Social Security Act 1991 Act No. 46 of 1991 as amended This compilation was prepared on 21 September 2009 taking into account amendments up to Act No. 81 of 2009 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 BA-Pension supplement 10 Module D-Pharmaceutical allowance [see Appendix for CPI adjusted figures] 11 Module G-Income test 15 Module J-Remote area allowance 29 Part 3.6A-Parenting Payment Rate Calculator 32 1068A Rate of parenting payment-pension PP (single) 32 Pension PP (Single) Rate Calculator 32 Module A-Overall rate calculation process 32 Module B-Maximum basic rate [see Appendix for CPI adjusted figures] 34 Module BA-Pension supplement 34 Module C-Pharmaceutical allowance [see Appendix for CPI adjusted figures] 35 Module E-Ordinary income test 37 Module F-Remote area allowance 44 1068B Rate of parenting payment-PP (partnered) 45 Benefit PP (Partnered) Rate Calculator 45 Module A-Overall rate calculation process 45 Module C-Maximum basic rate [see Appendix for CPI adjusted figures] 48 Module D-Income test 49 Module DA-Pension supplement 57 Module E-Pharmaceutical allowance [see Appendix for CPI adjusted figures] 58 Module G-Remote area allowance 62 Part 3.7-Rent assistance 65 Division 1-Operation of this Part 65 1070 When this Part applies 65 1070A Effect of this Part 65 Division 2-Qualification for rent assistance 66 1070B Qualification-general rule 66 1070C Common requirements (about aged care residence, home ownership and rent) 66 1070D Specific requirement (carer payments and certain age, disability support and wife pensions) 66 1070E Specific requirement (bereavement allowance, widow B pension and certain parenting payments) 67 1070F Specific requirement (certain disability support pensions) 68 1070G Specific requirement (youth allowance) 70 1070H Specific requirement (austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance or widow allowance) 71 1070J Specific requirement (certain parenting payments) 73 Division 3-Rate of rent assistance 74 1070K Rate depends on social security payment and family situation 74 1070L Rate for carer payments and certain age, disability support and wife pensions 74 1070M Rate for bereavement allowance, widow B pension and certain parenting payments 77 1070N Rate for disability support pension (person aged under 18) 78 1070P Rate for disability support pension (person aged between 18 and 21) 81 1070Q Rate for youth allowance, austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance and widow allowance 84 1070R Rate for certain parenting payments 86 Division 4-Certain concepts used in this Part 88 1070S Division has effect for purposes of Part 88 1070T Rent threshold amount 88 1070U Fortnightly rent 88 1070V Rent paid by a member of certain couples 89 1070W Partner with a rent increased pension 89 1070X Partner with a rent increased benefit 89 Division 5-Transitional indexation of rent assistance and rent threshold amounts 92 1070Y Indexation of certain amounts for CPI increases before commencement 92 Part 3.9-Seniors Health Card Taxable Income Test Calculator 93 1071 Seniors Health Card Taxable Income Test Calculator 93 Seniors Health Card Taxable Income Test Calculator 93 Part 3.9A-Health Care Card Income Test Calculator 98 1071A Health care card income test 98 Health Care Card Income Test Calculator 98 Part 3.10-General provisions relating to the ordinary income test 102 Division 1-Ordinary income concept 102 1072 General meaning of ordinary income 102 1073 Certain amounts taken to be received over 12 months 102 Division 1AAA-Work bonus 104 1073AA Work bonus 104 Division 1AA-Employment income attribution rules 106 1073A Employment income attribution over a period for social security pensioners 106 1073B Daily attribution of employment income 106 1073C Fortnightly or yearly expression of attributed employment income 107 Division 1AB-Working credit accrual and depletion rules and their consequences 108 1073D To whom do working credit accrual and depletion rules apply? 108 1073E Opening balance 108 1073F Working out accruals and depletions of working credit for social security beneficiaries 111 1073G Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary 113 1073H Working out accruals and depletions of working credit for social security pensioners 113 1073I Working out the effect of a working credit depletion on the yearly rate of ordinary income for a social security pensioner 115 1073J Working credit balance prevents loss of qualification in certain cases 116 Division 1A-Business income 118 1074 Ordinary income from a business-treatment of trading stock 118 1075 Permissible reductions of business income 118 Division 1B-Deemed income from financial assets 120 1076 Deemed income from financial assets-persons other than members of couples 120 1077 Deemed income from financial assets-members of pensioner couples 121 1078 Deemed income from financial assets-members of non- pensioner couples 122 1081 Deeming threshold 123 1082 Below threshold rate, above threshold rate 124 1083 Actual return on financial assets not treated as ordinary income 124 1084 Certain money and financial investments not taken into account 125 1084A Valuation and revaluation of certain financial investments 125 Division 1C-Income from income streams 126 Subdivision B-Income streams that are not family law affected income streams 126 1097A Scope of Subdivision 126 1098 Income from asset-test exempt income stream 126 1099 Income-income stream not a defined benefit income stream 126 1099A Income-income stream is a defined benefit income stream 127 1099AA Income from market-linked asset-test exempt income stream 127 1099B Income from asset-tested income stream (long term) 129 1099C Income-income stream not a defined benefit income stream 129 1099D Income-income stream is a defined benefit income stream 130 1099DAAIncome from certain low-payment asset-tested income streams 131 Subdivision C-Family law affected income streams 132 1099DA Scope of Subdivision 132 1099DB Income from asset-test exempt income streams 133 1099DC Income from asset-tested income stream (long term) 133 1099DD Decision-making principles 133 Division 1D-Aged care accommodation bonds: certain transactions before 6 November 1997 134 1099E Scope of Division 134 1099F Exempt bond amount does not count as income 135 1099G Person's ordinary income reduced using financial asset rules 135 1099H Meaning of exempt bond amount 135 Division 1E-Refunds to charge exempt residents 137 1099J Scope of Division 137 1099K Refunded amount does not count as income 137 1099L Person's ordinary income reduced using financial asset rules 137 1099M Application of Division 138 Division 2-Conversion of foreign currency amounts 139 1100 How value of a payment received in a foreign currency is to be determined 139 1100A Determining value of a payment originally denominated in a foreign currency but made in Australian currency 140 Division 3-Disposal of ordinary income 142 1106 Disposal of ordinary income 142 1107 Amount of disposition 143 1108 Disposal of ordinary income-individuals 143 1109 Disposal of ordinary income-members of couples 144 1111 Dispositions more than 5 years old to be disregarded 145 Part 3.12-General provisions relating to the assets test 147 Division 1-Value of person's assets 147 1118 Certain assets to be disregarded in calculating the value of a person's assets 147 1118B Value of superannuation investments determined by Minister to be disregarded 154 1118AA Value of assets reduced by amounts received from Mark Fitzpatrick Trust 155 1118AB Value of person's assets reduced: certain transactions to do with aged care accommodation bonds 156 1118AC Value of person's assets reduced: refunds to charge exempt residents 156 1119 Value of asset-tested income streams that are not defined benefit income streams 156 1120 Value of asset-tested income streams that are defined benefit income streams 157 1120A Value of asset-tested FLA income streams 158 1120B Value of partially asset-test exempt income streams 158 1120C Value of superannuation reserves for superannuation funds of 4 members or less 159 1121 Effect of charge or encumbrance on value of assets 159 1121A Effect of certain liabilities on value of assets used in primary production 160 1122 Loans 161 Division 2-Disposal of assets 162 1123 Disposal of assets 162 1124 Amount of disposal or disposition 163 1124A Disposal of assets in pre-pension years-individuals 164 1125 Disposal of assets in pension years-individuals 165 1125A Disposal of assets in pre-pension years-members of couples 165 1126 Disposal of assets in pension years-members of couples 168 1126AA Disposal of assets in income year-individuals 170 1126AB Disposals of assets in 5 year period-individuals 170 1126AC Disposal of assets in income year-members of couples 171 1126AD Disposal of assets in 5 year period-members of couples 173 1126A Disposal of assets in pre-pension year-family members 174 1126B Disposal of assets in pension year-family members 175 1126C Disposal of assets in income year-family members 177 1126D Disposals of assets in 5 year period-family members 178 1127 Disposition more than 5 years old to be disregarded 179 1127A Division does not apply for purposes of care receiver assets test 180 Division 3-Financial hardship 181 1129 Access to financial hardship rules-pensions 181 1130 Application of financial hardship rules-pensions 182 1130A Division does not apply for purposes of care receiver assets test 185 1130B Access to financial hardship rules-pension PP (single) 185 1130C Application of financial hardship rules-pension PP (single) 186 1131 Access to financial hardship rules-benefits 188 1132 Application of financial hardship rules-benefits 189 Division 4-Pension loans scheme 192 1133AA Pension loans scheme definitions 192 1133 Qualification for participation in pension loans scheme 192 1134 Effect of participation in pension loans scheme-pension or allowance rate 194 1135 Effect of participation in pension loans scheme-creation of debt 195 1135A Effect of participation in pension loans scheme-maximum loan available 196 1136 Need for a request to participate 198 1137 Need for a request to later nominate or change guaranteed amount or rate of pension or allowance 199 1138 Existence of debt results in charge over real assets 200 1139 Debt not to be recovered until after death 201 1140 Enforcement of charge 202 1141 Person ceases to participate in pension loans scheme if debt exceeds maximum loan available 202 1142 Person withdraws from pension loans scheme 203 1142A Repayment or recovery of debt after pension loans scheme ceases to operate because debt exceeds maximum loan available or person withdraws 203 1143 Registration of charge 204 1144 Manner of enforcement of charge 204 1144A Division does not apply for purposes of care receiver assets test 205 Division 5-Provisions relating to special residences and special residents 206 Subdivision A-General 206 1145A Application of Division to granny flat residents 206 1146 Basis for different treatment 206 1147 Entry contribution 206 1148 Extra allowable amount 208 1149 Renegotiation of retirement village agreement 210 Subdivision B-Residents who are not members of a couple 210 1150 Residents who are not members of a couple 210 Subdivision C-Residents who are members of couple and share principal home 211 1151 Members of couples 211 Subdivision D-Residents who are members of illness separated couple 212 1152 Members of illness separated couples (both in special residences) [see Appendix for CPI adjusted figures] 212 1153 Members of illness separated couples (partner not in special residence and partner homeowner) 215 1154 Members of illness separated couples (partner not in special residence and partner not homeowner) [see Appendix for CPI adjusted figures] 216 Subdivision E-Residents who are members of ordinary couple with different principal homes 218 1155 Members of ordinary couple with different principal homes (both in special residences) 218 1156 Members of ordinary couple with different principal homes (partner not in special residence and partner homeowner) 219 1157 Members of ordinary couple with different principal homes (partner not in special residence and partner not homeowner) 220 Part 3.12A-Provisions for Seniors Health Card taxable income test 222 Division 1-Purpose of this Part 222 1157A Purpose of Part 222 Division 2-Benefits that may be assessable fringe benefits 223 1157B Benefits received in or outside Australia 223 1157C Car benefits 223 1157D Exempt car benefits 225 1157E School fees benefits 225 1157F Health insurance benefits 227 1157G Loan benefits 228 1157H Exempt loan benefit 230 1157I Housing benefits 230 1157J Exempt housing benefits-live-in residential care workers 232 1157JA Expense benefits 233 1157JB Exempt expense benefit 233 1157JC Financial investment benefit 234 Division 3-Value of car fringe benefits 235 1157K Method of valuing car fringe benefits 235 1157L Value of car fringe benefits 235 1157M Minister may determine alternative method of valuing car fringe benefits 237 Division 4-Value of school fees fringe benefits 238 1157N Value of school fees fringe benefits 238 Division 5-Value of health insurance fringe benefits 239 1157O Value of health insurance fringe benefits 239 Division 6-Value of loan fringe benefits 240 1157P Method of valuing loan fringe benefits 240 1157Q Value of loan fringe benefits 240 1157R Minister may determine alternative method of valuing loan fringe benefits 242 Division 7-Value of housing fringe benefits 244 Subdivision A-Grants of housing rights 244 1157S Methods of valuing housing fringe benefits-grants of housing rights 244 1157T Value of grants of housing rights-general 244 1157TA Value of grants of housing rights-employees of the Defence Force 246 Subdivision B-Payments associated with loans 248 1157TB Method of valuing housing fringe benefits-payments associated with loans 248 1157TC Value of payments associated with loans 249 Subdivision C-Payments associated with enjoying housing rights 249 1157TD Methods of valuing housing fringe benefits-payments associated with enjoying housing rights 249 1157TE Value of payments associated with enjoying housing rights-general 250 1157TF Value of payments associated with enjoying housing rights-employees of the Defence Force 252 Subdivision D-Alternative methods of valuing housing fringe benefits 254 1157U Minister may determine alternative method of valuing housing fringe benefits 254 Division 8-Value of expense fringe benefit 255 1157UA Value of expense fringe benefits 255 Division 9-Value of financial investment fringe benefit 256 1157UB Value of financial investment fringe benefit 256 Division 8-Foreign currency rates 257 1157V Foreign currency rates 257 Part 3.13-Imprisonment 258 1158 Some social security payments not payable during period in gaol or in psychiatric confinement following criminal charge 258 1159 Payment may be redirected to dependent partner or child 258 1159A Person not qualified for some concession cards when in gaol or in psychiatric confinement following criminal charge 259 Part 3.14-Compensation recovery 260 Division 1-General 260 1160 General effect of Part 260 1161 Application of Part 260 1161A Application of Part to supplementary compensation affected payments 262 1162 Part to bind Crown 265 1163 Interpretation 265 1164 Certain lump sums to be treated as though they were received as periodic compensation payments 265 1165 Effect of certain State and Territory laws 266 Division 2-Enforcement of compensation rights 267 1166 Secretary may require person to take action to obtain compensation 267 1167 Failure to comply with a requirement to take action to obtain compensation 268 Division 3-Receipt of compensation 269 1168 Application 269 1169 Compensation affected payment not payable during lump sum preclusion period 269 1170 Lump sum preclusion period 269 1171 Deemed lump sum payment arising from separate payments 270 1172 Lump sum compensation not counted as ordinary income 271 1173 Effect of periodic compensation payments on rate of person's compensation affected payment 271 1174 Effect of periodic compensation payments on rate of partner's compensation affected payment 272 1175 Rate reduction under both income/assets test and this Part 273 1176 Periodic compensation not counted as ordinary income 273 Division 4-Recoverable amounts 274 Subdivision A-Preliminary 274 1177 Interpretation 274 Subdivision B-Recovery from recipient of compensation affected payment 274 1178 Repayment of amount where both lump sum and payments of compensation affected payment have been received 274 1179 The section 1178 recoverable amount 275 1180 Repayment where both periodic compensation payments and payments of compensation affected payment have been received 275 1181 The section 1180 recoverable amount 275 Subdivision C-Recovery from compensation payers and insurers 276 1182 Secretary may send preliminary notice to potential compensation payer or insurer 276 1183 Potential compensation payer or insurer must notify Secretary of liability 277 1184 Secretary may send recovery notice to compensation payer or insurer 278 1184A The section 1184 recoverable amount 279 1184B Preliminary notice or recovery notice suspends liability to pay compensation 282 1184C Compensation payer's or insurer's payment to Commonwealth discharges liability to compensation claimant 282 1184D Offence to make compensation payment after receiving preliminary notice or recovery notice 283 1184E Liability of compensation payer or insurer to pay the Commonwealth if there is a contravention of section 1184D 284 Division 5-Recoverable debts 285 1184F Debts resulting from notices under section 1178 or 1180 285 1184G Debts resulting from notices under section 1184 285 1184H Debts resulting from contravention of section 1184D 285 1184I Compensation arrears debts 285 Division 6-Miscellaneous 286 1184J Secretary may give recovery notice either to compensation payer or to insurer but not to both 286 1184K Secretary may disregard some payments 286 1184L Application to review compensation decision-disability support pension 287 1185 Special provision for certain recipients of dependency- based payments 287 Part 3.14A-Retirement assistance for farmers 289 Division 1-General 289 1185A Purpose of Part 289 1185AA Applicable cut-off date 289 1185AB Pre-assessment request 289 1185B Part to apply to certain transfers of estates in farms etc. 291 1185C How to assess the value of farms etc. subject to a transfer 294 Division 2-Modification of provisions relating to assets test 296 1185D Transfer of estate in farm etc. not disposal of an asset 296 Division 4-Requests for increase in rate of social security payment 298 1185F Application 298 1185G Request for increase 298 1185H Form of request 298 1185J Determination of request 298 Division 5-Farmers' income test 300 1185K Does a person satisfy the farmers' income test? 300 Division 6-Transitional: ex gratia payments 305 1185L Ex gratia payments 305 Part 3.14B-Retirement assistance for sugarcane farmers 306 Division 1-General 306 1185M Purpose of Part 306 1185N RASF commencement and closing days 306 1185P Applicable cut-off date 306 1185Q Pre-assessment request 307 1185R Part to apply to certain transfers of estates in sugarcane farms etc. 308 1185S How to assess the total net value of sugarcane farms etc. subject to a transfer 311 Division 2-Modification of provisions relating to assets test 314 1185T Transfer of estate in sugarcane farm etc. not disposal of an asset 314 Division 3-Requests for increase in rate of social security payment 316 1185U Application 316 1185V Request for increase 316 1185W Form of request 316 1185X Determination of request 316 Division 4-Sugarcane farmers' income test 318 1185Y Does a person satisfy the sugarcane farmers' income test? 318 Part 3.15-New Enterprise Incentive Scheme 323 1186 General effect of Part 323 1187 Reduction in rate of payments under this Act if recipient or partner also receiving payments under New Enterprise Incentive Scheme (NEIS) 323 1188 Rate reduction under this Part 324 Part 3.15A-Community Development Employment Projects Scheme 326 Division 1-Preliminary 326 1188A General effect of Part 326 1188B CDEP Scheme participants 326 1188BA Approval of Northern Territory CDEP transitional activities 326 1188BB Effect of undertaking Northern Territory CDEP transitional activities 327 Division 2-Reduction in rate of pension or allowance 328 1188C Reductions in rate of payments under this Act if recipient or partner also receiving payments under CDEP Scheme 328 Division 3-CDEP Scheme Participant Supplement 339 1188D Entitlement to Supplement: people receiving pension-type payments on or after 20 March 1999 339 1188E Entitlement to Supplement between 20 March 1999 and 19 March 2000: people not covered by section 1188D 340 1188F Entitlement to Supplement on or after 20 March 2000: people not covered by section 1188D 343 1188G Notification of periods in respect of which a CDEP Scheme payment is not payable 347 1188H Person receiving CDEP Scheme Participant Supplement to be taken to be in receipt of social security benefit or pension 348 1188J CDEP Scheme participant may accumulate supplement 348 1188K Need for a claim 349 1188KA CDEP Scheme Participant Supplement not payable in certain circumstances 349 Division 4-Transitional 350 1188L Existing CDEP Scheme participants to be treated as long- term social security recipients 350 1188M Certain people receiving CDEP Scheme Participant Supplement to be taken to have been receiving social security benefit for 9 months 350 Part 3.16-Indexation and adjustment of amounts 351 Division 1-Preliminary 351 1189 Analysis of Part 351 1190 Indexed and adjusted amounts [see Note 4] 351 Division 2-CPI indexation 372 1191 CPI Indexation Table 372 1192 Indexation of amounts 386 1193 Indexation factor 388 1194 Rounding off indexed amounts 388 1195 Certain indexed amounts to be increased in line with increases in Male Total Average Weekly Earnings 389 Division 3-Social security pension indexation using Pensioner and Beneficiary Living Cost Index 392 1196 Social security pension indexation using Pensioner and Beneficiary Living Cost Index 392 1197 Living cost indexation factor 393 1198 Rounding off amounts 394 Division 4-Adjustment of other rates 395 1198B Adjustment of disability support pension (under 21) MBRs 395 1198C Adjustment of youth disability supplement 395 1203 Adjustment of pension "single non-homeowner" AVL 396 1204 Adjustment of benefit AVLs 396 1205 Adjustment of special illness separated special resident AVL 397 1206A Adjustment of certain pharmaceutical allowance rates 398 1206B Adjustment of certain telephone allowance rates 399 Division 5-One-off adjustments of certain amounts 402 1206D Rent assistance threshold for social security pensions increased on 20 March 1996 402 1206E Rent assistance threshold for some social security payments increased on 20 March 1996 402 1206F Rent assistance for family allowance increased on 20 March 1996 402 1206G Increased rent assistance for pensioners with service pensioner partners with children 403 Division 6-One-off adjustments on 1 July 2000 relating to the introduction of the goods and services tax 404 1206GA 1 July 2000 increase in certain indexed and adjusted amounts 404 1206GAA1 July 2000 increase in rent assistance amounts 406 1206GB Adjustment of amounts following 1 July 2000 increase 407 1206GC 1 July 2000 increase in income and assets test free areas 411 1206GD Rounding off provisional replacement amounts 415 Division 7-Increase in maximum basic rate of some pensions on 20 September 2009 416 1206GE Maximum basic rate of some single pensions increased on 20 September 2009 416 Part 3.16A-Advance payment deductions 417 1206H Advance payment deduction 417 1206J Amount of advance payment deduction-basic calculation 417 1206K Person may request larger advance payment deduction 417 1206L Reduction of advance payment deduction in cases of severe financial hardship 418 1206M The final advance payment deduction 419 1206N Provisional payment rate insufficient to cover advance payment deduction 419 1206P Rounding of amounts 420 Part 3.16B-Special employment advance deductions 421 1206Q Special employment advance deduction 421 1206R Amount of special employment advance deduction-basic calculation 421 1206S Person may request larger special employment advance deduction 421 1206T Reduction of special employment advance deduction in cases of severe financial hardship 422 1206U The final special employment advance deduction 423 1206V Provisional payment rate insufficient to cover special employment advance deduction 423 1206W Rounding of amounts 424 Part 3.18-Means test treatment of private companies and private trusts 425 Division 1-Introduction 425 1207 Simplified outline 425 1207A Definitions 426 1207B Relatives 429 1207C Associates 430 1207D When a company is sufficiently influenced by an entity 431 1207E Majority voting interest in a company 432 1207F Entitled to acquire 432 1207G Transfer of property or services 432 1207H Constructive transfers of property or services to an entity 433 1207J Active involvement with a primary production enterprise 434 1207K Power to veto decisions of a trustee 434 1207L Extra-territorial operation 434 1207M Application to things happening before commencement 434 Division 2-Designated private companies 435 1207N Designated private companies 435 Division 3-Designated private trusts 437 1207P Designated private trusts 437 Division 4-Controlled private companies 439 1207Q Controlled private companies 439 1207R Direct voting interest in a company 440 1207S Voting power 441 1207T Direct control interest in a company 441 1207U Interest in a share 442 Division 5-Controlled private trusts 444 1207V Controlled private trusts 444 1207W Interest in a trust 445 Division 6-Attributable stakeholders and attribution percentages 447 1207X Attributable stakeholder, asset attribution percentage and income attribution percentage 447 Division 7-Attribution of income of controlled private companies and controlled private trusts 449 1207Y Attribution of income 449 1207Z No double counting of attributed income 450 1208 Ordinary income of a company or trust 451 1208A Ordinary income from a business-treatment of trading stock 451 1208B Permissible reductions of business and investment income 452 1208C Derivation periods 453 1208D Attribution periods 454 Division 8-Attribution of assets of controlled private companies and controlled private trusts 455 1208E Attribution of assets 455 1208F When attributed asset is unrealisable 455 1208G Effect of charge or encumbrance on value of assets 456 1208H Effect of unsecured loan on value of assets 458 1208J Value of company's or trust's assets etc. 458 Division 9-Modification of asset deprivation rules 459 1208K Individual disposes of asset to company or trust 459 1208L Disposal of asset by company or trust 459 1208M Individual ceases to be an attributable stakeholder of a company or trust 462 1208N Individual disposes of asset to company or trust before 1 January 2002-individual is attributable stakeholder 463 1208P Individual disposes of asset to company or trust before 1 January 2002-individual's spouse is attributable stakeholder 464 Division 10-Modification of income deprivation rules 466 1208Q Individual disposes of ordinary income to company or trust 466 1208R Disposal of income by company or trust 466 1208S Individual disposes of income to company or trust before 1 January 2002-individual is attributable stakeholder 469 1208T Individual disposes of income to company or trust before 1 January 2002-individual's spouse is attributable stakeholder 470 Division 11-Concessional primary production trusts 472 1208U Concessional primary production trusts 472 1208V Individual ceases to be an attributable stakeholder of trust-receipt of remuneration or other benefits from trust during asset deprivation period 476 1208W Net value of asset 478 1208X Value of entity's assets 478 1208Y When asset is controlled by an individual 478 1208Z Adjusted net value of asset 479 1209 Adjusted net primary production income 480 1209A Net income of a primary production enterprise 481 1209B Net income from a primary production enterprise-treatment of trading stock 481 1209C Permissible reductions of income from carrying on a primary production enterprise 482 Division 12-Anti-avoidance 483 1209D Anti-avoidance 483 Division 13-Decision-making principles 485 1209E Decision-making principles 485 Division 14-Information management 486 1209F Transitional period 486 1209G Information-gathering powers 486 1209H Secretary may obtain tax information 487 1209J Disclosure of tax information 488 1209K Disclosure of tax file number information 489 Part 3.18A-Private financial provision for certain people with disabilities 491 Division 1-Special disability trusts 491 1209L What is a special disability trust? 491 1209M Beneficiary requirements 491 1209N Trust purpose requirements 493 1209P Trust deed requirements 493 1209Q Trustee requirements 494 1209R Trust property requirements 494 1209S Reporting requirements 495 1209T Audit requirements 496 1209U Waiver of contravention of this Division 497 Division 2-Income of special disability trusts 499 1209V Attribution of income 499 1209X Income amounts from special disability trusts 499 Division 3-Assets of special disability trusts 500 1209Y Attribution of assets 500 Division 4-Transfers to special disability trusts 501 1209Z Effect of certain transfers to special disability trusts 501 1209ZA The effect of exceeding the $500,000 limit 502 1209ZB Transfers by the immediate family members prior to reaching pension age etc. 503 1209ZC Transfers by principal beneficiaries or partners 504 1209ZD Cessation of special disability trusts 504 1209ZE Effect of this Division 505 Part 3.19-Miscellaneous 506 1210 Application of income and assets test reductions and of compensation reductions for income tax purposes 506 1210A Effect of nil rate of pension etc. 508 Chapter 4-International agreements and portability 509 Part 4.2-Overseas portability 509 Division 1-Preliminary 509 1211 Social Security (International Agreements) Act overrides Part 509 1212 Meaning of terms used in this Part 509 1212A Meaning of acute family crisis 510 1212B Meaning of humanitarian purpose 510 1212C Meaning of temporary absence 511 1212D Part does not affect need for qualification 511 Division 2-Portability of social security payments 512 Subdivision A-Basic portability provisions 512 1213 Persons to whom Division applies 512 1214 Some payments generally portable with no time limit 512 1215 Some payments generally portable with time limit 512 1216 Amounts added to rate 513 1217 Meaning of maximum portability period, allowable absence and portability period 513 Subdivision B-Exceptions to Subdivision A rules 518 1218AA Extended portability period for disability support pension 518 1218 Exception-full-time students outside Australia for purposes of Australian course 518 1218A Exception-Reserve service 519 1218B Exception-waiting period in Australia before parenting payment is portable 519 1218C Extension of person's portability period-general 520 1218D Extension of person's portability period-life-saving medical treatment overseas 521 1220 No portability where claim based on short residence 521 Division 3-Rate of portable pensions 523 1220A Proportionality-age pension rate 523 1220B Proportionality-disability support pension rate for a severely disabled person 523 1221 Proportionality-wife pension and widow B pension rate for entitled persons 524 Pension Portability Rate Calculator 524 Module A-Overall rate calculation process 524 Module B-Australian working life residence 525 Module C-Residence factor 526 Chapter 5-Overpayments and debt recovery 527 Part 5.1-Effect of Chapter 527 1222 General effect of Chapter 527 Part 5.2-Amounts recoverable under this Act 531 1222A Debts due to the Commonwealth 531 1223 Debts arising from lack of qualification, overpayment etc. [see Note 6] 531 1223A Debt resulting from commutation of asset-test exempt income stream contrary to subsection 9A(2), 9B(2) or 9BA(2) 535 1223AA Debts arising from prepayments and certain other payments 539 1223AB Debts arising from AAT stay orders 541 1223ABAADebts arising in respect of one-off payments to older Australians 541 1223ABADebts arising in respect of one-off payments to carers 543 1223ABAAADebts arising in respect of economic security strategy payments 550 1223ABAABDebts arising in respect of training and learning bonuses etc. 552 1223ABBDebts in respect of child disability assistance 554 1223ABCDebts in respect of carer supplement for 2009 555 1223ABDDebts in respect of carer supplement for 2010 and later years 556 1224AA Person other than payee obtaining payment of a cheque 557 1224AB Joint and several liability for persons involved in contravention of Act 558 1224B Education entry payment debt 558 1224C Data-matching Program (Assistance and Tax) Acts debts 558 1224D Mobility allowance advance debts 559 1224E Debts arising from advance payments of social security entitlements 560 1224EA Debts arising from special employment advances of special employment advance qualifying entitlements 560 1227 Assurance of support debt 561 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 561 1227B Debts arising under Part 8 of the Student Assistance Act 1973 as in force before 1 July 1998 562 1228 Overpayments arising under other Acts and schemes 562 1228A Comparable foreign payment debt recovery 564 1228B Additional 10% penalty for understatement etc. of income 565 1229 Notices in respect of debt 566 1229A Interest on debt 567 1229AA Determination that interest not to be payable 569 1229AB Administrative charge 570 1229B Penalty interest rate 570 1229C Guidelines on the penalty interest provisions 570 1230 Debt from failure to comply with garnishee notice 571 1230A Debt from failure before 1 July 1991 to comply with garnishee notice under the 1947 Act 572 1230B Overseas application of provisions 573 1230C Methods of recovery of debt 573 Part 5.3-Methods of recovery 575 1231AA Application of sections dealing with deductions 575 1231 Deductions from debtor's pension, benefit or allowance 575 1231A Deductions from debtor's exceptional circumstances relief payment or farm help income support [see Note 2] 578 1232 Legal proceedings 578 1233 Garnishee notice 580 1234 Arrangement for payment of debt 583 1234AA Recovery of amounts from financial institutions 584 1234A Deductions by consent from social security payment of person who is not a debtor 585 Part 5.4-Non-recovery of debts 587 1235 Meaning of debt 587 1236 Secretary may write off debt 587 1236A Application 588 1237 Power to waive Commonwealth's right to recover debt 589 1237A Waiver of debt arising from error 589 1237AA Waiver of debt relating to an offence 590 1237AAAWaiver of small debt 590 1237AABWaiver in relation to settlements 591 1237AACWaiver where debtor or debtor's partner would have been entitled to an allowance 593 1237AADWaiver in special circumstances 596 1237AAEExtra rules for waiver of assurance of support debts 596 1237AB Secretary may waive debts of a particular class 597 1361A [see Note 6] 597 Schedule 1A-Savings and transitional provisions 598 Part 1-General 598 1 Correspondence of pensions, benefits and allowances 598 2 Correspondence of provisions 599 2A References in other Acts and instruments to provisions of the 1947 Act 600 Part 2-Savings and Transitional Provisions Applicable on the Transition from the 1947 Act to this Act 601 Division 4-Continuation of earlier savings provisions 601 21 Widow's pension-mental hospital patient partners (changes introduced on 1 November 1980) 601 22 Benevolent homes (changes introduced on 1 January 1981) 602 27 Rent assistance-boarders and lodgers (changes introduced on 13 June 1989) 603 28 Rent assistance-retirement village residents (changes introduced on 13 June 1989) 606 Part 3-Saving and Transitional Provisions Applicable after the Commencement of this Act 609 36 Incentive allowance (changes introduced on 12 November 1991) 609 41 Members of couples (changes made on 12 March 1992) 610 42 Modifications of Pension Rate Calculator A (changes made on 12 March 1992) 611 43 Modifications of Pension Rate Calculator B (changes made on 12 March 1992) 612 44 Modifications of Pension Rate Calculator C (changes made on 12 March 1992) 613 45 Modifications of Pension Rate Calculator D (changes made on 12 March 1992) 614 46 Modifications of Pension Rate Calculator E (changes made on 12 March 1992) 614 48 Modifications of Benefit Rate Calculator B (changes made on 12 March 1992) 615 49 Modifications of pharmaceutical allowance rates (changes made on 12 March 1992) 618 63 Rent assistance (changes introduced on 20 March 1993) 621 67 Sickness allowance for people on rehabilitation programs (changes introduced on 20 March 1994) 624 69B Saving of job search allowance and newstart allowance deferment determinations 625 74 Partner allowance for persons born on or before 1 July 1955 (changes made on 1 July 1995) 625 80 Income determinations (changes made on 1 January 1996) 625 86 Transitional and saving provisions applicable to the amendments relating to the pension loans scheme 626 88 Saving: Determinations under repealed sections 1099E and 1099L 627 96 Application and saving provisions: advance payment provisions 627 96A Application of revised Schedule 1B 628 98 Application and transitional provisions: amendments relating to tightening the activity test administration and simplifying the penalty periods that apply to youth training allowance 629 99 Application provision: amendments relating to unemployment due to industrial action 630 100 Application provision: amendments relating to the abolition of the minimum rate of payment to under 18 year old sickness allowance and newstart allowance recipients 630 101 Application provision: abolition of the earnings credit scheme 630 102 Application provision: amendments relating to the application of the below threshold deeming rate 631 102A Application and transitional provisions: amendments relating to simplifying the penalty periods that apply to newstart allowance 632 102AA Review of decisions under section 5 of the Aged Care Income Testing Act 1997 633 102B Applications for review of decisions made under section 5 of the Aged Care Income Testing Act 1997 634 102C Review by SSAT of decisions relating to determinations under section 5 of the Aged Care Income Testing Act 1997 634 102D Review by AAT of decisions relating to determinations under section 5 of the Aged Care Income Testing Act 1997 635 102E Application provision-abolition of residential care allowance and amendments relating to rent assistance 635 103 Application provision: income maintenance periods 636 104 Application provision: amendments relating to the liquid assets test waiting period 636 104A Application provision: amendments relating to means test exemption for superannuation assets 636 105 Application and saving provisions: debts due to the Commonwealth and their recovery 637 105A Parenting payment (changes introduced 20 March 1998) 638 106 Determinations etc. relating to family payment continue in force as determinations etc. relating to family allowance 644 107 Pending claims for family payment 644 108 Savings-Disabled child (changes made on 1 July 1998) 644 108A Disabled child (changes made on 1 July 1999) 645 109 Application of liquid assets test waiting period for sickness allowance 646 109A Application provision: amendments relating to the consistent treatment of lump sums 646 110 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) 647 111 Austudy payment in place of AUSTUDY living allowance 649 111A $3,000 opening balance for student income bank for students transferring from AUSTUDY 650 112 Pensioner education supplement under the Social Security Act in place of pensioner education supplement under the Austudy Regulations 650 113 Certain persons receiving benefit PP (partnered) and pensioner education supplement immediately before 1 July 1998 651 114 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 652 115 Persons under 21 receiving newstart allowance or sickness allowance on 17 June 1997 652 116 Newstart or sickness allowance bereavement payment in respect of death of partner 653 117 Youth training allowance bereavement payment in respect of death of partner 653 118 Qualification for double orphan pension for certain young persons who were qualified to receive payments under the AUSTUDY scheme immediately before 1 July 1998 654 119 Payment of family allowance-young person ceasing to be a FA child on becoming youth allowance recipient 654 120 Application-income maintenance period rules 655 120A Amendments relating to treatment of income streams 657 122 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 658 123 Carer payment provisions (changes to "severely handicapped person" category with effect from 1 July 1999) 659 124 Carer allowance (changes introduced on 1 July 1999) 659 125 Transitional regulations arising out of carer allowance changes introduced on 1 July 1999 663 121 Changes to newly arrived resident's waiting period 663 126 Application and transitional provisions relating to fares allowance 664 127 Seasonal work carried out in what would have been a seasonal work non-benefit period extending beyond 30 June 2000 664 128 Saving provision-portability rules relating to rates of pension 665 128A Saving of certain pensions payable under 1986 Agreement between Australia and Italy 666 129 Application of amendments relating to short residence 667 130 Saving provision-other portability rules 667 131 Certain payments not recoverable 668 132 Saving-ABSTUDY recipients 668 133 Meaning of Australian resident 669 134 Transitional and saving provisions-substitution of Part 3.14 669 135 Unlimited maximum portability period for disability support pension 673 136 Transitional definition of deductible amount (commencing 1 July 2007) 674 137 Application-general 676 138 Application-subsections 198AA(1) and (3) 676 139 Application-subsection 955(2) 676 139A Application-general 676 139B Application-sections 198AAA and 198AB 677 139C Application-subsections 731J(2) and (6) 677 139D Saving-principal beneficiary of a special disability trust 677 140 Person whose carer payment was cancelled on or after 1 July 2008 and before 1 July 2010 678 141 Saving-profoundly disabled child and disabled child 678 142 Person whose special benefit was cancelled on or after 1 July 2008 and before 1 July 2010 680 143 Saving-profoundly disabled child and disabled child 681 144 Saving and transitional provisions for section 93H 682 145 Saving provision for income test taper rate for disability support pensioners under 21 without dependent children 682 146 Transitional provision for rates of certain social security pensions on and after 20 September 2009 683 147 Amounts for subparagraph 146(4)(a)(i) 686 148 Rate of social security payments to partners of persons affected by clause 146 691 149 Payment and income tax consequences of receiving social security pension at rate affected by clause 146 692 Schedule 1B-Tables for the assessment of work-related impairment for disability support pension 694 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 another person, whether of the same sex or a different sex (other person); and (b) the relationship between them is a de facto relationship in the Secretary's opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A)); (c) the other person is under the age of consent applicable in the State or Territory in which the person is living; the person's benefit rate is not to exceed the rate at which it would be payable to the person if the other person were the person's partner. Note: this provision has the effect of taking into account the ordinary income and assets of the partner in applying the ordinary income test and assets test respectively. Rate of benefit limited for certain armed services widows (3) If: (a) an armed services widow is receiving a pension under Part II or IV of the Veterans' Entitlements Act at a rate determined under or by reference to subsection 30(1) of that Act; and (b) the widow has been receiving a payment referred to in paragraph (a) continuously since before 1 November 1986; and (c) before 1 November 1986 the widow was also receiving a social security benefit; the rate of benefit payable to the widow is not to be increased: (d) if, immediately before 1 November 1986, the widow was receiving a social security benefit at a rate less than $124.90 per fortnight-to a rate greater than $124.90 per fortnight; or (e) if, immediately before 1 November 1986, the widow was receiving a social security benefit at a rate equal to or greater than $124.90 per fortnight-to a rate greater than the rate at which it was payable immediately before 1 November 1986. Note 1: a benefit is not payable to a widow who starts to get a payment referred to in subsection (3) after 1 November 1986- see sections 408CF, 532, 614, 660YCF, 675 and 771HI. Note 2: for armed services widow see subsection 4(1). Benefit Rate Calculator B Module 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 1A. Work out the pension supplement amount (if any) using Module BA below. Step 2. Work out the amount per year (if any) of pharmaceutical allowance using MODULE D below. Step 3. Work out the applicable amount per fortnight (if any) for rent assistance in accordance with paragraph 1070A(a). Step 4. Add up the amounts obtained in Steps 1 to 4: the result is called the maximum payment rate. Step 5. Apply the income test using MODULE G below to work out the income reduction. Step 6. Take the income reduction away from the maximum payment rate: the result is called the provisional fortnightly payment rate. Step 7. The rate of benefit is the amount obtained by: (a) subtracting from the provisional fortnightly payment rate any special employment advance deduction (see Part 3.16B); and (b) if there is any amount remaining, subtracting from that amount any advance payment deduction (see Part 3.16A); and (c) except where the person is a CDEP Scheme participant in respect of the whole or a part of the period for which the rate of benefit is being worked out, adding any amount payable by way of remote area allowance (see Module J). Note 1: if a person's rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1210 (maximum basic rate first, then rent assistance). Note 2: in some circumstances a person may also be qualified for a pharmaceutical allowance under Part 2.22. Note 3: an amount of remote area allowance is to be added under paragraph (c) of step 7 only if the conditions in point 1068- J1 are satisfied. Module 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 5: the rates in column 3 are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194). Note 7: some dependent children will not be taken into account in working out a person's maximum basic rate (see point 1068- B2). Note 8: Some recipients of newstart allowance have a maximum basic rate based on the maximum basic rate under the Pension PP (Single) Rate Calculator (see point 1068-B5). Certain children who are not young persons are to be treated as dependent children 1068-B1A If: (a) a person is not a member of a couple; and (b) the person has at least one natural child, adopted child or relationship child who has turned 16 but has not turned 18; and (c) either: (i) a social security benefit is payable to the child; or (ii) if the person is receiving newstart allowance-a disability support pension is payable to the child; and (d) the child is substantially dependent on the person; the person's maximum basic rate is worked out as if the person had a dependent child. Certain children treated as dependent children if in recipient's care for at least minimum period 1068-B1B 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 3, 4, 4A and 4B of Table B in point 1068-B1, if: (a) a person has a dependent child; and (b) the child has turned 18; and (c) the child is a prescribed student child; the child is to be disregarded in working out the person's maximum basic rate under that point. Note: For prescribed student child see section 5. 