Commonwealth Numbered Acts

SOCIAL SECURITY (PARENTING ALLOWANCE AND OTHER MEASURES) LEGISLATION AMENDMENT ACT 1994 No. 174, 1994 - SCHEDULE 2

                               SCHEDULE 2                   Section 4

AMENDMENTS RELATING TO INCOME TESTS AND RELATED MATTERS 1. Subsection 8(8):
Add at the end:

"; (zl) if the person:

        (i)    is receiving a social security benefit and is a member of a
               couple; or

        (ii)   is receiving a parenting allowance; a payment received by the
               person either directly or indirectly from his or her partner.".
               2. Point 1067-A1 (Step 7): Omit "ordinary". 3. Paragraph
               1067-F12(b): Omit the paragraph, substitute:

"(b) either:

        (i)    is receiving a job search allowance, youth training allowance,
               newstart allowance, sickness allowance or partner allowance the
               rate of which is increased to take account of rent; or

        (ii)   would be receiving such an allowance but for the amount of the
               person's ordinary income reduction under point 1067-H14.". 4.
               Heading to Module H of Benefit Rate Calculator A: Omit
               "ORDINARY". 5. Point 1067-H1:

   (a)  After "person's ordinary income" (first occurring) insert ", and the
        ordinary income of a partner of the person,".

   (b)  Omit Note 1 at the end of Step 1, substitute:

"Note 1: For the treatment of the ordinary income of a partner who is
receiving a social security pension or a service pension see points 1067-H2
and 1067-H3.".

   (c)  Omit Steps 2, 3, 4, 5 and 6, substitute:

"Step 2. If the person is a member of a couple, work out the partner income
free area using point 1067-H9. 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 1067-H10(a), (b) and
(c) to work out whether the person has a partner income excess. Step 4. If the
requirements of paragraphs 1067-H10(a), (b) and (c) are not satisfied, the
person's partner income excess is nil. Step 5. If the requirements of
paragraphs 1067-H10(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 1067-H11. Step 7. Work out whether the
person's ordinary income exceeds the person's ordinary income free area under
point 1067A-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 1067-H14, 1067-H15 and 1067-H16. 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 7 of point 1067-A1.". 6. Point
1067-H1 (Note 2): Omit "reduction for ordinary income", substitute "income
reduction". 7. Points 1067-H2 and 1067-H2A: Omit the points, substitute:
Ordinary income of members of certain couples

"1067-H2. Subject to point 1067-H3, if a person is a member of a couple and
the person's partner is receiving a social security pension, a service pension
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.". 8. Points 1067-H9,
        1067-H9A, 1067-H10, 1067-H11, 1067-H12 and 1067-H13: Omit the points,
        substitute: Partner income free area

"1067-H9. The partner income free area for a person is:

   (a)  if the person is not receiving a social security benefit-the amount of
        income of the person (rounded up to the nearest dollar) beyond which
        job search allowance would not be payable to the person if the person
        were qualified for a job search allowance; or

   (b)  if the person is receiving a social security benefit-the amount of
        income of the person (rounded up to the nearest dollar) beyond which
        that benefit would not be payable to the person. Partner income excess

"1067-H10. If:

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

   (b)  the person's partner is not receiving a social security pension, a
        service pension or 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

"1067-H11. If a person has a partner income excess, the person's partner
income reduction is an amount equal to 70% of the part of the partner's
ordinary income that exceeds the partner income free area. Example: Facts:
Ian's partner Andrea has an ordinary income of $498. Assume that the partner
income free area under point 1067-H9 is $462. Application: Andrea's ordinary
income exceeds the partner income free area. She therefore has a partner
income excess under point 1067-H10 of $498 - $462 = $36. Ian's partner income
reduction under point 1067-H11 is therefore 70% of $36 = $25.20. Ordinary
income free area

"1067-H12. A person's ordinary income free area is $60. Note: The income free
area is used in the ordinary income test in relation to fortnightly income.
Ordinary income excess

"1067-H13. 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

"1067-H14. 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 1067-H15); and

   (b)  the person's upper range reduction (if any) (see point 1067-H16).
        Lower range reduction

"1067-H15. 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 $80. Upper
range reduction

"1067-H16. The person's upper range reduction is an amount equal to 70% of the
part (if any) of the person's ordinary income excess that exceeds $80.
Example: Facts: Further to the example at the end of point 1067-H11, Ian is
receiving job search allowance. His ordinary income is $160. Application:
Ian's ordinary income free area under point 1067-H12 is $60. His ordinary
income exceeds his ordinary income free area. He therefore has an ordinary
income excess under point 1067-H13 of $160 - $60 = $100. Because his ordinary
income excess exceeds $80:
. his lower range reduction under point 1067-H15 is 50% of $80 = $40; and
. his upper range reduction under point 1067-H16 is 70% of $20 = $14. His
ordinary income reduction under point 1067-H14 is therefore $40 + $14 = $54.
Ian's income reduction referred to in Step 7 of point 1067-A1 is $25.20 + $54
= $79.20.". 9. Point 1068-A1 (Step 5): Omit "ordinary". 10. Paragraph
1068-F14(b): Omit the paragraph, substitute:

"(b) either:

        (i)    is receiving a job search allowance, youth training allowance,
               newstart allowance, sickness allowance or partner allowance the
               rate of which is increased to take account of rent; or

        (ii)   would be receiving such an allowance but for the amount of the
               person's ordinary income reduction under point 1068-G14.". 11.
               Heading to Module G of Benefit Rate Calculator B: Omit
               "ORDINARY". 12. Point 1068-G1:

   (a)  After "person's ordinary income" (first occurring) insert ", and the
        ordinary income of a partner of the person,".

