 15 years, the person or the person’s
partner:
(i) has contributed a significant part of his or her labour and capital to
the development of a farm or farms; and
(ii) has derived a significant part of his or her income from that farm or
those farms; and
(d) during at least the last 2 years:
(i) that contribution of labour and capital has been to the development of
a sugarcane farm or sugarcane farms; and
(ii) that derivation of income has been from that sugarcane farm or those
sugarcane farms.
Note: For eligible interest see
subsection (5).
(4) A person is also a qualifying sugarcane farmer
if:
(a) the person has an eligible interest in one or more than one sugarcane
farm; and
(b) the eligible interest in the farm, or each of the farms, was acquired
by the person before 29 April 2004; and
(c) the person or the person’s partner or former partner has been
involved in farming in Australia for a continuous period of 20 years, or for
periods that together add up to 20 years, by:
(i) contributing a significant part of his or her labour to farm
enterprises; and
(ii) deriving a significant part of his or her income from farm
enterprises; and
(d) during at least the last 2 years:
(i) that contribution of labour has been to sugarcane farm enterprises;
and
(ii) that derivation of income has been from sugarcane farm
enterprises.
Note: For eligible interest see
subsection (5).
(5) A person has an eligible interest in a sugarcane farm
if:
(a) the person has a legal estate or interest in the farm; or
(b) the person has a transferable legal right or a transferable licence to
occupy the farm for a particular purpose of the farm enterprise; or
(c) as the mortgagor of a legal estate or interest in the farm (being an
estate or interest that is not registered under a relevant State land law), the
person has an equitable estate or interest in the farm; or
(d) the person is a shareholder in a proprietary company that has a legal
estate or interest in the farm; or
(e) the value of the person’s assets includes an amount calculated
(in accordance with section 52ZZR) by reference to the value of the
farm.
Note: The eligible interest in a sugarcane farm that is
relevant for the operation of Division 8A of Part IIIB is the interest
held by a person immediately before that interest is transferred to an eligible
descendant. So, for example, to find out whether an interest is covered by
paragraph (e), the provisions of Division 11A of Part IIIB must
be applied in relation to the person’s circumstances as they were
immediately before the transfer.
(6) A person has an eligible interest in a relevant
sugarcane farm asset if:
(a) the person has a legal interest in the relevant farm asset;
or
(b) the person is a shareholder in a proprietary company that has a legal
estate or interest in the relevant farm asset; or
(c) the value of the person’s assets includes an amount calculated
(in accordance with section 52ZZR) by reference to the value of the
relevant farm asset.
Note: The eligible interest in a relevant sugarcane farm
asset that is relevant for the operation of Division 8A of Part IIIB
is the interest held by a person immediately before that interest is transferred
to an eligible descendant. So, for example, to find out whether an interest is
covered by paragraph (c), the provisions of Division 11A of
Part IIIB must be applied in relation to the person’s circumstances
as they were immediately before the transfer.
(7) Subject to subsections (8), (10), (11) and (12), an eligible
interest that a person has in a sugarcane farm is transferred to
another person if, and only if, the eligible interest:
(a) ceases to be vested in the person; and
(b) becomes vested in the other person.
(8) To avoid any doubt, it is stated that if a person who transfers a
legal estate or interest in a sugarcane farm to another person is, under a
relevant State land law, registered as being the proprietor (whether that word
or any other word is used) of that estate or interest, the legal estate or
interest in the farm is taken not to have become vested in the other person
unless and until the transfer is registered in accordance with that
law.
Note: For relevant State land law see
subsection 5P(1).
(9) Subject to subsections (11) and (12), an eligible interest that a
person has in a relevant sugarcane farm asset is transferred to
another person if, and only if, the eligible interest:
(a) ceases to be vested in the person; and
(b) becomes vested in the other person.
(10) If, as the mortgagor of a legal estate or interest in a sugarcane
farm (see paragraph (5)(c)), a person has an eligible interest in the farm,
the person is taken to have transferred that eligible interest in
the farm to another person only if the person:
(a) has, under a relevant State land law, become registered as the
proprietor (whether that word or any other word is used) of the legal estate or
interest in the farm; and
(b) has then transferred that legal estate or interest to the other
person.