1068-B3 On 20 March 1994 the amounts specified in items 3, 4, 4A and 4B in column 3B of Table B in point 1068-B1 are increased by $6.00. The increase is to be made after the indexation of the amounts on that day has occurred. 1068-B4 The amounts in items 3, 4, 4A and 4B in columns 3A and 3B of Table B in point 1068-B1 are to be indexed on 20 September 1993 and 20 March 1994 under section 1192 as if Part 2 of the Social Security Amendment Act (No. 2) 1993 had commenced on 1 September 1993. Maximum basic rate for certain newstart allowance recipients 1068-B5 Despite point 1068-B1, if a person: (a) is not a member of a couple; and (b) receives newstart allowance; and (c) is not required to satisfy the activity test because of a determination in relation to the person under subsection 602C(3) or (3A); the person's maximum basic rate is the amount worked out as follows: [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: A person's maximum basic rate under Module B of the Pension PP (Single) Rate Calculator is indexed 6 monthly in line with increases in Male Total Average Weekly Earnings (see section 1195). Module BA-Pension supplement Pension supplement 1068-BA1 A pension supplement amount is to be added to the person's maximum basic rate if the person is residing in Australia, has reached pension age and: (a) is in Australia; or (b) is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks. 1068-BA2 The person's pension supplement amount is: (a) if an election by the person under subsection 1061VA(1) is in force-the amount worked out under point 1068-BA4; and (b) otherwise-the amount worked out under point 1068-BA3. Amount if no election in force 1068-BA3 The person's pension supplement amount is the amount worked out by: (a) applying the applicable percentage in the following table to the combined couple rate of pension supplement; and (b) dividing the result by 26; and (c) if: (i) the person is not partnered; and (ii) the amount resulting from paragraph (b) is not a multiple of 10 cents; rounding the amount up or down to the nearest multiple of 10 cents (rounding up if the amount is not a multiple of 10 cents but is a multiple of 5 cents). |Item |Person's family situation |Use this % | |1 |Not member of couple |66.33% | |2 |Partnered |50% | |3 |Member of illness |66.33% | | |separated couple | | |4 |Member of respite care |66.33% | | |couple | | |5 |Partnered (partner in |66.33% | | |gaol) | | Note: For combined couple rate of pension supplement, see subsection 20A(1). Amount if election in force 1068-BA4 The person's pension supplement amount is the amount worked out as follows: (a) work out the amount for the person under point 1068-BA3 as if the election were not in force; (b) from that amount, subtract 1/26 of the person's minimum pension supplement amount. Module D-Pharmaceutical allowance [see Appendix for CPI adjusted figures] Qualification for pharmaceutical allowance 1068-D1 Subject to points 1068-D3A, 1068-D4, 1068-D5, 1068-D6 and 1068-D8, an additional amount by way of pharmaceutical allowance is to be added to a person's maximum basic rate if: (c) one of the following subparagraphs applies: (i) the person is receiving sickness allowance; (ia) the person is receiving mature age allowance under Part 2.12B; (ii) the person is receiving widow allowance, newstart allowance or partner allowance and point 1068-D2, 1068-D2A, 1068-D2B or 1068-D3 applies to the person. Incapacity for work-job search allowance and newstart allowance 1068-D2 This point applies to a person if: (c) if the person is receiving job search allowance-the person is, under Subdivision BAA of Division 1 of Part 2.11, exempt from the activity test; and (d) if the person is receiving newstart allowance-the person is, under Subdivision BA of Division 1 of Part 2.12, exempt from the activity test. Incapacity for work-widow allowance and partner allowance recipients 1068-D2A This point applies to a person who is receiving widow allowance or partner allowance if the person is incapacitated for work. Newstart recipients who have a partial capacity to work or are principal carers 1068-D2B This point applies to a person who is receiving newstart allowance if the person: (a) has a partial capacity to work; or (b) is the principal carer of at least one child and is not a member of a couple. Note 1: For partial capacity to work see section 16B. Note 2: For principal carer see subsections 5(15) to (24). Long term recipients over 60 1068-D3 This point applies to a person if the person: (a) has turned 60; and (b) has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph). Note 1: For income support payment see subsection 23(1). Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B. No pharmaceutical allowance if person receiving pension supplement 1068-D3A Pharmaceutical allowance is not to be added to a person's maximum basic rate if a pension supplement amount has been added to that rate. No pharmaceutical allowance if person receiving veterans supplement or MRCA supplement 1068-D4 Pharmaceutical allowance is not to be added to a person's maximum basic rate if the person is receiving: (a) veterans supplement under section 118A of the Veterans' Entitlements Act; or (b) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act. No pharmaceutical allowance if partner receiving veterans supplement or MRCA supplement and not a service pensioner 1068-D5 Pharmaceutical allowance is not to be added to a person's maximum basic rate if: (a) the person is a member of a couple; and (b) the person's partner is receiving: (i) veterans supplement under section 118A of the Veterans' Entitlements Act; or (ii) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; and (c) the person's partner is not receiving a service pension. No pharmaceutical allowance before advance payment period ends 1068-D6 Pharmaceutical allowance is not to be added to a person's maximum basic rate if: (a) the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and (b) the person's advance payment period has not ended. Note: for advance payment period see point 1068-D7. Advance payment period 1068-D7 A person's advance payment period: (a) starts on the day on which the advance pharmaceutical allowance is paid to the person; and (b) ends after the number of paydays worked out using the following formula have passed: [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. 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 a parent, child, brother or sister of the person. Note: point 1068-G5 reverses paragraph 8(8)(z) which excludes these amounts. Board and lodging 1068-G6 A person's ordinary income is not to include a payment to the person for board or lodging provided by the person to a parent, child, brother or sister of the person. Lump sum payments arising from termination of employment 1068-G7 Subject to points 1068-G7AF to 1068-G7AR (inclusive), if: (a) a person's employment has been terminated; and (b) as a result the person is entitled to a lump sum payment from the person's former employer; the person is taken to have received the lump sum payment on the day on which the person's employment was terminated. Ordinary income to include certain sick leave entitlements 1068-G7AA If a person is a person who is qualified for sickness allowance, the person's ordinary income is taken to include an amount equal to the amount in respect of sick leave worked out under points 1068-G7AB, 1068-G7AC and 1068-G7AD. 1068-G7AB If: (a) a person has sick leave entitlements on a day that the person is incapacitated for work; and (b) the person has the right to claim payment from the person's employer by way of sick leave payment in respect of that day; and (c) the person's employer is able to pay the person the person's sick leave payment in respect of that day; (d) the person is not receiving a leave payment (other than a sick leave payment) in respect of that day; the person is, for the purposes of this point, taken to have received a sick leave payment equal to the person's sick leave entitlements in respect of that day, assuming that the person does not exercise any rights the person may have in relation to the amount to be paid in respect of that day. 1068-G7AC If point 1068-G7AB has applied to a person in respect of a day, then, for the purposes of any subsequent consecutive applications of the point, the person's sick leave entitlements are to be taken to be reduced by a day. 1068-G7AD A person's ordinary income is not to include a payment received by the person in respect of sick leave to the extent that an amount equal to the payment has been included in the person's ordinary income under point 1068-G7AA. 1068-G7AE If: (a) point 1068-G7AA has applied to a person while the person was qualified for sickness allowance; and (b) that allowance has been cancelled; and (c) at least 6 weeks after the day on which the sickness allowance was cancelled, the person is granted sickness allowance again; point 1068-G7AA applies to the person in respect of the person's sick leave entitlements. Directed termination payments excluded 1068-G7AF If: (a) a person's employment has been terminated; and (b) as a result the person is entitled to a lump sum payment from the person's former employer; and (c) the payment, or part of the payment, is a directed termination payment within the meaning of section 82-10F of the Income Tax (Transitional Provisions) Act 1997; the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of Module G of section 1068. Certain leave payments taken to be ordinary income-employment continuing 1068-G7AG If: (a) a person is employed; and (b) the person is on leave for a period; and (c) the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of a leave period; the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates. Certain termination payments taken to be ordinary income 1068-G7AH If: (a) a person's employment has been terminated; and (b) the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise); the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates. More than one termination payment on a day 1068-G7AJ If: (a) the person is covered by point 1068-G7AH; and (b) the person receives more than one termination payment on a day; the income maintenance period is worked out by adding the periods to which the payments relate. Start of income maintenance period-employment continuing 1068-G7AK If the person is covered by point 1068-G7AG, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates. Start of income maintenance period-employment terminated 1068-G7AKA Subject to point 1068-G7AKC, if the person is covered by point 1068-G7AH, the income maintenance period starts, subject to point 1068-G7AKB, on the day the person is paid the termination payment. Commencement of income maintenance period where there is a second termination payment 1068-G7AKB If a person who is covered by point 1068-G7AH is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences the day after the end of the first period. Start of income maintenance period where liquid assets test waiting period applies 1068-G7AKC If a person to whom point 1068-G7AKA applies is subject to a liquid assets test waiting period, the income maintenance period is taken to have started on the day on which the liquid assets test waiting period started. Leave payments or termination payments in respect of periods longer than a fortnight 1068-G7AL Subject to points 1068-G7AA to 1068-G7AE (inclusive), if: (a) a person receives a leave payment or termination payment; and (b) the payment is in respect of a period greater than a fortnight; the person is taken to receive in a payment fortnight or part of a payment fortnight an amount calculated by: (c) dividing the amount received by the number of days in the period to which the payment relates (the daily rate); and (d) multiplying the daily rate by the number of days in the payment fortnight that are also in the period. 1068-G7AM If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person. Note 1: For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple) and 19C(3) (person who is a member of a couple). Note 2: For unavoidable or reasonable expenditure see subsection 19C(4). Note 3: If an income maintenance period applies to a person, then, during that period: (a) the allowance claimed may not be payable to the person; or (b) the amount of the allowance payable to the person may be reduced. When a person receives a leave payment or a termination payment 1068-G7AN For the purposes of points 1068-G7AB and 1068-G7AD to 1068- G7AM (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person: (a) at the direction of the first person or a court; or (b) on behalf of the first person; or (c) for the benefit of the first person; or (d) the first person waives or assigns the first person's right to receive the payment. Single payment in respect of different kinds of termination payments 1068-G7AP If a person who is covered by point 1068-G7AH receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068- G7AG to 1068-G7AN (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate. Definitions 1068-G7AQ In points 1068-G7AG to 1068-G7AP (inclusive): payment fortnight means a fortnight in respect of which a sickness allowance or a newstart allowance, as the case requires, is paid, or would be paid, apart from the application of an income maintenance period, to a person. period to which the payment relates means: (a) if the payment is a leave payment-the leave period to which the payment relates; or (b) if the payment is a 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) any of the following subparagraphs applies: (i) apart from this point, the person's rate would be greater than nil; (ii) apart from this point, the person's rate would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act; (iii) apart from this point, the person's rate would be nil merely because an election by the person under subsection 1061VA(1) is in force; (iv) apart from this point, the person's rate would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and (a) the person's usual place of residence is situated in the remote area; and (b) the person is physically present in the remote area. Note 1: for remote area see subsection 14(1). Note 2: a person may be considered to be physically present in a remote area during temporary absences-see subsection 14(2). Rate of remote area allowance 1068-J3 The rate of remote area allowance payable to a person is worked out using Table J. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each FTB child, and regular care child, of the person. |Table J | |Remote area allowance | |Column 1|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 another person, whether of the same sex or a different sex (the other person); and (b) the relationship between them is a de facto relationship in the Secretary's opinion (formed after the Secretary has had regard to all the circumstances of the relationship, including, in particular, the matters referred to in paragraphs 4(3)(a) to (e) and subsection 4(3A)); and (c) either or both of them are under the age of consent applicable in the State or Territory in which they are living; the person's pension PP (single) rate is not to exceed the benefit PP (partnered) rate which would be payable to the person if the other person were the person's partner. Pension PP (Single) Rate Calculator Module 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 A pension supplement amount is to be added to the person's maximum basic rate. Residents of pension age who are in Australia etc. 1068A-BA2 If the person is residing in Australia, has reached pension age and: (a) is in Australia; or (b) is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks; the person's pension supplement amount is: (c) if an election by the person under subsection 1061VA(1) is in force-the amount worked out under point 1068A-BA4; and (d) otherwise-the amount worked out under point 1068A-BA3. Residents of pension age in Australia etc.-no election in force 1068A-BA3 The person's pension supplement amount is the amount worked out by: (a) working out 66.33% of the combined couple rate of pension supplement; and (b) if the result is not a multiple of $2.60, rounding the result up or down to the nearest multiple of $2.60 (rounding up if the result is not a multiple of $2.60 but is a multiple of $1.30). Note: For combined couple rate of pension supplement, see subsection 20A(1). Residents of pension age in Australia etc.-election in force 1068A-BA4 The person's pension supplement amount is the amount worked out as follows: (a) work out the amount for the person under point 1068A-BA3 as if the election were not in force; (b) from that amount, subtract the person's minimum pension supplement amount. Other persons 1068A-BA5 If the person is not covered by point 1068A-BA2, the person's pension supplement amount is the person's pension supplement basic amount. Module C-Pharmaceutical allowance [see Appendix for CPI adjusted figures] Qualification for pharmaceutical allowance 1068A-C1 Subject to points 1068A-C1A, 1068A-C2, 1068A-C3 and 1068A- C5, an additional amount by way of pharmaceutical allowance is to be added to a person's maximum basic rate if the person is an Australian resident. No pharmaceutical allowance if person has reached pension age 1068A-C1A Pharmaceutical allowance is not to be added to a person's maximum basic rate if the person has reached pension age. No pharmaceutical allowance if person receiving veterans supplement or MRCA supplement 1068A-C2 Pharmaceutical allowance is not to be added to a person's maximum basic rate if the person is receiving: (a) veterans supplement under section 118A of the Veterans' Entitlements Act; or (b) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act. No pharmaceutical allowance before advance payment period ends 1068A-C3 Pharmaceutical allowance is not to be added to a person's maximum basic rate if: (a) the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and (b) the person's advance payment period has not ended. Note: For advance payment period see point 1068A-C4. Advance payment period 1068A-C4(1) A person's advance payment period starts on the day on which the advance pharmaceutical allowance is paid to the person. (2) The period ends after the number of paydays worked out using the following formula have passed: [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. 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 satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person. Note 1: For in severe financial hardship see subsection 19C(2) (person who is not a member of a couple). Note 2: For unavoidable or reasonable expenditure see subsection 19C(4). Note 3: If an income maintenance period applies to a person, then, during that period: (a) the pension PP (single) claimed may not be payable to the person; or (b) the amount of the pension PP (single) payable to the person may be reduced. When a person receives a leave payment or a termination payment 1068A-E10 For the purposes of points 1068A-E2 to 1068A-E9 (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person: (a) at the direction of the first person or a court; or (b) on behalf of the first person; or (c) for the benefit of the first person; or the first person waives or assigns the first person's right to receive the payment. Single payment in respect of different kinds of termination payments 1068A-E11 If a person who is covered by point 1068A-E4 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068A- E3 to 1068A-E10 (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate. Definitions 1068A-E12 In points 1068A-E3 to 1068A-E12 (inclusive): leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave. 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. Payment of arrears of periodic compensation payments 1068A-E13 If: (a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected payment; and (b) in relation to that entitlement, the person receives a payment of arrears of periodic compensation; the person is taken to receive, on each day in the periodic payments period, an amount calculated by dividing the amount received by the number of days in the periodic payments period. Note: For compensation affected payment and periodic payments period see section 17. How to calculate a person's ordinary income free area 1068A-E14 A person's ordinary income free area is worked out using Table E. The ordinary income free area is the amount in Column 2 plus the additional amount in Column 4 for each dependent child of the person. |Table E-Ordinary income free area | |Column 1|Column 2 |Column 3 |Column 4 |Column 5 | | |Basic free|Basic free |Additional |Additional| |Item |area per |area per |free area |free area | | |year |fortnight |per year |per | | | | | |fortnight | |1 |$2,600 |$100 |$639.60 |$24.60 | Note 1: For dependent child see section 5 and point 1068A-E21. Note 2: The basic free area per year is indexed annually in line with CPI increases (see sections 1191 to 1194). No additional free area for certain prescribed student children 1068A-E15 No additional free area is to be added for a dependent child who: (a) has turned 18; and (b) is a prescribed student child; unless the person whose rate is being calculated receives carer allowance for the child. Reduction of additional free area for dependent children 1068A-E16 The additional free area for a dependent child is reduced by the annual amount of any payment received by the person for or in respect of that particular child. The payments referred to in point 1068A-E17 do not result in a reduction. Payments that do not reduce additional free area 1068A-E17 No reduction is to be made under point 1068A-E16 for a payment: (a) under this Act; or (b) of maintenance income; or (c) under the Veterans' Entitlements Act; or (d) under an Aboriginal study assistance scheme; or (e) under the Assistance for Isolated Children Scheme. Note: For Aboriginal study assistance scheme see subsection 23(1). Examples of payments reducing additional free area 1068A-E18 Examples of the kinds of payments that result in a reduction under point 1068A-E16 are: (a) amounts received from State authorities or benevolent societies in respect of the boarding out of the child; or (b) amounts of superannuation or compensation paid in respect of the child; or (c) amounts (other than amounts covered by point 1068A-E17) paid in respect of the child under educational schemes; or (d) foster care allowance payments made by a State welfare authority. Ordinary income excess 1068A-E19 A person's ordinary income excess is the person's ordinary income less the person's ordinary income free area. Reduction for ordinary income 1068A-E20 A person's reduction for ordinary income is: [pic] 1068A-E21 In this Module: dependent child, in relation to a person, includes any child of the person who is under 18 and is receiving a youth allowance. Module F-Remote area allowance Remote area allowance 1068A-F1 An amount by way of remote area allowance is to be added to a person's rate if: (a) any of the following subparagraphs applies: (i) apart from this point, the person's rate would be greater than nil; (ii) apart from this point, the person's rate would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act; (iii) apart from this point, the person's rate would be nil merely because an election by the person under subsection 1061VA(1) is in force; (iv) apart from this point, the person's rate would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and (b) the person's usual place of residence is situated in a remote area; and (c) the person is physically present in the remote area. Note: For remote area and physically present in the remote area see section 14. Rate of remote area allowance 1068A-F2 The rate of remote area allowance payable to a person is worked out using Table F. The rate of remote area allowance is the amount in Column 2 plus the additional corresponding amount in Column 4 for each FTB child, and each regular care child, of the person. |Table F-Remote area allowance | |Column 1|Column 2 |Column 3 |Column 4 |Column 5 | | |Basic |Basic |Additional |Additional| |Item |allowance |allowance |allowance |allowance | | |per year |per |per year |per | | | |fortnight | |fortnight | |1 |$473.20 |$18.20 |$189.80 |$7.30 | 1068B Rate of parenting payment-PP (partnered) (1) If a person is a member of a couple, the person's rate of parenting payment is the benefit PP (partnered) rate. (2) The benefit PP (partnered) rate is worked out in accordance with the rate calculator at the end of this section. Note: For member of a couple see section 4. Benefit PP (Partnered) Rate Calculator Module A-Overall rate calculation process Method of calculating rate-general 1068B-A1 The rate of benefit PP (partnered) is a daily rate. That rate is worked out by dividing the fortnightly rate calculated according to this Rate Calculator by 14. There are 2 ways of working out the fortnightly rate: (a) one for a person who is not a partner of a non-independent YA recipient (see point 1068B-A2); and (b) one for a person who is a partner of a non-independent YA recipient (see point 1068B-A3). Note: For partner of a non-independent YA recipient see subsection 23(1). Method of calculating rate for person who is not a partner of a non- independent YA recipient 1068B-A2 If a person is not the partner of a non-independent YA recipient, the fortnightly rate of benefit PP (partnered) for the person is worked out as follows: Method statement Step 1. Work out the person's maximum basic rate using Module C below. Step 2. Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a). Step 2A. Work out the pension supplement amount (if any) using Module DA below. Step 3. Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below. Step 4. Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate. Step 5. Apply the income test using Module D below to work out the person's income reduction. Step 6. Take the income reduction away from the maximum payment rate: the result is called the provisional payment rate. Step 7. The rate of benefit PP (partnered) is the difference between: (a) the provisional payment rate; and (b) any advance payment deduction (see Part 3.16A); plus, except where the person is a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, any amount by way of remote area allowance that, under Module G, is to be added to the person's rate of benefit PP (partnered). Note 1: For partner of a non-independent YA recipient see subsection 23(1). Note 2: If a person's rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1207 (maximum basic rate first, then rent assistance). Method of calculating rate for partner of a non-independent YA recipient 1068B-A3 If a person is the partner of a non-independent YA recipient, the fortnightly rate of benefit PP (partnered) for the person is worked out as follows: Method statement Step 1. Work out the person's maximum basic rate using Module C below. Step 2. Work out the amount per fortnight (if any) of rent assistance in accordance with paragraph 1070A(a). Step 2A. Work out the pension supplement amount (if any) using Module DA below. Step 3. Work out the amount per fortnight (if any) of pharmaceutical allowance using Module E below. Step 4. Add up the amounts obtained in steps 1 to 3: the result is called the maximum payment rate. Step 5. Apply the income test using Module E of the Rate Calculator in section 1068A to work out the person's income reduction. Step 6. Take the income reduction away from the maximum payment rate: the rate is called the provisional payment rate. Step 7. The rate of benefit is the difference between: (a) the provisional payment rate; and (b) any advance payment deduction (see Part 3.16A); plus, except where the person is a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, any amount by way of remote area allowance that, under Module G, is to be added to the person's rate of benefit PP (partnered). Note 1: For partner of a non-independent YA recipient see subsection 23(1). Note 2: If a person's rate is reduced under step 6, the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 1207 (maximum basic rate first, then rent assistance). Module C-Maximum basic rate [see Appendix for CPI adjusted figures] Maximum basic rate 1068B-C2 If a person is not a CDEP Scheme participant in respect of the whole or part of the period for which the rate of payment is being worked out, the person's maximum basic rate is worked out using Table C. Work out the person's family situation. The maximum basic rate is the corresponding amount in Column 3. |Table C-Maximum basic rates | |Column 1|Column 2 |Column 3 | | |Person's family situation |Rate | |Item | | | |1 |Person not covered by |$290.10 | | |item 2, 3 or 4 | | |2 |Member of illness |$347.80 | | |separated couple | | |3 |Member of respite care |$347.80 | | |couple | | |4 |Partnered (partner in |$347.80 | | |gaol) | | Note 1: For illness separated couple, respite care couple and partnered (partner in gaol) see section 4. Note 2: The rates are indexed 6 monthly in line with CPI increases (see sections 1191 to 1194). Maximum basic rate-CDEP Scheme participant 1068B-C3 The maximum basic rate of a person who is a CDEP Scheme participant in respect of the whole or a part of the period for which the maximum basic rate is being worked out is nil (see section 500W). Module D-Income test Effect of income on maximum payment rate 1068B-D1 This is how to work out the effect of a person's ordinary income, and the ordinary income of the person's partner, on the person's maximum payment rate: Method statement Step 1. Work out the amount of the person's ordinary income on a fortnightly basis. Note: The amount of the person's ordinary income is affected by points 1068B-D2 to 1068B-D21. Step 2. Work out the partner income free area using point 1068B- D22. Note: The partner income free area is the maximum amount of ordinary income the person's partner can have without affecting the person's rate. Step 3. Use point 1068B-D23 to work out the person's partner income excess. Step 4. Use the person's partner income excess to work out the person's partner income reduction using point 1068B-D24. Step 5. Work out whether the person's ordinary income exceeds the person's ordinary income free area (see point 1068B-D27). Note: A person's ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person's rate. Step 6. If the person's ordinary income does not exceed the person's ordinary income free area, the person's ordinary income excess is nil. Step 7. If the person's ordinary income exceeds the person's ordinary income free area, the person's ordinary income excess is the person's ordinary income less the person's ordinary income free area. Step 8. Use the person's ordinary income excess to work out the person's ordinary income reduction using points 1068B-D29 to 1068B-D31. Step 9. Add the person's ordinary income reduction and partner income reduction: the result is the person's income reduction referred to in step 5 of the method statement in point 1068B-A2. Note 1: For ordinary income see section 8. Note 2: See point 1068B-A2 (step 6) for the significance of the person's income reduction. Note 3: The application of the ordinary income test is affected by provisions concerning the following: (a) the general concept of ordinary income (sections 1072 and 1073); (b) business income (sections 1074 and 1075); (c) deemed income from financial assets (sections 1076 to 1084); (d) income from income streams (sections 1095 to 1099DAA); (e) disposal of income (sections 1106 to 1112). Ordinary income of members of certain couples 1068B-D2 If a person's partner is receiving a social security pension, a service pension or income support supplement, the person's ordinary income is taken to be one half of the sum of: (a) the amount that would be the person's ordinary income if he or she were not a member of a couple; and (b) the amount that would be the ordinary income of the person's partner if the partner were not a member of a couple. Friendly society amounts 1068B-D4 The ordinary income of a person to whose partner a sickness allowance is payable is not to include any amount received by the person from an approved friendly society in respect of the incapacity because of which the partner is qualified for the sickness allowance. Note: For approved friendly society see subsection 23(1). Ordinary income includes certain periodical payments from relatives 1068B-D5 Subject to point 1068B-D6, in this Module, a person's ordinary income includes a periodical payment or benefit by way of gift or allowance from a parent, child, brother or sister of the person. Note: Point 1068B-D5 reverses paragraph 8(8)(z) which excludes these amounts. Board and lodging 1068B-D6 A person's ordinary income is not to include a payment to the person for board or lodging provided by the person to a parent, child, brother or sister of the person. Lump sum payments arising from termination of employment 1068B-D7 Subject to points 1068B-D8 to 1068B-D18 (inclusive), if: (a) a person's employment has been terminated; and (b) as a result, the person is entitled to a lump sum payment from the person's former employer; the person is taken to have received the lump sum payment on the day on which the person's employment was terminated. Directed termination payments excluded 1068B-D8 If: (a) a person's employment has been terminated; and (b) as a result the person is entitled to a lump sum payment from the person's former employer; and (c) the payment, or part of the payment, is a directed termination payment within the meaning of section 82-10F of the Income Tax (Transitional Provisions) Act 1997; the payment, or that part, is to be disregarded in working out the ordinary income of the person for the purposes of this Module. Certain leave payments taken to be ordinary income-employment continuing 1068B-D9 If: (a) a person is employed; and (b) the person is on leave for a period; and (c) the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of the leave period; the person is taken to have received ordinary income for a period (the income maintenance period) equal to the leave period to which the leave payment entitlement relates. Certain termination payments taken to be ordinary income 1068B-D10 If: (a) a person's employment has been terminated; and (b) the person receives a termination payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise); the person is taken to have received ordinary income for a period (the income maintenance period) equal to the period to which the payment relates. More than one termination payment on a day 1068B-D11 If: (a) the person is covered by point 1068B-D10; and (b) the person receives more than one termination payment on a day; the income maintenance period is worked out by adding the periods to which the payments relate. Start of income maintenance period-employment continuing 1068B-D12 If the person is covered by point 1068B-D9, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates. Start of income maintenance period-employment terminated 1068B-D13 If the person is covered by point 1068B-D10, the income maintenance period starts, subject to point 1068B-D14, on the day the person is paid the termination payment. Commencement of income maintenance period where there is a second termination payment 1068B-D14 If a person who is covered by point 1068B-D10 is subject to an income maintenance period (the first period) and the person is paid another termination payment during that period (the second leave payment), the income maintenance period for the second termination payment commences the day after the end of the first period. 1068B-D15 If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while an income maintenance period applies to the person, the Secretary may determine that the whole, or any part, of the period does not apply to the person. Note 1: For in severe financial hardship see subsection 19C(3) (person who is a member of a couple). Note 2: For unavoidable or reasonable expenditure see subsection 19C(4). Note 3: If an income maintenance period applies to a person, then, during that period: (a) the PP (partnered) claimed may not be payable to the person; or (b) the amount of the PP (partnered) payable to the person may be reduced. When a person receives a leave payment or a termination payment 1068B-D16 For the purposes of points 1068B-D8 to 1068B-D15 (inclusive), a person (the first person) is taken to receive a leave payment or termination payment if the payment is made to another person: (a) at the direction of the first person or a court; or (b) on behalf of the first person; or (c) for the benefit of the first person; or the first person waives or assigns the first person's right to receive the payment. Single payment in respect of different kinds of termination payments 1068B-D17 If a person who is covered by point 1068B-D10 receives a single payment in respect of different kinds of termination payments, then, for the purposes of the application of points 1068B- D9 to 1068B-D16 (inclusive), each part of the payment that is in respect of a different kind of termination payment is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the periods to which the separate payments relate. Definitions 1068B-D18 In points 1068B-D9 to 1068B-D18 (inclusive): leave payment includes a payment in respect of sick leave, annual leave, maternity leave and long service leave. 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. Period over which ordinary income taken into account 1068B-D19 Subject to points 1068B-D8 to 1068B-D18 (inclusive), a person's ordinary income is to be taken into account over such period, not exceeding 52 weeks, as the Secretary determines. Note: This point, in conjunction with point 1068B-D20, enables the Secretary to determine the person's fortnightly income amount that best represents the person's income situation. Fortnightly rate of ordinary income 1068B-D20 For the purposes of this Module, the person's ordinary income for such a period is to be reduced to a fortnightly rate rounded to the nearest cent (rounding 0.5 cents downwards). Payment of arrears of periodic compensation payments 1068B-D21 If: (a) at the time of an event that gives rise to an entitlement of a person to compensation, the person is receiving a compensation affected payment; and (b) in relation to that entitlement, the person receives a payment of arrears of periodic compensation; the person is taken to receive, on each day in the periodic payments period, an amount calculated by dividing the amount received by the number of days in the periodic payments period. Note: For compensation affected payment and periodic payments period see section 17. Partner income free area 1068B-D22 The partner income free area for a person is: (a) if the person's partner is not receiving a social security benefit and has not turned 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 1068B-D23 If: (b) the person's partner is not receiving a social security pension, a service pension or income support supplement; and (c) the partner's ordinary income exceeds the partner income free area for the partner; the person's partner income excess is the amount by which the partner's ordinary income exceeds the partner income free area. Otherwise, the person's partner income excess is nil. Partner income reduction 1068B-D24 If a person has a partner income excess, the person's partner income reduction is an amount equal to 60% of the part of the partner's ordinary income that exceeds the partner income free area. Ordinary income free area 1068B-D27 A person's ordinary income free area is $62. Ordinary income excess 1068B-D28 If a person's ordinary income exceeds the person's ordinary income free area: (a) the person has an ordinary income excess; and (b) the person's ordinary income excess is the amount by which the person's ordinary income exceeds the person's ordinary income free area. Ordinary income reduction 1068B-D29 If a person has an ordinary income excess, the person's ordinary income reduction is the sum of: (a) the person's lower range reduction (see point 1068B-D30); and (b) the person's upper range reduction (if any) (see point 1068B- D31). Lower range reduction 1068B-D30 The person's lower range reduction is an amount equal to 50% of the part of the person's ordinary income excess that does not exceed $188. Upper range reduction 1068B-D31 The person's upper range reduction is an amount equal to 60% of the part (if any) of the person's ordinary income excess that exceeds $188. Module DA-Pension supplement Pension supplement 1068B-DA1 A pension supplement amount is to be added to the person's maximum basic rate if the person is residing in Australia, has reached pension age and: (a) is in Australia; or (b) is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks. 1068B-DA2 The person's pension supplement amount is: (a) if an election by the person under subsection 1061VA(1) is in force-the amount worked out under point 1068B-DA4; and (b) otherwise-the amount worked out under point 1068B-DA3. Amount if no election in force 1068B-DA3 The person's pension supplement amount is the amount worked out by: (a) applying the applicable percentage in the following table to the combined couple rate of pension supplement; and (b) dividing the result by 26; and (c) if: (i) the person is not partnered; and (ii) the amount resulting from paragraph (b) is not a multiple of 10 cents; rounding the amount up or down to the nearest multiple of 10 cents (rounding up if the amount is not a multiple of 10 cents but is a multiple of 5 cents). |Item |Person's family situation |Use this % | |1 |Partnered |50% | |2 |Member of illness |66.33% | | |separated couple | | |3 |Member of respite care |66.33% | | |couple | | |4 |Partnered (partner in |66.33% | | |gaol) | | Note: For combined couple rate of pension supplement, see subsection 20A(1). Amount if election in force 1068B-DA4 The person's pension supplement amount is the amount worked out as follows: (a) work out the amount for the person under point 1068B-DA3 as if the election were not in force; (b) from that amount, subtract 1/26 of the person's minimum pension supplement amount. Module E-Pharmaceutical allowance [see Appendix for CPI adjusted figures] Qualification for pharmaceutical allowance 1068B-E1 Subject to points 1068B-E1A, 1068B-E2, 1068B-E3, 1068B-E4 and 1068B-E6, an additional amount by way of pharmaceutical allowance is to be included in a person's maximum payment rate in points 1068B-A2 and 1068B-A3 if: (b) the person is an Australian resident, or has a qualifying residence exemption for parenting payment; and (d) one or more of the following applies: (i) the person has turned 60, and has been receiving income support payments in respect of a continuous period of at least 9 months (whether or not the kind of payment received has changed over the period and whether the period or any part of it occurred before or after the commencement of this paragraph); (ii) under section 502H, the person is covered by a participation exemption under Division 3A of Part 2.10; (iii) the person has a partial capacity to work. Note 1: For income support payment see subsection 23(1). Note 2: For the determination of the continuous period in respect of which a person received income support payments see section 38B. Note 3: For Australian resident and qualifying residence exemption see section 7. Note 4: For partial capacity to work see section 16B. No pharmaceutical allowance if person receiving pension supplement 1068B-E1A Pharmaceutical allowance is not to be added to a person's maximum basic rate if a pension supplement amount has been added to that rate. No pharmaceutical allowance if person receiving veterans supplement or MRCA supplement 1068B-E2 Pharmaceutical allowance is not to be included in a person's maximum basic rate if the person is receiving: (a) veterans supplement under section 118A of the Veterans' Entitlements Act; or (b) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act. No pharmaceutical allowance if partner receiving veterans supplement or MRCA supplement and not a service pensioner 1068B-E3 Pharmaceutical allowance is not to be included in a person's maximum basic rate if: (a) the person is a member of a couple; and (b) the person's partner is receiving: (i) veterans supplement under section 118A of the Veterans' Entitlements Act; or (ii) MRCA supplement under section 300 of the Military Rehabilitation and Compensation Act; and (c) the person's partner is not receiving a service pension. No pharmaceutical allowance before advance payment period ends 1068B-E4 Pharmaceutical allowance is not to be included in a person's provisional payment rate if: (a) the person has received an advance pharmaceutical allowance under Part 2.23 of this Act; and (b) the person's advance payment period has not ended. Note: For advance payment period see point 1068B-E5. Advance payment period 1068B-E5(1) A person's advance payment period starts on the day on which the advance pharmaceutical allowance is paid to the person. 1068B-E5(2) The period ends after the number of paydays worked out using the following formula have passed: [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 included in the person's maximum payment rate in working out the benefit PP (partnered) instalment for the day on which the advance is paid if parenting payment were payable to the person and pharmaceutical allowance were to be included in the person's maximum payment rate. (The person's maximum payment rate is the maximum payment rate at step 4 of whichever of the method statements in points 1068B-A2 and 1068B- A3 is applicable to the person.) Note: The person may have commenced receiving parenting payment after having been a pension recipient and have received an advance while a pension recipient. No pharmaceutical allowance if annual limit reached 1068B-E6 Pharmaceutical allowance is not to be included in a person's provisional payment rate if: (a) the person has received an advance pharmaceutical allowance during the current calendar year; and (b) the total amount paid to the person for that year by way of: (i) pharmaceutical allowance; and (ii) advance pharmaceutical allowance; equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance. Note 1: For the amount paid to a person by way of pharmaceutical allowance see subsections 19A(2) to (7). Note 2: The annual limit is affected by: (a) how long during the calendar year the person was on pension or benefit; and (b) whether the person's rate of pharmaceutical allowance varies during the calendar year. Amount of pharmaceutical allowance 1068B-E8 The amount of pharmaceutical allowance is the amount per fortnight worked out using Table E. |Table E-Pharmaceutical allowance amounts | |Column 1|Column 2 |Column 3 | | |Person's family situation |Amount per | |Item | |fortnight | |1 |Person not covered by item 2, 3,|$2.70 | | |4 or 5 | | |2 |Member of illness separated |$5.40 | | |couple | | |3 |Member of respite care couple |$5.40 | |4 |Partnered (partner getting |$2.70 | | |service pension) | | |5 |Partnered (partner in gaol) |$5.40 | Note 1: For illness separated couple, respite care couple and partnered (partner in gaol) see section 4. Note 2: The amounts in Column 3 are indexed or adjusted annually in line with CPI increases (see sections 1191 to 1194 and 1206A). Module G-Remote area allowance Remote area allowance-person physically in remote area 1068B-G1 An amount by way of remote area allowance is to be added in step 7 of the method statements in points 1068B-A2 and 1068B-A3 to a person's rate of benefit PP (partnered) if: (b) any of the following subparagraphs applies: (i) apart from this point, the person's rate of benefit PP (partnered) would be greater than nil; (ii) apart from this point, the person's rate of benefit PP (partnered) would be nil merely because an advance pharmaceutical allowance has been paid to the person under Part 2.23 of this Act; (iii) apart from this point, the person's rate of benefit PP (partnered) would be nil merely because an election by the person under subsection 1061VA(1) is in force; (iv) apart from this point, the person's rate of benefit PP (partnered) would be nil merely because of both of the matters mentioned in subparagraphs (ii) and (iii); and (c) the person's usual place of residence is in a remote area; and (d) the person is physically present in the remote area. Note 1: For remote area see subsection 14(1). Note 2: A person may be considered to be physically present in a remote area during temporary absences-see subsection 14(2). Rate of remote area allowance 1068B-G2 The rate of remote area allowance payable to a person is worked out using Table G. Work out which family situation in the table applies to the person. The rate of remote area allowance is the corresponding amount in Column 3 plus the additional corresponding amount in Column 4 for each FTB child, and each regular care child, of the person. |Table G-Remote area allowance | |Column 1|Column 2 |Column 3 |Column 4 | | |Person's family |Basic |Additional| |Item |situation |allowance |allowance | | | | |for each | | | | |FTB child | | | | |and | | | | |regular | | | | |care child| |1 |Person not covered by |$15.60 |$7.30 | | |item 2, 3 or 4 | | | |2 |Member of illness |$18.20 |$7.30 | | |separated couple | | | |3 |Member of respite care |$18.20 |$7.30 | | |couple | | | |4 |Partnered (partner in |$18.20 |$7.30 | | |gaol) | | | Note: For illness separated couple, respite care couple and partnered (partner in gaol) see section 4. Meaning of remote area allowance 1068B-G3 In point 1068B-G2, remote area allowance means: (a) an amount added to a person's social security pension or benefit by way of remote area allowance; or (b) a remote area allowance payable under point SCH6-G1 of the VEA. FTB or regular care child must be present in Australia 1068B-G4 Additional allowance is not payable for an FTB child, or a regular care child, unless the child is physically present in Australia. Special rule where partner has an FTB or regular care child but is not receiving additional allowance for the child 1068B-G5 If: (a) an amount of remote area allowance is to be added to the person's rate; and (b) the person's partner has an FTB child or a regular care child; and (c) the person's partner is not receiving an additional amount of remote area allowance for the child; the child is taken, for the purposes of this Module, to be an FTB child, or a regular care child, (as the case requires) of the person. Special rule dealing with the death of an FTB or regular care child 1068B-G6 If an FTB child, or a regular care child, of a person dies, this Module has effect, for a period of 14 weeks after the death of the child, as if the child had not died. Note: This point does not prevent this Module having the effect it would have had if the child would otherwise have ceased to be an FTB child, or a regular care child, during that 14 weeks. Part 3.7-Rent assistance Division 1-Operation of this Part 1070 When this Part applies This Part applies if the rate of a person's social security payment is to be calculated in accordance with any of the following Rate Calculators: (a) Pension Rate Calculator A (carer payments and certain age, disability support and wife pensions); (b) Pension Rate Calculator C (bereavement allowance and widow B pension); (c) Pension Rate Calculator D (certain disability support pensions); (d) Youth Allowance Rate Calculator; (da) Austudy Payment Rate Calculator; (e) Benefit Rate Calculator B (mature age allowance under Part 2.12B and newstart, partner, sickness and widow allowance); (f) Pension PP (Single) Rate Calculator or Benefit PP (Partnered) Rate Calculator (parenting payments). 1070A Effect of this Part If a person to whom this Part applies qualifies for rent assistance in accordance with Division 2, to help cover the cost of rent: (a) if paragraph (b) does not apply-the amount per fortnight worked out in accordance with Division 3 is added to the person's maximum basic rate for the social security payment; or (b) if the rate of the person's social security payment is to be calculated in accordance with Pension Rate Calculator A, C or D, or the Pension PP (Single) Rate Calculator-the amount per fortnight worked out in accordance with Division 3 is multiplied by 26 to calculate an amount per year and the amount per year is added to the person's maximum basic rate for the social security payment. Division 2-Qualification for rent assistance 1070B Qualification-general rule A person qualifies for rent assistance if the person satisfies: (a) the common requirements set out in section 1070C; and (b) any specific requirement, set out in a later section of this Division, applicable to the person's social security payment. 1070C Common requirements (about aged care residence, home ownership and rent) The common requirements are that: (a) the person is not an aged care resident, and is not taken to be an aged care resident for the purposes of the Rate Calculator concerned; and (b) the person is not an ineligible homeowner; and (c) the person pays, or is liable to pay, rent, other than Government rent, in respect of a period in respect of premises in Australia; and (d) the person's fortnightly rent is more than the rent threshold amount (see section 1070T). 1070D Specific requirement (carer payments and certain age, disability support and wife pensions) (1) If the rate of the person's social security payment is to be calculated in accordance with Pension Rate Calculator A and subsection (2) applies, the specific requirement applicable to the person's social security payment is that set out in subsection (3). (2) This subsection applies if: (a) the following conditions are satisfied: (i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; (ii) the person is entitled to be paid family tax benefit; or (b) the following conditions are satisfied: (i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; (ii) the person, or the person's partner, is entitled to be paid family tax benefit. (3) The specific requirement is that: (a) in a paragraph (2)(a) case, either of the following is satisfied: (i) the person's maximum Part A rate of family tax benefit does not include rent assistance; (ii) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit; and (b) in a paragraph (2)(b) case, either of the following is satisfied: (i) the person's, or the person's partner's, maximum Part A rate of family tax benefit does not include rent assistance; (ii) the person's, or the person's partner's, maximum Part A rate of family tax benefit includes rent assistance and clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's, or the person's partner's, Part A rate of family tax benefit. (4) Subsections (1), (2) and (3) do not apply if: (a) the person's social security payment is disability support pension; and (b) the person has not turned 21. Note: The specific requirement for a person who is receiving disability support pension and has not turned 21 is in section 1070F. 1070E Specific requirement (bereavement allowance, widow B pension and certain parenting payments) If: (a) the rate of the person's social security payment is to be calculated in accordance with Pension Rate Calculator C or the Pension PP (Single) Rate Calculator; and (b) the person is entitled to be paid family tax benefit; the specific requirement applicable to the social security payment is that either of the following is satisfied: (c) the person's maximum Part A rate of family tax benefit does not include rent assistance; (d) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit. 1070F Specific requirement (certain disability support pensions) (1) If: (a) the person's social security payment is disability support pension; and (b) the person has not turned 21; and (c) the rate of the person's social security payment is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D; the specific requirement applicable to the social security payment is that the person comply with subsection (2) or (3). Person who has not turned 18 (2) The person complies with this subsection if: (a) the person has not turned 18; and (b) one of the following applies: (i) the person is a member of a couple and, if the person's partner is living with the person in their home, the person's partner is not receiving incentive allowance; (ii) the person is in disability accommodation; (iii) the person is independent; (iv) the person is living away from the person's parental home because of a medical condition of the person; and (c) if: (i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit; and (d) if: (i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person, or the person's partner, is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's, or the person's partner's, maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's, or the person's partner's, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's, or the person's partner's, Part A rate of family tax benefit. Person who has turned 18 (3) The person complies with this subsection if: (a) the person has turned 18; and (b) one of the following applies: (i) the person is a member of a couple and, if the person's partner is living with the person in their home, the person's partner is not receiving incentive allowance; (ii) the person is in disability accommodation; (iii) the person is living away from the person's parental home permanently or indefinitely; and (c) if: (i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit; and (d) if: (i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person, or the person's partner, is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's, or the person's partner's, maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's, or the person's partner's, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's, or the person's partner's, Part A rate of family tax benefit. (4) For the purposes of applying the definition of living away from the person's parental home in subsection (3), a step-parent or guardian is taken to be a parent. 1070G Specific requirement (youth allowance) (1) If the rate of the person's social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the specific requirement applicable to the social security payment is that: (a) the person: (i) is independent but is not an accommodated independent person; or (ii) is not independent and is required to live away from home; and (b) the person does not have a partner with a rent increased pension; and (c) if: (i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit; and (d) if: (i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person, or the person's partner, is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's, or the person's partner's, maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's, or the person's partner's, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's, or the person's partner's, Part A rate of family tax benefit. (2) In this section, accommodated independent person and required to live away from home have the same meanings as in Part 3.5. 1070H Specific requirement (austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance or widow allowance) (1) If the rate of the person's social security payment is to be calculated in accordance with the Austudy Payment Rate Calculator or Benefit Rate Calculator B, the specific requirement applicable to the social security payment is that set out in subsection (2). (2) The specific requirement is that: (a) if the person: (i) is not a member of a couple; and (ii) is not living away from the principal home of a parent permanently or indefinitely; the person has turned 25; and (b) the person does not have a partner with a rent increased pension; and (c) if: (i) the person is not a member of a couple, or is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit; and (d) if: (i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person, or the person's partner, is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's, or the person's partner's, maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's, or the person's partner's, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's, or the person's partner's, Part A rate of family tax benefit. (3) For the purposes of subparagraph (2)(a)(ii), a step-parent or guardian is taken to be a parent. 1070J Specific requirement (certain parenting payments) If the rate of the person's social security payment is to be calculated in accordance with the Benefit PP (Partnered) Rate Calculator, the specific requirement applicable to the social security payment is that: (a) the person's partner is not receiving a rent increased pension; and (b) if: (i) the person is a member of an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's maximum Part A rate of family tax benefit includes rent assistance and clause 38J of Schedule 1 to the Family Assistance Act applies to reduce the person's Part A rate of family tax benefit; and (c) if: (i) the person is a member of a couple, other than an illness separated couple, a respite care couple or a temporarily separated couple; and (ii) the person, or the person's partner, is entitled to be paid family tax benefit; either of the following is satisfied: (iii) the person's, or the person's partner's, maximum Part A rate of family tax benefit does not include rent assistance; (iv) the person's, or the person's partner's, maximum Part A rate of family tax benefit includes rent assistance but clause 38J or 38K of Schedule 1 to the Family Assistance Act applies to reduce the person's, or the person's partner's, Part A rate of family tax benefit. Division 3-Rate of rent assistance 1070K Rate depends on social security payment and family situation A person's rate of rent assistance depends on the person's social security payment and the person's family situation. 1070L Rate for carer payments and certain age, disability support and wife pensions (1) The person's rate of rent assistance is worked out under this section if the rate of the person's social security payment is to be calculated in accordance with Pension Rate Calculator A. (2) Using the following table, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person's rate of rent assistance per fortnight but only up to the person's maximum rent assistance rate. If the person is not a single person sharing accommodation, the person's maximum rent assistance rate is rate B worked out using column 4 of the table. If the person is a single person sharing accommodation, the person's maximum rent assistance rate is two-thirds of rate B. |Rate of rent assistance | |Column 1|Column 2 |Column 3 |Column 4 | | |Person's |Rate A |Rate B | |Item |family | | | | |situation | | | |1 |Not a member|[pic] |$93.20 | | |of a couple | | | |2 |Partnered |[pic] |$88.00 | | |and partner | | | | |does not | | | | |have rent | | | | |increased | | | | |pension | | | |3 |Partnered |[pic] |Half the | | |and partner:| |rate | | | | |specified| | |(a) is | |in column| | |receiving a | |4 of | | |social | |item 2 | | |security | | | | |pension; and| | | | | | | | | |(b) has rent| | | | |increased | | | | |pension | | | |4 |Partnered |[pic] |Half the | | |and partner:| |rate | | | | |specified| | |(a) is | |in column| | |receiving a | |4 of | | |service | |item 2 | | |pension or | | | | |income | | | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent| | | | |increased | | | | |pension; and| | | | | | | | | |(c) does not| | | | |have a | | | | |dependent | | | | |child or | | | | |dependent | | | | |children | | | |5 |Partnered |[pic] |$54.80 | | |and partner:| | | | | | | | | |(a) is | | | | |receiving a | | | | |service | | | | |pension or | | | | |income | | | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent| | | | |increased | | | | |pension; and| | | | | | | | | |(c) has 1 or| | | | |2 dependent | | | | |children | | | |6 |Partnered |[pic] |$62.00 | | |and partner:| | | | | | | | | |(a) is | | | | |receiving a | | | | |service | | | | |pension or | | | | |income | | | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent| | | | |increased | | | | |pension; and| | | | | | | | | |(c) has 3 or| | | | |more | | | | |dependent | | | | |children | | | |7 |Partnered-me|[pic] |$93.20 | | |mber of an | | | | |illness | | | | |separated | | | | |couple | | | |8 |Partnered-me|[pic] |$93.20 | | |mber of a | | | | |respite care| | | | |couple | | | |9 |Partnered-me|[pic] |$88.00 | | |mber of a | | | | |temporarily | | | | |separated | | | | |couple | | | |10 |Partnered |[pic] |$93.20 | | |(partner in | | | | |gaol) | | | (3) Subsections (1) and (2) do not apply if: (a) the person's social security payment is disability support pension; and (b) the person has not turned 21. Note: The rate of rent assistance for a person who is receiving disability support pension and has not turned 21 is worked out: (a) under section 1070N if the person has not turned 18; and (b) under section 1070P if the person has turned 18. 1070M Rate for bereavement allowance, widow B pension and certain parenting payments (1) The person's rate of rent assistance is worked out under this section if the rate of the person's social security payment is to be calculated in accordance with Pension Rate Calculator C or the Pension PP (Single) Rate Calculator. (2) Using the following table, calculate rate A for the person using the formula in column 2. This will be the person's rate of rent assistance per fortnight but only up to the person's maximum rent assistance rate. If the person is not a single person sharing accommodation, the person's maximum rent assistance rate is rate B worked out using column 3 of the table. If the person is a single person sharing accommodation, the person's maximum rent assistance rate is two-thirds of rate B. |Rate of rent assistance | |Column 1|Column 2 |Column 3 | | |Rate A |Rate B | |Item | | | |1 |[pic] |$93.20 | 1070N Rate for disability support pension (person aged under 18) (1) The person's rate of rent assistance is worked out under this section if: (a) the person is receiving disability support pension; and (b) the person has not turned 18; and (c) the rate of the person's pension is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D. (2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person's rate of rent assistance per fortnight but only up to the person's maximum rent assistance rate. The person's maximum rent assistance rate is rate B worked out using column 4 of the table. |Rate of rent assistance | |Column 1|Column 2 |Column 3 |Column 4| | |Person's |Rate A | | |Item |family | |Rate B | | |situation | | | |1 |Not a member |[pic] |$93.20 | | |of a couple | | | | |and: | | | | |(a) in | | | | |disability | | | | |accommodation| | | | |; or | | | | |(b) | | | | |independent | | | |2 |Partnered and|[pic] |$88.00 | | |partner does | | | | |not have rent| | | | |increased | | | | |pension | | | |3 |Partnered and|[pic] |Half the| | |partner: | |rate | | |(a) is | |specifie| | |receiving a | |d in | | |social | |column 4| | |security | |of | | |pension; and | |item 2 | | |(b) has rent | | | | |increased | | | | |pension | | | |4 |Partnered and|[pic] |Half the| | |partner: | |rate | | |(a) is | |specifie| | |receiving a | |d in | | |service | |column 4| | |pension or | |of | | |income | |item 2 | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent | | | | |increased | | | | |pension; and | | | | |(c) does not | | | | |have a | | | | |dependent | | | | |child or | | | | |dependent | | | | |children | | | |5 |Partnered and|[pic] |$54.80 | | |partner: | | | | |(a) is | | | | |receiving a | | | | |service | | | | |pension or | | | | |income | | | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent | | | | |increased | | | | |pension; and | | | | |(c) has 1 or | | | | |2 dependent | | | | |children | | | |6 |Partnered and|[pic] |$62.00 | | |partner: | | | | |(a) is | | | | |receiving a | | | | |service | | | | |pension or | | | | |income | | | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent | | | | |increased | | | | |pension; and | | | | |(c) has 3 or | | | | |more | | | | |dependent | | | | |children | | | |7 |Partnered-mem|[pic] |$93.20 | | |ber of an | | | | |illness | | | | |separated | | | | |couple | | | |8 |Partnered-mem|[pic] |$93.20 | | |ber of a | | | | |respite care | | | | |couple | | | |9 |Partnered-mem|[pic] |$88.00 | | |ber of a | | | | |temporarily | | | | |separated | | | | |couple | | | |10 |Partnered |[pic] |$93.20 | | |(partner in | | | | |gaol) | | | 1070P Rate for disability support pension (person aged between 18 and 21) (1) The person's rate of rent assistance is worked out under this section if: (a) the person is receiving disability support pension; and (b) the person has turned 18 but has not turned 21; and (c) the rate of the person's pension is to be calculated in accordance with Pension Rate Calculator A or Pension Rate Calculator D. (2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person's rate of rent assistance per fortnight but only up to the person's maximum rent assistance rate. The person's maximum rent assistance rate is rate B worked out using column 4 of the table. |Rate of rent assistance | |Column 1|Column 2 |Column 3 |Column 4| | |Person's |Rate A | | |Item |family | |Rate B | | |situation | | | |1 |Not a member |[pic] |$93.20 | | |of a couple | | | | |and: | | | | |(a) in | | | | |disability | | | | |accommodation| | | | |; or | | | | |(b) living | | | | |away from the| | | | |person's | | | | |parental home| | | | |permanently | | | | |or | | | | |indefinitely | | | |2 |Partnered and|[pic] |$88.00 | | |partner does | | | | |not have rent| | | | |increased | | | | |pension | | | |3 |Partnered and|[pic] |Half the| | |partner: | |rate | | |(a) is | |specifie| | |receiving a | |d in | | |social | |column 4| | |security | |of | | |pension; and | |item 2 | | |(b) has rent | | | | |increased | | | | |pension | | | |4 |Partnered and|[pic] |Half the| | |partner: | |rate | | |(a) is | |specifie| | |receiving a | |d in | | |service | |column 4| | |pension or | |of | | |income | |item 2 | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent | | | | |increased | | | | |pension; and | | | | |(c) does not | | | | |have a | | | | |dependent | | | | |child or | | | | |dependent | | | | |children | | | |5 |Partnered and|[pic] |$54.80 | | |partner: | | | | |(a) is | | | | |receiving a | | | | |service | | | | |pension or | | | | |income | | | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent | | | | |increased | | | | |pension; and | | | | |(c) has 1 or | | | | |2 dependent | | | | |children | | | |6 |Partnered and|[pic] |$62.00 | | |partner: | | | | |(a) is | | | | |receiving a | | | | |service | | | | |pension or | | | | |income | | | | |support | | | | |supplement; | | | | |and | | | | |(b) has rent | | | | |increased | | | | |pension; and | | | | |(c) has 3 or | | | | |more | | | | |dependent | | | | |children | | | |7 |Partnered-mem|[pic] |$93.20 | | |ber of an | | | | |illness | | | | |separated | | | | |couple | | | |8 |Partnered-mem|[pic] |$93.20 | | |ber of a | | | | |respite care | | | | |couple | | | |9 |Partnered-mem|[pic] |$88.00 | | |ber of a | | | | |temporarily | | | | |separated | | | | |couple | | | |10 |Partnered |[pic] |$93.20 | | |(partner in | | | | |gaol) | | | 1070Q Rate for youth allowance, austudy payment, mature age allowance under Part 2.12B, newstart allowance, partner allowance, sickness allowance and widow allowance (1) The person's rate of rent assistance is worked out under this section if the rate of the person's social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the Austudy Payment Rate Calculator or Benefit Rate Calculator B. (2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person's rate of rent assistance per fortnight but only up to the person's maximum rent assistance rate. If the person is not a single person sharing accommodation, the person's maximum rent assistance rate is rate B worked out using column 4 of the table. If the person is a single person sharing accommodation, the person's maximum rent assistance rate is two- thirds of rate B. |Rate of rent assistance | |Column 1|Column 2 |Column 3 |Column 4 | | |Person's |Rate A |Rate B | |Item |family | | | | |situation | | | |1 |Not a member|[pic] |$93.20 | | |of a couple | | | |2 |Partnered-pa|[pic] |$88.00 | | |rtner does | | | | |not have | | | | |rent | | | | |increased | | | | |benefit | | | |3 |Partnered-pa|[pic] |Half the | | |rtner has | |rate | | |rent | |specified| | |increased | |in column| | |benefit | |4 of | | | | |item 2 | |4 |Partnered-me|[pic] |$93.20 | | |mber of an | | | | |illness | | | | |separated | | | | |couple | | | |5 |Partnered-me|[pic] |$93.20 | | |mber of a | | | | |respite care| | | | |couple | | | |6 |Partnered-me|[pic] |$88.00 | | |mber of a | | | | |temporarily | | | | |separated | | | | |couple | | | |7 |Partnered |[pic] |$93.20 | | |(partner in | | | | |gaol) | | | 1070R Rate for certain parenting payments (1) The person's rate of rent assistance is worked out under this section if the rate of the person's social security payment is to be calculated in accordance with Benefit PP (Partnered) Rate Calculator. (2) Using the table below, work out which family situation applies to the person and calculate rate A for the person using the formula in column 3. This is the person's rate of rent assistance per fortnight but only up to the person's maximum rent assistance rate. The person's maximum rent assistance rate is rate B worked out using column 4 of the table. |Rate of rent assistance | |Column 1|Column 2 |Column 3 |Column 4 | | |Person's |Rate of rent assistance |Maximum | |Item |family | |rate | | |situation | | | |1 |Partnered-pa|[pic] |$88.00 | | |rtner does | | | | |not have | | | | |rent | | | | |increased | | | | |benefit | | | |2 |Partnered-pa|[pic] |Half the | | |rtner has | |rate | | |rent | |specified| | |increased | |in column| | |benefit | |4 of | | | | |item 1 | |3 |Partnered-me|[pic] |$93.20 | | |mber of an | | | | |illness | | | | |separated | | | | |couple | | | |4 |Partnered-me|[pic] |$93.20 | | |mber of a | | | | |respite care| | | | |couple | | | |5 |Partnered-me|[pic] |$88.00 | | |mber of a | | | | |temporarily | | | | |separated | | | | |couple | | | |6 |Partnered |[pic] |$93.20 | | |(partner in | | | | |gaol) | | | Division 4-Certain concepts used in this Part 1070S Division has effect for purposes of Part This Division has effect for the purposes of this Part. 1070T Rent threshold amount (1) If the rate of a person's social security payment is to be calculated in accordance with Pension Rate Calculator C or the Pension PP (Single) Rate Calculator, the person's rent threshold amount is $82.80. (2) In any other case, a person's rent threshold amount is worked out in accordance with subsection (3). (3) First, identify which of sections 1070L, 1070N, 1070P, 1070Q and 1070R applies to work out the rate of rent assistance for the person's social security payment. Next, identify which family situation in the table in that section applies to the person. The person's rent threshold amount is the amount in the formula in column 3 of the table, in relation to the family situation, that is deducted from fortnightly rent. Example: If a person who is not a member of a couple receives an age pension, the person's rent threshold amount is worked out as follows. First, identify section 1070L as the section applicable to an age pension. Then identify the family situation in item 1 of the table in that section as applicable to the person. Finally, the person's rent threshold amount is $82.80, being the amount that, in the formula in column 3 of that table, is deducted from the person's fortnightly rent. Indexation of the $82.80 has been ignored for the purposes of this example. 1070U Fortnightly rent Fortnightly rent is the fortnightly rent paid or payable by the person whose rate of social security payment is being calculated. 1070V Rent paid by a member of certain couples Rent paid by a member of a couple where person's partner is living with the person in their home (1) If a person is a member of a couple and the person's partner is living with the person in their home, any rent that the person's partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person. Rent paid by a member of an illness separated, respite care couple or temporarily separated couple (2) If a person is a member of an illness separated couple, respite care couple or temporarily separated couple, any rent that the person's partner pays or is liable to pay in respect of the premises or lodgings occupied by the person is to be treated as paid or payable by the person. 1070W Partner with a rent increased pension A person has a partner with a rent increased pension if: (a) the partner is living with the person in their home; and (b) the partner receives a social security pension, service pension or income support supplement; and (c) the rate of the pension or supplement is increased to take account of rent paid or payable by the person. 1070X Partner with a rent increased benefit Youth Allowance Rate Calculator (1) If the rate of a person's social security payment is to be calculated in accordance with the Youth Allowance Rate Calculator, the person's partner has a rent increased benefit if the partner: (a) is living with the person in their home; and (b) either: (i) is receiving a social security benefit the rate of which is increased to take account of rent; or (ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner's income. Note 1: See also subsections 23(4A) and (4AA). Note 2: For designated ABSTUDY payment, see subsection (5). Benefit Rate Calculator B (2) If the rate of a person's social security payment is to be calculated in accordance with Benefit Rate Calculator B, the person's partner has a rent increased benefit if the partner: (a) is living with the person in their home; and (b) either: (i) is receiving a social security benefit the rate of which is increased to take account of rent; or (ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner's income. Note 1: See also subsections 23(4A) and (4AA). Note 2: For designated ABSTUDY payment, see subsection (5). Benefit PP (Partnered) Rate Calculator (3) If the rate of a person's social security payment is to be calculated in accordance with the Benefit PP (Partnered) Rate Calculator, the person's partner has a rent increased benefit if the partner: (a) is living with the person in their home; and (b) either: (i) is receiving a social security benefit the rate of which is increased to take account of rent; or (ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner's income. Note 1: See also subsections 23(4A) and (4AA). Note 2: For designated ABSTUDY payment, see subsection (5). Austudy Payment Rate Calculator (4) If the rate of a person's social security payment is to be calculated in accordance with the Austudy Payment Rate Calculator, the person's partner has a rent increased benefit if the partner: (a) is living with the person in their home; and (b) either: (i) is receiving a social security benefit the rate of which is increased to take account of rent; or (ii) is receiving a designated ABSTUDY payment, or would be receiving such a payment but for the partner's income. Note 1: See also subsections 23(4A) and (4AA). Note 2: For designated ABSTUDY payment, see subsection (5). Designated ABSTUDY payment (5) For the purposes of this section, a designated ABSTUDY payment is a payment under the scheme known as the ABSTUDY scheme: (a) the rate of which is increased to take account of rent; and (b) that includes an amount identified as living allowance. Division 5-Transitional indexation of rent assistance and rent threshold amounts 1070Y Indexation of certain amounts for CPI increases before commencement (1) If any of the following (the pre-indexation amount): (a) an amount in the table in any of sections 1070L to 1070R as inserted by the Social Security Amendment (Further Simplification) Act 2004 (ignoring this section); (b) the rent threshold amount in subsection 1070T(1) as so inserted; would have been different, assuming the pre-indexation amount had (ignoring subsection 1192(5)) been indexed on 20 September 2003 and 20 March 2004 under Division 2 of Part 3.16 of this Act as amended by that Act, then, for the purposes of this Act, the different amount is taken to have been substituted for the pre-indexation amount in the table or subsection inserted by that Act. Note: As a result of the normal operation of Division 2 of Part 3.16, the amounts will then continue to be indexed in line with CPI increases each 20 September and 20 March. (2) The Minister must arrange for a copy of the tables in sections 1070L to 1070R, and a statement of the rent threshold amount in subsection 1070T(1), as affected by subsection (1) of this section to be published in the Gazette as soon as reasonably practicable after the commencement of this Part. Part 3.9-Seniors Health Card Taxable Income Test Calculator 1071 Seniors Health Card Taxable Income Test Calculator The Seniors Health Card Taxable Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the seniors health card taxable income test for the purposes of this Act. Seniors Health Card Taxable Income Test Calculator Satisfying the seniors health card taxable income test 1071-1 This is how to work out whether a person satisfies the seniors health card taxable income test at a particular time (the test time). Method statement Step 1. Work out the amount of the person's adjusted taxable income for the reference tax year. Step 2. Work out the person's seniors health card taxable income limit using point 1071-12. Step 3. Work out whether the person's adjusted taxable income for the reference tax year exceeds the seniors health card taxable income limit. Step 4. If the person's adjusted taxable income for the reference tax year is less than the person's seniors health card taxable income limit, the person satisfies the seniors health card taxable income test. Step 5. If the person's adjusted taxable income for the reference tax year is equal to or exceeds the person's seniors health card taxable income limit, the person does not satisfy the seniors health card taxable income test. Reference tax year 1071-2(1) In the ordinary case, a person's reference tax year is: (a) if the person has received a notice of assessment of his or her taxable income for the tax year immediately preceding the tax year in which the test time occurred-that immediately preceding tax year; or (b) otherwise-the tax year immediately preceding the tax year applicable under paragraph (a). (2) However, if the person has informed the Secretary in writing that the person wishes to have his or her entitlement to a seniors health card determined by reference to his or her adjusted taxable income for the tax year in which the test time occurred (the current tax year), the person's reference tax year is the current tax year. Adjusted taxable income 1071-3 For the purposes of this Part, a person's adjusted taxable income for a particular tax year is the sum of the following amounts (income components): (a) the person's taxable income for that year; (b) the person's fringe benefits value for that year; (c) the person's target foreign income for that year; (d) the person's total net investment loss (within the meaning of the Income Tax Assessment Act 1997) for that year; (e) the person's reportable superannuation contributions (within the meaning of the Income Tax Assessment Act 1997) for that year. Note 1: For taxable income see subsection 23(1) and point 1071-4. Note 2: For fringe benefits value see point 1071-6. Note 3: For target foreign income see subsection 10A(2) and point 1071-7. Taxable income 1071-4 For the purposes of this Part, a person's taxable income for a particular tax year is: (a) the person's