"index number", in relation to a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician for that quarter.

"relevant rate" means the rate specified in subsection 103(4).

"year to which this section applies" means:

(a) the year commencing on 20 September 2005; or
(b) any later year commencing on 20 September.

(2)

Subject to subsection (3), if at any time, whether before or after the commencement of this section, the Australian Statistician has published or publishes an index number in respect of a quarter in substitution for an index number previously published by the Australian Statistician in respect of that quarter, the publication of the later index number is to be disregarded for the purposes of this section.

(3)

If at any time, whether before or after the commencement of this section, the Australian Statistician has changed or changes the reference base for the consumer price index, then, for the purposes of the application of this section after the change took place, or takes place, regard is to be had only to index numbers published in terms of the new reference base.

(4)

Where the factor worked out under subsection (5) in relation to a relevant rate in relation to a year to which this section applies is greater than 1, this Act, and any Act that refers to this Act, have effect as if for that relevant rate there were substituted, on the first day of that year:

(a) subject to paragraph (b)—the rate worked out by multiplying by that factor:
(i) where subparagraph (ii) does not apply—the relevant rate; or
(ii) if, because of another application or other applications of this section, this Act has had effect as if another rate was substituted, or other rates were successively substituted, for the relevant rate—the substituted rate or the last substituted rate, as the case may be; or
(b) where the amount of the rate worked out under paragraph (a) is not a multiple of one dollar—a rate equal to that amount rounded up to the nearest multiple of one dollar.

(5)

The factor to be worked out for the purposes of subsection (4) in relation to a year to which this section applies is:

(a) in relation to the year commencing on 20 September 2005—the number, calculated to 3 decimal places, worked out by dividing the index number for the June quarter 2005 by the index number for the June quarter 2004; or
(b) in relation to each subsequent year—the number calculated to 3 decimal places, worked out by dividing the index number for the last preceding June quarter by the highest index number in respect of an earlier June quarter, not being a June quarter that occurred before 2005; or
(c) if the number worked out under paragraph (a) or (b) would, if it were calculated to 4 decimal places, end in a number greater than 4—the number so worked out increased by 0.001.

(6)

Where, because of the application of this section, this Act has effect as if another rate were substituted for a relevant rate on the first day of a year to which this section applies, the substitution, in so far as it affects instalments of Victoria Cross allowance under this Act, has effect in relation to every instalment of the allowance that falls due on or after the first day of that year.

15 Application

(1) The amendment made by item 6 applies to decoration allowance payable after the commencement of this item.
(2) The amendments made by items 7 to 9 apply to decorations awarded after the commencement of this item.
(3) The amendments made by items 10 and 13 apply to Victoria Cross allowance payable after the commencement of this item.

Part 3—Automatic grant of income support supplement to age pensioners and wife pensioners
16 After paragraph 45N(1)(b)

Insert:

(ba) a war widower or war widow who:
(i) is granted a pension under Part II or Part IV, at a rate determined under or by reference to subsection 30(1), on or after the commencement of Part 3 of Schedule 1 to the Veterans' Entitlements Amendment (Direct Deductions and Other Measures) Act 2004 ; and
(ii) immediately before being granted the pension was receiving an age pension under Part 2.2 of the Social Security Act from the Department, acting on behalf of the Commonwealth, under an arrangement with the Department administered by the Minister administering that Part; and
(bb) a war widow who:
(i) is granted a pension under Part II or Part IV, at a rate determined under or by reference to subsection 30(1), on or after the commencement of Part 3 of Schedule 1 to the Veterans' Entitlements Amendment (Direct Deductions and Other Measures) Act 2004 ; and
(ii) immediately before being granted the pension was receiving a wife pension under Part 2.4 of the Social Security Act from the Department, acting on behalf of the Commonwealth, under an arrangement with the Department administered by the Minister administering that Part; and
(iii) has reached the qualifying age (see subsection (1A)); and
17 After subsection 45N(1)

Insert:

(1A)

For the purposes of subparagraph (1)(bb)(iii), the qualifying age for a person who is a war widow is:

(a) if the person is a veteran—the pension age for that person; or
(b) if the person is not a veteran—the age that would be the pension age for that person if she were a veteran.

Note: For pension age see section 5QA.

18 Subsection 45N(3)

After "If", insert "this section applies to the person other than because of paragraph (1)(ba) or (bb) and".

19 At the end of section 45N

Add:

(4)

If this section applies to the person because of paragraph (1)(ba) or (bb), and the person is not required by the Commission to make a claim for income support supplement, this Act applies to the person as if:

(a) the person had made a claim for income support supplement under section 45I on the day on which the person was granted the pension under Part II or Part IV; and
(b) the Commission had, on that day, determined under section 45Q that the claim was to be granted.

Part 4—Calculation of disability pension arrears
20 Paragraph 27A(1)(b)

Repeal the paragraph, substitute:

(b) the veteran is a member of a couple or was a member of a couple at any time during the period (the arrears period ) between:
(i) the operative date; and
(ii) immediately before the first pension period during which an instalment of the pension, or an instalment of the pension at the increased rate, is paid to the person; and
21 Application

The amendment made by this Part applies where the decision to grant the pension, or to increase the rate of the pension, is made after the commencement of this item.

Part 5—Partner service pension for Norfolk Island residents
22 At the end of subparagraph 38(1)(aa)(iii)

Add ", or would be so qualified if, in spite of subsection 7(4) of that Act, residence of a person in Norfolk Island was taken to be residence of the person in Australia".