(11) If a person has an eligible interest in a sugarcane farm or a
relevant sugarcane farm asset because (see paragraphs (5)(d) and (6)(b))
the person is a shareholder in a proprietary company that has a legal estate or
interest in the farm, or a legal interest in the relevant farm asset (as the
case may be), the person is taken to have transferred to another
person his or her eligible interest in the farm or relevant farm asset only if
the person:
(a) has acquired the company’s legal estate or interest in the farm
or the company’s legal interest in the relevant farm asset; and
(b) has then transferred it to the other person.
(12) An eligible interest that a person (the first person)
has in a sugarcane farm or a relevant sugarcane farm asset because (see
paragraphs (5)(e) and (6)(c)) the value of the first person’s assets
includes an amount calculated (in accordance with section 52ZZR) by
reference to the value of the farm or relevant farm asset is
transferred to another person if:
(a) the first person is divested of that eligible interest; and
(b) as a result, the other person gains an eligible interest in the farm
or relevant farm asset of a value that is referrable to the full value of the
eligible interest divested.
(13) To avoid doubt, if:
(a) a person is able to transfer an eligible interest under either
subsection (11) or (12); and
(b) the person transfers that interest under
subsection (12);
the person is not required to meet the requirements of subsection (11)
in relation to the transfer.
4 Subsection 46B(2) (note)
Repeal the note, substitute:
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 Division 8 (see subparagraph 49J(3)(b)(ii) and paragraph
49J(3)(e)); or
(b) the person satisfies the sugarcane farmers’ income
test for the purposes of Division 8A (see subparagraph 49Y(3)(b)(ii) and
paragraph 49Y(3)(e)).
5 Subsection 46C(1) (note)
Repeal the note, substitute:
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 Division 8 (see subparagraph 49J(3)(b)(ii) and paragraph
49J(3)(e)); or
(b) the person satisfies the sugarcane farmers’ income
test for the purposes of Division 8A (see subparagraph 49Y(3)(b)(ii) and
paragraph 49Y(3)(e)).
6 Subsection 46D(1) (note)
Repeal the note, substitute:
Note: The whole of Division 3 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 Division 8 (see paragraphs 49J(2)(c) and (3)(c));
or
(b) the person satisfies the sugarcane farmers’ income
test for the purposes of Division 8A (see paragraphs 49Y(2)(c) and
(3)(c)).
7 Subsection 46E(1) (note)
Repeal the note, substitute:
Note: The whole of Division 3 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 Division 8 (see paragraphs 49J(2)(c) and (3)(c));
or
(b) the person satisfies the sugarcane farmers’ income
test for the purposes of Division 8A (see paragraphs 49Y(2)(c) and
(3)(c)).
8 Subsection 46K(1) (note)
Repeal the note, substitute:
Note: When working out a person’s ordinary income to
find whether the person satisfies the farmers’ income test for the
purposes of Division 8 or the sugarcane farmers’ income test for the
purposes of Division 8A, actual returns on financial assets are taken to be
ordinary income (see paragraphs 49J(2)(d) and (3)(d) and 49Y(2)(d) and
(3)(d)).
9 After Division 8 of
Part IIIB
Insert:
This Division deals with the transfer of sugarcane farming interests to
family members of a younger generation. The purpose of the Division is to
provide that, if the conditions set out in the Division are met, the value of
any such interests transferred by a qualifying sugarcane farmer, his or her
partner, or an eligible former partner of a qualifying sugarcane farmer,
will be disregarded in determining:
(a) whether a service pension or an income support supplement is payable;
or
(b) at what rate a service pension or an income support supplement is
payable.
(1) For the purposes of this Division:
(a) the RASF commencement day is the day on which this
Division commences; and
(b) the RASF closing day is (subject to any determination
under subsection (2)) the day that is 3 years after the RASF commencement
day.
(2) The Minister may, by written determination, specify a day that is
later than the day mentioned in paragraph (1)(b) as the RASF closing
day.
(3) A determination under subsection (2) is a disallowable instrument
for the purposes of section 46A of the Acts Interpretation Act
1901.
