Social Security Act 1991 Act No. 46 of 1991 as amended This compilation was prepared on 17 July 2008 taking into account amendments up to Act No. 73 of 2008 Volume 3 includes: Table of Contents Sections 1068 - 1361A Schedules 1A and 1B 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 Chapter 3-General provisions relating to payability and rates Contents Chapter 3-General provisions relating to payability and rates i 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 [see Note 5] 2 Module B-Maximum basic rate [see Appendix for CPI adjusted figures] 4 Module D-Pharmaceutical allowance [see Appendix for CPI adjusted figures] 10 Module G-Income test 14 Module J-Remote area allowance 28 Part 3.6A-Parenting Payment Rate Calculator 31 1068A Rate of parenting payment-pension PP (single) 31 Pension PP (Single) Rate Calculator 31 Module A-Overall rate calculation process 31 Module B-Maximum basic rate [see Appendix for CPI adjusted figures] 33 Module BA-Pension supplement 33 Module C-Pharmaceutical allowance [see Appendix for CPI adjusted figures] 34 Module E-Ordinary income test 36 Module F-Remote area allowance 43 1068B Rate of parenting payment-PP (partnered) 44 Benefit PP (Partnered) Rate Calculator 44 Module A-Overall rate calculation process 44 Module C-Maximum basic rate [see Appendix for CPI adjusted figures] 47 Module D-Income test 47 Module E-Pharmaceutical allowance [see Appendix for CPI adjusted figures] 56 Module G-Remote area allowance 60 Part 3.7-Rent assistance 63 Division 1-Operation of this Part 63 1070 When this Part applies 63 1070A Effect of this Part 63 Division 2-Qualification for rent assistance 64 1070B Qualification-general rule 64 1070C Common requirements (about aged care residence, home ownership and rent) 64 1070D Specific requirement (carer payments and certain age, disability support and wife pensions) 64 1070E Specific requirement (bereavement allowance, widow B pension and certain parenting payments) 65 1070F Specific requirement (certain disability support pensions) 66 1070G Specific requirement (youth allowance) 68 1070H Specific requirement (austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance or widow allowance) 69 1070J Specific requirement (certain parenting payments) 70 Division 3-Rate of rent assistance 72 1070K Rate depends on social security payment and family situation 72 1070L Rate for carer payments and certain age, disability support and wife pensions 72 1070M Rate for bereavement allowance, widow B pension and certain parenting payments 75 1070N Rate for disability support pension (person aged under 18) 76 1070P Rate for disability support pension (person aged between 18 and 21) 79 1070Q Rate for youth allowance, austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance and widow allowance 82 1070R Rate for certain parenting payments 83 Division 4-Certain concepts used in this Part 85 1070S Division has effect for purposes of Part 85 1070T Rent threshold amount 85 1070U Fortnightly rent 85 1070V Rent paid by a member of certain couples 86 1070W Partner with a rent increased pension 86 1070X Partner with a rent increased benefit 86 Division 5-Transitional indexation of rent assistance and rent threshold amounts 88 1070Y Indexation of certain amounts for CPI increases before commencement 88 Part 3.9-Seniors Health Card Taxable Income Test Calculator 89 1071 Seniors Health Card Taxable Income Test Calculator 89 Seniors Health Card Taxable Income Test Calculator 89 Part 3.9A-Health Care Card Income Test Calculator 94 1071A Health care card income test 94 Health Care Card Income Test Calculator 94 Part 3.10-General provisions relating to the ordinary income test 98 Division 1-Ordinary income concept 98 1072 General meaning of ordinary income 98 1073 Certain amounts taken to be received over 12 months 98 Division 1AA-Employment income attribution rules 100 1073A Employment income attribution over a period for social security pensioners 100 1073B Daily attribution of employment income 100 1073C Fortnightly or yearly expression of attributed employment income 101 Division 1AB-Working credit accrual and depletion rules and their consequences 102 1073D To whom do working credit accrual and depletion rules apply? 102 1073E Opening balance 102 1073F Working out accruals and depletions of working credit for social security beneficiaries 105 1073G Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary 107 1073H Working out accruals and depletions of working credit for social security pensioners 107 1073I Working out the effect of a working credit depletion on the yearly rate of ordinary income for a social security pensioner 109 1073J Working credit balance prevents loss of qualification in certain cases 110 Division 1A-Business income 112 1074 Ordinary income from a business-treatment of trading stock 112 1075 Permissible reductions of business income 112 Division 1B-Deemed income from financial assets 114 1076 Deemed income from financial assets-persons other than members of couples 114 1077 Deemed income from financial assets-members of pensioner couples 115 1078 Deemed income from financial assets-members of non- pensioner couples 116 1081 Deeming threshold 117 1082 Below threshold rate, above threshold rate 118 1083 Actual return on financial assets not treated as ordinary income 118 1084 Certain money and financial investments not taken into account 119 1084A Valuation and revaluation of certain financial investments 119 Division 1C-Income from income streams 120 Subdivision B-Income streams that are not family law affected income streams 120 1097A Scope of Subdivision 120 1098 Income from asset-test exempt income stream 120 1099 Income-income stream not a defined benefit income stream 120 1099A Income-income stream is a defined benefit income stream 121 1099AA Income from market-linked asset-test exempt income stream 121 1099B Income from asset-tested income stream (long term) 123 1099C Income-income stream not a defined benefit income stream 123 1099D Income-income stream is a defined benefit income stream 124 1099DAAIncome from certain low-payment asset-tested income streams 125 Subdivision C-Family law affected income streams 126 1099DA Scope of Subdivision 126 1099DB Income from asset-test exempt income streams 127 1099DC Income from asset-tested income stream (long term) 127 1099DD Decision-making principles 127 Division 1D-Aged care accommodation bonds: certain transactions before 6 November 1997 128 1099E Scope of Division 128 1099F Exempt bond amount does not count as income 129 1099G Person's ordinary income reduced using financial asset rules 129 1099H Meaning of exempt bond amount 129 Division 1E-Refunds to charge exempt residents 131 1099J Scope of Division 131 1099K Refunded amount does not count as income 131 1099L Person's ordinary income reduced using financial asset rules 131 1099M Application of Division 132 Division 2-Conversion of foreign currency amounts 133 1100 How value of a payment received in a foreign currency is to be determined 133 1100A Determining value of a payment originally denominated in a foreign currency but made in Australian currency 134 Division 3-Disposal of ordinary income 136 1106 Disposal of ordinary income 136 1107 Amount of disposition 137 1108 Disposal of ordinary income-individuals 137 1109 Disposal of ordinary