assessed taxable income for that year; or (b) if the person does not have an assessed taxable income for that year-the person's accepted estimate of taxable income for that year. Assessed taxable income 1071-5 For the purposes of this Part, a person's assessed taxable income for a particular tax year at a particular time is the most recent of: (a) if, at that time, the Commissioner of Taxation has made an assessment or an amended assessment of that taxable income-that taxable income according to the assessment or amended assessment; or (b) if, at that time, a tribunal has amended an assessment or an amended assessment made by the Commissioner-that taxable income according to the amendment made by the tribunal; or (c) if, at that time, a court has amended an assessment or an amended assessment made by the Commissioner or an amended assessment made by a tribunal-that taxable income according to the amendment made by the court. Fringe benefits value 1071-6 For the purposes of this Part, a person's fringe benefits value for a particular tax year is the person's accepted estimate of the amount by which the total of the assessable fringe benefits received or to be received by the person in the tax year exceeds $1,000. Note: For assessable fringe benefit see subsection 10A(2) and Part 3.12A. Target foreign income 1071-7 For the purposes of this Part, a person's target foreign income for a particular tax year is the person's accepted estimate of the amount of that income for that year. Total net investment loss 1071-8 For the purposes of this Part, a person's total net investment loss for a particular tax year is the person's accepted estimate of the amount of that loss for that year. Accepted estimate 1071-9 For the purposes of this Part, a person's accepted estimate of an income component for a particular tax year is that income component according to the most recent notice given by the person to the Secretary under point 1071-10 and accepted by the Secretary for the purposes of this Part. Notice estimating income component 1071-10(1) A person may give the Secretary a notice, in a form approved by the Secretary, setting out the person's estimate of an income component of the person for a tax year. (2) The notice is to contain, or be accompanied by, such information as is required by the form to be contained in it or to accompany it, as the case may be. (3) The Secretary is to accept a notice only if the Secretary is satisfied that the estimate is reasonable. Adjusted taxable income of members of couples 1071-11 If a person is a member of a couple, add the couple's adjusted taxable incomes for the reference tax year and divide by 2 to work out the amount of the person's adjusted taxable income for the reference tax year. Seniors health card taxable income limit 1071-12 A person's seniors health card taxable income limit is worked out using the Seniors Health Card Taxable Income Limit Table. Work out which family situation in the table applies to the person. The person's seniors health card taxable income limit is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each dependent child of the person. |Seniors Health Card Taxable Income Limit Table| |Column 1|Column 2 |Column 3 |Column 4 | | |Person's family |Amount |Additional| |Item |situation |per year |dependent | | | | |child | | | | |Amount per| | | | |year | |1 |Not member of |$50,000 |$639.60 | | |couple | | | |2 |Partnered |$40,000 |$639.60 | |3 |Member of |$50,000 |$639.60 | | |illness | | | | |separated couple| | | |4 |Member of |$50,000 |$639.60 | | |respite care | | | | |couple | | | |5 |Partnered |$50,000 |$639.60 | | |(partner in | | | | |gaol) | | | Part 3.9A-Health Care Card Income Test Calculator 1071A Health care card income test The Health Care Card Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the health care card income test for the purposes of Division 3 of Part 2A.1. Health Care Card Income Test Calculator Satisfying the health care card income test: persons claiming a card 1071A-1 This is how to work out whether a person claiming a health care card satisfies the health care card income test on the day on which the person claims the card, whether or not the person is the holder of a health care card at that time. Method statement Step 1. Work out the amount of the person's ascertained income for the period of 8 weeks ending on the day on which the person lodged the claim. Step 2. Work out the amount of the person's allowable income for the period. Step 3. If the person's ascertained income for the period is less than the person's allowable income for the period, the person satisfies the health care card income test. Step 4. If the person's ascertained income for the period equals or exceeds the person's allowable income for the period, the person does not satisfy the health care card income test. Satisfying the health care card income test: cardholders 1071A-2 This is how to work out whether a person who holds a health care card satisfies the health care card income test at a particular time where there has been a change in circumstances. Method statement Step 1. Work out the amount of the person's ascertained income for the period of 8 weeks ending on the day on which the change of circumstances occurred. Step 2. Work out the amount of the person's allowable income for the period. Step 3. If the person's ascertained income for the period is less than 125% of the person's allowable income for that period, the person satisfies the health care card income test. Step 4. If the person's ascertained income for the period is 125% or more of the person's allowable income for that period, the person does not satisfy the health care card income test. Cessation of dependency 1071A-3 For the purposes of point 1071A-2, if a person (the first person) ceases to be a dependant of another person who is the holder of a health care card: (a) the fact that the first person has so ceased is to be disregarded for a period of 4 weeks commencing on the day on which the first person so ceased; and (b) if, at the end of the period, the first person has not become again a dependant of that other person, the first person is taken to have ceased to be a dependant of the other person at the expiration of that period of 4 weeks. Definitions 1071A-4 In this Part: allowable income, in relation to any period of 8 weeks, means: (a) in relation to a person who had a dependant or dependants on the last day of the period-the amount worked out by multiplying by 8, or such other number as is prescribed, the aggregate of: (i) the amount of the weekly rate of income that would, on the last day of the period, be sufficient to prevent both members of a one-income couple from receiving newstart allowance; and (ii) $20, or such other amount as is prescribed; and (iii) an amount worked out by multiplying $34, or such higher amount as is prescribed, by the number of the dependants of the person on the last day of the period; or (b) in relation to a person who had no dependants on the last day of the period-the amount worked out by multiplying by 8, or such other number as is prescribed, an amount equal to 60%, or such other percentage as is prescribed, of the aggregate of the amount worked out under subparagraph (a)(i) and the amount referred to in subparagraph (a)(ii) if paragraph (a) had applied to the person. ascertained income, in relation to a period, means: (a) in relation to a person who is not a member of a couple-the income of the person in respect of that period; and (b) in relation to a person who is a member of a couple-the income of the person and his or her partner in respect of that period. exceptional circumstances relief payment means exceptional circumstances relief payment under the Farm Household Support Act 1992. farm help income support means farm help income support under the Farm Household Support Act 1992. income, in relation to a person, means ordinary income and, to the extent that they are not ordinary income, includes: (aa) payments of a social security pension or a social security benefit; and (a) if the person is receiving a social security pension or benefit- the person's maintenance income (if any) within the meaning of the Family Assistance Act; and (b) payments of a pension under the Veterans' Entitlements Act; and (c) payments of a pension payable by a foreign country, being a pension that, in the opinion of the Secretary, is similar in character to a pension referred to in paragraph (b); and (ca) payments of income support supplement; and (cb) a payment under Part VIIAB (DFISA) of the Veterans' Entitlements Act (including a payment made under regulations made under that Part); and (d) payments under the scheme known as the New Enterprise Incentive Scheme; and (e) payments of compensation, including compensation within the meaning of the Military Rehabilitation and Compensation Act. 1071A-5 If a weekly rate of income referred to in subparagraph (a)(i) of the definition of allowable income in point 1071A-4 or an amount worked out under paragraph (b) of that definition includes an amount of cents, the amount of that weekly rate is, for the purposes of that definition, increased to the nearest whole dollar. 1071A-6 A couple is a one-income couple for the purposes of point 1071A-4 if only one member of the couple is receiving income. Part 3.10-General provisions relating to the ordinary income test Division 1-Ordinary income concept 1072 General meaning of ordinary income A reference in this Act to a person's ordinary income for a period is a reference to the person's gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 1A. Note 1: For ordinary income see subsection 8(1). Note 2: For other provisions affecting the amount of a person's ordinary income see section 1073AA (work bonus), sections 1074 and 1075 (business income), sections 1076 to 1084 (deemed income from financial assets) and sections 1095 to 1099DAA (income from income streams). 1073 Certain amounts taken to be received over 12 months (1) Subject to points 1067G-H5 to 1067G-H20 (inclusive), 1067L-D4 to 1067L-D16 (inclusive), 1068-G7AA to 1068-G7AR (inclusive), 1068A- E2 to 1068A-E12 (inclusive) and 1068B-D7 to 1068B-D18 (inclusive), if a person receives, whether before or after the commencement of this section, an amount that: (a) is not income within the meaning of Division 1B or 1C of this Part; and (b) is not: (i) income in the form of periodic payments; or (ii) ordinary income from remunerative work undertaken by the person; or (iii) an exempt lump sum. the person is, for the purposes of this Act, taken to receive one fifty-second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount. (2) Subsection (1) applies to a person who has claimed one of the following allowances: (a) newstart allowance; (b) sickness allowance; (c) youth allowance; (d) widow allowance; (e) partner allowance; (f) mature age allowance under Part 2.12B; even if the person: (g) has to serve an ordinary waiting period or a liquid assets test waiting period in respect of the allowance claimed; or (h) is subject to an income maintenance period in respect of the allowance claimed; or (i) is subject to a seasonal work preclusion period; during the period of 12 months referred to in subsection (1). Division 1AAA-Work bonus 1073AA Work bonus (1) This section applies to a person if: (a) the person's rate of social security pension is calculated in accordance with Pension Rate Calculator A at the end of section 1064 or Pension Rate Calculator C at the end of section 1066; and (b) the person has reached pension age. Note: For pension age see subsections 23(5A), (5B), (5C) and (5D). (2) If the person's employment income for an instalment period is greater than or equal to the income concession amount for that period, the amount of the person's employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of that income concession amount. (3) If a person's employment income for an instalment period is less than the income concession amount for that period, the amount of the person's employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of the person's employment income for that period. Definition (4) The income concession amount is: (a) for an instalment period of 14 days-$500; and (b) for an instalment period of less than 14 days-the amount worked out using the following formula: [pic] Interpretation (5) For the purposes of this section, a person's employment income for an instalment period includes an amount that is taken to have been earned, derived or received over that period because of subsection 1073A(1). (6) To avoid doubt, apply this section before applying point 1064- E2 or point 1066-E2 (whichever is relevant). Example 1: David and Amy are members of a couple. David earns $50 of employment income in an instalment period of 14 days and Amy earns $500 of employment income in that period. For David, $25 of the $50 is disregarded for the purposes of the ordinary income test. For Amy, $250 of the $500 is disregarded for the purposes of the ordinary income test. Example 2: Ian and Simone are members of a couple. Ian earns no employment income in an instalment period of 14 days and Simone earns $1,000 of employment income in that period. For Simone, $250 is disregarded for the purposes of the ordinary income test (which is 50% of the income concession amount). Division 1AA-Employment income attribution rules 1073A Employment income attribution over a period for social security pensioners (1) Employment income: (a) that is a lump sum amount either: (i) in respect of a period greater than a fortnight; or (ii) resulting from remunerative work although not in respect of any particular period; and (b) that is earned, derived or received, or is taken to have been earned, derived or received, by a person: (i) who is receiving a social security pension; and (ii) whose rate of payment of that pension is worked out with regard to the income test module of a rate calculator in this Chapter; is to be taken to have been earned, derived or received over such period, not exceeding 52 weeks, as the Secretary determines. (2) The person's employment income for the period determined by the Secretary is to be reduced to a fortnightly rate rounded to the nearest cent (rounding 0.5 cents downwards). 1073B Daily attribution of employment income (1) If: (a) a person is receiving a social security pension or a social security benefit; and (b) the person's rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and (d) the person earns, derives or receives, or is taken, either by virtue of the operation of section 1073A or any other provision of this Act, to earn, derive or receive, employment income during the whole or a part of a particular instalment period of the person; the person is taken to earn, derive or receive, on each day in that instalment period, an amount of employment income worked out by dividing the total amount of the employment income referred to in paragraph (d) by the number of days in the period. (2) If a person has reached pension age and is receiving a social security benefit, subsection (1) does not apply to the person, to the extent that it relates to that benefit. Note 1: Subsection (1) applies to a person who has not reached pension age and is receiving a social security benefit. Note 2: For pension age see subsections 23(5A), (5B), (5C) and (5D). 1073C Fortnightly or yearly expression of attributed employment income If, in accordance with the operation of section 1073B, a person is taken to earn, derive or receive a particular amount of employment income on each day in an instalment period: (a) the rate of the person's employment income on a fortnightly basis for that day may be worked out by multiplying that amount by 14; and (b) the rate of the person's employment income on a yearly basis for that day may be worked out by multiplying that amount by 364. Division 1AB-Working credit accrual and depletion rules and their consequences 1073D To whom do working credit accrual and depletion rules apply? The rules in this Division apply to a person (a working credit participant): (a) who is receiving a social security pension or a social security benefit; and (b) whose rate of payment of the pension or benefit is worked out with regard to the income test module of a rate calculator in this Chapter; and (c) who has not reached pension age; and (d) to whom the student income bank does not apply. 1073E Opening balance Basic opening balance rule (1) Subject to this section, each working credit participant has, on becoming a working credit participant, a working credit opening balance of nil. Opening balance following cancellation of social security pension or benefit (2) If: (a) a person ceases to be a working credit participant or a person to whom the student income bank applies because of a determination to cancel, or an automatic cancellation of, the person's social security pension or social security benefit; and (b) the person had a working credit balance or a student income bank balance greater than nil immediately before the date of effect of the determination or cancellation; and (c) the person makes, or is taken to have made, a new claim for a social security pension or social security benefit; and (d) the Secretary determines that the new claim is to be granted with effect from a day within 12 months after the date of effect mentioned in paragraph (b); and (e) the person becomes a working credit participant on a day (the participation day), being either the day with effect from which the new claim is granted or a day following that day; the working credit balance mentioned in paragraph (b), or the student income bank balance mentioned in that paragraph to the extent that it does not exceed $1,000, becomes the opening balance of the working credit applicable to the person on the participation day. Opening balance following suspension of social security pension or benefit (3) If: (a) a person ceases to be a working credit participant because of a determination to suspend the person's social security pension or social security benefit; and (b) the person had a working credit balance greater than nil immediately before the date of effect of the determination; and (c) within 12 months after the date of effect of the determination, the payment of the person's pension or benefit is resumed; and (d) the person becomes a working credit participant on the day with effect from which the person's pension or benefit is resumed; the working credit balance mentioned in paragraph (b) becomes the opening balance of the working credit applicable to the person on the day mentioned in paragraph (d). Opening balance following suspension and subsequent cancellation of social security pension or benefit (4) If: (a) a person ceases to be a working credit participant or a person to whom the student income bank applies because of a determination to suspend the person's social security pension or social security benefit; and (b) while the person's pension or benefit is suspended there is a determination to cancel the person's pension or benefit; and (c) the person had a working credit balance or a student income bank balance greater than nil immediately before the date of effect of the suspension determination; and (d) the person makes, or is taken to have made, a new claim for a social security pension or social security benefit; and (e) the Secretary determines that the new claim is to be granted with effect from a day within 12 months after the date of effect mentioned in paragraph (c); and (f) the person becomes a working credit participant on a day (the participation day), being either the day with effect from which the new claim is granted or a day following that day; the working credit balance mentioned in paragraph (c), or the student income bank balance mentioned in that paragraph to the extent that it does not exceed $1,000, becomes the opening balance of the working credit applicable to the person on the participation day. Opening balance following cessation of full-time study by youth allowance recipient (5) If: (a) a person is receiving youth allowance and is undertaking full- time study; and (b) the person ceases to undertake full-time study; and (c) either because of a determination made as a result of that cessation or, if no determination is necessary, because of the cessation itself, the person, on a day (the participation day): (i) ceases to be a person to whom the student income bank set out in Module J of the Youth Allowance Rate Calculator applies; and (ii) becomes a working credit participant; and (d) the person had a student income bank balance greater than nil immediately before the participation day; the student income bank balance mentioned in paragraph (d), to the extent that it does not exceed $1,000, becomes the opening balance of the working credit applicable to the person on the participation day. Opening balance following cessation as a new apprentice by youth allowance recipient (5A) If: (a) a person is receiving youth allowance and is a new apprentice; and (b) the person ceases to be a new apprentice; and (c) either because of a determination made as a result of that cessation or, if no determination is necessary, because of the cessation itself, the person, on a day (the participation day): (i) ceases to be a person to whom the student income bank set out in Module J of the Youth Allowance Rate Calculator applies; and (ii) becomes a working credit participant; and (d) the person had a student income bank balance greater than nil immediately before the participation day; the student income bank balance mentioned in paragraph (d), to the extent that it does not exceed $1,000, becomes the opening balance of the working credit applicable to the person on the participation day. Opening balance following cessation of ABSTUDY payment (6) If: (a) a person to whom the income bank under the ABSTUDY scheme applies stops being such a person; and (b) the person becomes a working credit participant within 12 months after so stopping; and (c) immediately before so stopping, the person had a credit balance greater than nil under the scheme; the credit balance, to the extent that it does not exceed $1,000, becomes the opening balance of the working credit applicable to the person on the day on which the person becomes a working credit participant. 1073F Working out accruals and depletions of working credit for social security beneficiaries This section determines, in respect of each working credit participant who is receiving a social security benefit, whether, for each day in an instalment period: (a) there is an accrual to the participant's working credit balance; or (b) the participant's working credit balance is unaffected; or (c) the participant's working credit balance is depleted; and, if there is an accrual to, or a depletion from, the participant's working credit balance, the amount of that accrual or depletion. Method statement Step 1. Work out the amount of the participant's employment income earned, derived or received on the day. This could be a nil amount or it could be an amount that is taken, under section 1073B, to have been earned, derived or received on the day. Step 2. Multiply the amount determined under step 1 by 14. This is the participant's rate of employment income on a fortnightly basis for the day. Step 3. Add to the participant's rate of employment income on a fortnightly basis for the day the participant's rate of any other ordinary income on a fortnightly basis for the day. This is the participant's rate of total ordinary income on a fortnightly basis for the day. Step 4. If the participant's rate of total ordinary income on a fortnightly basis for the day is less than $48, there is an accrual to the participant's working credit balance for the day of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is $1,000. Step 5. If the participant's rate of total ordinary income on a fortnightly basis for the day is at least $48 but does not exceed the ordinary income free area applicable to the participant for the day under the income test module of the appropriate rate calculator, the participant's working credit balance for the day is neither increased nor reduced. Step 6. If the participant's rate of total ordinary income on a fortnightly basis for the day is at least $48 and exceeds the participant's applicable ordinary income free area for the day, the participant's working credit balance, if it is greater than nil on the day, is depleted on that day by the least of: (a) the amount of employment income determined under step 1; or (b) one fourteenth of the amount by which the participant's rate of total ordinary income on a fortnightly basis exceeds the participant's applicable ordinary income free area; or (c) the participant's available working credit balance. 1073G Working out the effect of a working credit depletion on the fortnightly rate of ordinary income for a social security beneficiary If, under section 1073F, the working credit balance of a working credit participant is depleted on a particular day, the participant's rate of ordinary income on a fortnightly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 6 of the method statement, multiplied by 14. 1073H Working out accruals and depletions of working credit for social security pensioners This section determines, in respect of each working credit participant who is receiving a social security pension, whether, for each day in an instalment period: (a) there is an accrual to the participant's working credit balance; or (b) the participant's working credit balance is unaffected; or (c) the participant's working credit balance is depleted; and, if there is an accrual to, or a depletion from, the participant's working credit balance, the amount of that accrual or depletion. Method statement Step 1. Work out the amount of the participant's employment income earned, derived or received on the day. This could be a nil amount or it could be an amount that is taken, under section 1073B, to have been earned, derived or received on the day. Step 2. Multiply the amount determined under step 1 by 364. This is the participant's rate of employment income on a yearly basis for the day. Step 3. Add to the participant's rate of employment income on a yearly basis for the day the participant's rate of any other ordinary income on a yearly basis for the day. This is the participant's rate of total ordinary income on a yearly basis for the day. Step 4. Divide the participant's rate of total ordinary income on a yearly basis for the day by 26. This is the participant's rate of total ordinary income, expressed on a fortnightly basis, for the day. Step 5. Divide the yearly ordinary income free area applicable to the participant for the day under the ordinary income test module of the appropriate rate calculator by 26. This is the participant's applicable ordinary income free area, expressed on a fortnightly basis, for the day. Step 6. If the participant's rate of total ordinary income, expressed on a fortnightly basis, for the day, is less than $48, there is an accrual to the participant's working credit balance, for the day, of an amount equal to one fourteenth of the amount by which $48 exceeds that rate. The maximum working credit balance is $1,000. Step 7. If the participant's rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 but does not exceed the participant's applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant's working credit balance for the day is neither increased nor reduced. Step 8. If the participant's rate of total ordinary income, expressed on a fortnightly basis, for the day, is at least $48 and exceeds the participant's applicable ordinary income free area, expressed on a fortnightly basis for the day in accordance with step 5, the participant's working credit balance, if it is greater than nil on the day, is depleted on that day by the least of: (a) the amount of employment income determined under step 1; or (b) one fourteenth of the amount by which the participant's rate of total ordinary income, expressed on a fortnightly basis, exceeds the participant's applicable ordinary income free area, expressed on that basis; or (c) the participant's available working credit balance. 1073I Working out the effect of a working credit depletion on the yearly rate of ordinary income for a social security pensioner If, under section 1073H, the working credit balance of a working credit participant is depleted on a particular day, the participant's rate of ordinary income on a yearly basis for that day is reduced by the working credit depletion amount applicable to that day, determined under step 8 of the method statement, multiplied by 364. 1073J Working credit balance prevents loss of qualification in certain cases (1) If: (a) a person receiving disability support pension, carer payment, youth allowance, newstart allowance or sickness allowance is a working credit participant; and (b) either: (i) the participant commences to earn, derive or receive, or to be taken to earn, derive or receive, employment income; or (ii) there is an increase in the employment income that is earned, derived or received, or taken to be earned, derived or received, by the participant; and (c) the participant has a working credit balance greater than nil at the start of the instalment period of the participant in which the commencement or increase occurs; and (d) but for the commencement or increase, the participant would have continued to be qualified for the payment mentioned in paragraph (a) until the earlier of: (i) a day determined under Division 8 or 9 of Part 3 of the Administration Act; or (ii) the day on which the participant's working credit balance is reduced to nil; the participant is to be treated as if he or she had continued to be so qualified until the earlier of the days determined as referred to in subparagraphs (d)(i) and (ii). (2) If: (a) a woman receiving wife pension is a working credit participant; and (b) the partner of the participant ceases to receive age pension or disability support pension on and from a day (the cessation day); and (c) the partner ceases to receive that pension: (i) because of the employment income of the partner (either alone or in combination with any other ordinary income earned, derived or received, or taken to have been earned, derived or received, by the partner); and (ii) after any working credit balance of the partner is reduced to nil; and (d) as a result of the partner's so ceasing to receive that pension, the participant ceases to be qualified for wife pension on and from the cessation day; and (e) the participant has a working credit balance greater than nil at the start of the instalment period of the participant in which the cessation day occurs; and (f) but for the employment income, or combined income, referred to in paragraph (c), the participant would have continued to be qualified for wife pension until the earlier of: (i) a day determined under Division 8 or 9 of Part 3 of the Administration Act; or (ii) the day on which the participant's working credit balance is reduced to nil; the participant is to be treated as if she had continued to be so qualified until the earlier of the days referred to in subparagraphs (f)(i) and (ii). Division 1A-Business income 1074 Ordinary income from a business-treatment of trading stock (1) If: (a) a person carries on a business; and (b) the value of all the trading stock on hand at the end of a tax year is greater than the value of all the trading stock on hand at the beginning of that tax year; the person's ordinary income for that tax year in the form of profits from the business is to include the amount of the difference in values. (2) If: (a) a person carries on a business; and (b) the value of all the trading stock on hand at the end of a tax year is less than the value of all the trading stock on hand at the beginning of that tax year; the person's ordinary income for that tax year in the form of profits from the business is to be reduced by the amount of the difference in values. Note: Different provisions apply when working out a person's ordinary income from a farm to find whether: (a) the person satisfies the farmers' income test for the purposes of Part 3.14A (see subparagraph 1185K(3)(a)(ii) and paragraph 1185K(3)(c)); or (b) the person satisfies the sugarcane farmers' income test for the purposes of Part 3.14B (see subparagraph 1185Y(3)(a)(ii) and paragraph 1185Y(3)(c)). 1075 Permissible reductions of business income (1) Subject to subsection (2), if a person carries on a business, the person's ordinary income from the business is to be reduced by: (a) losses and outgoings that relate to the business and are allowable deductions for the purposes of section 8-1 of the Income Tax Assessment Act 1997; and (b) amounts that relate to the business and can be deducted in respect of plant (within the meaning of the Income Tax Assessment Act 1997) under Division 40 of that Act; and (c) amounts that relate to the business and are allowable deductions under section 290-60 of the Income Tax Assessment Act 1997. Note: Different provisions apply when working out a person's ordinary income from a farm to find whether: (a) the person satisfies the farmers' income test for the purposes of Part 3.14A (see subparagraph 1185K(3)(a)(ii) and paragraph 1185K(3)(c)); or (b) the person satisfies the sugarcane farmers' income test for the purposes of Part 3.14B (see subparagraph 1185Y(3)(a)(ii) and paragraph 1185Y(3)(c)). (2) If, under Division 1B, a person is taken to receive ordinary income on a financial investment, that ordinary income is not to be reduced by the amount of any expenses incurred by the person because of that investment. Note: For financial investment see subsection 9(1). (3) If a person's ordinary income for a period includes rental income from a property that is not business income, the person's ordinary income from that property is to be reduced by losses and outgoings that relate to the property and are allowable deductions for the purposes of section 8-1 of the Income Tax Assessment Act 1997 for that period. (4) If the amount of the allowable deductions relating to a property for a period under section 8-1 of the Income Tax Assessment Act 1997 exceeds the amount of the rental income from the property for that period, the amount of the ordinary income from the property for that period is taken to be nil. Division 1B-Deemed income from financial assets 1076 Deemed income from financial assets-persons other than members of couples (1) This section applies to a person who is not a member of a couple. Note: The whole of Division 1B does not apply when working out a person's ordinary income to find whether: (a) the person satisfies the farmers' income test for the purposes of Part 3.14A (see paragraphs 1185K(2)(a) and (3)(a)); or (b) the person satisfies the sugarcane farmers' income test for the purposes of Part 3.14B (see paragraphs 1185Y(2)(a) and (3)(a)). (2) A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section. (3) If the total value of the person's financial assets is equal to or less than the person's deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate. (3A) If the total value of the person's financial assets exceeds the person's deeming threshold, the ordinary income that the person is taken to receive is worked out as follows: Method statement Step 1. Multiply the person's deeming threshold by the below threshold rate. Note 1: For deeming threshold see subsection 1081(1). Note 2: For below threshold rate see subsection 1082(1). Step 2. Subtract the deeming threshold from the total value of the person's financial assets. Note: For deeming threshold see subsection 1081(1). Step 3. Multiply the remainder worked out at Step 2 by the above threshold rate. Note: For above threshold rate see subsection 1082(2). Step 4. The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the person is taken to receive per year on the financial assets. (4) The person is taken, for the purposes of this Act, to receive one fifty-second of the amount calculated under subsection (3) or (3A) as ordinary income of the person during each week. 1077 Deemed income from financial assets-members of pensioner couples (1) This section applies to the members of a pensioner couple. Note: The whole of Division 1B does not apply when working out a person's ordinary income to find whether: (a) the person satisfies the farmers' income test for the purposes of Part 3.14A (see paragraphs 1185K(2)(a) and (3)(a)); or (b) the person satisfies the sugarcane farmers' income test for the purposes of Part 3.14B (see paragraphs 1185Y(2)(a) and (3)(a)). (2) If one or both of the members of a couple have financial assets, the members of the couple are taken, for the purposes of this Act, to receive together ordinary income on those assets in accordance with this section. (3) If the total value of the couple's financial assets is equal to or less than the couple's deeming threshold, the ordinary income the couple is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate. (3A) If the total value of the couple's financial assets exceeds the couple's deeming threshold, the ordinary income that the couple is taken to receive is worked out as follows: Method statement Step 1. Multiply the couple's deeming threshold by the below threshold rate. Note 1: For deeming threshold see subsection 1081(2). Note 2: For below threshold rate see subsection 1082(1). Step 2. Subtract the deeming threshold from the total value of the couple's financial assets. Note: For deeming threshold see subsection 1081(2). Step 3. Multiply the remainder worked out at Step 2 by the above threshold rate. Note: For above threshold rate see subsection 1082(2). Step 4. The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the couple is taken to receive per year on the financial assets. (4) Each member of the couple is taken, for the purposes of this Act, to receive, as ordinary income during each week, an amount worked out under the following formula: [pic] 1078 Deemed income from financial assets-members of non-pensioner couples (1) This section applies to a person who is a member of a couple, other than a pensioner couple. Note: The whole of Division 1B does not apply when working out a person's ordinary income to find whether: (a) the person satisfies the farmers' income test for the purposes of Part 3.14A (see paragraphs 1185K(2)(a) and (3)(a)); or (b) the person satisfies the sugarcane farmers' income test for the purposes of Part 3.14B (see paragraphs 1185Y(2)(a) and (3)(a)). (2) A person who has financial assets is taken, for the purposes of this Act, to receive ordinary income on those assets in accordance with this section. (3) If the total value of the person's financial assets is equal to or less than the person's deeming threshold, the ordinary income the person is taken to receive per year on the financial assets is the amount worked out by multiplying the value of those assets by the below threshold rate. (3A) If the total value of the person's financial assets exceeds the person's deeming threshold, the ordinary income that the person is taken to receive is worked out as follows: Method statement Step 1. Multiply the person's deeming threshold by the below threshold rate. Note 1: For deeming threshold see subsection 1081(3). Note 2: For below threshold rate see subsection 1082(1). Step 2. Subtract the deeming threshold from the total value of the person's financial assets. Note: For deeming threshold see subsection 1081(3). Step 3. Multiply the remainder worked out at Step 2 by the above threshold rate. Note: For above threshold rate see subsection 1082(2). Step 4. The total of the amounts worked out at Steps 1 and 3 represents the ordinary income the person is taken to receive per year on the financial assets. (4) The person is taken, for the purposes of this Act, to receive one fifty-second of the amount calculated under subsection (3) or (3A) as ordinary income of the person during each week. 1081 Deeming threshold (1) The deeming threshold for a person who is not a member of a couple is $30,000. (2) The deeming threshold for a pensioner couple is $50,000. (3) The deeming threshold for a member of a couple, other than a pensioner couple, is an amount equal to one-half of the amount fixed by subsection (2). Note: The amounts fixed by subsections (1) and (2) are indexed every 1 July. See sections 1190-1192. 1082 Below threshold rate, above threshold rate (1) For the purposes of this Division, the below threshold rate is the rate determined, by legislative instrument, by the Minister to be the below threshold rate for the purposes of this Division. (2) For the purposes of this Division, the above threshold rate is the rate determined, by legislative instrument, by the Minister to be the above threshold rate for the purposes of this Division. (3) A rate determined under this section must be in the form of a specified percentage. 1083 Actual return on financial assets not treated as ordinary income (1) Subject to subsection (2), any return on a financial asset that a person actually earns, derives or receives is taken, for the purposes of this Act, not to be ordinary income of the person. Note: When working out a person's ordinary income to find whether the person satisfies the farmers' income test for the purposes of Part 3.14A or the sugarcane farmers' income test for the purposes of Part 3.14B, actual returns on financial assets are taken to be ordinary income (see paragraphs 1185K(2)(b) and (3)(b) and 1185Y(2)(b) and (3)(b)). (2) If, because of: (a) a determination under subsection 1084(1); or (b) the operation of subsection 1084(2); a financial investment is not to be regarded as a financial asset for the purposes of section 1076, 1077 or 1078, subsection (1) does not apply to any return on the investment that the person actually earns, derives or receives. 1084 Certain money and financial investments not taken into account (1) The Minister may determine that: (a) specified financial investments; or (b) a specified class of financial investments; are not to be regarded as financial assets for the purposes of section 1076, 1077 or 1078. (2) If a financial investment is an unrealisable asset for the purposes of section 1129, 1130B or 1131, the financial asset is not to be regarded as a financial asset for the purposes of section 1076, 1077 or 1078. (3) A determination under subsection (1): (a) must be in writing; and (b) takes effect on the day on which it is made or on such other day (whether earlier or later) as is specified in the determination. 1084A Valuation and revaluation of certain financial investments The total value of a person's listed securities and managed investments (being listed securities and managed investments that fluctuate depending on the market) (the relevant investments) is determined in accordance with the following: (a) an initial total valuation is to be given to the relevant investments on 1 July 1996, or when a new claim is determined, by the method set out in departmental guidelines; (b) that total valuation continues in effect until the relevant investments are revalued by the method set out in departmental guidelines, and that revaluation must occur: (i) on 20 March in each calendar year after 1996; and (ii) on 20 September in each calendar year after 1996; and (iii) when the person requests a revaluation of one or more of the person's listed securities and managed investments; and (iv) following an event that affects the relevant investments and is the subject of a notice given under section 68 of the Administration Act. Division 1C-Income from income streams Subdivision B-Income streams that are not family law affected income streams 1097A Scope of Subdivision This Subdivision applies to income streams that are not family law affected income streams. 1098 Income from asset-test exempt income stream (1) For the purpose of working out the annual rate of ordinary income of a person from an asset-test exempt income stream to which this Subdivision applies, the person is taken to receive from that income stream each year the amount worked out under section 1099 or 1099A. Note: For asset-test exempt income stream see sections 9A, 9B and 9BA. (2) Sections 1099 and 1099A do not apply if: (a) the income stream is covered by subsection 9BA(1); or (b) on the income stream's commencement day, there was a reasonable likelihood that the income stream would have been covered by subsection 9BA(1), but the income stream is no longer covered by that subsection. Note: See section 1099AA. 1099 Income-income stream not a defined benefit income stream If the asset-test exempt income stream to which this Subdivision applies is not a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows: [pic] where: annual payment means the amount payable to the person for the year under the income stream. purchase price has the meaning given by subsection 9(1). relevant number has the meaning given by subsection 9(1). Example: Mark is 65 years old and single. He purchases an annuity for $100,000 with a term based on life expectancy (i.e. 15.41 years, which he chooses to round up to 16 years). The annuity has all the revised characteristics listed in the legislation. His annual payment from the annuity totals $9,895. Mark's assessable income from this income stream is: [pic] 1099A Income-income stream is a defined benefit income stream If the asset-test exempt income stream to which this Subdivision applies is a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows: [pic] where: annual payment means the amount payable to the person for the year under the income stream. deductible amount has the meaning given by subsection 9(1). 1099AA Income from market-linked asset-test exempt income stream (1) If either of the following conditions is satisfied in relation to the asset-test exempt income stream to which this Subdivision applies: (a) the income stream is covered by subsection 9BA(1); (b) on the income stream's commencement day, there was a reasonable likelihood that the income stream would have been covered by subsection 9BA(1), but the income stream is no longer covered by that subsection; the annual rate of ordinary income of a person from the income stream is worked out under whichever of subsections (2) and (3) is applicable. Recipient makes election (2) If: (a) the person has elected that a particular amount is to be the payment, or the total of the payments, to be made under the income stream in respect of a period (the payment period) that: (i) consists of the whole or a part of a particular financial year; and (ii) begins on or after the income stream's commencement day; and (b) the election is in force on a particular day in the payment period; the annual rate of ordinary income of the person from the income stream on that day is worked out using the following formula: [pic] where: purchase price has the meaning given by subsection 9(1). relevant number has the meaning given by subsection 9(1). total payments means the payment, or the total of the payments, to be made under the income stream in respect of the payment period. Recipient does not make election (3) If the person has not elected that a particular amount is to be the payment, or the total of the payments, to be made under the income stream in respect of a period (the payment period) that: (a) consists of the whole or a part of a particular financial year; and (b) begins on or after the income stream's commencement day; the annual rate of ordinary income of the person from the income stream on each day during the payment period is worked out using the following formula: [pic] where: default amount means 100% of the amount worked out for the financial year using the formula in subsection 9BA(5) (for pro- rating, see subsection (4)). purchase price has the meaning given by subsection 9(1). relevant number has the meaning given by subsection 9(1). (4) If the income stream's commencement day is not a 1 July, the default amount (within the meaning of subsection (3)) for the financial year starting on the preceding 1 July must be reduced on a pro-rata basis by reference to the number of days in the financial year that are on and after the commencement day. Exception-income stream's commencement day happens in June (5) If: (a) the income stream's commencement day happens in June; and (b) no payment is made under the income stream for the financial year in which the commencement day happens; subsections (2), (3) and (4) do not apply in working out the annual rate of ordinary income of the person from the income stream on a day in that financial year. 1099B Income from asset-tested income stream (long term) (1) For the purpose of working out the annual rate of ordinary income of a person from an asset-tested income stream (long term) to which this Subdivision applies, the person is taken to receive from that income stream each year the amount worked out under section 1099C or 1099D. (2) Sections 1099C and 1099D do not apply to an income stream if section 1099DAA applies to the income stream. 1099C Income-income stream not a defined benefit income stream If the asset-tested income stream (long term) to which this Subdivision applies is not a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows: [pic] where: annual payment means the amount payable to the person for the year under the income stream. purchase price has the meaning given by subsection 9(1). relevant number has the meaning given by subsection 9(1). residual capital value has the meaning given by subsection 9(1). Note: For treatment of asset-tested income streams (short term) see Division 1B of Part 3.10. Example: Sally is 65 years old and single. She purchases a 10 year annuity for $150,000, with a residual capital value of $20,000. Her total annual annuity payment is $18,337. Sally's assessable income from her 10 year annuity is: [pic] 1099D Income-income stream is a defined benefit income stream If the asset-tested income stream (long term) to which this Subdivision applies is a defined benefit income stream, the amount that the person is taken to receive from the income stream each year is worked out as follows: [pic] where: annual payment means the amount payable to the person for the year under the income stream. deductible amount has the meaning given by subsection 9(1). 1099DAA Income from certain low-payment asset-tested income streams (1) If: (a) an income stream is an asset-tested income stream (long term) to which this Subdivision applies; and (b) either: (i) the income stream is an allocated pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994, or is any other pension determined, by legislative instrument, by the Minister; or (ii) the income stream is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the standards determined, by legislative instrument, by the Minister; and (c) one or more payments have been, or are to be, made under the income stream in respect of a period (the payment period) that: (i) consists of the whole or a part of a financial year; and (ii) begins on or after the income stream's commencement day; and (d) on a day in the payment period, the amount worked out using the formula in subsection (2) is less than the amount worked out using the formula in subsection (3); the annual rate of ordinary income of a person from the income stream on that day is worked out under subsection (3). Annual rate based on total payments (2) For the purposes of paragraph (1)(d), the formula in this subsection is: [pic] where: purchase price has the meaning given by subsection 9(1). relevant number has the meaning given by subsection 9(1). total payments means the payment, or the total of the payments, made, or to be made, under the income stream in respect of the payment period. Annual rate based on minimum amount (3) For the purposes of paragraph (1)(d), the formula in this subsection is: [pic] where: minimum amount means the minimum amount calculated in accordance with the method determined, by legislative instrument, by the Minister for the purposes of this definition. purchase price has the meaning given by subsection 9(1). relevant number has the meaning given by subsection 9(1). Exception-income stream's commencement day happens in June (4) If: (a) the income stream's commencement day happens in June; and (b) no payment is made under the income stream for the financial year in which the commencement day happens; subsections (2) and (3) do not apply in working out the annual rate of ordinary income of the person from the income stream on a day in that financial year. Subdivision C-Family law affected income streams 1099DA Scope of Subdivision This Subdivision applies to family law affected income streams. 1099DB Income from asset-test exempt income streams (1) For the purpose of working out the annual rate of ordinary income of a person from an asset-test exempt income stream to which this Subdivision applies, the person is taken to receive from that income stream each year: (a) if the income stream is not a defined benefit income stream-the amount determined by the Secretary under this paragraph; or (b) if the income stream is a defined benefit income stream-the amount determined by the Secretary under this paragraph. (2) In making a determination under paragraph (1)(a) or (b), the Secretary must comply with any relevant decision-making principles in force under section 1099DD. 1099DC Income from asset-tested income stream (long term) (1) For the purpose of working out the annual rate of ordinary income of a person from an asset-tested income stream (long term) to which this Subdivision applies, the person is taken to receive from that income stream each year: (a) if the income stream is not a defined benefit income stream-the amount determined by the Secretary under this paragraph; or (b) if the income stream is a defined benefit income stream-the amount determined by the Secretary under this paragraph. (2) In making a determination under paragraph (1)(a) or (b), the Secretary must comply with any relevant decision-making principles in force under section 1099DD. 1099DD Decision-making principles The Secretary may, by legislative instrument, formulate principles (decision-making principles) to be complied with by him or her in making decisions under: (a) paragraph 1099DB(1)(a); or (b) paragraph 1099DB(1)(b); or (c) paragraph 1099DC(1)(a); or (d) paragraph 1099DC(1)(b). Division 1D-Aged care accommodation bonds: certain transactions before 6 November 1997 1099E Scope of Division (1) This Division applies to a person if: (a) at any time from the beginning of 1 October 1997 until the end of 5 November 1997, the person became liable to pay an accommodation bond for entry to a residential care service; and (b) either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44-8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry; and (c) the person later made an agreement (a refund agreement) with the provider of the service that the person's liability to pay an accommodation bond for the entry was to be replaced with a liability to pay an accommodation charge for the entry, and that any payment of any of the bond was to be refunded to the person. Note: For accommodation bond, accommodation charge and charge exempt resident, see subsection 11(1). (2) This Division also applies to a person if the Secretary is satisfied that: (a) on or before 5 November 1997, the person sold his or her principal home for the sole or principal purpose of raising money to pay an accommodation bond for entry to a residential care service; and (b) either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44-8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry. Note: For accommodation bond, accommodation charge and charge exempt resident, see subsection 11(1). (3) This Division also applies to the partner of a person covered by subsection (1) or (2) (even if the person so covered is now deceased). (4) For the purposes of subsection (2), the time at which a person sells his or her home is the time when he or she comes under a legal obligation to transfer the home to the buyer. 1099F Exempt bond amount does not count as income The person's exempt bond amount (see section 1099H) does not count as income of the person for the purposes of this Act. Note: Income is otherwise defined in section 8. 1099G Person's ordinary income reduced using financial asset rules (1) For the purposes of this section, assume that the person's exempt bond amount (see section 1099H) were a financial asset of the person. (2) The person's ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (Deemed income from financial assets). 1099G(3) In working out that reduction, assume that the total value of the person's financial assets exceeded the person's deeming threshold (deeming threshold is a term used in Division 1B). 1099H Meaning of exempt bond amount (1) The following is how to work out a person's exempt bond amount. (2) If the person is covered by subsection 1099E(1) (but not subsection 1099E(2)), the person's exempt bond amount is any amount of accommodation bond payment refunded to the person under the refund agreement mentioned in that subsection. (3) If the person is covered by subsection 1099E(2) (but not subsection 1099E(1)), the person's exempt bond amount is the gross proceeds of the sale mentioned in that subsection, less: (a) any costs incurred in the course of the sale; and (b) the amount of any debt the person or the person's partner owed immediately before the sale, so far as the debt was secured by the home at that time. (4) If the person is covered by both subsections 1099E(1) and (2), the person's exempt bond amount is the greater of the 2 amounts worked out under subsections (2) and (3) of this section. (5) If the person is covered by subsection 1099E(3), the person's exempt bond amount is equal to the exempt bond amount of the person's partner, as worked out under subsection (2), (3) or (4) of this section. (6) But in all of the above cases, if the person currently has a partner (who is not deceased), the person's exempt bond amount is half of what it would otherwise be. Division 1E-Refunds to charge exempt residents 1099J Scope of Division (1) This Division applies to an amount (the refunded amount) that is refunded as mentioned in paragraph 56-1(kc) or 56-3(ic) of the Aged Care Act 1997 to a person because the person is or was a charge exempt resident. Note: For charge exempt resident, see subsection 11(1). (2) This Division also applies to an amount (also called the refunded amount) that is paid to a person under paragraph 44- 8A(6)(b) of that Act because the person is or was a charge exempt resident. Note: For charge exempt resident, see subsection 11(1). (3) To avoid doubt, this Division does not apply if the amount is paid to the person's estate or to any other person. 1099K Refunded amount does not count as income The refunded amount does not count as income of the person for the purposes of this Act. Note: Income is otherwise defined in section 8. 1099L Person's ordinary income reduced using financial asset rules (1) For the purposes of this section, assume that the refunded amount were a financial asset of the person. (2) The person's ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (Deemed income from financial assets). (3) In working out that reduction, assume that the total value of the person's financial assets exceeded the person's deeming threshold (deeming threshold is a term used in Division 1B). 1099M Application of Division This Division applies in relation to a person who is a charge exempt resident at any time, whether before or after the commencement of the Division. Division 2-Conversion of foreign currency amounts 1100 How value of a payment received in a foreign currency is to be determined (1) If: (a) the rate of a payment to be made to a person under this Act is being worked out for a calculation day; and (b) an amount received by the person in a foreign currency needs to be taken into account in working out the rate; the value in Australian currency of the amount received is to be determined in accordance with this section. (2) Except in the case of: (a) amounts received in a foreign currency in respect of which the Secretary determines that it is not appropriate for this subsection to apply; or (b) a payment, or class or kind of payments, received in a foreign currency, being a payment or a class or kind of payments in respect of which the Secretary determines that it is not appropriate for this subsection to apply; the value in Australian currency of the amount received is to be calculated using the appropriate market exchange rate for the foreign currency on the fifth business day before the calculation day. (3) For the purposes of subsection (2), the appropriate market exchange rate on a particular day for a foreign currency to which subsection (2) applies is: (a) if there is an on-demand airmail buying rate for the currency available at the Commonwealth Bank of Australia at the start of business in Sydney on that day and the Secretary determines it is appropriate to use that rate-that rate; or (b) in any other case: (i) if there is another rate of exchange for the currency, or there are other rates of exchange for the currency, available at the Commonwealth Bank of Australia at the start of business in Sydney on that day and the Secretary determines it is appropriate to use the other rate or one of the other rates- the rate so determined; or (ii) otherwise-a rate of exchange for the currency available from another source at the start of business in Sydney on that day that the Secretary determines it is appropriate to use. (4) In the case of a foreign currency or a payment in a foreign currency in respect of which the Secretary has determined that it is not appropriate for subsection (2) to apply, the value in Australian currency of the amount received is to be calculated using a rate of exchange that the Secretary determines to be appropriate. (5) The Secretary may make written determinations for the purposes of this section. (6) In this section: business day means a day other than: (a) a Saturday; or (b) a Sunday; or (c) a day that is a public holiday or bank holiday in Canberra or Sydney. calculation day means the first business day for each month. month means one of the 12 months of the calendar year. 1100A Determining value of a payment originally denominated in a foreign currency but made in Australian currency (1) This section applies if, for the purposes of working out for a calculation day the rate of a payment to be made to a person under this Act, it is necessary to take account of a payment (the foreign payment): (a) that the person received from a source overseas; and (b) that was originally denominated in a foreign currency but was received by the person in Australian currency. (2) For those purposes, the value in Australian currency of the foreign payment is taken to be the value that would have been determined under section 1100 had the person received the foreign payment in the foreign currency. (3) Subsection (2) has effect regardless of the amount of the foreign payment actually received by the person in Australian currency. (4) In this section: calculation day has the same meaning as in section 1100. Division 3-Disposal of ordinary income 1106 Disposal of ordinary income (1) For the purposes of this Act, a person disposes of ordinary income of the person if: (a) the person engages in a course of conduct that directly or indirectly: (i) destroys the source of the income; or (ii) disposes of the income or the source of the income; or (iii) diminishes the income; and (b) one of the following subparagraphs is satisfied: (i) the person receives no consideration in money or money's worth for the destruction, disposal or diminution; (ii) the person receives inadequate consideration in money or money's worth for the destruction, disposal or diminution; (iii) the Secretary is satisfied that the person's purpose, or the person's dominant purpose, in engaging in that course of conduct was to obtain a social security advantage. (2) For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of: (a) obtaining, or enabling the person's partner to obtain, a social security pension a social security benefit, a youth training allowance, a service pension or income support supplement; or (b) obtaining, or enabling the person's partner to obtain, a social security pension a social security benefit, a youth training allowance, a service pension or income support supplement at a higher rate than that which would otherwise have been payable; or (c) ensuring that the person or the person's partner would be qualified for fringe benefits for the purposes of this Act or the Veterans' Entitlements Act. (3) Paragraph (1)(a) does not apply if: (a) the source of the income is a deprived asset, or (b) the income is earned, derived or received from a transaction involving a deprived asset. Note: for amount of disposition see section 1107. 1107 Amount of disposition If a person disposes of ordinary income, the amount of the disposition is the amount that, in the Secretary's opinion, is: (a) if the person receives no consideration for the destruction, disposal or diminution-the annual rate of the diminution of the income because of the destruction, disposal or diminution; or (b) if the person receives consideration for the destruction, disposal or diminution-the annual rate of the diminution of the income because of the destruction, disposal or diminution less the part (if any) of the consideration that the Secretary considers to be fair and reasonable in all the circumstances of the case. 1108 Disposal of ordinary income-individuals If a person who is not a member of a couple has disposed of ordinary income of the person, the amount of that disposition is to be included in the person's ordinary income for the purposes of this Act. Note 1: for disposes of ordinary income see section 1106. Note 2: for amount of disposition see section 1107. Note 3: for ordinary income see subsection 8(1): ordinary income includes investment income but does not include maintenance income. 1109 Disposal of ordinary income-members of couples (1) Subject to subsections (1A), (1B), (2), (3) and (4), if a person who is a member of a couple has disposed of ordinary income of the person: (a) 50% of the amount of the disposition is to be included in the person's ordinary income; and (b) 50% of the amount of the disposition is to be included in the person's partner's ordinary income. Note 1: for disposes of ordinary income see section 1106. Note 2: for amount of disposition see section 1107. (1A) Subject to subsection (3), for the purposes of the application of this Act in relation to a person's rate of social security benefit, if: (a) a person who is a member of a couple has disposed of ordinary income of the person; and (b) the amount of the disposition is not greater than the least amount that, if added to the person's ordinary income (disregarding this section), would cause the person's rate of benefit to be reduced to nil; the amount of the disposition is to be included in the person's ordinary income. (1B) Subject to subsection (3), for the purposes of the application of this Act in relation to a person's rate of social security benefit, if: (a) a person who is a member of a couple has disposed of ordinary income of the person; and (b) the amount of the disposition is greater than the least amount that, if added to the person's ordinary income (disregarding this section), would cause the person's rate of benefit to be reduced to nil; then: (c) the second of the amounts referred to in paragraph (b) is to be included in the person's ordinary income; and (d) the difference between the 2 amounts referred to in paragraph (b) is to be included in the person's partner's ordinary income. (2) If: (a) amounts are included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person's partner's ordinary income because the person has disposed of ordinary income; and (b) the person and the person's partner cease to be members of the same couple; any amount that was included in the ordinary income of the person's former partner because of the disposition is to be included in the person's ordinary income. (3) If: (a) amounts are included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person's partner's ordinary income because the person has disposed of ordinary income; and (b) the person dies; no amount is to be included in the ordinary income of the person's partner because of the disposition. (4) If: (a) an amount is included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person's partner's ordinary income because the person has disposed of ordinary income; and (b) the person's partner dies; any amount that would, if the person's partner had not died, be included in the ordinary income of the person's partner because of the disposition is to be included in the person's ordinary income. Note: for ordinary income see subsection 8(1): ordinary income includes investment income but does not include maintenance income. 1111 Dispositions more than 5 years old to be disregarded This Division does not apply to a disposition of ordinary income that took place: (a) more than 5 years before the time when: (i) the person who disposed of the ordinary income; or (ii) if the person who disposed of the ordinary income was, at the time of disposition, a member of a couple-the person's partner; became qualified for a social security pension; or (b) less than 5 years before the time referred to in paragraph (a) and before the time when the Secretary is satisfied that the person who disposed of the ordinary income could reasonably have expected that the person or the person's partner would become qualified for such a pension. Part 3.12-General provisions relating to the assets test Division 1-Value of person's assets 1118 Certain assets to be disregarded in calculating the value of a person's assets (1) In calculating the value of a person's assets for the purposes of this Act (other than sections 198F to 198MA (inclusive), Division 1B of Part 3.10, Division 2 and sections 1133 and 1135A), disregard the following: (a) if the person is not a member of a couple-the value of any right or interest of the person in the person's principal home that is a right or interest that gives the person reasonable security of tenure in the home; (b) if the person is a member of a couple-the value of any right or interest of the person in one residence that is the principal home of the person, of the person's partner or of both of them that is a right or interest that gives the person or the person's partner reasonable security of tenure in the home; (c) the value of any life interest of the person other than: (i) a life interest in the principal home of the person, of the person's partner or of both of them; or (ii) a life interest created by the person, by the person's partner or by both of them; or (iii) a life interest created on the death of the person's partner; (d) the value of any asset-test exempt income stream of the person, other than a partially asset-test exempt income stream; (da) half of the value of any partially asset-test exempt income stream of the person; (e) any amount that is: (i) received by the person within the immediately preceding period of 90 days; and (ii) is excluded from the definition of income in subsection 8(1) by subsection 8(4) or (5); (f) the value of the person's investment in: (i) a superannuation fund; or (ii) an approved deposit fund; or (iii) a deferred annuity; or (iv) an ATO small superannuation account; until the person: (v) reaches pension age; or (vi) starts to receive a pension or annuity out of the fund; (fa) the value of the person's investment in an FHSA (within the meaning of the First Home Saver Accounts Act 2008); (g) if: (i) the person has a granny flat interest in the person's principal home; and (ii) the granny flat interest gives the person reasonable security of tenure in the home; and (iii) the person acquired or retained the granny flat interest before 22 August 1990; the value of the granny flat interest; (ga) if: (i) the person has a granny flat interest in the person's principal home; and (ii) the person is a person to whom subsection 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2) or 1157(2) applies; the value of the granny flat interest; Note: a person described in subparagraph (ii) will have acquired or retained the granny flat interest on or after 22 August 1990 (see section 1145A). (gb) if: (i) the person is a sale leaseback resident; and (ii) the person is a person to whom subsection 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2) or 1157(2) applies; the value of any right or interest of the person in the sale leaseback home; (h) the value of any contingent, remainder or reversionary interest of the person (other than an interest created by the person, by the person's partner or by both of them); (j) the value of any assets (other than a contingent, remainder or reversionary interest) to which the person is entitled from the estate of a deceased person but which has not been, and is not able to be, received; (k) the value of any medal or other decoration awarded (whether to the person or another person) for valour that is owned by the person otherwise than for the purposes of investment or a hobby; (m) the value of: (i) any cemetery plot acquired by the person for the burial of the person or the person's partner; and (ii) any funeral expenses paid in advance by the person in respect of the funeral of the person or the person's partner; (ma) an amount invested in an exempt funeral investment and any return on the investment; (n) if: (i) personal property of the person is designed for use by a disabled person; and (ii) the person, the person's partner, a dependent child of the person or a dependent child of the person's partner is disabled; the value of the property; (p) if: (i) personal property of the person is modified so that it can be used by a disabled person; and (ii) the person, the person's partner, a dependent child of the person or a dependent child of the person's partner is disabled; the part of the value of the property that is attributable to the modifications; (q) if the person is provided with a motor vehicle under the scheme administered by the Commonwealth known as the gift car scheme- the value of that motor vehicle; (r) if the person has sold a residence that was the principal home of the person on terms and has purchased, also on terms, another residence that is the principal home of the person-so much of the balance due to the person in respect of the sale as will be applied by the person in respect of the purchase of the other residence; (s) the amount of any insurance or compensation payments received by the person because of the loss of or damage to buildings, plant or personal effects within the immediately preceding 12 months or such longer period as the Secretary determines for any special reason for a particular payment; (sa) if subsection (1AB) applies (application of insurance etc. payments to rebuilding etc.)-the amount worked out under that subsection, during the period mentioned in subsection (1AC); (t) the value of any native title rights and interests of the person, or of a community or group of which the person is a member; (u) the amount of any accommodation bond balance in respect of an accommodation bond paid by the person. Note 1: for granny flat interest see subsection 12A(2). Note 2: for principal home see section 11A. Note 3: for reasonable security of tenure see subsection 11A(10). Note 4: for exempt funeral investment see section 19E. Application of insurance etc. payments to rebuilding etc. (1AA) Subsection (1AB) applies if: (a) a person receives any insurance or compensation payments because of loss of or damage to a building (including the person's principal home) or plant; and (b) either: (i) if the building or plant was lost-the person applies the whole or a part of those payments to build another building or plant to replace the building or plant that was lost; or (ii) if the building or plant was damaged-the person applies the whole or a part of those payments to rebuild, repair or renovate the building or plant. (1AB) For the purposes of paragraph (1)(sa), the amount that may be disregarded is: (a) the value of the building or plant that is being built, rebuilt, repaired or renovated, to the extent that those payments are so applied; and (b) if a building whose value is being disregarded under paragraph (a) of this subsection is to be the person's principal home: (i) the value of the land on which the building is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person's principal home, the land will, under section 11A, be included in a reference to the principal home; and (ii) the value of any other structure, on that land, that is to be the person's principal home to the extent that the structure was built before the person began applying the payments. (1AC) For the purposes of paragraph (1)(sa), the amount worked out under subsection (1AB) may be disregarded during the period: (a) beginning when the payments are received; and (b) ending at the earlier of the following times: (i) 12 months, or such longer period as the Secretary determines for any special reason, after that time; (ii) when the building, rebuilding, repair or renovation of the building or plant is complete. Definitions (1A) In this section: native title rights and interests means: (a) native title rights and interests within the meaning of section 223 of the Native Title Act 1993; (b) any rights and interests of a similar nature under any law of a State, a Territory or a foreign country (whether or not the rights and interests relate to land or waters outside Australia); but, to avoid any doubt, does not include any right or interest in a lease or licence, or in a freehold estate. partially asset-test exempt income stream means: (a) an asset-test exempt income stream that: (i) is an income stream (other than a defined benefit income stream) covered by subsection 9A(1) or (1A), 9B(1) or 9BA(1); and (ii) has a commencement day during the period from 20 September 2004 to 19 September 2007 (both dates inclusive); and (iii) is not covered by principles (if any) determined for the purposes of this subparagraph, by legislative instrument, by the Secretary; or (b) an income stream that: (i) has a commencement day happening on or after 20 September 2007; and (ii) is covered by principles determined for the purposes of this subparagraph, by legislative instrument, by the Secretary. Application of proceeds of sale of principal home (1B) Subsection (2) applies if: (a) a person sells the person's principal home; and (b) either: (i) the person does not have a right or interest in a principal home; or (ii) the person has a right or interest in a principal home that the Secretary is satisfied does not give the person reasonable security of tenure in the home; and (c) before the end of 12 months, or any longer period determined under subsection (2B), after the sale, one or more of the following applies: (i) the person intends to apply the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person's principal home; (ii) the person applies the whole or a part of the proceeds of the sale to build, rebuild, repair or renovate another residence that is to be the person's principal home; (iii) the person intends to apply the whole or a part of the proceeds of the sale to purchase another residence that is to be the person's principal home. (2) For the purposes of this Act (other than Division 1B of Part 3.10): (a) if subparagraph (1B)(c)(i) applies-disregard the proceeds, to the extent that the person intends to apply those proceeds to build, rebuild, repair or renovate the other residence, until the earlier of the following times: (i) the period mentioned in paragraph (1B)(c) ends; (ii) the Secretary becomes satisfied that the person has ceased to have that intention; or (b) if subparagraph (1B)(c)(ii) applies-disregard the value of the following, until the end of the period mentioned in paragraph (1B)(c), to the extent that the person applies those proceeds to build, rebuild, repair or renovate that other residence: (i) the value of the other residence; (ii) the value of the land on which the other residence is being built, rebuilt, repaired or renovated to the extent that, once the building becomes the person's principal home, the land will, under section 11A, be included in a reference to the principal home; (iii) the value of any other structure, on that land, that is to be the person's principal home to the extent that the structure was built before the person began applying those proceeds; or (c) if subparagraph (1B)(c)(iii) applies-disregard the proceeds, to the extent that the person intends to apply those proceeds to purchase the other residence, until the earlier of the following times: (i) the period mentioned in paragraph (1B)(c) ends; (ii) the Secretary becomes satisfied that the person has ceased to have that intention. (2A) Subsection (2) does not apply to the calculation of the value of a person's assets for the purposes of sections 198F to 198MA or 1123 to 1128 (disposal of assets). (2B) For the purposes of subsection (1B), the Secretary may determine, in writing, a period of up to 24 months if: (a) a person who has sold his or her principal home is making reasonable attempts to purchase, build, repair or renovate another residence; and (b) the person has been making those attempts within a reasonable period after selling the principal home; and (c) the person has experienced delays beyond his or her control in purchasing, building, repairing or renovating the other residence. Value of certain personal effects of less than $10,000 (3) For the purposes of this section, if: (a) the value of any assets of a person or, if the person is a member of a couple, of the person and the person's partner, that consists of the contents of a principal home and of other personal effects that are used primarily within the principal home does not exceed $10,000; and (b) the assets are used primarily for private or domestic purposes; the value of the assets is to be taken to be $10,000 unless the person satisfies the Secretary that the value of the assets is less than $10,000. This section subject to sections 1145A to 1157 (4) This section has effect subject to sections 1145A to 1157 (special residences). 1118B Value of superannuation investments determined by Minister to be disregarded (1) The value of a person's investment in a superannuation fund, an approved deposit fund, a deferred annuity or an ATO small superannuation account is to be disregarded in calculating the value of the person's assets for the purposes of this Act (other than section 198H, 198HA, 198HB, 198J, 198JA, 198JB, 198K or 198L, subparagraph 263(1)(d)(iv), Division 1B of Part 3.10, or section 1124A, 1125, 1125A, 1126, 1133 or 1135A) if the investment is specified in a determination made under subsection (2). (2) The Minister may specify: (a) a specified investment in a superannuation fund, an approved deposit fund, a deferred annuity or an ATO small superannuation account; or (b) a specified class of investments in a superannuation fund, an approved deposit fund, a deferred annuity or an ATO small superannuation account; in a determination for the purpose of subsection (1). (3) A determination under subsection (2) must be in writing. (4) A determination under subsection (2) takes effect on the day on which it is made or on such other day (whether earlier or later) as is specified in the determination. 1118AA Value of assets reduced by amounts received from Mark Fitzpatrick Trust (1) In this section: application day, in relation to a person who was a recipient of a social security payment immediately before 28 September 1995, means the day, on or after that date, on which the person applied or applies for review of the rate of that social security payment because of the expected enactment, or the operation, of this section. (2) Subject to subsection (3), the value of a person's assets for the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126) is reduced by the sum of any amounts received by the person from the Mark Fitzpatrick Trust. (3) Subsection (2) has effect, or is taken to have had effect, as the case may be: (a) for a person who was a recipient of a social security pension immediately before 28 September 1995-on the first pension payday after the application day; or (b) for a person who was a recipient of a social security payment other than a social security pension immediately before 28 September 1995-on the next day, after the application day, on which the person received or receives an instalment of the payment; or (c) for a person who became or becomes a recipient of a social security payment on or after 28 September 1995-on the day on which the person received or receives the first instalment of the payment. 1118AB Value of person's assets reduced: certain transactions to do with aged care accommodation bonds (1) This section applies to a person if Division 1D of Part 3.10 applies to the person. (2) For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person's assets is reduced by the person's exempt bond amount (as defined by section 1099H). 1118AC Value of person's assets reduced: refunds to charge exempt residents (1) This section applies to a person if Division 1E of Part 3.10 applies to the person. (2) For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person's assets is reduced by the refunded amount (as defined by section 1099J). 1119 Value of asset-tested income streams that are not defined benefit income streams (1) This section applies to a person's asset-tested income stream if it is not a defined benefit income stream and it is not a family law affected income stream. Note: For defined benefit income streams see section 1120. (2) The value of the income stream is, for the purposes of the assets test, worked out: (a) if the person receives payments from the income stream 2 or more times a year-in relation to each 6 month period of the income stream's term; and (b) if the person receives a payment from the income stream only once a year-in relation to each 12 month period of the income stream's term. (3) If the income stream has an account balance, the value of the income stream, for the purposes of the assets test, is the value of the account balance at the beginning of the 6 month or 12 month period (as the case requires) referred to in subsection (2). (4) If the income stream does not have an account balance, the value of the income stream is, for the purposes of the assets test, worked out as follows: [pic] where: purchase price has the meaning given by subsection 9(1). relevant number has the meaning given by subsection 9(1). residual capital value has the meaning given by subsection 9(1). term elapsed is the number of years of the term that have elapsed since the commencement day of the income stream, rounded down: (a) in the case of an income stream referred to in paragraph (2)(a)- to the nearest half-year; and (b) in the case of an income stream referred to in paragraph (2)(b)- to the nearest whole year. Example: Sally is 65 years old and single. She purchases a 10 year annuity for $150,000 with a residual capital value of $20,000. Her total annual annuity payment is $18,337. Monthly payments commence on 1 January. Her assessable asset for the first six months will be: [pic] Her assessable asset after 30 June in that year will be: [pic] 1120 Value of asset-tested income streams that are defined benefit income streams (1) This section applies to a person's asset-tested income stream if it is a defined benefit income stream and it is not a family law affected income stream. (2) The value of the income stream is, for the purposes of the assets test, worked out in relation to each 12 month period of the income stream's term. (3) The value of the income stream is, for the purposes of the assets test, worked out as follows: [pic] where: annual payment means the amount payable to the person for the relevant 12 month period under the income stream. pension valuation factor means the pension valuation factor that applies to the person in accordance with the determination made, by legislative instrument, by the Minister for the purposes of this section. 