In this Division:
applicable cut-off date means:
(a) in relation to a transfer, where:
(i) the transfer was not completed before the RASF closing day;
and
(ii) a pre-assessment request in relation to the transfer was lodged with
the Department within the period of 28 days immediately after the RASF closing
day; and
(iii) the Department responded affirmatively to the request;
the first day after the end of the period of 13 weeks beginning on the
day on which the Department responded to the request; and
(b) in relation to any other transfer—the RASF closing
day.
Pre-assessment request
(1) For the purposes of this Division, a pre-assessment request
is a written request by a person:
(a) for advice about whether this Division would apply to the person, or
to the person’s partner, in the event that a proposed transfer were to
take place; and
(b) that sets out sufficient information to enable the advice to be
given.
(2) For the purposes of subsection (1), a written request does not
include a request made by e-mail.
Contact by telephone etc.—timing of request
(3) For the purposes of this Division, if:
(a) a person contacted the Department:
(i) by telephone; or
(ii) by fax; or
(iii) by e-mail; or
(iv) in person;
for advice about whether this Division would apply to the person, or to
the person’s partner, in the event that a proposed transfer were to take
place; and
(b) the person followed up that contact by lodging a pre-assessment
request with the Department within 21 days after the day on which the person
contacted the Department;
the person is taken to have lodged the pre-assessment request on the day on
which the person contacted the Department.
Affirmative response to pre-assessment request
(4) For the purposes of this Division, if a person lodges a pre-assessment
request, the Department is taken to have responded affirmatively to that request
if, and only if, the Secretary, or an officer of the Department, gives the
person a written notice:
(a) that contains advice to the effect that this Division would apply to
the person, or to the person’s partner, in the event that the proposed
transfer were to take place; and
(b) that specifies the date on which the notice was issued.
Timing of response
(5) The Department is taken to have responded to a pre-assessment request
on the date specified in the notice as the date on which the notice was
issued.
(1) Subject to subsections (3) and (4), this Division applies to a
person if:
(a) at any time after the RASF commencement day but before the applicable
cut-off date, the person, being then a qualifying sugarcane farmer, transferred
by way of gift to one, or more than one, eligible descendant (either solely to
the eligible descendant or jointly to him or her and his or her
partner):
(i) his or her eligible interest in the sugarcane farm or sugarcane farms
in which he or she had such an interest; and
(ii) all the eligible interests that he or she had in relevant sugarcane
farm assets; and
(b) the person, or (if the person is a member of a couple) the person or
his or her partner:
(i) has reached retirement age; or
(ii) will reach retirement age before the RASF closing day; and
(c) the total net value (calculated in accordance with section 49R)
of the sugarcane farm or sugarcane farms, and the relevant sugarcane farm
assets, in which the person had eligible interests does not exceed $500,000;
and
(d) during the last 3 years before the transfer was completed, the
eligible descendant or each of the eligible descendants:
(i) had been actively involved with the sugarcane farm or any of the
sugarcane farms; or
(ii) would, in the opinion of the Commission, have been so involved but
for exceptional circumstances beyond his or her control; and
(e) if the person is a member of a couple—the person’s partner
does not have an eligible interest in any sugarcane farm or relevant sugarcane
farm asset; and
(f) the person satisfies the sugarcane farmers’ income test for the
purposes of this Division.
Note 1: For eligible descendant see subsection
5P(1).
Note 2: For eligible interest,
qualifying sugarcane farmer, relevant sugarcane farm
asset, sugarcane farm and transfer, see
subsection 5PAA(1).
Note 3: For retirement age see subsection
5Q(1).
Note 4: For actively involved with a sugarcane
farm see subsection (5).
Note 5: For the total net value of a sugarcane
farm, or sugarcane farms, and relevant sugarcane farm assets see
section 49R.
Note 6: For the sugarcane farmers’ income test see
section 49Y.