income-members of couples 138 1111 Dispositions more than 5 years old to be disregarded 139 Part 3.12-General provisions relating to the assets test 141 Division 1-Value of person's assets 141 1118 Certain assets to be disregarded in calculating the value of a person's assets 141 1118B Value of superannuation investments determined by Minister to be disregarded 148 1118AA Value of assets reduced by amounts received from Mark Fitzpatrick Trust 149 1118AB Value of person's assets reduced: certain transactions to do with aged care accommodation bonds 150 1118AC Value of person's assets reduced: refunds to charge exempt residents 150 1119 Value of asset-tested income streams that are not defined benefit income streams 150 1120 Value of asset-tested income streams that are defined benefit income streams 151 1120A Value of asset-tested FLA income streams 152 1120B Value of partially asset-test exempt income streams 152 1120C Value of superannuation reserves for superannuation funds of 4 members or less 153 1121 Effect of charge or encumbrance on value of assets 153 1121A Effect of certain liabilities on value of assets used in primary production 154 1122 Loans 155 Division 2-Disposal of assets 156 1123 Disposal of assets 156 1124 Amount of disposal or disposition 157 1124A Disposal of assets in pre-pension years-individuals 158 1125 Disposal of assets in pension years-individuals 159 1125A Disposal of assets in pre-pension years-members of couples 159 1126 Disposal of assets in pension years-members of couples 162 1126AA Disposal of assets in income year-individuals 164 1126AB Disposals of assets in 5 year period-individuals 164 1126AC Disposal of assets in income year-members of couples 165 1126AD Disposal of assets in 5 year period-members of couples 167 1126A Disposal of assets in pre-pension year-family members 168 1126B Disposal of assets in pension year-family members 169 1126C Disposal of assets in income year-family members 171 1126D Disposals of assets in 5 year period-family members 172 1127 Disposition more than 5 years old to be disregarded 173 1127A Division does not apply for purposes of care receiver assets test 174 Division 3-Financial hardship 175 1129 Access to financial hardship rules-pensions 175 1130 Application of financial hardship rules-pensions 176 1130A Division does not apply for purposes of care receiver assets test 179 1130B Access to financial hardship rules-pension PP (single) 179 1130C Application of financial hardship rules-pension PP (single) 180 1131 Access to financial hardship rules-benefits 182 1132 Application of financial hardship rules-benefits 183 Division 4-Pension loans scheme 186 1133AA Pension loans scheme definitions 186 1133 Qualification for participation in pension loans scheme 186 1134 Effect of participation in pension loans scheme-pension or allowance rate 188 1135 Effect of participation in pension loans scheme-creation of debt 189 1135A Effect of participation in pension loans scheme-maximum loan available 190 1136 Need for a request to participate 192 1137 Need for a request to later nominate or change guaranteed amount or rate of pension or allowance 193 1138 Existence of debt results in charge over real assets 194 1139 Debt not to be recovered until after death 195 1140 Enforcement of charge 196 1141 Person ceases to participate in pension loans scheme if debt exceeds maximum loan available 196 1142 Person withdraws from pension loans scheme 197 1142A Repayment or recovery of debt after pension loans scheme ceases to operate because debt exceeds maximum loan available or person withdraws 197 1143 Registration of charge 198 1144 Manner of enforcement of charge 198 1144A Division does not apply for purposes of care receiver assets test 199 Division 5-Provisions relating to special residences and special residents 200 Subdivision A-General 200 1145A Application of Division to granny flat residents 200 1146 Basis for different treatment 200 1147 Entry contribution 200 1148 Extra allowable amount 202 1149 Renegotiation of retirement village agreement 204 Subdivision B-Residents who are not members of a couple 204 1150 Residents who are not members of a couple 204 Subdivision C-Residents who are members of couple and share principal home 205 1151 Members of couples 205 Subdivision D-Residents who are members of illness separated couple 206 1152 Members of illness separated couples (both in special residences) [see Appendix for CPI adjusted figures] 206 1153 Members of illness separated couples (partner not in special residence and partner homeowner) 209 1154 Members of illness separated couples (partner not in special residence and partner not homeowner) [see Appendix for CPI adjusted figures] 210 Subdivision E-Residents who are members of ordinary couple with different principal homes 212 1155 Members of ordinary couple with different principal homes (both in special residences) 212 1156 Members of ordinary couple with different principal homes (partner not in special residence and partner homeowner) 213 1157 Members of ordinary couple with different principal homes (partner not in special residence and partner not homeowner) 214 Part 3.12A-Provisions for Seniors Health Card taxable income test 216 Division 1-Purpose of this Part 216 1157A Purpose of Part 216 Division 2-Benefits that may be assessable fringe benefits 217 1157B Benefits received in or outside Australia 217 1157C Car benefits 217 1157D Exempt car benefits 219 1157E School fees benefits 219 1157F Health insurance benefits 221 1157G Loan benefits 222 1157H Exempt loan benefit 224 1157I Housing benefits 224 1157J Exempt housing benefits-live-in residential care workers 226 1157JA Expense benefits 227 1157JB Exempt expense benefit 227 1157JC Financial investment benefit 228 Division 3-Value of car fringe benefits 229 1157K Method of valuing car fringe benefits 229 1157L Value of car fringe benefits 229 1157M Minister may determine alternative method of valuing car fringe benefits 231 Division 4-Value of school fees fringe benefits 232 1157N Value of school fees fringe benefits 232 Division 5-Value of health insurance fringe benefits 233 1157O Value of health insurance fringe benefits 233 Division 6-Value of loan fringe benefits 234 1157P Method of valuing loan fringe benefits 234 1157Q Value of loan fringe benefits 234 1157R Minister may determine alternative method of valuing loan fringe benefits 236 Division 7-Value of housing fringe benefits 238 Subdivision A-Grants of housing rights 238 1157S Methods of valuing housing fringe benefits-grants of housing rights 238 1157T Value of grants of housing rights-general 238 1157TA Value of grants of housing rights-employees of the Defence Force 240 Subdivision B-Payments associated with loans 242 1157TB Method of valuing housing fringe benefits-payments associated with loans 242 1157TC Value of payments associated with loans 243 Subdivision C-Payments associated with enjoying housing rights 243 1157TD Methods of valuing housing fringe benefits-payments associated with enjoying housing rights 243 1157TE Value of payments associated with enjoying housing rights-general 244 1157TF Value of payments associated with enjoying housing rights-employees of the Defence Force 246 Subdivision D-Alternative methods of valuing housing fringe benefits 248 1157U Minister may determine alternative method of valuing housing fringe benefits 248 Division 8-Value of expense fringe benefit 249 1157UA Value of expense fringe benefits 249 Division 9-Value of financial investment fringe benefit 250 1157UB Value of financial investment fringe benefit 250 Division 8-Foreign currency rates 251 1157V Foreign currency rates 251 Part 3.13-Imprisonment 252 1158 Some social security payments not payable during period in gaol or in psychiatric confinement following criminal charge 252 1159 Payment may be redirected to dependent partner or child 252 1159A Person not qualified for some concession cards when in gaol or in psychiatric confinement following criminal charge 253 Part 3.14-Compensation recovery 254 Division 1-General 254 1160 General effect of Part 254 1161 Application of Part 254 1161A Application of Part to supplementary compensation affected payments 256 1162 Part to bind Crown 259 1163 Interpretation 259 1164 Certain lump sums to be treated as though they were received as periodic compensation payments 259 1165 Effect of certain State and Territory laws 260 Division 2-Enforcement of compensation rights 261 1166 Secretary may require person to take action to obtain compensation 261 1167 Failure to comply with a requirement to take action to obtain compensation 262 Division 3-Receipt of compensation 263 1168 Application 263 1169 Compensation affected payment not payable during lump sum preclusion period 263 1170 Lump sum preclusion period 263 1171 Deemed lump sum payment arising from separate payments 264 1172 Lump sum compensation not counted as ordinary income 265 1173 Effect of periodic compensation payments on rate of person's compensation affected payment 265 1174 Effect of periodic compensation payments on rate of partner's compensation affected payment 266 1175 Rate reduction under both income/assets test and this Part 267 1176 Periodic compensation not counted as ordinary income 267 Division 4-Recoverable amounts 268 Subdivision A-Preliminary 268 1177 Interpretation 268 Subdivision B-Recovery from recipient of compensation affected payment 268 1178 Repayment of amount where both lump sum and payments of compensation affected payment have been received 268 1179 The section 1178 recoverable amount 269 1180 Repayment where both periodic compensation payments and payments of compensation affected payment have been received 269 1181 The section 1180 recoverable amount 269 Subdivision C-Recovery from compensation payers and insurers 270 1182 Secretary may send preliminary notice to potential compensation payer or insurer 270 1183 Potential compensation payer or insurer must notify Secretary of liability 271 1184 Secretary may send recovery notice to compensation payer or insurer 272 1184A The section 1184 recoverable amount 273 1184B Preliminary notice or recovery notice suspends liability to pay compensation 276 1184C Compensation payer's or insurer's payment to Commonwealth discharges liability to compensation claimant 276 1184D Offence to make compensation payment after receiving preliminary notice or recovery notice 277 1184E Liability of compensation payer or insurer to pay the Commonwealth if there is a contravention of section 1184D 278 Division 5-Recoverable debts 279 1184F Debts resulting from notices under section 1178 or 1180 279 1184G Debts resulting from notices under section 1184 279 1184H Debts resulting from contravention of section 1184D 279 1184I Compensation arrears debts 279 Division 6-Miscellaneous 280 1184J Secretary may give recovery notice either to compensation payer or to insurer but not to both 280 1184K Secretary may disregard some payments 280 1184L Application to review compensation decision-disability support pension 281 1185 Special provision for certain recipients of dependency- based payments 281 Part 3.14A-Retirement assistance for farmers 283 Division 1-General 283 1185A Purpose of Part 283 1185AA Applicable cut-off date 283 1185AB Pre-assessment request 283 1185B Part to apply to certain transfers of estates in farms etc. 285 1185C How to assess the value of farms etc. subject to a transfer 288 Division 2-Modification of provisions relating to assets test 290 1185D Transfer of estate in farm etc. not disposal of an asset 290 Division 4-Requests for increase in rate of social security payment 292 1185F Application 292 1185G Request for increase 292 1185H Form of request 292 1185J Determination of request 292 Division 5-Farmers' income test 294 1185K Does a person satisfy the farmers' income test? 294 Division 6-Transitional: ex gratia payments 299 1185L Ex gratia payments 299 Part 3.14B-Retirement assistance for sugarcane farmers 300 Division 1-General 300 1185M Purpose of Part 300 1185N RASF commencement and closing days 300 1185P Applicable cut-off date 300 1185Q Pre-assessment request 301 1185R Part to apply to certain transfers of estates in sugarcane farms etc. 302 1185S How to assess the total net value of sugarcane farms etc. subject to a transfer 305 Division 2-Modification of provisions relating to assets test 308 1185T Transfer of estate in sugarcane farm etc. not disposal of an asset 308 Division 3-Requests for increase in rate of social security payment 310 1185U Application 310 1185V Request for increase 310 1185W Form of request 310 1185X Determination of request 310 Division 4-Sugarcane farmers' income test 312 1185Y Does a person satisfy the sugarcane farmers' income test? 312 Part 3.15-New Enterprise Incentive Scheme 317 1186 General effect of Part 317 1187 Reduction in rate of payments under this Act if recipient or partner also receiving payments under New Enterprise Incentive Scheme (NEIS) 317 1188 Rate reduction under this Part 318 Part 3.15A-Community Development Employment Projects Scheme 320 Division 1-Preliminary 320 1188A General effect of Part 320 1188B CDEP Scheme participants 320 1188BA Approval of Northern Territory CDEP transitional activities 321 1188BB Effect of undertaking Northern Territory CDEP transitional activities 321 Division 2-Reduction in rate of pension or allowance 323 1188C Reductions in rate of payments under this Act if recipient or partner also receiving payments under CDEP Scheme 323 Division 3-CDEP Scheme Participant Supplement 334 1188D Entitlement to Supplement: people receiving pension-type payments on or after 20 March 1999 334 1188E Entitlement to Supplement between 20 March 1999 and 19 March 2000: people not covered by section 1188D 335 1188F Entitlement to Supplement on or after 20 March 2000: people not covered by section 1188D 338 1188G Notification of periods in respect of which a CDEP Scheme payment is not payable 342 1188H Person receiving CDEP Scheme Participant Supplement to be taken to be in receipt of social security benefit or pension 343 1188J CDEP Scheme participant may accumulate supplement 343 1188K Need for a claim 344 Division 4-Transitional 345 1188L Existing CDEP Scheme participants to be treated as long- term social security recipients 345 1188M Certain people receiving CDEP Scheme Participant Supplement to be taken to have been receiving social security benefit for 9 months 345 Part 3.16-Indexation and adjustment of amounts 346 Division 1-Preliminary 346 1189 Analysis of Part 346 1190 Indexed and adjusted amounts [see Notes 2 and 4] 346 Division 2-CPI indexation 368 1191 CPI Indexation Table 368 1192 Indexation of amounts 381 1193 Indexation factor 382 1194 Rounding off indexed amounts 383 1195 Certain indexed amounts to be increased in line with increases in Male Total Average Weekly Earnings 383 Division 4-Adjustment of other rates 386 1198B Adjustment of disability support pension (under 21) MBRs 386 1198C Adjustment of youth disability supplement 386 1203 Adjustment of pension "single non-homeowner" AVL 387 1204 Adjustment of benefit AVLs 387 1205 Adjustment of special illness separated special resident AVL 388 1206A Adjustment of certain pharmaceutical allowance rates 389 1206B Adjustment of certain telephone allowance rates 390 Division 5-One-off adjustments of certain amounts 393 1206D Rent assistance threshold for social security pensions increased on 20 March 1996 393 1206E Rent assistance threshold for some social security payments increased on 20 March 1996 393 1206F Rent assistance for family allowance increased on 20 March 1996 393 1206G Increased rent assistance for pensioners with service pensioner partners with children 394 Division 6-One-off adjustments on 1 July 2000 relating to the introduction of the goods and services tax 395 1206GA 1 July 2000 increase in certain indexed and adjusted amounts 395 1206GAA1 July 2000 increase in rent assistance amounts 397 1206GB Adjustment of amounts following 1 July 2000 increase 398 1206GC 1 July 2000 increase in income and assets test free areas 402 1206GD Rounding off provisional replacement amounts 406 Part 3.16A-Advance payment deductions 407 1206H Advance payment deduction 407 1206J Amount of advance payment deduction-basic calculation 407 1206K Person may request larger advance payment deduction 407 1206L Reduction of advance payment deduction in cases of severe financial hardship 408 1206M The final advance payment deduction 409 1206N Provisional payment rate insufficient to cover advance payment deduction 409 1206P Rounding of amounts 410 Part 3.16B-Special employment advance deductions 411 1206Q Special employment advance deduction 411 1206R Amount of special employment advance deduction-basic calculation 411 1206S Person may request larger special employment advance deduction 411 1206T Reduction of special employment advance deduction in cases of severe financial hardship 412 1206U The final special employment advance deduction 413 1206V Provisional payment rate insufficient to cover special employment advance deduction 413 1206W Rounding of amounts 414 Part 3.18-Means test treatment of private companies and private trusts 415 Division 1-Introduction 415 1207 Simplified outline 415 1207A Definitions 416 1207B Relatives 419 1207C Associates 420 1207D When a company is sufficiently influenced by an entity 422 1207E Majority voting interest in a company 422 1207F Entitled to acquire 422 1207G Transfer of property or services 422 1207H Constructive transfers of property or services to an entity 423 1207J Active involvement with a primary production enterprise 424 1207K Power to veto decisions of a trustee 424 1207L Extra-territorial operation 424 1207M Application to things happening before commencement 425 Division 2-Designated private companies 426 1207N Designated private companies 426 Division 3-Designated private trusts 428 1207P Designated private trusts 428 Division 4-Controlled private companies 430 1207Q Controlled private companies 430 1207R Direct voting interest in a company 431 1207S Voting power 432 1207T Direct control interest in a company 432 1207U Interest in a share 433 Division 5-Controlled private trusts 435 1207V Controlled private trusts 435 1207W Interest in a trust 436 Division 6-Attributable stakeholders and attribution percentages 438 1207X Attributable stakeholder, asset attribution percentage and income attribution percentage 438 Division 7-Attribution of income of controlled private companies and controlled private trusts 440 1207Y Attribution of income 440 1207Z No double counting of attributed income 441 1208 Ordinary income of a company or trust 442 1208A Ordinary income from a business-treatment of trading stock 442 1208B Permissible reductions of business and investment income 443 1208C Derivation periods 444 1208D Attribution periods 445 Division 8-Attribution of assets of controlled private companies and controlled private trusts 446 1208E Attribution of assets 446 1208F When attributed asset is unrealisable 446 1208G Effect of charge or encumbrance on value of assets 447 1208H Effect of unsecured loan on value of assets 449 1208J Value of company's or trust's assets etc. 449 Division 9-Modification of asset deprivation rules 450 1208K Individual disposes of asset to company or trust 450 1208L Disposal of asset by company or trust 450 1208M Individual ceases to be an attributable stakeholder of a company or trust 453 1208N Individual disposes of asset to company or trust before 1 January 2002-individual is attributable stakeholder 454 1208P Individual disposes of asset to company or trust before 1 January 2002-individual's spouse is attributable stakeholder 455 Division 10-Modification of income deprivation rules 457 1208Q Individual disposes of ordinary income to company or trust 457 1208R Disposal of income by company or trust 457 1208S Individual disposes of income to company or trust before 1 January 2002-individual is attributable stakeholder 460 1208T Individual disposes of income to company or trust before 1 January 2002-individual's spouse is attributable stakeholder 461 Division 11-Concessional primary production trusts 463 1208U Concessional primary production trusts 463 1208V Individual ceases to be an attributable stakeholder of trust-receipt of remuneration or other benefits from trust during asset deprivation period 467 1208W Net value of asset 469 1208X Value of entity's assets 469 1208Y When asset is controlled by an individual 469 1208Z Adjusted net value of asset 470 1209 Adjusted net primary production income 471 1209A Net income of a primary production enterprise 472 1209B Net income from a primary production enterprise-treatment of trading stock 472 1209C Permissible reductions of income from carrying on a primary production enterprise 473 Division 12-Anti-avoidance 474 1209D Anti-avoidance 474 Division 13-Decision-making principles 476 1209E Decision-making principles 476 Division 14-Information management 477 1209F Transitional period 477 1209G Information-gathering powers 477 1209H Secretary may obtain tax information 478 1209J Disclosure of tax information 479 1209K Disclosure of tax file number information 480 Part 3.18A-Private financial provision for certain people with disabilities 482 Division 1-Special disability trusts 482 1209L What is a special disability trust? 482 1209M Beneficiary requirements 482 1209N Trust purpose requirements 483 1209P Trust deed requirements 484 1209Q Trustee requirements 485 1209R Trust property requirements 485 1209S Reporting requirements 486 1209T Audit requirements 487 1209U Waiver of contravention of this Division 488 Division 2-Income of special disability trusts 490 1209V Attribution of income 490 1209X Income amounts from special disability trusts 490 Division 3-Assets of special disability trusts 491 1209Y Attribution of assets 491 Division 4-Transfers to special disability trusts 492 1209Z Effect of certain transfers to special disability trusts 492 1209ZA The effect of exceeding the $500,000 limit 493 1209ZB Transfers by the immediate family members prior to reaching pension age etc. 494 1209ZC Transfers by principal beneficiaries or partners 495 1209ZD Cessation of special disability trusts 495 1209ZE Effect of this Division 496 Part 3.19-Miscellaneous 497 1210 Application of income and assets test reductions and of compensation reductions for income tax purposes 497 1210A Effect of nil rate of pension etc. 498 Chapter 4-International agreements and portability 499 Part 4.2-Overseas portability 499 Division 1-Preliminary 499 1211 Social Security (International Agreements) Act overrides Part 499 1212 Meaning of terms used in this Part 499 1212A Meaning of acute family crisis 500 1212B Meaning of humanitarian purpose 500 1212C Meaning of temporary absence 501 1212D Part does not affect need for qualification 501 Division 2-Portability of social security payments 502 Subdivision A-Basic portability provisions 502 1213 Persons to whom Division applies 502 1214 Some payments generally portable with no time limit 502 1215 Some payments generally portable with time limit 502 1216 Amounts added to rate 503 1217 Meaning of maximum portability period, allowable absence and portability period 503 Subdivision B-Exceptions to Subdivision A rules 508 1218AA Extended portability period for disability support pension 508 1218 Exception-full-time students outside Australia for purposes of Australian course 508 1218A Exception-Reserve service 509 1218B Exception-waiting period in Australia before parenting payment is portable 509 1218C Extension of person's portability period-general 509 1218D Extension of person's portability period-life-saving medical treatment overseas 510 1220 No portability where claim based on short residence 511 Division 3-Rate of portable pensions 513 1220A Proportionality-age pension rate 513 1220B Proportionality-disability support pension rate for a severely disabled person 513 1221 Proportionality-wife pension and widow B pension rate for entitled persons 514 Pension Portability Rate Calculator 514 Module A-Overall rate calculation process 514 Module B-Australian working life residence 515 Module C-Residence factor 516 Chapter 5-Overpayments and debt recovery 517 Part 5.1-Effect of Chapter 517 1222 General effect of Chapter 517 Part 5.2-Amounts recoverable under this Act 521 1222A Debts due to the Commonwealth 521 1223 Debts arising from lack of qualification, overpayment etc. [see Note 6] 521 1223A Debt resulting from commutation of asset-test exempt income stream contrary to subsection 9A(2), 9B(2) or 9BA(2) 525 1223AA Debts arising from prepayments and certain other payments 529 1223AB Debts arising from AAT stay orders 531 1223ABAADebts arising in respect of one-off payments to older Australians 531 1223ABADebts arising in respect of one-off payments to carers 533 1223ABBDebts in respect of child disability assistance 540 1224AA Person other than payee obtaining payment of a cheque 541 1224AB Joint and several liability for persons involved in contravention of Act 541 1224B Education entry payment debt 541 1224C Data-matching Program (Assistance and Tax) Acts debts 542 1224D Mobility allowance advance debts 542 1224E Debts arising from advance payments of social security entitlements 543 1224EA Debts arising from special employment advances of special employment advance qualifying entitlements 544 1227 Assurance of support debt 544 1227A Debts arising under the Farm Household Support Act 1992 in respect of re-establishment grant, exceptional circumstances relief payment or farm help income support 545 1227B Debts arising under Part 8 of the Student Assistance Act 1973 as in force before 1 July 1998 546 1228 Overpayments arising under other Acts and schemes 546 1228A Comparable foreign payment debt recovery 548 1228B Additional 10% penalty for understatement etc. of income 548 1229 Notices in respect of debt 549 1229A Interest on debt 550 1229AA Determination that interest not to be payable 552 1229AB Administrative charge 553 1229B Penalty interest rate 553 1229C Guidelines on the penalty interest provisions 554 1230 Debt from failure to comply with garnishee notice 554 1230A Debt from failure before 1 July 1991 to comply with garnishee notice under the 1947 Act 555 1230B Overseas application of provisions 557 1230C Methods of recovery of debt 557 Part 5.3-Methods of recovery 559 1231AA Application of sections dealing with deductions 559 1231 Deductions from debtor's pension, benefit or allowance 559 1231A Deductions from debtor's exceptional circumstances relief payment or farm help income support [see Note 3] 561 1232 Legal proceedings 562 1233 Garnishee notice 563 1234 Arrangement for payment of debt 567 1234AA Recovery of amounts from financial institutions 568 1234A Deductions by consent from social security payment of person who is not a debtor 569 Part 5.4-Non-recovery of debts 571 1235 Meaning of debt 571 1236 Secretary may write off debt 571 1236A Application 572 1237 Power to waive Commonwealth's right to recover debt 573 1237A Waiver of debt arising from error 573 1237AA Waiver of debt relating to an offence 574 1237AAAWaiver of small debt 574 1237AABWaiver in relation to settlements 575 1237AACWaiver where debtor or debtor's partner would have been entitled to an allowance 577 1237AADWaiver in special circumstances 580 1237AAEExtra rules for waiver of assurance of support debts 580 1237AB Secretary may waive debts of a particular class 581 1361A [see Note 6] 581 Schedule 1A-Savings and transitional provisions 582 Part 1-General 582 1 Correspondence of pensions, benefits and allowances 582 2 Correspondence of provisions 583 2A References in other Acts and instruments to provisions of the 1947 Act 584 Part 2-Savings and Transitional Provisions Applicable on the Transition from the 1947 Act to this Act 585 Division 4-Continuation of earlier savings provisions 585 21 Widow's pension-mental hospital patient partners (changes introduced on 1 November 1980) 585 22 Benevolent homes (changes introduced on 1 January 1981) 586 27 Rent assistance-boarders and lodgers (changes introduced on 13 June 1989) 587 28 Rent assistance-retirement village residents (changes introduced on 13 June 1989) 590 Part 3-Saving and Transitional Provisions Applicable after the Commencement of this Act 593 36 Incentive allowance (changes introduced on 12 November 1991) 593 41 Members of couples (changes made on 12 March 1992) 594 42 Modifications of Pension Rate Calculator A (changes made on 12 March 1992) 595 43 Modifications of Pension Rate Calculator B (changes made on 12 March 1992) 596 44 Modifications of Pension Rate Calculator C (changes made on 12 March 1992) 597 45 Modifications of Pension Rate Calculator D (changes made on 12 March 1992) 598 46 Modifications of Pension Rate Calculator E (changes made on 12 March 1992) 598 48 Modifications of Benefit Rate Calculator B (changes made on 12 March 1992) 599 Module D-Supplementary Amount for Member of Couple in Some Circumstances 600 49 Modifications of pharmaceutical allowance rates (changes made on 12 March 1992) 602 63 Rent assistance (changes introduced on 20 March 1993) 605 67 Sickness allowance for people on rehabilitation programs (changes introduced on 20 March 1994) 608 69B Saving of job search allowance and newstart allowance deferment determinations 609 74 Partner allowance for persons born on or before 1 July 1955 (changes made on 1 July 1995) 609 80 Income determinations (changes made on 1 January 1996) 609 86 Transitional and saving provisions applicable to the amendments relating to the pension loans scheme 610 88 Saving: Determinations under repealed sections 1099E and 1099L 611 96 Application and saving provisions: advance payment provisions 611 96A Application of revised Schedule 1B 612 98 Application and transitional provisions: amendments relating to tightening the activity test administration and simplifying the penalty periods that apply to youth training allowance 613 99 Application provision: amendments relating to unemployment due to industrial action 614 100 Application provision: amendments relating to the abolition of the minimum rate of payment to under 18 year old sickness allowance and newstart allowance recipients 614 101 Application provision: abolition of the earnings credit scheme 614 102 Application provision: amendments relating to the application of the below threshold deeming rate 615 102A Application and transitional provisions: amendments relating to simplifying the penalty periods that apply to newstart allowance 616 102AA Review of decisions under section 5 of the Aged Care Income Testing Act 1997 617 102B Applications for review of decisions made under section 5 of the Aged Care Income Testing Act 1997 618 102C Review by SSAT of decisions relating to determinations under section 5 of the Aged Care Income Testing Act 1997 618 102D Review by AAT of decisions relating to determinations under section 5 of the Aged Care Income Testing Act 1997 619 102E Application provision-abolition of residential care allowance and amendments relating to rent assistance 619 103 Application provision: income maintenance periods 620 104 Application provision: amendments relating to the liquid assets test waiting period 620 104A Application provision: amendments relating to means test exemption for superannuation assets 620 105 Application and saving provisions: debts due to the Commonwealth and their recovery 621 105A Parenting payment (changes introduced 20 March 1998) 622 106 Determinations etc. relating to family payment continue in force as determinations etc. relating to family allowance 628 107 Pending claims for family payment 628 108 Savings-Disabled child (changes made on 1 July 1998) 628 108A Disabled child (changes made on 1 July 1999) 629 109 Application of liquid assets test waiting period for sickness allowance 630 109A Application provision: amendments relating to the consistent treatment of lump sums 630 110 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) 631 111 Austudy payment in place of AUSTUDY living allowance 633 111A $3,000 opening balance for student income bank for students transferring from AUSTUDY 634 112 Pensioner education supplement under the Social Security Act in place of pensioner education supplement under the Austudy Regulations 634 113 Certain persons receiving benefit PP (partnered) and pensioner education supplement immediately before 1 July 1998 635 114 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 636 115 Persons under 21 receiving newstart allowance or sickness allowance on 17 June 1997 636 116 Newstart or sickness allowance bereavement payment in respect of death of partner 637 117 Youth training allowance bereavement payment in respect of death of partner 637 118 Qualification for double orphan pension for certain young persons who were qualified to receive payments under the AUSTUDY scheme immediately before 1 July 1998 638 119 Payment of family allowance-young person ceasing to be a FA child on becoming youth allowance recipient 638 120 Application-income maintenance period rules 639 120A Amendments relating to treatment of income streams 641 122 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 642 123 Carer payment provisions (changes to "severely handicapped person" category with effect from 1 July 1999) 643 124 Carer allowance (changes introduced on 1 July 1999) 643 125 Transitional regulations arising out of carer allowance changes introduced on 1 July 1999 647 121 Changes to newly arrived resident's waiting period 647 126 Application and transitional provisions relating to fares allowance 648 127 Seasonal work carried out in what would have been a seasonal work non-benefit period extending beyond 30 June 2000 648 128 Saving provision-portability rules relating to rates of pension 649 128A Saving of certain pensions payable under 1986 Agreement between Australia and Italy 650 129 Application of amendments relating to short residence 651 130 Saving provision-other portability rules 651 131 Certain payments not recoverable 652 132 Saving-ABSTUDY recipients 652 133 Meaning of Australian resident 653 134 Transitional and saving provisions-substitution of Part 3.14 653 135 Unlimited maximum portability period for disability support pension 657 136 Transitional definition of deductible amount (commencing 1 July 2007) 658 Schedule 1B-Tables for the assessment of work-related impairment for disability support pension 661 Part 3.6-Benefit 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 a person of the opposite sex (other person); and (b) the relationship between them is a marriage-like relationship in the Secretary's opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A)); (c) 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 A-Overall rate calculation process [see Note 5] 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 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 8, 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 Step 8 only if the person's rate of benefit after Step 5 is greater than nil. Module B-Maximum 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 |Column 3A |Column 3B | | |situation |Person |Person | | | |with |without | | | |dependent |dependent | | | |child |child | |3. |Not member of |$326.10 |$301.50 | | |couple and | | | | |person: | | | | |(a) receives | | | | |sickness | | | | |allowance; and | | | | |(b) has not | | | | |turned 60 | | | |4. |Not member of |$326.10 |$301.50 | | |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 | | | |4A. |Not member of |$326.10 |$301.50 | | |couple and | | | | |person: | | | | |(a) receives | | | | |newstart | | | | |allowance or | | | | |widow allowance;| | | | |and | | | | |(b) has not | | | | |turned 60 | | | |4B. |Not member of |$326.10 |$301.50 | | |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 | | | |5. |Not member of |$326.10 |$326.10 | | |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 | | | |5A. |Not member of a |$326.10 |$326.10 | | |couple and | | | | |person receives | | | | |mature age | | | | |allowance under | | | | |Part 2.12B | | | |7. |Partnered |$272.00 |$272.00 | |9. |Member of |$326.10 |$326.10 | | |illness | | | | |separated couple| | | |11. |Partnered |$326.10 |$326.10 | | |(partner in | | | | |gaol) | | | 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 4: the item 1, 2, 6 and 8 rates in column 3B are indexed annually in line with CPI increases (see sections 1191 to 1194). Note 5: the other rates are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194). Note 6: if the person has been receiving the benefit since 20 September 1990 and item 6 applies to the person, the person's maximum basic rate may be the amount specified in column 3A rather than the amount specified in column 3B: see clause 31 in Schedule 1A. 