Commonwealth Numbered Acts

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

                            SCHEDULE 2                    Section 20

AMENDMENTS OF RATE CALCULATOR IN SECTION 45Y OF THE
VETERANS' ENTITLEMENTS ACT 1986
PART 1-MODULES TO BE SUBSTITUTED FOR MODULES B AND C

"MODULE B-OVERALL RATE CALCULATION PROCESS Method of calculating rate (persons
who are not permanently blind)

"45Y-B1. The rate of income support supplement for a person who is not
permanently blind is an annual rate worked out as follows (fortnightly amounts
are provided for information only):
Method statement Step 1. Work out the person's maximum basic rate using MODULE
C below. Step 2. Apply the adjusted income test using MODULE D below to work
out the reduction for adjusted income. Step 3. Take the amount obtained in
Step 2 away from the amount obtained in Step 1: the result is called the
adjusted income reduced rate. Step 4. Apply the assets test using MODULE E
below to work out the reduction for assets. Step 5. Take the amount obtained
in Step 4 from the amount obtained in Step 1: the result is called the assets
reduced rate. Step 6. Work out the person's ceiling rate using points 45Y-A3
and 45Y-A4. Step 7. Find out, using points 45Y-A5 and 45Y-A6, whether the
pension payable to the person under Part II or Part IV is compensation
reduced. If the pension is not compensation reduced, go directly to Step 10.
If the pension is compensation reduced, work out the amount of the reduction
in the pension using point 45Y-A7; then go to Step 8. Step 8. This Step
applies only to a person whose pension under Part II or IV is compensation
reduced. Add the amount of the reduction in the person's pension (see Step 7)
to the person's ceiling rate (see Step 6): the result is called the adjusted
ceiling rate. Step 9. This Step applies only to a person whose pension under
Part II or IV is compensation reduced. Work out the person's provisional rate
as follows: compare the adjusted income reduced rate (see Step 3), the assets
reduced rate (see Step 5) and the adjusted ceiling rate (see Step 8); the
person's provisional rate is equal to:

   (a)  whichever is the least of those rates; or

   (b)  if 2 of those rates are the same and the third one is higher-the lower
        rate; or

   (c)  if the 3 rates are the same-those rates. Go now to Step 11. Step 10.
        This Step applies only to a person whose pension under Part II or IV
        is not compensation reduced. Work out the person's provisional rate as
        follows: compare the adjusted income reduced rate (see Step 3), the
        assets reduced rate (see Step 5) and the ceiling rate (see Step 6);
        the person's provisional rate is equal to:

   (a)  whichever is the least of those rates; or

   (b)  if 2 of those rates are the same and the third one is higher-the lower
        rate; or

   (c)  if the 3 rates are the same-those rates. Step 11. Work out the amount
        per year (if any) for rent assistance using MODULE F below. Step 12.
        Work out the amount per year (if any) for dependent children using
        MODULE G below. Step 13. Add up the amounts obtained in Steps 11 and
        12. Step 14. Apply the maintenance income test to the maintenance
        income of the person using MODULE H below to work out the reduction
        for maintenance income. Step 15. Take the reduction for maintenance
        income away from the result obtained in Step 13. Step 16. Work out the
        amount per year (if any) payable by way of remote area allowance using
        MODULE I below. Step 17. Add the amounts obtained in Steps 15 and 16
        to the person's provisional rate (see Step 9 or 10): the result is the
        rate of income support supplement. Note 1: If a person's assets
        reduced rate is less than the person's adjusted income reduced rate,
        the person may be able to take advantage of provisions dealing with:
. financial hardship (sections 52Y and 52Z);
. pension loans scheme (section 52ZA). Note 2: The rate calculation for a
member of a couple is affected by the operation of point 45Y-A2. Note 3: The
amount of a fortnightly instalment of income support supplement will be
rounded off to the nearest multiple of 10 cents (see subsections 58A(2) and
(3)). Note 4: For the minimum amount of a fortnightly instalment of income
support supplement see subsection 58A(4). Method of calculating rate (persons
permanently blind)