(2) Subject to subsections (3) and (4), this Division also applies to
a person if:
(a) at any time after the RASF commencement day but before the applicable
cut-off date, the person, being then an eligible former partner of a qualifying
sugarcane farmer, transferred by way of gift to one, or more than one, eligible
descendant of the farmer (either solely to the eligible descendant or jointly to
him or her and his or her partner):
(i) his or her eligible interest in the sugarcane farm or sugarcane farms
in which he or she had such an interest; and
(ii) all the eligible interests that he or she had in relevant sugarcane
farm assets; and
(b) the person has reached retirement age or will reach retirement age
before the RASF closing day; and
(c) the total net value (calculated in accordance with section 49R)
of the sugarcane farm or sugarcane farms, and the relevant sugarcane farm
assets, in which the person had eligible interests does not exceed $500,000;
and
(d) during the last 3 years before the transfer was completed, the
eligible descendant or each of the eligible descendants:
(i) had been actively involved with the sugarcane farm or any of the
sugarcane farms; or
(ii) would, in the opinion of the Commission, have been so involved but
for exceptional circumstances beyond his or her control; and
(e) the person satisfies the sugarcane farmers’ income test for the
purposes of this Division.
Note 1: For eligible descendant see subsection
5P(1).
Note 2: For eligible former partner of a
qualifying sugarcane farmer, eligible interest,
relevant sugarcane farm asset, sugarcane farm and
transfer see subsection 5PAA(1).
Note 3: For retirement age see subsection
5Q(1).
Note 4: For actively involved with a sugarcane
farm see subsection (5).
Note 5: For the total net value of a sugarcane
farm, or sugarcane farms, and relevant sugarcane farm assets see
section 49R.
Note 6: For the sugarcane farmers’ income test see
section 49Y.
(3) This Division does not apply to the person if:
(a) immediately before the transfer, the eligible descendant, or one of
the eligible descendants, referred to in paragraph (1)(a) or (2)(a) (as the
case may be) had an eligible interest in:
(i) the sugarcane farm or one of the sugarcane farms referred to in
subparagraph (1)(a)(i) or (2)(a)(i); or
(ii) any relevant sugarcane farm asset; and
(b) the eligible descendant had acquired the eligible interest in the
farm, or in the relevant farm asset, after 29 April 2004; and
(c) the consideration, or part of the consideration, for the interest so
acquired was the wages forgone by the eligible descendant while he or she was
working as an employee on the farm or any of the farms.
Note 1: For eligible descendant see subsection
5P(1).
Note 2: For eligible interest, relevant
sugarcane farm asset, sugarcane farm and
transfer see subsection 5PAA(1).
(4) This Division does not apply to the person (the
transferor) if:
(a) the eligible interest, or any part of the eligible interest, that was
transferred is an interest that the transferor had in a sugarcane farm, or
sugarcane farms, or any relevant sugarcane farm asset because the value of the
transferor’s assets included an amount calculated by reference to the
value of the farm, or farms, or relevant farm asset (see paragraphs 5PAA(5)(e)
and (6)(c)); and
(b) immediately after the transfer to the eligible descendant, or eligible
descendants, referred to in paragraph (1)(a) or (2)(a) (as the case may
be), the eligible interest, or any part of the eligible interest, transferred
was held by a trust that was a concessional primary production trust in relation
to the transferor.
Note 1: For eligible descendant see subsection
5P(1).
Note 2: For eligible interest, relevant
sugarcane farm asset and sugarcane farm see subsection
5PAA(1).
Note 3: For the transfer of eligible interests
that are such interests because of paragraphs 5PAA(5)(e) and (6)(c) see
subsection 5PAA(12).
Note 4: For concessional primary production trust
see section 52ZZZF.
(5) For the purposes of paragraphs (1)(d) and (2)(d), a person is
taken to have been actively involved with a sugarcane farm during
a particular period if, during that period, the person:
(a) has contributed a significant part of his or her labour to the
development of the sugarcane farm; or
(b) has undertaken educational studies or training in a field that, in the
opinion of the Commission, is relevant to the development or management of the
sugarcane farm enterprise.
Meaning of total net value
(1) For the purposes of subsections 49Q(1) and (2), the total net
value of a sugarcane farm, or sugarcane farms, and relevant sugarcane
farm assets, the eligible interests in which have been transferred, is to be
calculated as follows:
where:
market value of sugarcane farm assets means the total of the
market values of the sugarcane farm, or sugarcane farms, and relevant sugarcane
farm assets immediately before the transfer of the eligible interests.
sugarcane farm debts means the total of any amounts of money
that:
(a) had been borrowed for the purposes of undertaking one or more
sugarcane farm enterprises on the sugarcane farm or sugarcane farms;
and
(b) had not been repaid before the transfer of the eligible
interests.
Note: The total net value of a sugarcane farm, or sugarcane
farms, and relevant sugarcane farm assets is not affected by the number of
persons who have interests in them.
(2) Subsection (1) has effect subject to subsections (3), (4)
and (5).
Value of farm reduced by value of transferee’s
interest
(3) If:
(a) a person transfers eligible interests that the person has in a
sugarcane farm, or sugarcane farms, and relevant sugarcane farm assets;
and
(b) immediately before the transfer by the person of his or her eligible
interests in the farm, or farms, and relevant farm assets, the transferee had an
eligible interest in the farm, or one of those farms, or a relevant farm
asset;
then, the total net value of the farm, or farms, and relevant
farm assets is the amount worked out under subsection (1) reduced by the
value of the transferee’s eligible interest in the farm or relevant farm
asset at that time.
Value of farm affected by previous transaction
(4) If:
(a) a person transfers his or her eligible interests in a sugarcane farm,
or sugarcane farms, and relevant sugarcane farm assets; and
(b) at any time after 29 April 2004 the person making the transfer
entered into a transaction or transactions; and
(c) the result of the transaction or transactions was that the total net
value (worked out in accordance with subsection (1)) of the farm, or farms,
and relevant farm assets immediately before the transfer is less than the total
net value that that farm, or those farms, and relevant farm assets would have
had immediately before the transfer if the person had not entered into the
transaction or transactions (the unreduced value);
then, the total net value of the farm, or farms, and relevant
farm assets is taken to be an amount equal to the unreduced value.
Life interest retained in principal home on farm
(5) If:
(a) a person transfers eligible interests that the person has in a farm by
way of gift; and
(b) the person retains a freehold estate, a leasehold interest or a life
interest in the dwelling-house on the farm, and the adjacent private land, that
constitute the person’s principal home;
then:
(c) for the purposes of subsections 49Q(1) and (2), the person is taken to
have transferred the whole of his or her eligible interest in the farm by way of
gift; and
(d) in assessing the market value of the farm for the purposes of
subsection (1), the value of the dwelling-house and the adjacent private
land is not to be included.
Note: For eligible interest, relevant sugarcane farm
asset, sugarcane farm and transfer see
subsection 5PAA(1).
(1) If this Division applies to a person because of subsection 49Q(1),
then, subject to subsections (4) and (6):
(a) the transfer by the person of his or her eligible interest in a
sugarcane farm or in a relevant sugarcane farm asset is taken not to be a
disposal of an asset (within the meaning of section 52E); and
(b) if the person’s partner has also transferred by way of gift to
an eligible descendant of the person any eligible interest in a sugarcane farm
or in a relevant sugarcane farm asset, that transfer is taken not to be a
disposal of an asset (within the meaning of section 52E).
(2) If this Division applies to a person because of subsection 49Q(2),
then, subject to subsections (5) and (6), the transfer by the person of his
or her eligible interest in a sugarcane farm or in a relevant sugarcane farm
asset is taken not to be a disposal of an asset (within the meaning of
section 52E).
(3) To avoid doubt, subsections (1) and (2) have effect despite
sections 52ZZX and 52ZZY.
(4) If:
(a) the applicable cut-off date in relation to the transfer referred to in
paragraph (1)(a) was the RASF closing day; and
(b) when the transfer was completed neither the person making the transfer
nor his or her partner had reached retirement age;
subsection (1) only applies after one of them reaches that
age.
(5) If:
(a) the applicable cut-off date in relation to the transfer referred to in
subsection (2) was the RASF closing day; and
(b) when the transfer was completed the person making the transfer had not
reached retirement age;
subsection (2) only applies after the person reaches that
age.
Note 1: For eligible descendant see subsection
5P(1).
Note 2: For eligible interest, RASF
closing day, relevant sugarcane farm asset,
sugarcane farm and transfer see subsection
5PAA(1).
Note 3: For retirement age see subsection
5Q(1).
(6) Disregard subsections (1) and (2) when working out a rate for the
purposes of Division 6 of Part IIIAB.
