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VETERANS' AFFAIRS (1994-95 BUDGET MEASURES) LEGISLATION AMENDMENT ACT (No. 2) 1994 No. 164 of 1994 - SECT 8

Application of income and assets test reductions for income tax purposes
8. Section 40C of the Principal Act is amended:

   (a)  by inserting after subsection (1) the following subsections:

"(1A) If:

   (a)  the rate of a service pension applicable to a person who has no
        dependent children is increased under the rent assistance Module of a
        Rate Calculator or the pharmaceutical allowance Module of a Rate
        Calculator; and

   (b)  an amount of that pension is to be reduced under section 59T
        (compensation recovery); the reduction is to be applied:

   (c)  first, to that part of the amount that does not include any increase
        under the rent assistance Module or the pharmaceutical allowance
        Module; and

   (d)  then, to the amount of any increase under the rent assistance Module;
        and

   (e)  finally, to the amount of any increase under the pharmaceutical
        allowance Module.



"(1B) If:

   (a)  the rate of a service pension applicable to a person who has dependent
        children is increased under the pharmaceutical allowance Module of a
        Rate Calculator; and

   (b)  an amount of that pension or the compensation affected component of
        such an amount is to be reduced under section 59T (compensation
        recovery); the reduction is to be applied:

   (c)  first, to that part of the amount or of the compensation affected
        component that does not include the increase under the pharmaceutical
        allowance Module; and

   (d)  then, to the amount of the increase under the pharmaceutical allowance
        Module.";

   (b)  by omitting from subsection (2) "subsection (1)" and substituting
        "subsections (1), (1A) and (1B)". 


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