   (b)  Omit Note 1 at the end of Step 1, substitute:

"Note 1: For the treatment of the ordinary income of a partner who is
receiving a social security pension or a service pension see points 1068-G2
and 1068-G3.".

   (c)  Omit Steps 2, 3, 4, 5 and 6, substitute:

"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.". 13. Point
1068-G1 (Note 2): Omit "reduction for ordinary income", substitute "income
reduction". 14. Points 1068-G2 and 1068-G2A: Omit the points, substitute:
Ordinary income of members of certain couples

"1068-G2. Subject to point 1068-G3, if a person is a member of a couple and
the person's partner is receiving a social security pension, a service pension
or 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.". 15. Points 1068-G9,
        1068-G9A, 1068-G10, 1068-G11, 1068-G12 and 1068-G13: Omit the points,
        substitute: Partner income free area

"1068-G9. The partner income free area for a person is:

   (a)  if the person is not receiving a social security benefit-the amount of
        income of the person (rounded up to the nearest dollar) beyond which
        job search allowance would not be payable to the person if the person
        were qualified for a job search allowance; or

   (b)  if the person is receiving a social security benefit-the amount of
        income of the person (rounded up to the nearest dollar) beyond which
        that benefit would not be payable to the person. Partner income excess

"1068-G10. If:

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

   (b)  the person's partner is not receiving a social security pension, a
        service pension or 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 70% 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 $470. Assume that the partner
income free area under point 1068-G9 is $462. Application: Colin's ordinary
income exceeds the partner income free area. He therefore has a partner income
excess under point 1068-G10 of $470 - $462 = $8. Susan's partner income
reduction under point 1068-G11 is therefore 70% of $8 = $5.60. Ordinary income
free area

"1068-G12. A person's ordinary income free area is $60. 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 $80. Upper
range reduction

"1068-G16. The person's upper range reduction is an amount equal to 70% of the
part (if any) of the person's ordinary income excess that exceeds $80.
Example: Facts: Further to the Example at the end of point 1068-G11, Susan is
receiving newstart allowance. Her ordinary income is $180. Application:
Susan's ordinary income free area under point 1068-G12 is $60. Her ordinary
income exceeds her ordinary income free area. She therefore has an ordinary
income excess under point 1068-G13 of $180 - $60 = $120. Because her ordinary
income excess exceeds $80:
. her lower range reduction under point 1068-G15 is 50% of $80 = $40; and
. her upper range reduction under point 1068-G16 is 70% of $40 = $28. Her
ordinary income reduction under point 1068-G14 is therefore $40 + $28 = $68.
Susan's income reduction referred to in Step 5 of point 1068-A1 is $5.60 + $68
= $73.60. 16. Subsection 1109(1): After "subsections" insert "(1A), (1B),".
17. After subsection 1109(1): Insert:

"(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 or parenting
allowance, if:

   (a)  a person who is a member of a couple has, on or after 1 June 1984,
        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 or parenting
allowance, if:

   (a)  a person who is a member of a couple has, on or after 1 June 1984,
        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.". 18.
        Subsection 1115A(1): Omit "If", substitute "Subject to subsection (2),
        if". 19. Subsection 1115A(2): Omit the subsection, substitute:

"(2) Subsection (1) does not apply in relation to the application of an
ordinary income test to the person if the fortnightly rate of ordinary income
of the person's partner is such that the rate of social security benefit
payable to the person for the accounting period would be nil even if the
person's fortnightly rate of ordinary income were not taken into account in
working out the rate of benefit.

"(3) The reference in subsection (1) to the fortnightly rate of ordinary
income of the person's partner is a reference to that rate after taking into
account any application of subsection (1) in relation to amounts of money the
partner has earned for remunerative work.". 20. Subsections 1115B(2) and (3):
Omit the subsections. 21. Point 1115C-A5: Omit the point. 22. Point 1115C-C1
(Note 1): Omit "points 1115C-A4 and 1115C-A5", substitute "point 1115C-A4".
23. Points 1115C-C2 and 1115C-C3: Omit the points, substitute: Amount of
earnings credit