Note: Part IIIAB provides for the payment of a pension
bonus to a person who qualifies for an age service pension if the person has
deferred claiming that pension for a period of at least one year and the person,
or the person’s partner, has worked gainfully during that
period.
If:
(a) a person, or a person’s partner, has reached retirement age;
and
(b) this Division applies because of a transfer of eligible interests by
the person or the person’s partner; and
(c) the person makes a claim under this Act for a service pension or an
income support supplement within the period of 13 weeks starting on the day on
which the transfer was completed;
then, despite any other provision of this Act, the claimant’s
provisional commencement day is:
(d) the day on which the transfer was completed; or
(e) the day on which the person becomes qualified for the pension or
supplement;
whichever is later.
This Subdivision applies if:
(a) a person, or a person’s partner, has reached retirement age;
and
(b) this Division applies because of a transfer of eligible interests by
the person or the person’s partner; and
(c) the person is receiving a service pension or income support supplement
under this Act; and
(d) the value of the eligible interests has been included in the value of
the person’s assets, or the partner’s assets, when calculating the
rate of the person’s pension or supplement.
If:
(a) the rate at which a service pension or income support supplement is
being, or has been, paid to a person is less than the rate (the increased
rate) at which it would be, or would have been, paid if the value of the
eligible interests transferred by the person or the person’s partner had
not been included in the value of the person’s assets, or of the
partner’s assets, in calculating the rate of the person’s pension or
supplement; and
(b) the person wants the pension or supplement to be paid at the increased
rate;
the person must make a request to that effect.
(1) A request under section 49V:
(a) must be made in writing; and
(b) must be in accordance with a form approved by the Commission;
and
(c) must be lodged at an office of the Department in Australia in
accordance with section 5T.
(2) A request made by lodging a document in accordance with
section 5T is taken to have been made on a day determined under that
section.
(1) If:
(a) a person makes a request under section 49V in respect of a
service pension or income support supplement; and
(b) the Commission is satisfied that the rate at which the pension or
supplement is being, or has been, paid to the person is less than the rate at
which it would be, or would have been, paid if the value of the eligible
interests transferred by the person or the person’s partner had not been
included in the value of the person’s assets, or the partner’s
assets, when calculating the rate of the person’s pension or
supplement;
the Commission must determine that the request is to be granted.
(2) The determination takes effect:
(a) if the person makes the request during the period of 13 weeks that
starts on the day on which the transfer was completed—on the day on which
the transfer was completed; or
(b) in any other case—on the day on which the request is
made.
How to work out whether the sugarcane farmers’ income test is
satisfied
(1) This is how to work out whether a person who has transferred his or
her eligible interest in a sugarcane farm or sugarcane farms satisfies the
sugarcane farmers’ income test for the purposes of this
Division:
Method statement
Step 1. Work out under subsection (2) the amount of the
person’s ordinary income (other than ordinary income from farming) for
each of the last 3 financial years before the applicable completion day (the
income test years).
If the person was a member of a couple on the applicable completion day,
work out also under subsection (2) the amount of his or her partner’s
ordinary income (other than ordinary income from farming) for the 3 income test
years.
Add up all the amounts so obtained. The result is called the
person’s total non-farm income.
Step 2. Work out under subsection (3) the amount of the
person’s ordinary income from farming for each of the 3 income test
years.
If the person was a member of a couple on the applicable completion day,
work out also under subsection (3) the amount of his or her partner’s
ordinary income from farming for the 3 income test years.
Add up all the amounts of positive income for both the person and the
person’s partner and deduct from that total the amounts of negative income
(if any) for both the person and the person’s partner. The result is
called the person’s total farm income (which may be either
positive or negative).
Step 3. Work out the person’s total income for the 3
income test years:
(a) if the person’s total farm income is a positive amount—by
adding that amount to the amount of the person’s total non-farm income;
or
(b) if the person’s total farm income is a negative amount—by
deducting that amount from the amount of the person’s total non-farm
income.
Step 4. Work out under subsection (4) the maximum basic rate
for age service pension applicable to the person. Multiply that rate by 3. The
result is called the person’s maximum basic
entitlement.