1120A Value of asset-tested FLA income streams (1) This section applies to family law affected income streams. (2) The value of an income stream that is not a defined benefit income stream is, for the purposes of the assets test, determined by the Secretary. (3) The value of an income stream that is a defined benefit income stream is, for the purposes of the assets test, determined by the Secretary. (4) In making a determination under subsection (2) or (3), the Secretary must comply with any relevant decision-making principles in force under subsection (5). (5) The Secretary may, by legislative instrument, formulate principles (decision-making principles) to be complied with by him or her in making decisions under: (a) subsection (2); or (b) subsection (3). 1120B Value of partially asset-test exempt income streams (1) This section applies to income streams covered by paragraph 1118(1)(da). (2) The value of such an income stream is, for the purposes of paragraph 1118(1)(da), worked out as follows: (a) if the income stream is a family law affected income stream- under section 1120A; (b) otherwise-under section 1119; as if the income stream were an asset-tested income stream to which that section applied. 1120C Value of superannuation reserves for superannuation funds of 4 members or less (1) This section applies in calculating the value of a person's investment in a superannuation fund if: (a) the fund has 4 or fewer members; and (b) the fund has reserves (within the meaning of section 115 of the Superannuation Industry (Supervision) Act 1993). Note: The value of a person's investment in a superannuation fund is only included in the value of the person's assets after the person reaches pension age or starts to receive a pension or annuity out of the fund (see paragraph 1118(1)(f)). (2) Despite paragraph 1118(1)(h), the value of the person's investment in the superannuation fund includes the following amount: [pic] (3) However, if it is not possible to work out the person's interest in the superannuation fund, the value of the person's investment in the fund includes the following amount: [pic] 1121 Effect of charge or encumbrance on value of assets (1) If there is a charge or encumbrance over a particular asset of the person, the value of the asset, for the purposes of calculating the value of the person's assets for the purposes of this Act (other than Division 1B of Part 3.10), is to be reduced by the value of that charge or encumbrance. Note: this section does not apply to an asset to which section 1121A (primary production assets) applies. (2) Subsection (1) does not apply to a charge or encumbrance over an asset of a person to the extent that: (a) the charge or encumbrance is a collateral security; or (b) the charge or encumbrance was given for the benefit of a person other than the person or the person's partner. (3) Subsection (1) does not apply to a charge or encumbrance over assets that are to be disregarded under section 1118. (3A) Subsection (1) does not apply to an asset that is an asset- tested income stream (long-term). (3B) Subsection (1) does not apply to an asset that is a partially asset-test exempt income stream (within the meaning of section 1118). (4) If: (a) there is a charge or encumbrance over assets; and (b) the charge does not arise under section 1138; and (c) the assets consist of assets whose value is to be disregarded under section 1118 and other assets; the amount to be deducted under subsection (1) is: [pic] (6) This section has effect subject to sections 1145A to 1157 (special residences). 1121A Effect of certain liabilities on value of assets used in primary production (1) For the purposes of working out the value of a person's assets under this Act, if: (a) the person is: (i) a primary producer; or (ii) a family member of a primary producer; and (b) the person has assets (including real property) that are, in the Secretary's opinion, used for the purposes of carrying on that primary production; and (c) the person also has liabilities that are, in the Secretary's opinion, related to the carrying on of the primary production; then: (d) section 1121 does not apply in relation to the assets referred to in paragraph (b); and (e) those assets are taken to be a single asset (in this section called the primary production asset); and (f) the value of that single asset is worked out under subsection (2). Note: for family member see subsection 23(1). (2) The value of a person's primary production asset is worked out in the following way: Method statement Step 1. Add together the value of the assets referred to in paragraph (1)(b): the result is called the unencumbered value. Step 2. Add together the value of the liabilities referred to in paragraph (1)(c): the result is called the total liability. Step 3. Take the total liability away from the unencumbered value: the result is the value of the person's primary production asset. (3) If the result under Step 3 of the Method statement is less than nil, the value of the primary production asset is taken to be nil. 1122 Loans If a person lends an amount after 27 October 1986, the value of the assets of the person for the purposes of this Act includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan. Division 2-Disposal of assets 1123 Disposal of assets (1) For the purposes of this Act, a person disposes of assets of the person if: (a) the person engages in a course of conduct that directly or indirectly: (i) destroys all or some of the person's assets; or (ii) disposes of all or some of the person's assets; or (iii) diminishes the value of all or some of the person's assets; and (b) one of the following subparagraphs is satisfied: (i) the person receives no consideration in money or money's worth for the destruction, disposal or diminution; (ii) the person receives inadequate consideration in money or money's worth for the destruction, disposal or diminution; (iii) the Secretary is satisfied that the person's purpose, or the dominant purpose, in engaging in that course of conduct was to obtain a social security advantage. Note 1: If Part 3.14A or 3.14B applies in relation to the transfer by a person of a qualifying interest or an eligible interest in a farm or relevant farm asset, that transfer and certain transfers by the person's partner are taken not to be disposal of assets (see sections 1185D and 1185T). Note 2: Under Division 4 of Part 2.24, certain transfers of assets to special disability trusts can be taken not to be disposals of the assets (but this can be subject to a limit on the aggregate value of the transfers). (2) For the purposes of subsection (1), a person has a purpose of obtaining a social security advantage if the person has a purpose of: (a) obtaining a social security pension, a social security benefit, a parenting allowance, a service pension or an income support supplement or enabling the person's partner or someone else of whom the person is a family member to obtain such a pension, benefit, allowance or supplement, or a youth training allowance; or (b) obtaining a social security pension, a social security benefit, a parenting allowance, a service pension or an income support supplement, or enabling the person's partner to obtain such a pension, benefit, allowance or supplement, or a youth training allowance, at a higher rate than would have otherwise been payable; or (c) ensuring that the person or the person's partner would be qualified for fringe benefits for the purposes of this Act or the Veterans' Entitlements Act. (3) For the purposes of subsection (1), the value of a person's granny flat interest is to be taken not to be consideration received by the person if the interest was acquired or retained before 22 August 1990. Note: for granny flat interest see subsection 11(9). (4) If, under subsection 1147(1A), the value of a granny flat interest is less than the amount paid, or agreed to be paid, for the interest, then, for the purposes of this section, so much of the amount paid, or agreed to be paid, as exceeds the value of the interest is not consideration for the interest. Note: for granny flat interest see subsection 11(9). 1124 Amount of disposal or disposition If a person disposes of assets, the amount of the disposal or disposition is: (a) if the person receives no consideration for the destruction, disposal or diminution-an amount equal to: (i) the value of the assets that are destroyed; or (ii) the value of the assets that are disposed of; or (iii) the amount of the diminution in the value of the assets whose value is diminished; or (b) if the person receives consideration for the destruction, disposal or diminution-an amount equal to: (i) the value of the assets that are destroyed; or (ii) the value of the assets that are disposed of; or (iii) the amount of the diminution in the value of the assets whose value is diminished; less the amount of the consideration received by the person in respect of the destruction, disposal or diminution. Note: If subsection 1209ZA(2) applies in relation to the transfer of an asset to a special disability trust, that subsection has the effect of reducing the amount of the disposal or disposition. 1124A Disposal of assets in pre-pension years-individuals (1A) This section applies only to disposals of assets that took place before 1 July 2002. (1) If: (a) a person is not a member of a couple when the person claims a pension, benefit or payment of a kind referred to in subsection 11(10A); and (b) the person has, during a pre-pension year of the person, disposed of an asset of the person; and (c) the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pre-pension year, exceeds the disposal limit; then, for the purposes of determining whether a pension, benefit or payment is payable to the person, there is to be included in the value of the person's assets for the period of 5 years that starts on the day on which the disposition took place: (d) the amount by which the sum of the amount of the first- mentioned disposition of assets and of the amounts (if any) of other dispositions of assets previously made by the person during that pre-pension year exceeds the disposal limit; or (e) the amount of the first-mentioned disposition; whichever is the lesser amount. Note 1: for disposes of assets see section 1123. Note 2: for amount of disposition see section 1124. Note 4: if a pension or benefit is payable to the person, section 1125 operates to determine the rate of payment and section 1124A ceases to apply to the person. (3) In this section: disposal limit means: (a) in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991-$2,000; and (b) in relation to assets disposed of on or after 1 March 1991-$10,000. 1125 Disposal of assets in pension years-individuals (1) If, on or after 1 March 1986 and before 1 July 2002: (a) a person who is not a member of a couple has, during a pension year of the person, disposed of an asset of the person; and (b) the amount of that disposition, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit; then, for the purposes of this Act, there is to be included in the value of the person's assets for the period of 5 years that starts on the day on which the disposition takes place: (c) the amount by which the sum of the amount of the first- mentioned disposition of assets, and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds the disposal limit; or (d) the amount of the first-mentioned disposition; whichever is the lesser amount. Note 1: for disposes of assets see section 1123. Note 2: for amount of disposition see section 1124. (3) In this section: disposal limit means: (a) in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991-$2,000; and (b) in relation to assets disposed of on or after 1 March 1991-$10,000. 1125A Disposal of assets in pre-pension years-members of couples (1A) This section applies only to disposals of assets that took place before 1 July 2002. (1) Subject to subsections (3), (4) and (5), if: (a) a person has disposed of an asset; and (b) the person is a member of a couple when the person or the person's partner claims a pension, benefit or payment of a kind referred to in subsection 11(10A) or when the person's partner claims a youth training allowance; and (c) the person disposed of the asset: (i) during a pre-pension year of the person; or (ii) if the person has not claimed a pension, benefit or payment of a kind referred to in subsection 11(10A) but the person's partner has claimed such a pension, benefit or payment or has claimed a youth training allowance-during a pre-pension year of the person's partner; and (d) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person or the person's partner during that pre- pension year, exceeds the disposal limit; then, for the purposes of determining whether a pension, benefit, payment or allowance is payable to the person: (e) there is to be included in the value of the person's assets for the period of 5 years that starts on the day on which the disposition took place: (i) 50% of the amount by which the sum of the amount of the first- mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person's partner during that pre-pension year exceeds the disposal limit; or (ii) 50% of the amount of the first-mentioned disposition; whichever is the lesser amount; and (f) there is to be included in the value of the assets of the person's partner for the period of 5 years that starts on the day on which the disposition took place: (i) 50% of the amount by which the sum of the amount of the first- mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person's partner during that pre-pension year exceeds the disposal limit; or (ii) 50% of the amount of the first-mentioned disposition; whichever is the lesser amount. Note 1: for disposes of assets see section 1123. Note 2: for amount of disposition see section 1124. Note 4: if a pension or benefit is payable to the person, section 1126 operates to determine the rate of payment and section 1125A ceases to apply to the person. (3) If: (a) amounts are included under subsection (1) in the value of a person's assets who is a member of a couple and in the assets of the person's partner because of a disposition of an asset by the person; and (b) the person and the person's partner cease to be members of the same couple; any amount that was included in the value of the person's former partner's assets because of that disposition is to be included in the value of the person's assets. (4) If: (a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person's partner because of a disposition of an asset by the person; and (b) the person dies; an amount is not to be included in the value of the assets of the person's partner because of that disposition. (5) If: (a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person's partner because of a disposition of an asset by the person; and (b) the partner dies; any amount that would, if the partner had not died, be included in the value of the partner's assets because of the disposition is to be included in the value of the person's assets. (6) In this section: disposal limit means: (a) in relation to assets disposed of on or after 1 March 1986 and before 1 March 1991-$4,000; and (b) in relation to assets disposed of on or after 1 March 1991-$10,000. 1126 Disposal of assets in pension years-members of couples (1) Subject to subsections (3) and (4), if, on or after 1 March 1986 and before 1 July 2002: (a) a person who is a member of a couple has disposed of an asset of the person: (i) during a pension year of the person; or (ii) if the person is not receiving a pension, benefit or payment of a kind referred to in subsection 11(10) but the person's partner is receiving such a pension, benefit or payment or is receiving a youth training allowance-during a pension year of the person's partner; and (b) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person or the person's partner during that pension year, exceeds disposal limit; then, for the purposes of this Act: (c) there is to be included in the value of the person's assets for the period of 5 years that starts on the day on which the disposition takes effect: (i) 50% of the amount by which the sum of the amount of the first- mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person's partner during the pension year exceeds disposal limit; or (ii) 50% of the amount of the first-mentioned disposition; whichever is the lesser amount; and (d) there is to be included in the value of the assets of the person's partner for the period of 5 years that starts on the day on which the disposition takes place: (i) 50% of the amount by which the sum of the amount of the first- mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the person or the person's partner during the pension year exceeds disposal limit; or (ii) 50% of the amount of the first-mentioned disposition; whichever is the lesser amount. Note 1: for disposes of assets see section 1123. Note 2: for amount of disposition see section 1124. (3) If: (a) amounts are included under subsection (1) in the value of a person's assets who is a member of a couple and in the assets of the person's partner because of a disposition of an asset by the person; and (b) the person and the person's partner cease to be members of the same couple; any amount that was included in the value of the person's former partner's assets because of that disposition is to be included in the value of the person's assets. (4) If: (a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person's partner because of a disposition of an asset by the person; and (b) the person dies; no amount is to be included in the value of the assets of the person's partner because of that disposition. (5) If: (a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person's partner because of a disposition of an asset by the person; and (b) the partner dies; any amount that would, if the partner had not died, be included in the value of the partner's assets because of the disposition is to be included in the value of the person's assets. (6) In this section: disposal limit means: (a) in relation to assets disposed on or after 1 March 1986 and before 1 March 1991-$4,000; and (b) in relation to assets disposed of on or after 1 March 1991-$10,000. 1126AA Disposal of assets in income year-individuals Disposals to which section applies (1) This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposal. Increase in value of assets (2) If the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person during the income year in which the relevant disposal took place, exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person's assets for the period of 5 years starting on the day on which the relevant disposal took place: (a) the amount of the relevant disposal; (b) the amount by which the sum of the amount of the relevant disposal and the amounts (if any) of other disposals of assets previously made by the person during the income year in which the relevant disposal took place, exceeds $10,000. Previous joint disposals (3) If, during the income year in which the relevant disposal took place but before the time of the relevant disposal, the person was a member of a couple who jointly disposed of an asset, a reference in subsection (2) to the amounts (if any) of other disposals of assets previously made by the person during that income year includes a reference to one-half of the amount of the joint disposal. 1126AB Disposals of assets in 5 year period-individuals Disposal to which section applies (1) This section also applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposal. Increase in value of assets (2) If: (a) the sum of the amount of the relevant disposal and the amounts of any previous disposals of assets made during the rolling period by the person; less (b) the sum of any amounts included in the value of the person's assets during the rolling period under section 1126AA, 1126AC or 1126AD or any previous application or applications of this section; exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person's assets for the period of 5 years starting on the day on which the relevant disposal took place: (c) an amount equal to the excess; (d) the amount of the relevant disposal. Previous joint disposals (3) If, during the rolling period but before the time of the relevant disposal, the person was a member of a couple who jointly disposed of an asset, the reference in paragraph (2)(a) to the amounts of any previous disposals of assets made during the rolling period by the person includes a reference to one-half of the amount of the joint disposal. Rolling period (4) For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002. 1126AC Disposal of assets in income year-members of couples Disposals to which section applies (1) If there is a disposal (the relevant disposal) on or after 1 July 2002 of an asset by: (a) a person who, at the time of the relevant disposal, is a member of a couple; or (b) the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph; subsection (2) has effect. Increase in value of assets (2) Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person, the person's partner, or the person and the person's partner, during the income year in which the relevant disposal took place (whether before or after they became members of the couple), exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place: (a) one-half of the amount of the relevant disposal; (b) one-half of the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the person, the partner, or the person and the partner, during the income year in which the relevant disposal took place, exceeds $10,000. Effect of ceasing to be member of couple (3) If, after the disposal referred to in paragraph (1)(a), the person and the person's partner cease to be members of the same couple: (a) no amount is to be included after the cessation in the value of the assets of the former partner because of that disposal; and (b) any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person. Effect of death of person (4) If, after the disposal referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person's partner because of that disposal. Effect of death of partner (5) If, after the disposal referred to in paragraph (1)(a), the person's partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposal is to be included in the value of the assets of the person. 1126AD Disposal of assets in 5 year period-members of couples Disposals to which section applies (1) If there is a disposal (the relevant disposal) on or after 1 July 2002 of an asset by: (a) a person who, at the time of the relevant disposal, is a member of a couple; or (b) the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph; subsection (2) has effect. Increase in value of assets (2) Subject to this section, if: (a) the sum of the amount of the relevant disposal and the amounts of any previous disposals of assets made during the rolling period by the person, the person's partner or the person and the person's partner; less (b) the sum of any amounts included in the value of the assets of the person or of the partner during the rolling period under section 1126AA, 1126AB or 1126AC or any previous application or applications of this section; exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place: (c) an amount equal to one-half of the excess; (d) one-half of the amount of the relevant disposal. Effect of ceasing to be member of couple (3) If, after the disposal referred to in paragraph (1)(a), the person and the person's partner cease to be members of the same couple: (a) no amount is to be included after the cessation in the value of the assets of the former partner because of that disposal; and (b) any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person. Effect of death of person (4) If, after the disposal referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person's partner because of that disposal. Effect of death of partner (5) If, after the disposal referred to in paragraph (1)(a), the person's partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposal is to be included in the value of the assets of the person. Rolling period (6) For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002. 1126A Disposal of assets in pre-pension year-family members (1A) This section applies only to disposals of assets that took place before 1 July 2002. (1) Subject to this section, if: (a) a person (the relevant person) has disposed of an asset; and (b) the relevant person is a family member of another person (the other person) when the other person claims a youth allowance; and (c) the relevant person disposed of the asset during a pre-pension year of the other person; and (d) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pre- pension year, exceeds $10,000; then, for the purpose of determining whether a youth allowance is payable to the other person, there is to be included in the value of the other person's assets for the period of 5 years that starts on the day on which the disposition took place: (e) the amount by which the sum of the amount of the first- mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pre-pension year exceeds $10,000; or (f) the amount of the first-mentioned disposition; whichever is the lesser amount. Note 1: For disposes of assets see section 1123. Note 2: For amount of disposition see section 1124. (2) If: (a) amounts are included under subsection (1) in the value of the other person's assets because of a disposition of an asset by the relevant person; and (b) the relevant person ceases to be a family member of the other person; any amount that was included in the value of the other person's assets because of the disposition ceases to be included in the value of those assets. (3) If: (a) an amount is included under subsection (1) in the value of the assets of the other person because of a disposition of an asset by the relevant person; and (b) the relevant person dies; any amount that was included in the value of those assets because of the disposition ceases to be included in the value of those assets. 1126B Disposal of assets in pension year-family members (1A) This section applies only to disposals of assets that took place before 1 July 2002. (1) Subject to this section, if: (a) a person (the relevant person) has disposed of an asset during a pension year of another person (the other person) of whom the relevant person is a family member; and (b) the other person is receiving youth allowance; and (c) the amount of that disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during that pension year, exceeds $10,000; then, for the purposes of this Act, there is to be included in the value of the other person's assets for the period of 5 years that starts on the day on which the disposition took place: (d) the amount by which the sum of the amount of the first- mentioned disposition and of the amounts (if any) of other dispositions of assets previously made by the relevant person or the other person during the pension year exceeds $10,000; or (e) the amount of the first-mentioned disposition; whichever is the lesser amount. Note 1: For disposes of assets see section 1123. Note 2: For amount of disposition see section 1124. (2) If: (a) amounts are included under subsection (1) in the value of the other person's assets because of a disposition of an asset by the relevant person; and (b) the relevant person ceases to be a family member of the other person; any amount that was included in the value of the other person's assets because of the disposition ceases to be included in the value of those assets. (3) If: (a) an amount is included under subsection (1) in the value of the assets of the other person because of a disposition of an asset by the relevant person; and (b) the relevant person dies; any amount that was included in the value of those assets because of the disposition ceases to be included in the value of those assets. 1126C Disposal of assets in income year-family members Disposals to which section applies (1) This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person (the relevant person) who is a family member of another person (the other person) who has claimed or is receiving a youth allowance. Increase in value of assets (2) Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the relevant person or the other person during the income year in which the relevant disposal took place, exceeds $10,000, then, for the purpose of determining whether a youth allowance is payable to the other person, the lesser of the following amounts is to be included in the value of the other person's assets for the period of 5 years starting on the day on which the relevant disposal took place: (a) the amount of the relevant disposal; (b) the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the relevant person or the other person during the income year in which the relevant disposal took place, exceeds $10,000. Effect of ceasing to be family member (3) If: (a) an amount is included under subsection (2) in the value of the other person's assets because of a disposal of an asset by the relevant person; and (b) the relevant person ceases to be a family member of the other person; any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets. Effect of death (4) If: (a) an amount is included under subsection (2) in the value of the other person's assets because of a disposal of an asset by the relevant person; and (b) the relevant person dies; any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets. 1126D Disposals of assets in 5 year period-family members Disposals to which section applies (1) This section applies to a disposal (the relevant disposal) on or after 1 July 2002 of an asset by a person (the relevant person) who is a family member of another person (the other person) who has claimed or is receiving youth allowance. Increase in value of assets (2) If: (a) the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets made during the rolling period by the relevant person or the other person; less (b) the sum of any amounts included in the value of the other person's assets during the rolling period under section 1126C or any previous application or applications of this section; exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the other person's assets for the period of 5 years starting on the day on which the relevant disposal took place: (c) an amount equal to the excess; (d) the amount of the relevant disposal. Effect of ceasing to be family member (3) If: (a) amounts are included under subsection (2) in the value of the other person's assets because of a disposal of an asset by the relevant person; and (b) the relevant person ceases to be a family member of the other person; any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets. Effect of death (4) If: (a) an amount is included under subsection (2) in the value of the other person's assets because of a disposal of an asset by the relevant person; and (b) the relevant person dies; any amount that was included in the value of those assets because of the disposal ceases to be included in the value of those assets. Rolling period (5) For the purposes of this section, the rolling period is the period comprising the income year in which the relevant disposal took place and such (if any) of the 4 previous income years as occurred after 30 June 2002. 1127 Disposition more than 5 years old to be disregarded This Division does not apply to a disposition of an asset that took place: (a) more than 5 years before the time when: (i) the person who disposed of the asset; or (ii) if that person was, at the time when the disposition took place, a member of a couple-the person's partner; or (iii) if that person was, at that time, a family member of another person who is receiving or claiming youth allowance and is not independent-the other person; became qualified for a social security pension or a social security benefit; or (b) less than 5 years before the time referred to in paragraph (a) and before the time when the Secretary is satisfied that the person who disposed of the asset could reasonably have expected that the person, the person's partner or the other person, as the case may be, would become qualified for such a pension or benefit. 1127A Division does not apply for purposes of care receiver assets test This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test). Division 3-Financial hardship 1129 Access to financial hardship rules-pensions (1) If: (a) either: (i) a social security pension is not payable to a person because of the application of an assets test; or (ii) a person's social security pension rate is determined by the application of an assets test; and (b) either: (i) sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC and 1126AD (disposal of assets) do not apply to the person; or (ii) the Secretary determines that the application of those sections to the person should, for the purposes of this section, be disregarded; and (c) the person, or the person's partner, has an unrealisable asset; and (d) the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and (e) the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person; the Secretary must determine that this section applies to the person. Note 1: For social security pension see subsection 23(1). Note 2: for unrealisable asset see subsections 11(12) and (13). (1A) In subsection (1): social security pension does not include a pension PP (single). Note: Financial hardship rules for pension PP (single) are contained in sections 1130B and 1130C. (2) A decision under subsection (1) takes effect: (a) on the day on which the request under paragraph (1)(d) was lodged with the Department; or (b) if the Secretary so decides in the special circumstances of the case-on a day not more than 6 months before the day referred to in paragraph (a). 1130 Application of financial hardship rules-pensions Value of unrealisable asset to be disregarded (1) If section 1129 applies to a person, the value of: (a) any unrealisable asset of the person; and (b) any unrealisable asset of the person's partner; is to be disregarded in working out the person's social security pension rate. Deduction from social security pension maximum payment rate (2) If section 1129 applies to a person, there is to be deducted from the person's social security pension maximum payment rate an amount equal to the person's adjusted annual rate of ordinary income. Adjusted annual rate of ordinary income (3) A person's adjusted annual rate of ordinary income is an amount per year equal to the sum of: (a) the person's annual rate of ordinary income (other than income from assets); and (b) the person's annual rate of ordinary income from assets that are not assets tested; and (c) either: (i) the person's annual rate of ordinary income from unrealisable assets; or (ii) the person's notional annual rate of ordinary income from unrealisable assets; whichever is the greater; and (d) an amount per year equal to $9.75 for each $250 of the value of the person's assets (other than disregarded assets); and (e) any amounts that are not income of the person because of paragraph 8(8)(zp). Assets tested asset (4) For the purposes of subsection (3), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1). Notional annual rate of ordinary income from unrealisable assets (5) A person's notional annual rate of ordinary income from unrealisable assets is: (a) the amount per year equal to 2.5% of the value of the person's and the person's partner's unrealisable assets; or (b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person's and the person's partner's unrealisable assets; whichever is the less. Family farms (6) If: (a) an unrealisable asset is a farm; and (b) the farm is operated by a person who is a family member of the person to whom this section applies; and (c) it is not reasonable to expect the farm to be used for another purpose; the Secretary, in working out the amount per year that could reasonably be expected to be obtained from a purely commercial application of the farm, is to have regard to the overall financial situation of the person operating the farm. (6A) If: (a) section 1129 applies to a person; and (b) the person, or the person's partner, owns residential premises; and (c) the premises are an unrealisable asset; and (d) a family member of the person, or of the partner, lives at the premises; and (e) one of the following conditions is satisfied: (i) the family member previously provided substantial care for the person or the partner at the premises at a time when the premises were the principal home of the person or the partner; (ii) the family member has resided at the premises for a period of, or periods that add up to, 10 years or more; (iii) the family member is: (A) a child of the person or the partner; and (B) disabled; and the person or the partner is promoting the independent living of the family member; and (f) it is not reasonable to expect the premises to be sold or otherwise used to provide income support for the person; the Secretary, in working out the amount per year that could reasonably be expected to be obtained from a purely commercial application of the premises, is to have regard to whether the family member is financially capable of obtaining suitable alternative accommodation. Note: for family member see subsection 23(1). (7) Subsections (6) and (6A) do not limit the matters to which the Secretary may have regard in exercising the powers under paragraph (5)(b). (8) Subsection (2) applies: (a) subject to subsection (10); and (b) despite sections 1064 and 1066. (9) If: (a) a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC or 1126AD applies to the disposition; and (b) the Secretary has made a determination under subparagraph 1129(1)(b)(ii) in relation to the disposition; this section applies to the person as if the person had not disposed of the assets. (10) If the sum of the rate of pension that would, apart from this subsection, be payable to a person and the annual rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per annum of the excess. 1130A Division does not apply for purposes of care receiver assets test This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test). 1130B Access to financial hardship rules-pension PP (single) (1) If: (a) a pension PP (single) is not payable to a person because of the application of an assets test; and (b) the person is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and (c) either: (i) sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC and 1126AD (disposal of assets) do not apply to the person; or (ii) the Secretary decides that the application of those sections to the person should, for the purposes of this section, be disregarded; and (d) the person has an unrealisable asset; and (e) the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and (f) the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person; the Secretary must determine that this section applies to the person. Note: For unrealisable asset see subsections 11(12) and (13). (2) A reference in subsection (1) to acceptable alternative Commonwealth income support in relation to a person is a reference to payments (other than payments under the Farm Household Support Act 1992): (a) that are made available by the Commonwealth by way of income support; and (b) the rate of which is not less than the rate of pension PP (single) that would be applicable to the person if pension PP (single) were payable to the person. (3) A decision under subsection (1) takes effect: (a) on the day on which the request under paragraph (1)(e) was lodged with the Department; or (b) if the Secretary so decides in the special circumstances of the case-on a day not more than 6 months before the day on which the request under paragraph (1)(e) was lodged with the Department. 1130C Application of financial hardship rules-pension PP (single) Value of unrealisable asset to be disregarded (1) If section 1130B applies to a person, the value of any unrealisable asset of the person is to be disregarded in working out whether a pension PP (single) is payable to the person. Deduction from pension PP (single) maximum payment rate (2) If section 1130B applies to a person, there is to be deducted from the person's pension PP (single) maximum payment rate an amount equal to the person's adjusted annual rate of ordinary income. Note: For maximum payment rate see Step 4 of the method statement in point 1068A-A1. Adjusted annual rate of ordinary income (3) The person's adjusted annual rate of ordinary income is an amount per year equal to the sum of: (a) the person's annual rate of ordinary income (other than income from assets); and (b) the person's annual rate of ordinary income from assets that are not assets tested; and (c) either: (i) the person's annual rate of ordinary income from unrealisable assets; or (ii) the person's notional annual rate of ordinary income from unrealisable assets; whichever is the greater; and (d) an amount per year equal to $26.00 for each $250 of the value of the person's assets (other than disregarded assets); and (e) any amounts that are not income of the person because of paragraph 8(8)(zp). Assets tested asset (5) For the purposes of paragraph (3)(b), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1). Notional annual rate of ordinary income from unrealisable assets (6) A person's notional annual rate of ordinary income from unrealisable assets is: (a) the amount per year equal to 2.5 per cent of the value of the person's unrealisable assets; or (b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person's unrealisable assets; whichever is the lesser. (7) Subsection (2) applies: (a) subject to subsection (9); and (b) despite section 500Q. (8) If: (a) a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC or 1126AD applies to the disposition; and (b) the Secretary has made a determination under paragraph 1130B(1)(c) in relation to the disposition; this section applies to the person as if the person had not disposed of the assets. (9) If the sum of the rate of pension PP (single) that would, apart from this subsection, be payable to a person and the annual rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per year of the excess. 1131 Access to financial hardship rules-benefits (1) If: (a) a social security benefit is not payable to a person because of the application of an assets test; and (b) the person is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and (c) the person's partner is not receiving and is not eligible to apply for acceptable alternative Commonwealth income support; and (d) either: (i) sections 1108 and 1109 (disposal of income) and 1124A, 1125, 1125A, 1126, 1126AA, 1126AB, 1126AC and 1126AD (disposal of assets) do not apply to the person; or (ii) the Secretary decides that the application of those sections to the person should, for the purposes of this section, be disregarded; and (e) the person, or the person's partner, has an unrealisable asset; and (f) the person lodges with the Department, in a form approved by the Secretary, a request that this section apply to the person; and (g) the Secretary is satisfied that the person would suffer severe financial hardship if this section did not apply to the person; the Secretary must determine that this section applies to the person. Note: for unrealisable asset see subsections 11(12) and (13). (1A) In subsection (1): assets test does not include the parental means test in section 1067G (Youth Allowance Rate Calculator). (2) A reference in subsection (1) to acceptable alternative Commonwealth income support in relation to a person is a reference to payments (other than payments under the Farm Household Support Act 1992): (a) that are made available by the Commonwealth by way of income support; and (b) the rate of which is not less than the rate of newstart allowance, youth allowance or austudy payment that would be applicable to the person if that allowance were payable to the person. (3) A decision under subsection (1) takes effect: (a) on the day on which the request under paragraph (1)(f) was lodged with the Department; or (b) if the Secretary so decides in the special circumstances of the case-on a day not more than 6 months before the day on which the request under paragraph (1)(f) was lodged with the Department. 