Commonwealth Numbered Acts

SOCIAL SECURITY ACT 1991 No. 46, 1991 - SECT 1119

1119. (1) Subject to subsection (2), in calculating the value of a person's
assets for the purposes of this Act (other than subparagraph 263 (1) (c) (iv)
and sections 1125 and 1126), disregard the value of any annuity of the person.

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

   (a)  a disposable or deferrable annuity; or

   (b)  an immediate annuity purchased on or after 15 August 1989; or

   (c)  an annuity that became presently payable on or after 15 August 1989.
        Disposable or deferrable annuity

(3) For the purposes of subsection (2), an annuity is a disposable or
deferrable annuity if:

   (a)  either:

   (i)  the annuity is able to be disposed of; or

   (ii) a substantial part of the income under the annuity is deferred; or

   (iii) a substantial part of the income under the annuity may be deferred;
        and

   (b)  the Secretary is satisfied that the annuity should not be disregarded
        under paragraph 1118 (1) (e). Value of certain post-15 August 1989
        annuities

(4) The value of:

   (a)  an immediate annuity purchased on or after 15 August 1989; or

   (b)  an annuity that became presently payable on or after 15 August 1989;
        is worked out using the Annuity Value Calculator at the end of this
        section.
ANNUITY VALUE CALCULATOR Overall value calculation
1119-1. This is how to work out the value of the annuity:
Method statement Step 1. Work out the residual capital value of the annuity.
Step 2. Work out the balance of the purchase price of the annuity using point
1119-2. Step 3. Work out the adjustment factor using point 1119-3. Step 4.
Multiply the balance obtained under Step 2 by the adjustment factor obtained
in Step 3: the result is called the adjusted balance. Step 5. Add the adjusted
balance to the residual capital value: the result is called the adjusted value
of the annuity. Step 6. The value of the annuity is the higher of the adjusted
value and the residual capital value.
Note: for "residual capital value" see subsection 9 (1). Balance of
purchase price
1119-2. The balance of the purchase price of the annuity is:
purchase price - residual capital value
Note: for "purchase price" and "residual capital value" see subsection 9 (1).
Adjustment factor
1119-3. The adjustment factor is:
relevant number - (years elapsed + 1) where:
relevant number is the relevant number for the annuity;
years elapsed is the number of full years that have elapsed since the annuity
became presently payable.
Note: for "relevant number" see subsection 9 (1).