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 or adopted 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 For the purposes of point 1068-B1A, 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 1, 2, 3, 4 and 5 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: [pic] 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 1: 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). Note 2: A person's pension supplement amount under Module BA of the Pension PP (Single) Rate Calculator is indexed 6 monthly in line with CPI increases (see sections 1191 to 1194). Module D-Pharmaceutical allowance [see Appendix for CPI adjusted figures] Qualification for pharmaceutical allowance 1068-D1 Subject to points 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 pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act 1068-D4 Pharmaceutical allowance is not to be added to a person's maximum basic rate if the person is receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act. No pharmaceutical allowance if partner receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act and not a service pensioner 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 pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act; and (c) the person's partner is not receiving a service pension. Note: if paragraphs (a), (b) and (c) apply to the person's partner, the partner is receiving pharmaceutical allowance under the VEA at the higher rate (rather than the person and the person's partner each receiving pharmaceutical allowance at the lower rate). 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: (i) Part 2.23 of this Act; or (ii) Division 2 of Part VIIA of the Veterans' Entitlements Act; and (b) the person's advance payment period has not ended. Note: for advance payment period see point 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: [pic] 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: 1. how long during the calendar year the person was on pension or benefit; 2. the rate of pharmaceutical allowance the person attracts at various times depending on the person's family situation. VEA and MRCA payments taken into account 1068-D9 In points 1068-D7 and 1068-D8: advance pharmaceutical allowance includes advance pharmaceutical allowance under the Veterans' Entitlements Act. pharmaceutical allowance includes pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act. Amount of pharmaceutical allowance 1068-D10 The amount of pharmaceutical allowance is the amount per fortnight worked out using the following Table: |Pharmaceutical allowance amount table | |Column 1|Column 2 |Column 3 | | |Person's family |Amount per | |Item |situation |fortnight | |1. |Not member of couple |$5.20 | |2. |Partnered |$2.60 | |4. |Member of illness |$5.20 | | |separated couple | | |5. |Member of respite care |$5.20 | | |couple | | |6. |Partnered (partner |$2.60 | | |getting service pension)| | |7. |Partnered (partner in |$5.20 | | |gaol) | | Note 1: For member of couple, partnered, illness separated couple, respite care couple and partnered (partner in gaol) see section 4. Note 2: The amounts in column 3 are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1206A). Module G-Income test Effect of ordinary income on maximum payment rate 1068-G1 This is how to work out the effect of a person's ordinary income, and the ordinary income of a partner of the person, on the person's maximum payment rate: Method statement Step 1. Work out the amount of the person's ordinary income on a fortnightly basis. Note 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-H12. 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 and 1068-G16. 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: 3. the general concept of ordinary income (sections 1072 and 1073); 4. business income (sections 1074 and 1075); 5. deemed income from financial assets (sections 1076 to 1084); 6. income from income streams (sections 1095 to 1099DAA); 7. 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, income support supplement or a rehabilitation allowance, 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 the father, mother, son, daughter, 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 the person's father, mother, son, daughter, brother or sister. 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 redundancy payment and is calculated as an amount equivalent to an amount of ordinary income that the person would (but for the redundancy) 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 redundancy 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 redundancy 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 does not include a directed termination payment within the meaning of section 82-10F of the Income Tax (Transitional Provisions) Act 1997. termination payment means: (a) a leave payment relating to a person's employment that has been terminated; or (b) a redundancy payment. 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. 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: 8. 5 days of the first fortnight; 9. all of the second fortnight; 10. 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: [pic] Then multiply the daily rate ($24) by the number of days in the fortnight that are also within the work period. The result is: [pic] For the second fortnight the calculation is: [pic] For the third fortnight the calculation is: [pic] plus [pic] 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 21-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 21-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, income support supplement or a rehabilitation allowance; 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: [pic] Susan's partner income reduction under point 1068-G11 is therefore: [pic] 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 1068-G14 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. Module J-Remote area allowance Remote area allowance-person physically in remote area 1068-J1 An amount by way of remote area allowance is to be added to a person's rate if: (aa) either: (i) the person's rate of benefit apart from this point is greater than nil; or (ii) apart from this point the person's rate of benefit would be nil merely because an advance pharmaceutical allowance has been paid to the person under: (A) Part 2.23 of this Act; or (B) Division 2 of Part VIIA of the Veterans' Entitlements Act; and (a) the person's usual place of residence is situated in the remote area; and (b) the person is physically present in the remote area. Note 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|Column 2 |Column 3|Column 4 | | |Person's family | |Additional| |Item |situation |Basic |allowance | | | |allowanc|for each | | | |e |FTB child | | | | |and | | | | |regular | | | | |care child| |1. |Not member of |$18.20 |$7.30 | | |couple | | | |2. |Partnered |$15.60 |$7.30 | |3. |Member of |$18.20 |$7.30 | | |illness | | | | |separated couple| | | |5. |Partnered |$18.20 |$7.30 | | |(partner in | | | | |gaol) | | | Meaning of remote area allowance 1068-J4 In Table J, remote area allowance means: (a) an amount added to a person's social security pension or benefit by way of remote area allowance; or (b) a remote area allowance payable under point SCH6-G1 of the VEA. In remote area 1068-J5 For the purposes of Table J in point 1068-J3, a person is in the remote area if: (a) the person's usual place of residence is in the remote area; and (b) the person is physically present in the remote area. Special rule where partner has an FTB or regular care child but is not receiving a pension 1068-J7 If: (a) a person who is a member of a couple is qualified for an amount by way of additional allowance; and (b) the person's partner is not receiving a pension or benefit; and (c) the person's partner has an FTB child or a regular care child; the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person. Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child 1068-J8 If: (a) a person who is a member of a couple is qualified for an amount by way of remote area allowance; and (b) the person's partner has an FTB child or a regular care child; and (c) the person's partner is not receiving additional allowance for the child; the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person. Special rule dealing with the death of an FTB or regular care child 1068-J9 If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died. Note: This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks. Part 3.6A-Parenting Payment Rate Calculator 1068A Rate of parenting payment-pension PP (single) (1) If a person is not a member of a couple, the person's rate of parenting payment is the pension PP (single) rate. (2) The pension PP (single) rate is worked out in accordance with the rate calculator at the end of this section. Note: For rate of a person who is a member of a couple see section 1068B. (3) If: (a) a person has a relationship with a person of the opposite sex (the other person); and (b) the relationship between them is a marriage-like relationship in the Secretary's opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A)); and (c) either or both of them are under the age of consent applicable in the State or Territory in which they are living; the person's pension PP (single) rate is not to exceed the benefit PP (partnered) rate which would be payable to the person if the other person were the person's partner. Pension PP (Single) Rate Calculator Module A-Overall rate calculation process Method of calculating rate 1068A-A1 The rate of pension PP (single) is a daily rate. That rate is worked out by dividing the annual rate calculated according to this Rate Calculator by 364 (fortnightly rates are provided for information only). Method statement Step 1. Work out the person's maximum basic rate using Module B below. Step 1A. Work out the amount of pension supplement using Module BA below. Step 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 B-Maximum 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 BA-Pension supplement Pension supplement 1068A-BA1 The amount of a person's pension supplement depends on the person's maximum basic rate. Amount of pension supplement 1068A-BA2 The amount of a person's pension supplement is worked out by: (a) calculating the amount (the provisional supplement amount) that is 4% of the person's 1 July 2000 maximum basic rate; and (b) rounding off the provisional supplement amount in accordance with points 1068A-BA4 to 1068A-BA6. Note: The pension supplement amount is indexed 6 monthly in line with CPI increases (see sections 1191 to 1194). 1068A-BA3 A person's 1 July 2000 maximum basic rate is the maximum basic rate that would have been the person's maximum basic rate if the rate had not changed since 1 July 2000. Rounding off of provisional supplement amount 1068A-BA4 If a provisional supplement amount is a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount. 1068A-BA5 If a provisional supplement amount is not a multiple of $2.60, the amount of the pension supplement is the provisional supplement amount rounded up or down to the nearest multiple of $2.60. 1068A-BA6 If a provisional supplement amount is not a multiple of $2.60, but is a multiple of $1.30, the amount of the pension supplement is the provisional supplement amount rounded up to the nearest multiple of $2.60. Module C-Pharmaceutical allowance [see Appendix for CPI adjusted figures] Qualification for pharmaceutical allowance 1068A-C1 Subject to points 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 receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act 1068A-C2 Pharmaceutical allowance is not to be added to a person's maximum basic rate if the person is receiving pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act. Note: A person can receive both: (a) a disability pension under the VEA; and (b) a payment under this Act; and pharmaceutical allowance might be built into the disability pension rate. 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: (i) Part 2.23 of this Act; or (ii) Division 2 of Part VIIA of the Veterans' Entitlements Act; and (b) the person's advance payment period has not ended. Note: For advance payment period see point 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: [pic] 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. VEA and MRCA payments taken into account 1068A-C6 In points 1068A-C4 and 1068A-C5: advance pharmaceutical allowance includes advance pharmaceutical allowance under the Veterans' Entitlements Act. pharmaceutical allowance includes pharmaceutical allowance under the Veterans' Entitlements Act or the Military Rehabilitation and Compensation Act. Amount of pharmaceutical allowance 1068A-C7 The amount of pharmaceutical allowance is $140.40 per year ($5.40 per fortnight). Note: The annual amount is adjusted annually in line with CPI increases (see section 1206A). Module E-Ordinary income test Effect of income on maximum payment rate 1068A-E1 This is how to work out the effect of a person's ordinary income on the person's maximum payment rate: Method statement Step 1. Work out the amount of the person's ordinary income on a yearly basis. Step 2. Work out the person's ordinary income free area (see points 1068A-E14 to 1068A-E18 below). Note: A person's ordinary income free area is the amount of ordinary income that the person can have without any deduction being made from the person's maximum payment rate. Step 3. Work out whether the person's ordinary income exceeds the person's ordinary income free area. Step 4. If the person's ordinary income does not exceed the person's ordinary income free area, the person's ordinary income excess is nil. Step 5. If the person's ordinary income exceeds the person's ordinary income free area, the person's ordinary income excess is the person's ordinary income less the person's ordinary income free area. Step 6. Use the person's ordinary income excess to work out the person's reduction for ordinary income using points 1068A- E19 and 1068A-E20 below. Note 1: See point 1068A-A1 (Steps 5 and 6) for the significance of the person's reduction for ordinary income. Note 2: The application of the ordinary income test is affected by provisions concerning the following: (a) the general concept of ordinary income (sections 1072 and 1073); (b) business income (sections 1074 and 1075); (c) 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 s