1132 Application of financial hardship rules-benefits Value of unrealisable asset to be disregarded (1) If section 1131 applies to a person, the value of: (a) any unrealisable asset of the person; and (b) any unrealisable asset of the person's partner; is to be disregarded in working out whether a social security benefit is payable to the person. Deduction from social security benefit maximum payment rate (2) If section 1131 applies to a person, there is to be deducted from the person's social security benefit maximum payment rate an amount equal to the person's adjusted fortnightly rate of ordinary income. Note: for maximum payment rate, see, for example, Step 4 of the Method statement in point 1068-A1. Adjusted fortnightly rate of ordinary income (3) The person's adjusted fortnightly rate of ordinary income is an amount per fortnight equal to the sum of: (a) the person's fortnightly rate of ordinary income (other than income from assets); and (b) the person's fortnightly rate of ordinary income from assets that are not assets tested; and (c) either: (i) the person's fortnightly rate of ordinary income from unrealisable assets; or (ii) the person's notional fortnightly rate of ordinary income from unrealisable assets; whichever is the greater; and (d) an amount per fortnight equal to $1 for each $250 of the value of the person's assets (other than disregarded assets); and (e) any amounts that are not income of the person because of paragraph 8(8)(zp). Assets tested asset (4) For the purposes of paragraph (3)(b), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1). Notional fortnightly rate of ordinary income from unrealisable assets (5) A person's notional fortnightly rate of ordinary income from unrealisable assets is: (a) the amount per fortnight equal to one twenty-sixth of 2.5% of the value of the person's and the person's partner's unrealisable assets; or (b) the amount per fortnight that could reasonably be expected to be obtained from a purely commercial application of the person's and the person's partner's unrealisable assets; whichever is the less. (6) Subsection (2) applies: (a) subject to subsection (8); and (b) despite sections 601, 733, 1067G, 1067L and 1068. (7) If: (a) a person has disposed of assets and section 1125, 1126, 1126AA, 1126AB, 1126AC or 1126AD applies to the disposition; and (b) the Secretary has made a determination under paragraph 1131(1)(d) in relation to the disposition; this section applies to the person as if the person had not disposed of the assets. (8) If the sum of the rate of benefit that would, apart from this subsection, be payable to a person and the fortnightly rate of ordinary income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per fortnight of the excess. Division 4-Pension loans scheme 1133AA Pension loans scheme definitions (1) In this Division, unless the contrary intention appears: assets reduced rate means the rate worked out at Step 10 of the Method statement in Module A of the relevant Pension Rate Calculator. disposes of real assets has its ordinary meaning. guaranteed amount means the amount (if any) specified under paragraph 1136(1A)(b) or subsection 1137(1) (as the case may be). income reduced rate means the rate worked out at Step 8 of the Method statement in Module A of the relevant Pension Rate Calculator. maximum payment rate means the rate worked out at Step 4 of the Method statement in Module A of the relevant Pension Rate Calculator. real assets, in relation to a person or couple, means the real property (including the principal home) of the person or couple in Australia, but does not include any real property specified under paragraph 1136(1A)(a). (2) For the purposes of this Division, a reference to a charge under section 1138 includes a reference to a charge continued in force by subsection 1138(3) or paragraph 1139(2A)(b). 1133 Qualification for participation in pension loans scheme Person not member of a couple (1) A person who is not a member of a couple is qualified to participate in the pension loans scheme if: (a) the person is receiving or is qualified for: (i) age pension; or (ii) disability support pension; or (iii) carer payment; or (v) widow B pension; or (vi) bereavement allowance; or (viii) rehabilitation allowance; and (b) the rate of that pension or allowance is, or is to be: (i) an income reduced rate; or (ii) an assets reduced rate; and at least one of those reduced rates is not a nil rate; and (c) the person has reached pension age; and (d) either: (i) the value of the person's real assets (after deduction of any guaranteed amount) is sufficient to secure the payment of any debt that may become payable to the Commonwealth under this Division; or (ii) subsection (3) applies to the person. Note 1: For income reduced rate and assets reduced rate see subsection 1133AA(1). Note 2: For real assets see subsection 1133AA(1). Note 3: For guaranteed amount see subsection 1133AA(1). Note 4: For pension age see subsections 23(5A), (5B), (5C) and (5D). Person member of a couple (2) A person who is a member of a couple is qualified to participate in the pension loans scheme if: (a) the person is receiving or is qualified for: (i) an age pension; or (ii) a disability support pension; or (iii) a wife pension; or (iv) a carer payment; or (vii) a rehabilitation allowance; and (b) the rate of that pension or allowance is, or is to be: (i) an income reduced rate; or (ii) an assets reduced rate; and at least one of those reduced rates is not a nil rate; and (c) the person: (i) has reached pension age; or (ii) is the partner of a person who has reached pension age; and (d) either: (i) the value of the couple's real assets (after deduction of any guaranteed amount) is sufficient to secure the payment of any debt that may become payable to the Commonwealth under this Division; or (ii) subsection (3) applies to both of the members of the couple. Note 1: For income reduced rate and assets reduced rate see subsection 1133AA(1). Note 2: For real assets see subsection 1133AA(1). Note 3: For guaranteed amount see subsection 1133AA(1). Note 4: For pension age see subsections 23(5A), (5B), (5C) and (5D). (3) This subsection applies to a person if: (a) either: (i) the person is an attributable stakeholder of a company or trust (within the meaning of Part 3.18); or (ii) the person is a member of a couple and the other member of the couple is an attributable stakeholder of a company or trust (within the meaning of Part 3.18); and (b) the company or trustee has given the Commonwealth a guarantee that the company or trustee will pay any debt that may become payable to the Commonwealth by the person under this Division; and (c) the company's or trustee's liability under the guarantee is secured by a charge against real property of the company or trust in Australia; and (d) the Secretary is satisfied that the value of that real property is sufficient to secure the payment of any amount that may become payable by the company or trustee under the guarantee; and (e) the Secretary has, by writing, approved the guarantee and the charge. 1134 Effect of participation in pension loans scheme-pension or allowance rate (1) If: (a) a person is qualified to participate in the pension loans scheme; and (b) the person makes a request to participate under section 1136; and (d) the Secretary is satisfied that the amount of any debt that becomes payable by the person to the Commonwealth under this Division is readily recoverable; then: (e) the rate of the pension or allowance payable to the person by operation of the scheme is to be: (i) the maximum payment rate; or (ia) if DFISA under Part VIIAB of the Veterans' Entitlements Act is payable to the person-the maximum payment rate less the DFISA rate; or (ii) some other rate nominated by the person; whichever is the lowest. Note: For maximum payment rate see subsection 1133AA(1). (2) The pension or allowance is to commence to be paid at the rate payable by operation of the scheme in respect of the first instalment period for which an instalment is paid after the request is lodged. 1135 Effect of participation in pension loans scheme-creation of debt (1) If the rate of the pension or allowance payable by operation of the pension loans scheme is more than the rate that would have been received by the person but for the operation of the scheme, the person owes a debt to the Commonwealth. (3) This is how to work out the amount of the debt owed by the person from time to time: Method statement Step 1. Work out the sum of the amount of pension or allowance received by the person from time to time under the pension loans scheme: the result is the primary loan amount. Step 2. Add to the primary loan amount the amount of any registration costs payable by the person under subsection 1143(4): the result is the registration cost adjusted amount. Step 3. Take away from the registration cost adjusted amount the sum of the amount of pension or allowance (if any) that would have been received by the person but for the operation of the scheme: the result is the basic amount of debt. Step 4. Add to the basic amount of debt the amount of interest payable. The interest payable is compound interest at the rate fixed under subsection (4) and compounding fortnightly: the result is the total amount of debt. Step 5. From the total amount of debt take away any amount of the debt already paid to the Commonwealth: the result is the current amount of debt owed by the person. (4) The rate at which compound interest is payable under subsection (3) is the rate fixed from time to time by the Minister by legislative instrument. 1135A Effect of participation in pension loans scheme-maximum loan available (1) The maximum loan available to a person under the pension loans scheme is the amount worked out using the formula: [pic] where: age component amount means the amount specified in column 2 of the Table in subsection (3), in relation to: (a) if the person is not a member of a couple-the age the person turned on his or her last birthday; or (b) if the person is a member of a couple-the age the younger member of the couple turned on his or her last birthday. value of real assets means: (a) if neither subparagraph 1133(1)(d)(ii) nor subparagraph 1133(2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme-the value of the real assets (after deduction of any guaranteed amount); or (b) if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme-the value of the charge referred to in paragraph 1133(3)(c). Note 1: For real assets see subsection 1133AA(1). Note 2: For guaranteed amount see subsection 1133AA(1). (2) For the purposes of subsection (1), the following provisions have effect: (a) if, but for this paragraph, the value of real assets would be an amount that exceeds $10,000 but is not a multiple of $10,000, the value is to be taken to be the next lower amount that is a multiple of $10,000; (b) if, but for this paragraph, the value of real assets would be less than $10,000, the value is to be taken to be nil. (3) The following is the Table referred to in subsection (1): |Age component amount table | |Column 1 |Column 2 |Column 1 |Column 2 | |Age |Age |Age |Age | | |component | |component | | |amount | |amount | |55, and | | | | |each |$1,710.00 |75 |$3,750.00 | |earlier | | | | |year | | | | |56 |$1,780.00 |76 |$3,900.00 | |57 |$1,850.00 |77 |$4,050.00 | |58 |$1,920.00 |78 |$4,210.00 | |59 |$2,000.00 |79 |$4,380.00 | |60 |$2,080.00 |80 |$4,560.00 | |61 |$2,160.00 |81 |$4,740.00 | |62 |$2,250.00 |82 |$4,930.00 | |63 |$2,340.00 |83 |$5,130.00 | |64 |$2,430.00 |84 |$5,330.00 | |65 |$2,530.00 |85 |$5,550.00 | |66 |$2,630.00 |86 |$5,770.00 | |67 |$2,740.00 |87 |$6,000.00 | |68 |$2,850.00 |88 |$6,240.00 | |69 |$2,960.00 |89 |$6,490.00 | |70 |$3,080.00 |90, and | | | | |each later|$6,750.00 | | | |year | | |71 |$3,200.00 | | | |72 |$3,330.00 | | | |73 |$3,460.00 | | | |74 |$3,600.00 | | | 1136 Need for a request to participate (1) A person who wants to participate in the pension loans scheme must make a request to participate in accordance with this section. (1A) A request under subsection (1) must: (a) specify any real property that is not to be included in working out the value of real assets for the purposes of sections 1133 and 1135A, or that is not to be subject to a charge under section 1138; and (b) specify the minimum amount (if any) that the person is to be entitled to retain out of the proceeds of the enforcement of a charge under section 1138; and (c) specify the rate of the pension or allowance (if any) nominated by the person for the purposes of subparagraph 1134(1)(e)(ii). (1B) Paragraphs (1A)(a) and (b) do not apply if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme. (2) The request must be signed: (a) if the person is not a member of a couple-by the person; or (b) if the person is a member of a couple-by both members of the couple. (3) The request must be: (a) in writing; and (b) in a form approved by the Secretary; and (c) lodged at an office of the Department. 1137 Need for a request to later nominate or change guaranteed amount or rate of pension or allowance (1) A person who is participating in the pension loans scheme and who wants to: (a) nominate a minimum amount that the person is to be entitled to retain out of the proceeds of the enforcement of the charge under section 1138; or (b) nominate a rate of pension or allowance for the purposes of subparagraph 1134(1)(e)(ii); or (c) change the guaranteed amount earlier specified; or (d) change the rate of the pension or allowance earlier specified; must make a request that specifies the nomination or change (as the case may be). (1A) Paragraphs (1)(a) and (c) do not apply if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme. (2) A request under subsection (1) must be signed: (a) if the person is not a member of a couple-by the person; or (b) if the person is a member of a couple-by both members of the couple. (3) The request must: (a) be in writing; and (b) be lodged at an office of the Department. 1138 Existence of debt results in charge over real assets Person not member of a couple (1) If a person who is not a member of a couple is participating in the pension loans scheme, the person's real assets are subject to a charge in favour of the Commonwealth to secure the payment of the debt to the Commonwealth. Note: If there is a guaranteed amount, the charge is enforceable only to the extent that the value of the real assets exceeds the guaranteed amount (see subsection 1144(2)). Person member of a couple (2) If: (a) a person who is a member of a couple is participating in the pension loans scheme; and (b) the person's partner has signed the person's request under subsection 1136(2); the couple's real assets are subject to a charge in favour of the Commonwealth to secure the payment of a debt to the Commonwealth. Note: If there is a guaranteed amount, the charge is enforceable only to the extent that the value of the real assets exceeds the guaranteed amount (see subsection 1144(2)). (3) If: (a) the pension loans scheme ceases to operate in relation to a person because of the effect of section 1141 or 1142; and (b) at the time the scheme ceases to operate, the person owes a debt to the Commonwealth because of the person's participation in the scheme; the charge in favour of the Commonwealth under subsection (1) or (2) of this section continues in relation to the real assets until the debt is repaid or recovered. Note 1: Section 1141 provides that a person ceases to participate in the scheme if the debt owed by the person exceeds the maximum loan available. Note 2: Section 1142 provides for a person to withdraw from the scheme. Note 3: If there is a guaranteed amount, the charge is enforceable only to the extent that the value of the real assets exceeds the guaranteed amount (see subsection 1144(2)). (4) This section does not apply if subparagraph 1133(1)(d)(ii) or (2)(d)(ii) applied to the person when the person made his or her request to participate in the pension loans scheme. 1139 Debt not to be recovered until after death (1) The Commonwealth is not entitled to recover a debt under section 1135 from a person until after the person's death. (2) In the following circumstances, the Commonwealth is not entitled to recover the debt until after the person's death and after: (a) if: (i) the person was a member of a couple at the time of death; and (ii) the person's partner survives the person; and (iii) an amount of bereavement payment is payable to the partner because of the person's death; the last instalment of bereavement payment has been paid; or (b) if: (i) the person was a member of a couple at the time of death; and (ii) the person's partner survives the person; and (iii) the person's partner has the use of the assets or part of the assets that are subject to a charge; and (iv) the partner has reached pension age; (A) if a woman-60; or (B) if a man-65; the death of the partner. Note: For pension age see subsections 23(5A), (5B), (5C) and (5D). (2A) In relation to the period between the person's death and the time of recovery of the debt by the Commonwealth: (a) compound interest continues to accrue, and forms part of the debt, in accordance with Step 4 of the Method statement in subsection 1135(3); and (b) the charge in favour of the Commonwealth under section 1138 continues in relation to the real assets until the debt is recovered. Note: If there is a guaranteed amount, the charge is enforceable only to the extent that the value of the real assets exceeds the guaranteed amount (see subsection 1144(2)). (3) This section is subject to section 1140 (enforcement of charge if assets change hands). (4) If the Secretary decides that the debt is to be recovered before the events referred to in subsection (1) or (2), the debt may be so recovered in spite of those subsections. 1140 Enforcement of charge (1) If: (a) real assets of a person are subject to a charge under section 1138; and (b) any of those real assets cease to be real assets of the person; and (c) the person receives proceeds from the sale or other disposal of the real assets; the Secretary may recover from the person, out of those proceeds but after deduction of any guaranteed amount, the whole or part of the debt secured by the charge. (2) If: (a) real assets of a person are subject to a charge under section 1138; and (b) any of those real assets are disposed of to another person (in this section called the new owner); the Secretary may, subject to subsection (3), enforce the charge against those real assets. (3) The Secretary may not enforce the charge against the assets if the new owner is a bona fide purchaser for value without notice. 1141 Person ceases to participate in pension loans scheme if debt exceeds maximum loan available If: (a) a person is participating in the pension loans scheme; and (b) the debt owed by the person under section 1135 exceeds the maximum loan available to the person under the scheme; the scheme ceases to operate in relation to the person at the beginning of the first instalment period for the pension or allowance being paid to the person that begins after the debt exceeds the maximum loan available. Note 1: The maximum loan available is worked out by using the formula set out in subsection 1135A(1). Note 2: For repayment or recovery of the debt owed by the person see sections 1142A and section 1139. 1142 Person withdraws from pension loans scheme (1) If a person who is participating in the pension loans scheme makes a request to withdraw from the scheme, the scheme ceases to operate in relation to the person at the beginning of the first instalment period for the pension or allowance being paid to the person that begins after the request is lodged. (2) A request under subsection (1) must be signed: (a) if the person is not a member of a couple-by the person; or (b) if the person is a member of a couple-by both members of the couple. (3) The request must: (a) be in writing; and (b) be lodged at an office of the Department. 1142A Repayment or recovery of debt after pension loans scheme ceases to operate because debt exceeds maximum loan available or person withdraws (1) The debt owed by a person under section 1135, at the time the pension loans scheme ceases to operate in relation to the person by operation of section 1141 or 1142, may be repaid by the person at any time. Note 1: Section 1141 provides that a person ceases to participate in the scheme if the debt owed by the person exceeds the maximum loan available. Note 2: Section 1142 provides for a person to withdraw from the scheme. (2) If the debt owed by the person is not repaid by the person at the time the scheme ceases to operate in relation to the person, compound interest continues to accrue, and forms part of the debt, in accordance with Step 4 of the Method statement in subsection 1135(3), until the debt is repaid or recovered. (3) If the debt is not repaid under subsection (1) of this section, subject to section 1139 the Commonwealth is entitled to recover the debt. Note: Section 1139 provides that a debt cannot be recovered from a person until after the person's death. 1143 Registration of charge (1) If real assets are subject to a charge under section 1138, the Secretary may lodge a notice in writing of the charge with the appropriate officer of the State or Territory in which the real assets are situated. (2) The appropriate officer may register the charge as if the Secretary's notice were an instrument of charge or encumbrance duly executed under the laws in force in the State or Territory. (3) The Secretary may require the person whose real assets are subject to the charge to execute an instrument relating to the registration of the charge. (4) If the Commonwealth incurs costs associated with: (a) the registration of the charge; or (b) the registration of the discharge of the charge; those costs are payable by the person whose real assets are subject to the charge. 1144 Manner of enforcement of charge (1) If a charge against real assets is enforceable under this Division, the Secretary may, subject to subsection (2), enforce the charge against those real assets or against part of those real assets in any manner that the Secretary decides. (2) If there is a guaranteed amount, the charge is enforceable only to the extent that the value of the real assets exceeds the guaranteed amount. 1144A Division does not apply for purposes of care receiver assets test (1) This Division does not apply for the purposes of the assets test set out in Subdivision A of Division 1 of Part 2.5 (care receiver assets test). (2) This section is for the avoidance of doubt. Division 5-Provisions relating to special residences and special residents Subdivision A-General 1145A Application of Division to granny flat residents This Division applies to a granny flat resident only if the resident acquired or retained the person's granny flat interest in the person's principal home on or after 22 August 1990. 1146 Basis for different treatment This Division's operation on a special resident depends on: (a) whether the resident is: (i) not a member of a couple; or (ii) a member of a couple; or (iii) a member of an illness separated couple; or (iv) a member of an ordinary couple with different principal homes; and (b) the resident's entry contribution; and (c) the resident's extra allowable amount. Note 1: for member of an ordinary couple with different principal homes see subsection 12(2). Note 2: for entry contribution see section 1147. Note 3: for extra allowable amount see section 1148. 1147 Entry contribution (1) A special resident's entry contribution is: (a) if the resident is not a member of a couple-the resident's individual residence contribution; or (b) if the resident is a member of a couple, shares the resident's principal home with the resident's partner and is not a member of an illness separated couple-an amount equal to 50% of the resident's individual residence contribution and of the partner's individual residence contribution; or (c) if the resident is a member of an illness separated couple-the resident's individual residence contribution; or (d) if: (i) the resident is a member of an ordinary couple with different principal homes; and (ii) the principal home of the resident's partner is not a special residence; the resident's individual residence contribution; or (e) if: (i) the resident is a member of an ordinary couple with different principal homes; and (ii) the principal home of the resident's partner is also a special residence; an amount equal to 50% of the resident's individual residence contribution and of the partner's individual residence contribution. (1A) A special resident's entry contribution is the resident's individual residence contribution plus the amount paid, or agreed to be paid, for the resident's current right (if any) to share the resident's principal home with a partner if: (a) the resident was a member of a couple at the time when the resident took up residence in the retirement village or granny flat; and (b) the resident has ceased to be a member of a couple. (1B) A special resident's entry contribution is the resident's individual residence contribution if: (a) the resident was a member of a couple at the time when the sale leaseback agreement was entered into; and (b) the resident has ceased to be a member of a couple. (1C) For the purposes of this Division, the individual residence contribution is: (a) for a retirement village resident-the total amount paid, or agreed to be paid, for the resident's current right to live in the retirement village; and (b) for a granny flat resident-the total amount paid, or agreed to be paid, for the resident's current right to live in the granny flat; and (c) for a sale leaseback resident-the deferred payment amount. Note: for deferred payment amount see section 12B. (1D) For the purposes of paragraph (1C)(b): (a) the total amount paid to obtain for a person his or her current right to live in a granny flat is the amount equal to the value of the person's granny flat interest; and (b) the value of a person's granny flat interest is: (i) unless subparagraph (ii) applies-the amount paid, or agreed to be paid, for the interest; or (ii) if the Secretary considers that, for any special reason in any particular case, that value should be another amount-that other amount. (2) An amount that is rent for the purposes of this Act is to be disregarded in applying subsections (1), (1A) and (1B). 1148 Extra allowable amount Residence taken up before 13 June 1989 (1) If a retirement village resident became entitled to take up residence in the retirement village before 13 June 1989, the resident's extra allowable amount is: (a) if the resident is not a member of a couple-$64,000; or (b) if the resident is a member of an illness separated couple-$64,000; or (c) in any other case-$32,000. Residence taken up on or after 13 June 1989 (2) If a retirement village resident became entitled to take up residence in the retirement village on or after 13 June 1989, the resident's extra allowable amount is: (a) if the resident is not a member of a couple-the amount that, as at the time when the resident becomes entitled to take up that residence, is the difference between the pension "single" homeowner AVL and the pension "single" non-homeowner AVL; or (b) if the resident is a member of an illness separated couple-the amount that, as at the time when the resident becomes entitled to take up that residence, is the difference between the pension "single" homeowner AVL and the pension "single" non- homeowner AVL; or (c) in any other case-the amount that, as at the time when the resident becomes entitled to take up that residence, is the difference between the pension "partnered" homeowner AVL and the pension "partnered" non-homeowner AVL. (2A) A granny flat resident's extra allowable amount is: (a) if the resident is not a member of a couple-the amount that, as at the time when the resident becomes entitled to the granny flat interest, is the difference between the pension "single" homeowner AVL and the pension "single" non-homeowner AVL; or (b) if the resident is a member of an illness separated couple-the amount that, as at the time when the resident becomes entitled to the granny flat interest, is the difference between the pension "single" homeowner AVL and the pension "single" non- homeowner AVL; or (c) in any other case-the amount that, as at the time when the resident becomes entitled to the granny flat interest, is the difference between the pension "partnered" homeowner AVL and the pension "partnered" non-homeowner AVL. (2B) A sale leaseback resident's extra allowable amount is: (a) if the resident is not a member of a couple-the amount that, as at the time when the sale leaseback agreement is entered into, is the difference between the pension "single" homeowner AVL and the pension "single" non-homeowner AVL; or (b) if the resident is a member of an illness separated couple-the amount that, as at the time when the sale leaseback agreement is entered into, is the difference between the pension "single" homeowner AVL and the pension "single" non-homeowner AVL; or (c) in any other case-the amount that, as at the time when the sale leaseback agreement is entered into, is the difference between the pension "partnered" homeowner AVL and the pension "partnered" non-homeowner AVL. (3) For the purposes of this section, a person becomes entitled to take up residence in a retirement village when the person becomes entitled to take up residence in a retirement village pursuant to the agreement under which the person's current right to live in the retirement village arises. (4) In this section, "pension 'single' homeowner AVL", "pension 'single' non-homeowner AVL", "pension 'partnered' homeowner AVL" and "pension 'partnered' non-homeowner AVL" have the same meaning as in Part 3.16 (Indexation). 1149 Renegotiation of retirement village agreement If a person who has a right to live in a retirement village under an agreement enters into a new agreement under which the person obtains a right to live in the retirement village, then, for the purposes of this Division, the total amount paid, or agreed to be paid, for the person's current right to live in the retirement village is the sum of the following amounts: (a) the total amount paid under the new agreement for that right; and (b) so much (if any) of: (i) any amount paid under an earlier agreement to obtain a right for the person to live in the retirement village; and (ii) any amount that was, or would have been, payable to the person upon the termination of an earlier agreement; as ought, in the Secretary's opinion, to be attributed to the cost of the person's current right to live in the retirement village. Subdivision B-Residents who are not members of a couple 1150 Residents who are not members of a couple (1) This section applies to a special resident who is not a member of a couple. Entry contribution above extra allowable amount (2) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was more than the extra allowable amount; the resident is to be taken, for the purposes of this Act, to be a homeowner. Entry contribution equal to or below extra allowable amount (3) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was equal to or less than the extra allowable amount; then, for the purposes of this Act: (c) the resident is to be taken not to have a right or interest in relation to the resident's principal home; and (d) the resident's assets are to be taken to include an asset the value of which is equal to the amount of the resident's entry contributions; and (e) sections 198H, 198HA, 198HB, 198J, 198JA and 198JB, subsection 1118(1) and section 1125 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, to be taken to have. (4) Subsection (3) applies: (a) whether or not the resident actually has any right or interest in the resident's principal home; and (b) whatever the value of any right or interest that the resident does have in the resident's principal home. Subdivision C-Residents who are members of couple and share principal home 1151 Members of couples (1) This section applies to a special resident if: (a) the resident is a member of a couple; and (b) the resident shares the resident's principal home with the resident's partner. Entry contribution above extra allowable amount (2) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was more than the extra allowable amount; the resident is to be taken, for the purposes of this Act, to be a homeowner. Entry contribution equal to or below extra allowable amount (3) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was equal to or less than the extra allowable amount; then, for the purposes of this Act: (c) the resident is to be taken not to have a right or interest in relation to the resident's principal home; and (d) the resident's assets are to be taken to include an asset the value of which is equal to the amount of the resident's entry contribution; and (e) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, to be taken to have. (4) Subsection (3) applies: (a) whether or not the resident actually has any right or interest in the resident's principal home; and (b) whatever the value of any right or interest that the resident does have in the resident's principal home. Subdivision D-Residents who are members of illness separated couple 1152 Members of illness separated couples (both in special residences) [see Appendix for CPI adjusted figures] (1) This section applies to a special resident if: (a) the resident is a member of an illness separated couple; and (b) the principal home of the resident's partner is also a special residence. Both entry contributions above extra allowable amount (2) If: (a) this section applies to a special resident; and (b) the resident's entry contribution, and the entry contribution of the resident's partner, were each more than the extra allowable amount concerned; then, for the purposes of this Act: (c) the resident is to be taken to be a homeowner; and (d) any right or interest of the resident in the partner's principal home is to be disregarded in calculating the actual value of the resident's assets for the purposes of this Act; and (e) any right or interest of the partner in his or her principal home, or in the resident's principal home, is to be disregarded in calculating the actual value of the partner's assets for the purposes of this Act. Both entry contributions equal to or below extra allowable amount (3) If: (a) this section applies to a special resident; and (b) the resident's entry contribution, and the entry contribution of the resident's partner, were each equal to or less than the extra allowable amount concerned; then, for the purposes of this Act: (c) the resident is to be taken not to have a right or interest in relation to the resident's principal home; and (d) the resident's assets are to be taken to include an asset the value of which is equal to the amount of the resident's entry contribution; and (e) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, taken to have. (4) Subsection (3) applies: (a) whether or not the resident actually has any right or interest in the resident's principal home; and (b) whatever the value of any right or interest that the resident does have in the resident's principal home. Person's entry contribution above extra allowable amount and partner's entry contribution equal to or below extra allowable amount (5) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was more than the extra allowable amount; and (c) the resident's partner's entry contribution was equal to or less than the extra allowable amount; the following provisions apply for the purposes of the application of this Act to the resident and to the partner: (d) the resident is to be taken to be a homeowner; (e) for the purposes of this Act: (i) both the resident, and the partner, are to be taken not to have a right or interest in relation to the partner's principal home; and (ii) the partner's assets are to be taken to include an asset whose value is equal to the amount of the partner's entry contribution; and (iii) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the partner is, because of subparagraph (ii) of this paragraph, to be taken to have; (f) any right or interest of the partner in the resident's principal home is to be disregarded in calculating the actual value of the partner's assets for the purposes of this Act; (g) the resident's assets value limit and the partner's assets value limit are both to be taken to be $98,625. Note: the amount in paragraph (g) is adjusted annually: see section 1205. (6) Subsection (5) applies: (a) whether or not the resident's partner actually has any right or interest in the partner's principal home; and (b) whatever the value of any right or interest that the partner does have in the partner's principal home. 1153 Members of illness separated couples (partner not in special residence and partner homeowner) (1) This section applies to a special resident if: (a) the resident is a member of an illness separated couple; and (b) the principal home of the resident's partner is not a special residence; and (c) the right or interest of the partner in the partner's principal home is to be disregarded because of paragraph 1118(1)(b). Entry contribution above extra allowable amount (2) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was more than the extra allowable amount; then: (c) for the purposes of this Act, the resident is to be taken to be a homeowner; and (d) any right or interest of the resident in the partner's principal home referred to in paragraph (1)(c) is to be disregarded in calculating the actual value of the resident's assets for the purposes of this Act; and (e) any right or interest of the partner in the resident's principal home is also to be disregarded in calculating the actual value of the partner's assets for the purposes of this Act. Entry contribution equal to or below extra allowable amount (3) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was equal to or less than the extra allowable amount; the following provisions apply for the purposes of the application of this Act to the resident and to the resident's partner: (c) for the purposes of this Act: (i) the resident is to be taken not to be a homeowner; and (ia) the partner is to be taken not to have a right or interest in relation to the resident's principal home; and (ii) the resident's assets are to be taken to include an asset the value of which is equal to the amount of the resident's entry contribution; and (iii) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of subparagraph (ii) of this paragraph, to be taken to have; (d) any right or interest of the resident in the partner's principal home referred to in paragraph (1)(c) is to be disregarded in calculating the actual value of the resident's assets for the purposes of this Act; (e) the resident's assets value limit and the partner's assets value limit are both to be taken to be $98,625. Note: the amount in paragraph (e) is adjusted annually: see section 1205. (4) Subsection (3) applies: (a) whether or not the resident actually has any right or interest in the resident's principal home; and (b) whatever the value of any right or interest that the resident does have in the resident's principal home. 1154 Members of illness separated couples (partner not in special residence and partner not homeowner) [see Appendix for CPI adjusted figures] (1) This section applies to a special resident if: (a) the resident is a member of an illness separated couple; and (b) the principal home of the resident's partner is not a special residence; and (c) the resident's partner does not have a right or interest in the partner's principal home that is to be disregarded because of paragraph 1118(1)(b). Entry contribution above extra allowable amount (2) If: (a) this section applies to a special resident; and (c) the resident's entry contribution was more than the extra allowable amount; the following provisions apply for the purposes of the application of this Act to the resident and to the partner: (d) for the purposes of this Act, the resident is to be taken to be a homeowner; (e) any right or interest of the partner in the resident's principal home is to be disregarded in calculating the actual value of the partner's assets for the purposes of this Act; (f) the resident's assets value limit and the partner's assets value limit are both to be taken to be $98,625. Note: the amount in paragraph (f) is adjusted annually: see section 1205. Entry contribution equal to or below extra allowable amount (4) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was equal to or less than the extra allowable amount; then, the following provisions apply for the purposes of the application of this Act to the resident and to the resident's partner: (c) both the resident, and the partner, are to be taken not to have a right or interest in relation to the resident's principal home; (d) the resident's assets are to be taken to include an asset the value of which is equal to the amount of the resident's entry contribution; (e) sections 198K and 198L, subsection 1118(1) and section 1126 do not apply to the asset that the resident is, because of paragraph (d) of this subsection, taken to have. (5) Subsection (4) applies: (a) whether or not the resident actually has any right or interest in the resident's principal home; and (b) whatever the value of any right or interest that the resident does have in the resident's principal home. Subdivision E-Residents who are members of ordinary couple with different principal homes 1155 Members of ordinary couple with different principal homes (both in special residences) (1) This section applies to a special resident if: (a) the resident is a member of an ordinary couple with different principal homes; and (b) the principal home of the resident's partner is also a special residence. Both entry contributions above extra allowable amount (2) If: (a) this section applies to a special resident; and (b) the resident's entry contribution and the partner's entry contribution, were each more than the extra allowable amount concerned; then, for the purposes of this Act: (c) the resident and the partner are each to be taken to be home owners; and (d) the value of the resident's principal home is taken to be the resident's individual residence contribution; and (e) the value of the partner's principal home is taken to be the partner's individual residence contribution; and (f) any right or interest of the resident in: (i) the more valuable of the 2 principal homes; or (ii) where the value of the 2 principal homes is the same-the principal home of the younger person; (in this subsection called the more valuable principal home) is to be disregarded in calculating the actual value of the resident's assets; and (g) any right or interest of the partner in the more valuable principal home is to be disregarded in calculating the actual value of the partner's assets; and (h) the assets of the person whose principal home is not the more valuable principal home are to be taken to include an asset the value of which is equivalent to the amount of that person's entry contribution. Both entry contributions equal to or below extra allowable amount (3) If: (a) this section applies to a special resident; and (b) the resident's entry contribution, and the partner's entry contribution, were each less than or equal to the extra allowable amount concerned; then, for the purposes of this Act: (c) the resident and the partner are each to be taken not to have a right or interest in relation to the resident's principal home or the partner's principal home; and (d) the resident's assets are taken to include an amount equal to the resident's individual residence contribution; and (e) the partner's assets are taken to include an amount equal to the partner's individual residence contribution. (4) Subsection (3) applies: (a) whether or not the resident actually has any right or interest in the resident's principal home; and (b) whatever the value of any right or interest that the resident does have in the resident's principal home; and (c) whether or not the partner actually has any right or interest in the partner's principal home; and (d) whatever the value of any right or interest that the partner does have in the partner's principal home. 1156 Members of ordinary couple with different principal homes (partner not in special residence and partner homeowner) (1) This section applies to a special resident if: (a) the resident is a member of an ordinary couple with different principal homes; and (b) the principal home of the resident's partner is not a special residence; and (c) the right or interest of the partner in the partner's principal home would, but for this section, be disregarded because of paragraph 1118(1)(b). (2) If this section applies to a special resident, then, for the purposes of this Act: (a) the resident and the resident's partner are each to be taken to have a right or interest in a principal home to which paragraph 1118(1)(b) applies; and (b) the value of the resident's principal home is to be taken to be the amount of the resident's entry contribution; and (c) any right or interest of the resident in: (i) the more valuable of the 2 principal homes; or (ii) where the value of the 2 principal homes is the same-the principal home that is not a special residence; (in this subsection called the more valuable principal home) is to be disregarded in calculating the actual value of the resident's assets; and (d) any right or interest of the partner in the more valuable principal home is to be disregarded in calculating the actual value of the partner's assets; and (e) the assets of the person whose principal home is not the more valuable principal home are to be taken to include an asset whose value is equivalent to the value of the less valuable principal home. 1157 Members of ordinary couple with different principal homes (partner not in special residence and partner not homeowner) (1) This section applies to a special resident if: (a) the resident is a member of an ordinary couple with different principal homes; and (b) the principal home of the resident's partner is not a special residence; and (c) the partner does not have a right or interest in the partner's principal home that is to be disregarded because of paragraph 1118(1)(b). Entry contribution above extra allowable amount (2) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was more than the amount that would be the extra allowable amount if the resident were not a member of a couple; then, for the purposes of this Act, the resident and the partner are each to be taken to have a right or interest in a principal home to which paragraph 1118(1)(b) applies. Entry contribution equal to or below extra allowable amount (3) If: (a) this section applies to a special resident; and (b) the resident's entry contribution was equal to or less than the amount that would be the extra allowable amount if the resident were not a member of a couple; then, the following provisions apply for the purposes of the application of this Act to the resident and to the resident's partner: (c) both the resident, and the partner, are to be taken not to have a right or interest in relation to the resident's principal home; and (d) the resident's assets are to be taken to include an asset whose value is equal to the amount of the resident's entry contribution. (4) Subsection (3) applies: (a) whether or not the resident actually has any right or interest in the resident's principal home; and (b) whatever the value of any right or interest that the resident does have in the resident's principal home; and (c) whether or not the partner actually has any right or interest in the resident's principal home; and (d) whatever the value of any right or interest that the partner does have in the resident's principal home. Part 3.12A-Provisions for Seniors Health Card taxable income test Division 1-Purpose of this Part 1157A Purpose of Part (1) Division 2 of this Part describes the kind of benefits that can be assessable fringe benefits. Division 3 to 7 tell you how to work out the value of the assessable fringe benefits received by a person in a tax year. Division 8 deals with foreign currency conversions. These provisions are necessary for the purposes of the Seniors Health Card Taxable Income Test Calculator. Note 1: For assessable fringe benefit see section 10A. Note 2: A fringe benefit is one that is provided by an employer to an employee in respect of the employee's employment (see section 10A). (2) Section 10A contains many of the definitions that are relevant to the provisions of this Part. Division 2-Benefits that may be assessable fringe benefits 1157B Benefits received in or outside Australia This Part applies to a fringe benefit whether the benefit is received in or outside Australia. 