"1115C-C2. The amount of an earnings credit for an EC accounting period is
$60.00. Note: This is the amount of the ordinary income free area. See point
1067-H12 (Benefit Rate Calculator A), point 1068-G12 (Benefit Rate Calculator
B) and point 1068A-D16 (Parenting Allowance Rate Calculator).". 24. Point
1115C-D1: Omit "subsection 1115B(1)", substitute "section 1115B". 25. Point
1115C-D2: Omit the point. 26. Subsection 1168(1): Omit "If", substitute
"Subject to subsections (4), (5), (6) and (7), if". 27. Subsection 1168(3):
Omit "this section", substitute "subsection (1)". 28. Subsection 1168(3)
(Reduction Table-item 3-column 6): Add at the end "(but see subsections (6)
and (7))". 29. Subsection 1168(3) (Reduction Table-item 4-column 6): Add at
the end "(but see subsections (6) and (7))". 30. Subsection 1168(3) (Reduction
Table-item 5-column 6): Add at the end "(but see subsections (6) and (7))".
31. Subsection 1168(3) (Note 2): Omit "section 1168", substitute "subsection
(3)". 32. After subsection 1168(3): Insert before the Rate Reduction Examples:

"(4) Subject to subsections (6) and (7), if:

   (a)  a person, or the person's partner, receives a series of periodic
        compensation payments; and

   (b)  the person is qualified for a social security benefit or a parenting
        allowance for the periodic payments period; and

   (c)  the person's partner is qualified for a social security benefit or a
        parenting allowance for the periodic payments period; and

   (d)  the person was not, at the time of the event that gave rise to the
        entitlement of the person, or the person's partner, to the
        compensation, receiving a social security benefit or a parenting
        allowance; the rate of the person's social security benefit or
        parenting allowance is to be reduced, under subsection (5), for the
        periodic payments period. Note 1: For 'periodic payments period' see
        section 17. Note 2: If a person, or a person's partner, was, at the
        time of an event that gave rise to the entitlement of the person, or
        the person's partner, to compensation, receiving a compensation
        affected payment referred to in subsection (4), the compensation is
        treated as ordinary income.

"(5) If the rate of a person's social security benefit or parenting allowance
is to be reduced under subsection (4), the person's reduced rate is worked out
as follows:
     Social security  -  Partner's excess   -  Person's compensation

     payment rate        compensation rate     rate
where:
'Social security payment rate' is the fortnightly rate of the social security
benefit or parenting allowance payable to the person during the periodic
payments period;
'Partner's excess compensation rate' is the fortnightly rate of the amount (if
any) by which any periodic compensation payable to the person's partner during
the periodic payments period exceeds the fortnightly rate of the social
security benefit payable to the partner during that period;
'Person's compensation rate' is the fortnightly rate of any periodic
compensation payable to the person during the periodic payments period. Note
1: If the person's compensation rate or the partner's excess compensation
rate, or the 2 rates taken together, are higher than the fortnightly rate of
the social security benefit or parenting allowance, the benefit or allowance
will be reduced to nil for the periodic payments period. (However, in the case
of parenting allowance, the effect of the partner's excess compensation rate
may be reduced by subsection (6)). Note 2: If a person's rate is reduced under
subsection (5), 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).

"(6) If:

   (a)  a person is qualified for parenting allowance; and

   (b)  the person's rate of parenting allowance, disregarding any application
        of this section in relation to a fortnightly rate of periodic
        compensation of the person's partner, exceeds the maximum basic
        component of parenting allowance; and

   (c)  the application of this section in relation to a fortnightly rate of
        periodic compensation of the person's partner would, apart from this
        subsection, have the effect of reducing the person's rate of parenting
        allowance to a rate below the maximum basic component of parenting
        allowance; this section is taken to apply in relation to a fortnightly
        rate of periodic compensation of the person's partner only to the
        extent of reducing the person's maximum basic rate of parenting
        allowance to a rate equal to the maximum basic component of parenting
        allowance. Note: For the maximum basic component of parenting
        allowance see point 1068A-B6 of the Parenting Allowance Rate
        Calculator at the end of section 1068A.

"(7) If:

   (a)  a person is qualified for parenting allowance; and

   (b)  the person's rate of parenting allowance does not exceed the maximum
        basic component of parenting allowance; this section is taken not to
        have the effect of reducing the person's rate of parenting allowance
        to take into account a fortnightly rate of periodic compensation of
        the person's partner. Note: For the maximum basic component of
        parenting allowance see point 1068A-B6 of the Parenting Allowance Rate
        Calculator at the end of section 1068A.". 33. Section 1168 (Example
        1): After "in the Table" insert "in subsection (3)". 34. Section 1168
        (Example 2): Omit the Example, substitute:

"Example 2: Martha is a member of a couple. She has to stop work because of
sickness. She claimed and was granted sickness allowance of $260 per
fortnight. Her partner, Fred, is receiving job search allowance of $260 per
fortnight. Martha's employer has started paying her fortnightly compensation
of $300. Martha was obliged to notify the Department (under section 727) as
soon as she became aware that she was going to receive the periodic
compensation payments. While she is receiving periodic payments of
compensation from her employer, both her sickness allowance and Fred's job
search allowance will be affected. Since their situation is covered by the
subsection, Martha's rate will be reduced by $260 and Fred's rate will be
reduced by $40 ($300 (compensation) - $260 (Martha's sickness allowance)).
Therefore, Martha's rate of payment will be nil and Fred's rate of payment
will be $220 ($260 (Fred's job search allowance rate)-$40).".