Step 5. If the person’s total income for the 3 income test
years is less than the person’s maximum basic entitlement, the person
satisfies the sugarcane farmers’ income test for the purposes of this
Division.
If the person’s total income for the 3 income test years equals or
exceeds the person’s maximum basic entitlement, the person does not
satisfy the sugarcane farmers’ income test for the purposes of this
Division.
Person’s ordinary income from all sources other than
farming
(2) For the purpose of working out a person’s ordinary income from
all sources other than farming during a financial year, the following provisions
have effect:
(a) Divisions 1, 4, 6 and 7 of this Part apply to the
person;
(b) Division 2 of this Part applies to the person as if any reference
in that Division to a tax year were a reference to that financial
year;
(c) Division 3 of this Part does not apply to the person;
(d) any return on a financial asset that the person has actually received
during the financial year is taken to be ordinary income of the
person.
Person’s ordinary income from farming
(3) For the purpose of working out a person’s ordinary income from
farming during a financial year, the following provisions have effect:
(a) Divisions 1, 4, 6 and 7 of this Part apply to the
person;
(b) Division 2 of this Part applies to the person as if:
(i) any reference in subsection 46B(1) to a tax year were a reference to
that financial year; and
(ii) subsection 46B(2) and section 46C were omitted;
(c) Division 3 of this Part does not apply to the person;
(d) any return on a financial asset that the person has actually received
during the financial year and that relates to a farm or a relevant farm asset is
taken to be ordinary income of the person from farming;
(e) if, at the end of the financial year, the value of all trading stock
on hand that relates to a farm is less than the value of all such trading stock
on hand at the beginning of that financial year—the amount of the
difference is to be deducted from that part of the person’s ordinary
income from farming for that financial year that is income in the form of
profits;
(f) there is also to be deducted from the person’s ordinary
income from farming:
(i) losses and outgoings that relate to a business of primary production
and are allowable deductions under section 8-1 of the Income Tax
Assessment Act 1997; and
(ii) deductions for the cost of depreciating assets that are used in a
business of primary production and are allowable deductions under
Subdivisions 40-A to 40-E (inclusive), or Division 328, of the
Income Tax Assessment Act 1997; and
(iii) contributions that are allowable deductions under
sections 82AAC, 82AAD, 82AADA and 82AAF of the Income Tax Assessment Act
1936;
(g) if a negative result is obtained after applying paragraphs (e)
and (f)—the person’s ordinary income from farming for the financial
year is a negative income;
(h) if paragraph (g) does not apply—the person’s ordinary
income from farming for the financial year is a positive income.
Person’s maximum basic rate for age service pension
(4) For the purposes of Step 4 in the Method statement in
subsection (1), the maximum basic rate for age service pension applicable
to the person is:
(a) if the person was a member of a couple at any time during the 3 years
immediately before the applicable completion day—the sum of:
(i) an amount equal to twice the amount that was, on the applicable
completion day, the maximum basic rate for a partnered person under point
SCH6-B1; and
(ii) an amount equal to twice the pension supplement under Module BA in
Schedule 6; or
(b) otherwise—the sum of:
(i) the amount that was, on the applicable completion day, the maximum
basic rate for a person who is not a member of a couple under point SCH6-B1;
and
(ii) the pension supplement under Module BA in Schedule 6.
Definitions
(5) In this section:
applicable completion day, in relation to a transfer, means
the earlier of:
(a) the day on which the transfer was completed; and
(b) the RASF closing day.
income, in relation to a person, has the same meaning as in
subsection 5H(1), except that, in addition to any amount that is not income of
the person because of subsection 5H(4), (5) or (8), any payment to the person
under:
(a) the AUSTUDY scheme; or
(b) the Social Security Act; or
(c) the Farm Household Support Act 1992;
is not income of the person for the purposes of this section.
ordinary income from farming, in relation to a person who has
an eligible interest in a sugarcane farm or sugarcane farms, means the ordinary
income of the person from:
(a) the sugarcane farm, or sugarcane farms, and any relevant sugarcane
farm assets; and
(b) any other farm, or farms, or relevant farm assets in which the person
has an interest.
10 Subsection 52E(1) (note)
Repeal the note, substitute:
Note: If Division 8 or 8A 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 49C and 49S).