1157C Car benefits (1) A person (the employee) receives a car benefit if: (a) a car held by another person (the provider): (i) is applied to a private use by the employee or an associate of the employee; or (ii) is taken under subsection (2), (3) or (4) to be available for the private use of the employee or an associate of the employee; and (b) either: (i) the provider is the employer, or an associate of the employer, of the employee; or (ii) the car is applied or available in that way under an arrangement between: (A) the provider or another person; and (B) the employer or an associate of the employer. (2) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if: (a) the car is held by a person who is: (i) the employer; or (ii) an associate of the employer; or (iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and (b) the car is garaged or kept at or near a place of residence of the employee or of an associate of the employee. (3) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if: (a) the car is held by a person who is: (i) the employer; or (ii) an associate of the employer; or (iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and (b) the car is not at business premises of: (i) the employer; or (ii) an associate of the employer; or (iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and (c) either: (i) the employee is entitled to apply the car to a private use at that time; or (ii) the employee is not performing the duties of his or her employment at that time and has custody or control of the car; or (iii) an associate of the employee is entitled to use the car at that time; or (iv) an associate of the employee has custody or control of the car at that time. (4) For the purposes of subsection (3), if a prohibition on the use of a car, or on the application of a car for a private use, by a person is not consistently enforced, the person is taken to be entitled to use the car, or to apply the car to a private use, despite the prohibition. (5) For the purposes of this section, a car that is let on hire to a person under a hire-purchase agreement is taken: (a) to have been purchased by the person at the time when the person first took the car on hire; and (b) to have been owned by the person at all material times. (6) A reference in this Part to a car held by a person (the provider) does not include a reference to: (a) a taxi let on hire to the provider; or (b) a car let on hire to the provider under an agreement of a kind that is ordinarily entered into by persons taking cars on hire intermittently as occasion requires on an hourly, daily, weekly or other short-term basis. (7) Paragraph (6)(b) does not apply if the car has been or may reasonably be expected to be on hire under successive agreements of a kind that result in substantial continuity of the hiring of the car. 1157D Exempt car benefits (1) Except in so far as section 1157C provides that the application or availability of a car held by a person is a car benefit, the application or availability of a car held by a person is exempt. (2) A car benefit provided in respect of the employment of the employee is exempt if: (a) the car is: (i) a taxi, panel van or utility truck; or (ii) any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passengers); and (b) the only private use of the car at a time when the benefit was provided was: (i) work-related travel of the employee; and (ii) other minor, infrequent and irregular private use by the employee or an associate of the employee. (3) A car benefit provided in respect of the employment of the employee is exempt if the car was unregistered at all times when the car was held by the person who provided the car. 1157E School fees benefits Payment to recipient (1) If: (a) a person (the provider) pays an amount to another person (the recipient); and (b) the amount is for fees for: (i) tuition at primary or secondary level provided by a school; or (ii) books or equipment provided by the school in relation to that tuition; and (c) the tuition, books or equipment is provided to: (i) a dependent child of the recipient or the recipient's partner; or (ii) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a newstart allowance, a sickness allowance or a youth allowance; the payment constitutes a school fees benefit provided by the provider to the recipient. Note: For school see section 10A. Payment to or on behalf of the school (2) If: (a) a person (the provider) pays an amount to or on behalf of a school; and (b) the amount is for fees for: (i) tuition at primary or secondary level provided by the school; or (ii) books or equipment provided by the school in relation to that tuition; and (c) the tuition, books or equipment is provided to: (i) a dependent child of a person (the recipient) or the recipient's partner; or (ii) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a newstart allowance or a sickness allowance; the payment constitutes a school fees benefit provided by the provider to the recipient. Note: For school see section 10A. Boarding fees (3) For the purposes of subsections (1) and (2), if: (a) a school is providing tuition at primary or secondary level to a dependent child of a person; and (b) the child is boarding at the school; the fees that are payable for the child to board at the school are taken to be fees for the tuition provided by the school to the child. 1157F Health insurance benefits Payment to recipient (1) If: (a) a person (the provider) pays an amount to another person (the recipient); and (b) the amount is for the cost of health insurance; and (c) the health insurance covers: (i) the recipient; or (ii) the recipient's partner; or (iii) a dependent child of the recipient or the recipient's partner; or (iv) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a newstart allowance, a sickness allowance or a youth allowance; the payment constitutes a health insurance benefit provided by the provider to the recipient. Payment to the health insurance fund (2) If: (a) a person (the provider) pays an amount to a health insurance fund; and (b) the amount is for the cost of health insurance; and (c) the health insurance covers: (i) a person (the recipient); or (ii) the recipient's partner; or (iii) a dependent child of the recipient or the recipient's partner; or (iv) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a newstart allowance or a sickness allowance; the payment constitutes a health insurance benefit provided by the provider to the recipient. 1157G Loan benefits (1) Subject to subsection (1A), if a person (the provider) makes a loan to another person (the recipient), the making of the loan constitutes a loan benefit provided by the provider to the recipient. (1A) The making of the loan does not constitute a loan benefit provided by the provider to the recipient if: (a) the provider is the Defence Force, or a body one of the objects or functions of which is making loans to employees of the Defence Force; and (b) the recipient is an employee of the Defence Force. Late payment of debt (2) For the purposes of this section, if: (a) a person (the debtor) is under an obligation to pay or repay an amount (the principal amount) to another person (the creditor); and (b) the principal amount is not the whole or a part of the amount of a loan; and (c) after the due date for payment or repayment of the principal amount, the whole or part of the principal amount remains unpaid; the following provisions have effect: (d) the creditor is taken, immediately after the due date, to have made a loan (the deemed loan) of the principal amount to the debtor; (e) at any time when the debtor is under an obligation to repay any part of the principal amount, the debtor is taken to be under an obligation to repay that part of the deemed loan; (f) the deemed loan is taken to have been made: (i) if interest accrues on so much of the principal amount as remains from time to time unpaid-at the rate of interest at which that interest accrues; or (ii) in any other case-at a nil rate of interest. (3) Subject to subsection (4), a loan is a deferred interest loan if interest is payable on the loan at a rate that exceeds nil. (4) A loan is not a deferred interest loan if: (a) the whole of the interest is due for payment within 6 months after the loan is made; or (b) all of the following conditions are satisfied: (i) interest on the loan is payable by instalments; (ii) the intervals between instalments do not exceed 6 months; (iii) the first instalment is due for payment within 6 months after the loan is made. (5) For the purposes of this section, if a person (the provider) makes a deferred interest loan (the principal loan) to another person (the recipient), the following provisions apply: (a) the provider is taken, at the end of: (i) the period of 6 months starting on the day on which the principal loan was made; and (ii) each subsequent period of 6 months; to have made a loan (the deemed loan) to the recipient; (b) the amount of the loan is taken to be equal to the amount by which the interest (the accrued interest) that has accrued on the principal loan in respect of the period exceeds the amount (if any) paid in respect of the accrued interest before the end of the period; (c) if any part of the accrued interest becomes payable or is paid after the time when the deemed loan is taken to have been made, the deemed loan is to be reduced accordingly; (d) the deemed loan is taken to have been made at a nil rate of interest. (6) Paragraph (5)(a) only applies to a period of 6 months if the recipient is under an obligation during the whole of the period to repay the whole or a part of the principal loan. (7) For the purposes of this Part, if no interest is payable in respect of a loan, a nil rate of interest is taken to be payable in respect of the loan. 1157H Exempt loan benefit (3) The making of a loan is exempt if: (a) the loan consists of an advance by the employer to the employee; and (b) the loan is made for the sole purpose of enabling the employee to meet expenses incurred in performing the duties of his or her employment; and (c) the amount of the loan is not substantially greater than the amount of those expenses that could reasonably be expected to be incurred by the employee; and (d) the employee is required: (i) to account to the employer for expenses met from the loan; and (ii) to repay (whether by set-off or otherwise) any amount not so accounted for. (4) The making of a loan is exempt if: (a) the loan consists of an advance by the employer to the employee; and (b) the sole purpose of the making of the loan is to enable the employee to pay any of the following amounts payable by the employee in respect of accommodation: (i) a rental bond; (ii) a security deposit in respect of electricity, gas or telephone services; (iii) any similar amount; and (c) the employee is required to repay (whether by set-off or otherwise) the loan amount of the advance. 1157I Housing benefits (1) The subsistence of a housing right granted by a person (the provider) to another person (the recipient) constitutes a housing benefit provided by the provider to the recipient. (2) The payment of money or other valuable consideration by an employer directly or indirectly to an employee (other than an employee of the Defence Force) to enable or assist the employee to meet costs associated with a loan to which subsection (4) applies constitutes a housing benefit provided by the employer to the employee. Note: For employee and employer see section 10A. (3) The payment of money or other valuable consideration by an employer directly or indirectly to an employee of the Defence Force to meet costs associated with a loan to which subsection (4) applies does not constitute a housing benefit provided by the employer to the employee. (4) This subsection applies to a loan made to, or used by, a person (whether in his or her own right or jointly with his or her partner) wholly: (a) to enable the person to acquire a prescribed interest in land on which a dwelling or a building containing a dwelling was subsequently to be constructed; or (b) to enable the person to acquire a prescribed interest in land and construct, or complete the construction of, a dwelling or a building containing a dwelling on the land; or (c) to enable the person to construct, or complete the construction of, a dwelling or a building containing a dwelling on land in which the person held a prescribed interest; or (d) to enable the person to acquire a prescribed interest in land on which there was a dwelling or a building containing a dwelling; or (e) to enable the person to acquire a prescribed interest in a stratum unit in relation to a dwelling; or (f) to enable the person to extend a building that: (i) is a dwelling or contains a dwelling; and (ii) is constructed on land in which the person held a prescribed interest; by adding a room or part of a room to the building or part of the building containing the dwelling, as the case may be; or (g) if the person held a prescribed interest in a stratum unit in relation to a dwelling-to enable the person to extend the dwelling by adding a room or part of a room to the dwelling; or (h) to enable the person to repay a loan that was made to, and used by, the person wholly for a purpose mentioned in paragraph (a) to (g). Note 1: For dwelling see subsection 10A(7). Note 2: For prescribed interest see subsections 10A(10) to (14). Note 3: For stratum units see subsection 10A(8). (5) The payment of money or other valuable consideration by an employer directly or indirectly to an employee to enable or assist the employee to meet costs associated with enjoying a housing right constitutes a housing benefit provided by the employer to the employee. Note: For employee, employer and housing right see section 10A. (6) For the avoidance of doubt, subsection (5) does not apply to payments to which subsection (2) or (3) applies. 1157J Exempt housing benefits-live-in residential care workers (1) If, during a period: (a) the employer of an employee is: (i) a government body; or (ii) a religious institution; or (iii) a non-profit company; whose activities consist of, or include, caring for mature persons or disadvantaged persons; and (b) the duties of the employee's employment consist of, or consist principally of, caring for mature or disadvantaged persons; and (c) in the performance of those duties, the employee lives, together with mature persons or disadvantaged persons, in residential premises of the employer; and (d) the fact that the employee lives in those premises is directly related to the provision, in the course of the performance of the duties of the employee's employment, of care to the mature persons or disadvantaged persons living in those premises; any benefit arising from the provision, during that period, of that accommodation to the employee or to the employee and a partner or dependent child of the employee who resides in those premises with the employee is exempt. (2) In this section: residential premises means a house or hostel used exclusively for the provision of residential accommodation to: (a) mature persons or disadvantaged persons and dependent children of mature persons or disadvantaged persons; and (b) persons the duties of whose employment consist of, or consist principally of, caring for persons referred to in paragraph (a); and (c) partners and children of persons referred to in paragraph (b). 1157JA Expense benefits (1) A person (the employee) receives an expense benefit if an amount is paid to, or on behalf of, the employee or a person connected with the employee by: (a) an employer of the employee; or (b) an associate of the employer; or (c) a person (the arranger), other than the employer or an associate of the employer, under an arrangement between: (i) the employer or an associate of the employer; and (ii) the arranger or another person; and is so paid in connection with an expense or expenses of a private nature that have been, or will or may be, incurred by the employee or person connected with the employee. (2) The following are persons connected with the employee: (a) a partner of the employee; (b) a dependent child of the employee or of the employee's partner; (c) a person who would be a dependent child of the employee or of the employee's partner if the person was not receiving a newstart allowance or a sickness allowance. 1157JB Exempt expense benefit An amount paid as mentioned in subsection 1157JA(1) is exempt if: (a) the amount is paid to reimburse expenses incurred in connection with the employee's employment; or (b) the employee requires the amount to be applied in paying expenses related to the employee's employment. 1157JC Financial investment benefit (1) A person (the employee) receives a financial investment benefit if: (a) an employer of the employee; or (b) an associate of the employer; or (c) a person (the arranger), other than the employer or an associate of the employer, under an arrangement between: (i) the employer or an associate of the employer; or (ii) the arranger or another person; pays for, or reimburses the cost of, the acquisition of a financial investment by the employee or a person connected with the employee. (2) The making by a person, for the benefit of another person, of contributions to a superannuation fund or an ATO small superannuation account does not constitute payment for the acquisition of a financial investment by the other person. (3) The following are persons connected with the employee: (a) a partner of the employee; (b) a dependent child of the employee or of the employee's partner; (c) a person who would be a dependent child of the employee or of the employee's partner if the person was not receiving a newstart allowance or a sickness allowance. Division 3-Value of car fringe benefits 1157K Method of valuing car fringe benefits (1) Subject to subsection (2), the value of a car fringe benefit is to be worked out in accordance with section 1157L. (2) If a determination is in force under section 1157M, the value of a car fringe benefit is to be worked out in accordance with the determination. 1157L Value of car fringe benefits (1) This is how to work out the value of a car fringe benefit: Method statement Step 1. Work out the engine capacity of the car and go to the relevant Part of the Car Fringe Benefits Value Table. Step 2. Work out how old the car is and go to the appropriate row in the Table. Step 3. Work out how many complete months in the appropriate tax year the person had or will have the car fringe benefit and go to the appropriate column in the Table: the number where that row and column intersect is the value of the car fringe benefit. Note: If the person is a member of a couple, the value of the car fringe benefit is to be halved in certain circumstances (see subsection (3)). (2) The following Table is to be used in working out the value of a car fringe benefit: |CAR FRINGE BENEFITS VALUE TABLE | |PART A-Car engine size up to 1600cc | | | | | | |car| | | |age| | |item | |PART B-Car engine size 1601cc to 2850cc | |11. | |PART C-Car engine size more than 2850cc | |21. | |Location |Type of accommodation | | |House, flat or home|Any other | | |unit |unit of | | | |accommodation| | |3 or more|1-2 | | | |bedrooms |bedrooms | | |Metropolitan|140 |120 |85 | |Non-metropol|100 |90 |70 | |itan | | | | |Special |80 |80 |25 | |housing | | | | |Outside |140 |120 |85 | |Australia | | | | Note 1: For unit of accommodation, metropolitan location, non- metropolitan location and special housing location see section 10A. Note 2: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B). Note 3: For Australia see subsection 23(1). (3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by: (a) if the person is not a member of a couple-the person; or (b) if the person is a member of a couple-the person and the person's partner. (4) If: (a) the person is a member of a couple; and (b) the person's partner receives a housing fringe benefit in the appropriate tax year; and (c) the person's and the partner's housing fringe benefits relate to the same unit of accommodation; the weekly market rent obtained in Step 2 of the Method statement and the allowable rent obtained in Step 5 of the Method statement are both to be halved. 1157TA Value of grants of housing rights-employees of the Defence Force (1) This is how to work out the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to an employee of the Defence Force: Method statement Step 1. Work out the type of accommodation and go to the appropriate column in the Housing Fringe Benefits Value Table (Defence Force Employees): the number in the appropriate column is the weekly market rent of the unit of accommodation. Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)). Step 2. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person. Step 3. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 2: the result is the provisional value of the housing fringe benefit. Step 4. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3). Note: If a person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)). Step 5. Take the allowable rent away from the provisional value of the housing fringe benefit: the result is the value of the housing fringe benefit. Note: For employee see section 10A. (2) The following Table is to be used in working out the value of a housing fringe benefit to which subsection 1157I(1) applies that is provided to an employee of the Defence Force: |Housing Fringe Benefits Value Table (Defence | |Force Employees) | |Type of accommodation | |House, flat or home unit |Any other unit | | |of | | |accommodation | |3 or more |1-2 bedrooms | | |bedrooms | | | |80 |80 |25 | Note 1: For employee see section 10A. Note 2: For unit of accommodation see section 10A. Note 3: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B). Note 4: For Australia see subsection 23(1). (3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by: (a) if the person is not a member of a couple-the person; or (b) if the person is a member of a couple-the person and the person's partner. (4) If: (a) the person is a member of a couple; and (b) the person's partner receives a housing fringe benefit in the appropriate tax year; and (c) the person's and the partner's housing fringe benefits relate to the same unit of accommodation; the weekly market rent obtained in Step 1 of the Method statement and the allowable rent obtained in Step 4 of the Method statement are both to be halved. Subdivision B-Payments associated with loans 1157TB Method of valuing housing fringe benefits-payments associated with loans (1) Subject to subsection (2), the value of a housing fringe benefit to which subsection 1157I(2) applies is to be worked out in accordance with section 1157TC. (2) If: (a) a determination is in force under section 1157U; and (b) the determination applies to housing fringe benefits to which subsection 1157I(2) applies; the value of a housing fringe benefit to which subsection 1157I(2) applies is to be worked out in accordance with the determination. 1157TC Value of payments associated with loans The value of a housing fringe benefit to which subsection 1157I(2) applies is the amount of the payment that constitutes the housing benefit. Subdivision C-Payments associated with enjoying housing rights 1157TD Methods of valuing housing fringe benefits-payments associated with enjoying housing rights (1) Subject to subsection (3), the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to a person who is not an employee of the Defence Force is to be worked out in accordance with section 1157TE. (2) Subject to subsection (3), the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to an employee of the Defence Force is to be worked out in accordance with section 1157TF. (3) If: (a) a determination is in force under section 1157U; and (b) the determination applies to housing fringe benefits to which subsection 1157I(5) applies; the value of a housing fringe benefit to which subsection 1157I(5) applies is to be worked out in accordance with the determination. 1157TE Value of payments associated with enjoying housing rights-general (1) This is how to work out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to a person who is not an employee of the Defence Force: Method statement Step 1. Work out the location of the unit of accommodation and go to the appropriate row of the Housing Fringe Benefits Value Table. Step 2. Work out the type of accommodation and go to the appropriate column in the Table: the number where the row and column intersect is the weekly market rent of the unit of accommodation. Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)). Step 3. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person. Step 4. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 3: the result is the provisional value of the housing fringe benefit. Step 5. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3). Note: If a person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)). Step 6. Work out the amount the employer paid or will pay by way of the housing fringe benefits in respect of the unit of accommodation in the appropriate tax year: the result is the employer subsidy. Step 7. Work out the amount (if any) by which the allowable rent exceeds the employer subsidy: the result is the employee contribution. Note: If the employer subsidy equals or exceeds the allowable rent, the employee contribution is nil. Step 8. Take the employee contribution away from the provisional value of the housing fringe benefit: the result is the value of the housing fringe benefit. (2) The following Table is to be used in working out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to a person who is not an employee of the Defence Force: |Housing fringe benefits value table | |Location |Type of accommodation | | |House, flat or home|Any other | | |unit |unit of | | | |accommodation| | |3 or |1-2 | | | |more |bedrooms | | | |bedrooms| | | |Metropolitan|140 |120 |85 | |Non-metropol|100 |90 |70 | |itan | | | | |Special |80 |80 |25 | |housing | | | | |Outside |140 |120 |85 | |Australia | | | | Note 1: For unit of accommodation, metropolitan location, non- metropolitan location and special housing location see section 10A. Note 2: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B). Note 3: For Australia see subsection 23(1). (3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by: (a) if the person is not a member of a couple-the person; or (b) if the person is a member of a couple-the person and the person's partner. (4) If: (a) the person is a member of a couple; and (b) the person's partner receives a housing fringe benefit in the appropriate tax year; and (c) the person's and the partner's housing fringe benefits relate to the same unit of accommodation; the weekly market rent obtained in Step 2 of the Method statement and the allowable rent obtained in Step 5 of the Method statement are both to be halved. 1157TF Value of payments associated with enjoying housing rights-employees of the Defence Force (1) This is how to work out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to an employee of the Defence Force: Method statement Step 1. Work out the type of accommodation and go to the appropriate column in the Housing Fringe Benefits Value Table (Defence Force Employees): the number in the appropriate column is the weekly market rent of the unit of accommodation. Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)). Step 2. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person. Step 3. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 2: the result is the provisional value of the housing fringe benefit. Step 4. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3). Note: If a person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)). Step 5. Work out the amount the employer paid or will pay by way of the housing fringe benefits in respect of the unit of accommodation in the appropriate tax year: the result is the employer subsidy. Step 6. Work out the amount (if any) by which the allowable rent exceeds the employer subsidy: the result is the employee contribution. Note: If the employer subsidy equals or exceeds the allowable rent, the employee contribution is nil. Step 7. Take the employee contribution away from the provisional value of the housing fringe benefit: the result is the value of the housing fringe benefit. (2) The following Table is to be used in working out the value of a housing fringe benefit to which subsection 1157I(5) applies that is provided to an employee of the Defence Force: |Housing Fringe Benefits Value Table (Defence | |Force Employees) | |Type of accommodation | |House, flat or home unit |Any other unit | | |of | | |accommodation | |3 or more |1-2 bedrooms | | |bedrooms | | | |80 |80 |25 | Note 1: For employee see section 10A. Note 2: For unit of accommodation see section 10A. Note 3: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B). Note 4: For Australia see subsection 23(1). (3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by: (a) if the person is not a member of a couple-the person; or (b) if the person is a member of a couple-the person and the person's partner. (4) If: (a) the person is a member of a couple; and (b) the person's partner receives a housing fringe benefit in the appropriate tax year; and (c) the person's and the partner's housing fringe benefits relate to the same unit of accommodation; the weekly market rent obtained in Step 1 of the Method statement and the allowable rent obtained in Step 4 of the Method statement are both to be halved. Subdivision D-Alternative methods of valuing housing fringe benefits 1157U Minister may determine alternative method of valuing housing fringe benefits (1) The Minister may, by legislative instrument, determine an alternative method for valuing housing fringe benefits. (1A) A determination under subsection (1) may apply to all housing fringe benefits or only to specified kinds of housing fringe benefits. (2) A determination under subsection (1): (a) takes effect from the first moment of the day next following the day when it is registered in the Federal Register of Legislative Instruments under the Legislative Instruments Act 2003; and (b) ceases to have effect 6 months after the day it starts to have effect, if it has not already been revoked. Division 8-Value of expense fringe benefit 1157UA Value of expense fringe benefits The value of an expense fringe benefit is the amount of the payment that constitutes the expense benefit. Division 9-Value of financial investment fringe benefit 1157UB Value of financial investment fringe benefit The value of a financial investment fringe benefit is the value of the financial investment benefit that constitutes the financial investment fringe benefit when the financial investment benefit is received. Division 8-Foreign currency rates 1157V Foreign currency rates (1) If: (a) it is necessary, for the purposes of this Part, to work out an amount or value of a fringe benefit; and (b) the amount or value of the benefit is expressed in a foreign currency; the amount or value in Australian currency is to be worked out using the market exchange rate for 1 July in the appropriate tax year. (2) If there is no market exchange rate for 1 July in the appropriate tax year (for example, because of a national public holiday), the market exchange rate to be used is the market exchange rate that applied on the last working day immediately before that 1 July. (3) For the purposes of this section, the market exchange rate of a foreign currency is the on-demand airmail buying rate for that currency available at the Commonwealth Bank of Australia. Part 3.13-Imprisonment 1158 Some social security payments not payable during period in gaol or in psychiatric confinement following criminal charge An instalment of a social security pension, a social security benefit, a parenting payment, a carer allowance, a mobility allowance or a pensioner education supplement is not payable to a person in respect of a day on which the person is: (a) in gaol; or (b) undergoing psychiatric confinement because the person has been charged with an offence. Note 1: For in gaol see subsection 23(5). Note 2: For psychiatric confinement see subsections 23(8) and (9). 1159 Payment may be redirected to dependent partner or child (1) If: (a) a social security pension (other than pension PP (single)) is not payable to a person on a pension payday because of section 1158; and (b) the person's partner is dependent on the person; the Secretary may authorise the payment of all or some of the instalment that would otherwise have been payable to the person to be paid to: (c) the partner; or (d) someone else for the benefit of the partner. (2) If: (a) a social security pension (other than pension PP (single)) is not payable to a person on a pension payday because of section 1158; and (b) a young person is dependent on the person; the Secretary may authorise the payment of all or some of the instalment that would otherwise have been payable to the person to be paid to: (c) the young person; or (d) someone else for the benefit of the young person. 1159A Person not qualified for some concession cards when in gaol or in psychiatric confinement following criminal charge (1) A person is not qualified under section 1061ZG or 1061ZO for a seniors health card or health care card on a day on which the person is: (a) in gaol; or (b) undergoing psychiatric confinement because the person has been charged with an offence. Note 1: For in gaol see subsection 23(5). Note 2: For psychiatric confinement see subsections 23(8) and (9). (2) This section has effect despite sections 1061ZG and 1061ZO. Part 3.14-Compensation recovery Division 1-General 1160 General effect of Part (1) This Part operates in certain specified circumstances to do one or more of the following: (a) reduce a person's compensation affected payment; (b) render a person's compensation affected payment not payable; (c) require the repayment of some or all of a person's compensation affected payment; because of the receipt of compensation by the person or the person's partner. (2) This Part applies whether or not there is any connection between the circumstances that give rise to the person's qualification for the compensation affected payment and the circumstances that give rise to the receipt of compensation by the person or the person's partner. 1161 Application of Part (1) Subject to subsections (2) to (7), payments of a compensation affected payment are affected under this Part if: (a) whether the compensation was received before or after the commencement of this Part, the compensation affected payment is: (i) a newstart allowance in relation to which, under Subdivision BA of Division 1 of Part 2.12, the recipient of the allowance is not required to satisfy the activity test; or (ii) a sickness allowance; or (iii) a sickness benefit under the 1947 Act; or (iv) a rehabilitation allowance under the 1947 Act payable in place of sickness benefit under the 1947 Act; or (b) in the case of any other kind of compensation affected payment, the compensation was received on or after 1 May 1987 and the claim for the compensation affected payment was made on or after 1 May 1987. (2) This Part applies to a pension PP (single) if: (a) the compensation was received on or after 20 March 1992; and (b) the claim for the pension was made on or after 20 March 1992. (3) This Part applies to carer payment if: (a) the compensation was received on or after 1 January 1993; and (b) the claim for the carer payment was made on or after 1 January 1993. (4) This Part applies to a mature age allowance or mature age partner allowance if: (a) the compensation was received on or after 20 March 1994; and (b) the claim for the allowance was made on or after 20 March 1994. (5) This Part applies to partner allowance if: (a) the compensation was received on or after 20 September 1994; and (b) the claim for the allowance was made on or after 20 September 1994. (6) This Part applies to age pension if: (a) the compensation was received on or after 20 March 1997; and (b) the person's provisional commencement day or start day for the age pension is on or after 20 March 1997. (6A) Subject to section 1161A, this Part applies to a compensation affected payment to which paragraph (l), (m) or (n) of the definition of that expression in subsection 17(1) applies if: (a) the compensation is received on or after 1 July 2004; and (b) either: (i) if the compensation affected payment to which that paragraph applies is one in respect of which a claim must be made for a person to be qualified for the payment-a claim is made for the payment on or after 1 July 2004; or (ii) if the compensation affected payment to which that paragraph applies is not one in respect of which a claim must be made for a person to be qualified for the payment-the compensation affected payment is received on or after 1 July 2004. (7) In spite of subsection (1), Division 4 does not apply to: (a) a disability support wife pension; or (b) a special needs disability support wife pension; received by a person if: (c) the compensation was received by the person on or after 1 May 1987 but before 1 January 1994; and (d) the claim for the pension was made on or after 1 May 1987 but before 1 January 1994. 1161A Application of Part to supplementary compensation affected payments (1) For the purposes of this section: (a) a reference to a supplementary compensation affected payment is a reference to a compensation affected payment to which paragraph (l), (m) or (n) of the definition of compensation affected payment in subsection 17(1) applies; and (b) a supplementary compensation affected payment relates to any allowance, supplement, pension or payment of a kind that, in the applicable paragraph of the definition of compensation affected payment in subsection 17(1), is labelled as the underlying compensation affected payment. (2) Except as mentioned in this section, this Part does not apply to a supplementary compensation affected payment. (3) If: (a) as a result of the operation of section 1169, any underlying compensation affected payment to which a supplementary compensation affected payment relates was not payable in relation to the day on which the supplementary compensation affected payment was received; or (b) as a result of the oper