"45Y-B2. The rate of income support supplement for a person who is permanently
blind is an annual rate worked out as follows (fortnightly amounts are
provided for information only):
Method statement Step 1. Work out the person's ceiling rate using points
45Y-A3 and 45Y-A4. Step 2. Find out using points 45Y-A5 and 45Y-A6 whether the
pension payable to the person under Part II or Part IV is compensation
reduced. If the pension is not compensation reduced, go directly to Step 3. If
the pension is compensation reduced, work out the amount of the reduction in
the pension using point 45Y-A7 and add that amount to the person's ceiling
rate: the result is called the adjusted ceiling rate. Step 3. Work out the
amount per year (if any) for rent assistance using MODULE F below. Step 4.
Work out the amount per year (if any) for dependent children using MODULE G
below. Step 5. Add up the amounts obtained in Steps 3 and 4. Step 6. Apply the
maintenance income test to the maintenance income of the person using MODULE H
below to work out the reduction for maintenance income. Step 7. Take the
reduction for maintenance income away from the result obtained in Step 5. Step
8. Work out the amount per year (if any) payable by way of remote area
allowance using MODULE I below. Step 9. If the pension payable to the person
is not compensation reduced, add the amounts obtained in Steps 7 and 8 to the
person's ceiling rate (see Step 1): the result is the rate of income support
supplement. Step 10. If the pension payable to the person is compensation
reduced, add the amounts obtained in Steps 7 and 8 to the person's adjusted
ceiling rate (see Step 2): the result is the rate of income support
supplement.

"MODULE C-MAXIMUM BASIC RATE Maximum basic rate

"45Y-C1. A person's maximum basic rate depends on the person's family
situation. Work out which family situation in Table C applies to the person.
The maximum basic rate is the corresponding amount in column 3.
TABLE C
MAXIMUM BASIC RATES
column 1    column 2

item no.    person's family situation

                        column 3         column 4

                        rate per year    rate per fortnight

1.          Not member of couple

                        $8,361.60        $321.60

2.          Partnered (partner getting neither pension nor benefit)

                        $8,361.60        $321.60

3.          Partnered (partner getting pension or benefit)

                        $6,973.20        $268.20

4.          Member of illness separated or respite care couple

                        $8,361.60        $321.60
Note 1: For 'member of a couple', 'partnered (partner getting neither pension
nor benefit)' and 'partnered (partner getting pension or benefit)' see section
5E, and for 'illness separated couple' and 'respite care couple' see
subsections 5R(5) and (6). Note 2: The maximum basic rates are indexed 6
monthly in line with CPI increases (see sections 59B to 59E).".
PART 2-MODULE TO BE ADDED AT END OF CALCULATOR

"MODULE I-REMOTE AREA ALLOWANCE Remote area allowance

"45Y-I1. An amount by way of remote area allowance is to be added to a
person's provisional rate if:

   (a)  the person's usual place of residence is situated in a remote area;
        and

   (b)  the person is physically present in the remote area. Note: For 'remote
        area' and 'physically present in the remote area' see section 5Q.

"45Y-I2. Point 45Y-I1 does not apply if the person's provisional rate is nil.
Rate of remote area allowance

"45Y-I3. The rate of remote area allowance payable to a person is worked out
using Table I. 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 5 for each income
support supplement add-on child of a person.
TABLE I
REMOTE AREA ALLOWANCE
column 1    column 2

item no.    person's family situation

column 3
basic allowance per year
column 4
basic allowance per fortnight
column 5
additional allowance per year
column 6
additional allowance per fortnight
1.          Not member of couple

$455.00
$17.50
$182.00
$7.00
2.          Partnered-partner receiving remote area allowance

$390.00
$15.00
$182.00
$7.00
3.          Partnered-partner not receiving remote area allowance

$455.00
$17.50
$182.00
$7.00 Note 1: For 'member of a couple' and 'partnered' see section 5E. Note 2:
For 'income support supplement add-on child' see point 45Y-I5. Illness
separated and respite care couples

"45Y-I4. For the purposes of Table I in point 45Y-I3, a member of an illness
separated couple or a respite care couple is to be treated as not being a
member of a couple. Income support supplement add-on child

"45Y-I5. A person has an income support supplement add-on child if:

   (a)  the person is receiving income support supplement; and

   (b)  the person has a child; and

   (c)  the person's income support supplement rate includes a dependent child
        add-on for the child. Dependent children must be physically present in
        Australia

"45Y-I6. Additional allowance is not payable for a child unless the child is
physically present in Australia.

"45Y-I7. If 2 persons have an income support supplement add-on for the same
child, additional allowance is not payable to either person for that child
except as directed by the Commission. The Commission may direct that
additional allowance is payable either to one of the persons or to both.".