23 At the end of subparagraph 38(1)(e)(ii)

Add ", or would be so qualified if, in spite of subsection 7(4) of that Act, residence of a person in Norfolk Island was taken to be residence of the person in Australia".

24 Application

Subparagraphs 38(1)(aa)(iii) and 38(1)(e)(ii) of the Veterans' Entitlements Act 1986 , as amended by this Part, apply for the purpose of determining whether a person is, at or after the commencement of this Part, eligible for a partner service pension, and for that purpose residence of a person in Norfolk Island before (as well as at or after) the commencement of this Part may be taken into account.

Part 6—Calculation of rent assistance
25 Point SCH6-C14 of Schedule 6

Repeal the point, substitute:

Disability income

SCH6-C14 If a person is a member of a couple, the person's disability income for the purposes of this Module is worked out as follows:

(a) if each member of the couple receives either or both a disability pension and permanent impairment compensation—by adding the couple's annual rates of disability pension and permanent impairment compensation and dividing the result by 2;
(b) if only one member of the couple receives either or both a disability pension and permanent impairment compensation:
(i) where the member receives both a disability pension and permanent impairment compensation—by adding the member's annual rates of disability pension and permanent impairment compensation and dividing the result by 2; or
(ii) where subparagraph (i) does not apply—by dividing the member's annual rate of disability pension or permanent impairment compensation by 2.

Note 1: For disability pension see section 5Q.

Note 2: For permanent impairment compensation see point SCH6-C16.

26 Application

The amendment made by this Part applies in relation to instalments of service pension for pension periods that start after the commencement of this item.

Part 7—Reduction in pension arrears resulting from partner's receipt of service pension
27 After subparagraph 27A(1)(c)(i)

Insert:

(ia) a service pension; or
28 Paragraph 27A(1)(d)

After "benefit", insert ", service pension".

29 Subsection 27A(2) (step 4 of the method statement)

After "benefit", insert ", service pension".

30 Subsection 27A(2) (step 5 of the method statement)

After "benefit", insert ", service pension".

31 Application

The amendments made by this Part apply where the decision to grant the pension, or to increase the rate of the pension, mentioned in paragraph 27A(1)(a) of the Veterans' Entitlements Act 1986 is made after the commencement of this item.

Part 8—Value of financial assets for purposes of deeming rules
32 Subsection 52C(1)

After "other than", insert "Division 3 and".

33 Application

The amendment made by this Part applies in relation to instalments of service pension and income support supplement for pension periods starting at or after the commencement of this item.

Part 9—Deemed income and actual income from accrued returns
34 Subsection 46K(1)

Omit "receives", substitute "earns, derives or receives".

35 Subsection 46K(2)

Omit "receives", substitute "earns, derives or receives".

Part 10—Means test exemption of certain superannuation assets
36 At the end of paragraph 52(1)(f)

Add:

Note: Some investments in superannuation funds, approved deposit funds, deferred annuities and ATO small superannuation accounts may be disregarded—see section 52AA.

37 After section 52

Insert:

52AA 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 52FA, 52G, 52GA, 52H, 52ZA or 52ZCA) 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.

(3)

A determination must be in writing.

(4)

A determination 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.

Part 11—Income and assets test treatment of ATO small superannuation accounts and private rental income
38 At the end of subparagraph 5H(8)(i)(iii)

Add "or".

39 After subparagraph 5H(8)(i)(iii)

Insert:

(iiia) an ATO small superannuation account;
40 Paragraph 5H(8)(i) (note 2)

Omit "and deferred annuity ", substitute ", deferred annuity and ATO small superannuation account ".

41 At the end of section 46C

Add:

(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 that property for that period, the amount of the ordinary income from the property for that period is taken to be nil.

42 After subparagraph 52(1)(f)(iii)

Insert:

; or (iiia) an ATO small superannuation account;

Part 12—Ceiling rate service pension
43 Subparagraph (a)(i) of point SCH6-A6 of Schedule 6

After "supplement", insert " or service pension".

Part 13—Offences
44 At the end of subparagraphs 208(1)(a)(i) and (iii)

Add "or".

45 Paragraph 208(1)(b)

Repeal the paragraph, substitute:

(b) intentionally obtain:
(i) payment of a pension, allowance or other pecuniary benefit under this Act; or
(ii) payment of an instalment of such a pension, allowance or benefit;
knowing that the payment is:
(iii) not payable at all; or
(iv) payable only in part; or
46 At the end of paragraph 208(1)(c)

Add "or".

Part 14—Disposal of income and assets
47 Section 48 (notes 1 and 2)

Repeal the notes, substitute:

Note: For amount of disposition see section 48A.

48 Subsection 48C(1) (note 3)

Repeal the note.

49 Section 48D

Repeal the section.

50 Subsection 52FA(1) (notes 3 and 4)

Repeal the notes, substitute:

Note 3: If a pension is payable to the person, section 52G operates to determine the rate of payment and section 52FA ceases to apply to the person.

51 Subsection 52GA(1) (notes 3 and 4)

Repeal the notes, substitute:

Note 3: If a pension is payable to the person, section 52H operates to determine the rate of payment and section 52GA ceases to apply to the person.

52 Subsection 52H(1) (note 3)

Repeal the note.

Part 15—Compensation recovery provisions
53 Subsection 5H(1) (note 2 at the end of the definition of ordinary income )

Omit "a series of".

54 Subsection 5NB(1) (definition of periodic payments period )

Repeal the definition, substitute: