Commonwealth Consolidated Acts

SOCIAL SECURITY LEGISLATION AMENDMENT (YOUTH ALLOWANCE CONSEQUENTIAL AND RELATED MEASURES) ACT 1998 - SCHEDULE 2

1   Section   3 (index)

Insert the following entry in its appropriate alphabetical position, determined on a letter - by - letter basis:

2   Subsection   4(6A)

Repeal the subsection, substitute:

  (6A)   A person who:

  (a)   has claimed youth allowance and is not independent within the meaning of Part   3.5; or

  (b)   is receiving a youth allowance and is not independent within the meaning of Part   3.5; or

  (c)   is a member of a couple of which a person referred to in paragraph   (b) is the other member;

is not a member of a couple for the purposes of:

  (d)   the provisions of this Act referred to in the table at the end of this subsection; and

  (e)   any provision of this Act that applies for the purposes of a provision mentioned in paragraph   (d); and

  (f)   any provision of this Act that applies for the purposes of Module E (Ordinary income test) of the Pension PP (Single) Rate Calculator in section   1068A or section   500Q (Parenting payment assets test for person not member of a couple).

Note:   Paragraphs   (e) and (f) have the effect of treating a person as not being a member of a couple in provisions that apply for the purposes of the income test, assets test, liquid assets test or compensation recovery provisions, including section   8 (Income test definitions), section   11 (Assets test definitions), section   14A (Social security benefit liquid assets test provisions), section   17 (Compensation recovery definitions), section   19B (Financial hardship provisions liquid assets test definition), Part   3.10 (General provisions relating to the ordinary income test) and Part   3.12 (General provisions relating to the assets test).

3   After subsection   13(2)

Insert:

  (2A)   If:

  (a)   youth allowance is payable to a person; and

  (b)   the person is not independent (see section   1067A) and is required to live away from home (see section   1067D); and

  (c)   the person is attending boarding school while living away from home;

then, for the purposes of subsection   (2):

  (d)   the boarding school is taken to be the person's principal home while the person is attending the school; and

  (e)   any fees charged for attending the boarding school are taken to be payable by the person.

4   Subsection   23(1)

Insert:

"study" includes vocational training.

5   Subsection   541(3)

Omit "the person" (first occurring).

6   Paragraph   541(3)(a)

Before "is employed", insert "the person".

7   Paragraph   541(3)(b)

Before "is employed", insert "except in the case of a person who is undertaking full - time study--the person".

8   Paragraph   541(3)(c)

Before "is", insert "except in the case of a person who is undertaking full - time study--the person".

9   Paragraph   541B(1)(b)

Repeal the paragraph, substitute:

  (b)   the person:

  (i)   is undertaking in the particular study period (such as, for example, a semester) for which he or she is enrolled for the course; or

  (ii)   intends to undertake in the next study period for which he or she intends to enrol for the course;

    at least three quarters of the normal amount of full - time study in respect of the course for that period (see subsections   (2) to (4)); and

10   Subsection   541B(4)

Repeal the subsection, substitute:

  (4)   For the purposes of paragraph   (1)(b), a person is taken to be undertaking full - time study in respect of a course during the period (the relevant period ):

  (a)   starting on the first day of classes in a study period; and

  (b)   ending on the Friday of the second week of classes in the study period;

if the person is enrolled in the course and undertakes study in respect of the course on at least one day in the relevant period.

11   Subsection   541B(5)

Omit all the words from and including "determined", substitute "determined, under section   5D of the Student Assistance Act 1973 , to be a secondary course or a tertiary course for the purposes of that Act".

12   Before paragraph   547(a)

Insert:

  (aa)   if the value of the person's assets is more than the person's asset value limit (see Subdivision AB); or

13   Paragraph   547(e)

Omit "an alternative support", substitute "a multiple entitlement".

14   After Subdivision A of Division   2 of Part   2.11

Insert:

Subdivision AB -- Assets test

547A   Allowance not payable if assets value limit exceeded

    A youth allowance is not payable to a person if:

  (a)   the person is not excluded from the application of the youth allowance assets test; and

  (b)   the value of the person's assets is more than the person's assets value limit.

Note 1:   For persons excluded from application of test see section   547B.

Note 2:   For assets value limit see section   547C.

547B   Who is excluded from application of assets test?

  (1)   A person is excluded from the application of the youth allowance assets test if the person is independent but the person's partner is receiving:

  (a)   a payment of pension, benefit or allowance referred to in Module L; or

  (b)   a payment under Part   5 or 6 of the Farm Household Support Act 1992 .

  (2)   A person is excluded from the application of the youth allowance assets test if:

  (a)   the person is not independent; but

  (b)   in working out the rate of youth allowance payable to the person, the parental income test is not applied because of point 1067G - F3 (other than paragraph   (d)).

547C   Assets value limit

  (1)   A person's assets value limit is:

  (a)   $407,250 if the person is not independent (see section   1067A); or

  (b)   $125,750 if the person:

  (i)   is independent; and

  (ii)   is not a member of a couple (see section   4); and

  (iii)   is a homeowner; or

  (c)   $215,750 if the person:

  (i)   is independent; and

  (ii)   is not a member of a couple; and

  (iii)   is not a homeowner; or

  (d)   $178,500 if the person:

  (i)   is independent; and

  (ii)   is a member of a couple; and

  (iii)   is a homeowner; or

  (e)   $268,500 if the person:

  (i)   is independent; and

  (ii)   is a member of a couple; and

  (iii)   is not a homeowner.

Note 1:   For homeowner see subsection   11(4).

Note 2:   The amount in paragraph   (a) is indexed annually on 1   January and the amounts in paragraphs   (b), (c), (d) and (e) are indexed annually on 1   July (see sections   1191 to 1194).

  (2)   If the Secretary determines in writing a higher amount in substitution for the amount specified in paragraph   (1)(b), (c), (d) or (e) (the existing amount ), the higher amount is taken, from the commencement of this section, to have been substituted for the existing amount. A determination under this subsection is a disallowable instrument.

  (3)   Subsection   (2) and this subsection are repealed at the end of 31   December 1998.

547D   Value of person's assets to include value of assets of partner or family members in certain circumstances

    The value of a person's assets is the sum of the following values:

  (a)   the value of the person's assets (disregarding paragraphs   (b) and (c));

  (b)   if the person is independent (see section   1067A) and is a member of a couple (see section   4)--the value of the assets of the person's partner;

  (c)   if the person is not independent--the value of the assets of each person who is a family member of the person.

Sections   547E to 547G apply for the purpose of working out the value of the assets of the person and of any other person who is the partner, or a family member, of the person.

547E   Assets of trust in which person benefits

    A person's assets include:

  (a)   any benefit to which the person is entitled directly or indirectly out of the assets of a trust; and

  (b)   any asset of a trust that the person can deal with directly or indirectly to his or her advantage; and

  (c)   any interest in the assets of a trust which has been assigned to someone else but which the person can directly or indirectly control.

547F   Exclusion of certain farm assets

    If:

  (a)   an exceptional circumstances certificate referred to in section   8A of the Farm Household Support Act 1992 was issued in respect of a person; and

  (b)   the certificate has effect;

the person's assets do not include any asset that is an exempt asset in respect of the person within the meaning of that Act.

547G   How business assets are treated

  (1)   If (and only if) paragraph   547D(c) applies in working out the value of the assets of a person, assets of a business are treated in accordance with subsections   (2) and (3). For this purpose, a business includes:

  (a)   the carrying on of primary production; and

  (b)   the provision of professional services.

  (2)   Subject to subsection   (3), 50% of the value of a person's interest in the assets of a business is disregarded if the person, or his or her partner, is wholly or mainly engaged in the business and the business:

  (a)   is owned by the person; or

  (b)   is carried on by a partnership of which the person is a member; or

  (c)   is carried on by a company of which the person is a member; or

  (d)   is carried on by the trustee of a trust in which the person is a beneficiary.

  (3)   Subsection   (2) does not apply to assets of a business that are of any of the following kinds:

  (a)   cash on hand, bank deposits, bank bonds, or similar readily realisable assets;

  (b)   shares in companies, or rights in relation to shares;

  (c)   rights to deal in real or personal property;

  (d)   assets leased out by the business, unless leasing is a major activity of the business;

  (e)   assets used for private or domestic purposes by the owners of the business.

15   Paragraph   548C(2)(a)

Omit "payment", substitute "allowance".

16   At the end of subparagraph   548E(b)(ii)

Add "and".

17   Subsection   549A(3)

Repeal the subsection, substitute:

  (3)   If the Secretary is satisfied that a person is in severe financial hardship because the person has incurred unavoidable or reasonable expenditure while serving a liquid assets test waiting period, the Secretary may determine that the person does not have to serve the whole, or any part, of the waiting period.

Note 1:   For in severe financial hardship see subsections   19C(2) (person who is not a member of a couple) and 19C(3) (person who is a member of a couple).

Note 2:   For unavoidable or reasonable expenditure see subsection   19C(4).

Note:   The heading to subsection   549A(3) is altered by omitting " disadvantage or ".

18   Paragraph   549D(1)(a)

Omit "1   January 1993", substitute "4   March 1997".

19   Subparagraph   549D(3)(a)(ii)

After " 1973 ", insert "as in force immediately before the commencement of this section".

20   At the end of section   549D

Add:

  (4)   Subsection   (1) does not apply to a person if:

  (a)   the person would:

  (i)   if the person had made a claim under this Act for a social security payment other than youth allowance--have been subject to a newly arrived resident's waiting period under this Act; or

  (ii)   if the person had, before 1   July 1998, made a claim under the Student Assistance Act 1973 --have been subject to a waiting period under Part   2 of that Act or a newly arrived resident's waiting period under Part   8 of that Act;

    and that period would have ended; or

  (b)   the person has had:

  (i)   a qualifying residence exemption for a newstart allowance or a sickness allowance under this Act; or

  (ii)   a qualifying residence exemption for a youth training allowance under the Student Assistance Act 1973 ; or

  (c)   in the case of an AUSTUDY allowance recipient--the person was not subject to a waiting period.

  (5)   Subsection   (1) does not apply to a person if:

  (a)   the person is a New Zealand citizen; and

  (b)   the person became, or first became, an Australian resident before 1   July 1998; and

  (c)   one of the following subparagraphs applies to the person:

  (i)   when the person made the claim for youth allowance, the person had been an Australian resident for the immediately preceding 12 months or had been continuously present in Australia for the immediately preceding 6 months; or

  (ii)   the person was immediately before 1   July 1998 qualified for sickness allowance or youth training allowance; or

  (iii)   the person has previously received sickness allowance or youth training allowance.

22   Subdivision F of Division   2 of Part   2.11 (heading)

Repeal the heading, substitute:

Subdivision F -- Multiple entitlement exclusions

23   Section   552

Omit "an alternative support", substitute "a multiple entitlement".

Note:   The heading to section   552 is altered by omitting " Alternative support " and substituting " Multiple entitlement ".

24   Subsection   552A(2)

Omit "an alternative support", substitute "a multiple entitlement".

25   At the end of section   1067B (but before the note)

Add:

  ; and (f)   is not a person who:

  (i)   qualified for the independent living allowance under the AUSTUDY scheme, as in force immediately before the commencement of Schedule   11 to the Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Act 1998 , only under AUSTUDY Regulation   68, as in force at that time; and

  (ii)   had not, at that time, turned 25.

26   After paragraph   1067F(1)(b)

Insert:

  (ba)   does not have a dependent child; and

27   At the end of paragraph   1067F(1)(d)

Add:

  ; (xii)   benefit parenting allowance;

  (xiii)   benefit PP (partnered).

28   Point 1067G - A1 (steps 5 to 7 of the method statement)

Repeal the steps.

29   Paragraph   1067G - D1(h)

Omit "payment" (wherever occurring), substitute "allowance".

30   Section   1067G (Module E of the Youth Allowance Rate Calculator)

Repeal the Module.

31   Paragraph   1067G - F3(c)

Omit "AUSTUDY or" (wherever occurring).

32   Before paragraph   1067G - F7(a)

Insert:

  (aa)   a person's combined parental income for the tax year following the base tax year is substantially less than it was in the base tax year and is likely to continue to be so for 2 years after the later of:

  (i)   1   January in the tax year following the base tax year; or

  (ii)   the day on which the combined parental income is reduced; and

33   Paragraph   1067G - F7(a)

Omit "a person", substitute "the person".

34   Paragraph   1067G - F10(d)

Omit "rental property", substitute "passive business".

35   Paragraph   1067G - F10 (note 5)

Repeal the note, substitute:

Note 5:   For net passive business loss see subpoint 1067G - F11(4).

36   Subpoint 1067G - F11(4)

Repeal the subpoint, substitute:

  1067G - F11(4)   A person's net passive business loss for a tax year is the difference between:

  (a)   the total amount of the person's loss or outgoings for that year that are or will be deductible under the Income Tax Assessment Act because they were necessarily incurred in relation to a passive business; and

  (b)   the gross income from the business for that year.

Note:   For passive business see point 1067G - F19A.

37   After point 1067G - F19

Insert:

  1067G - F19A(1)   In subpoint 1067G - F11(4):

"passive business" , in relation to a person, means a business in relation to which the person is usually engaged for less than 17.5 hours in a week.

  1067G - F19A(2)   In this point:

"business" includes:

  (a)   the carrying on of primary production; and

  (b)   the provision of professional services; and

  (c)   the earning of income as a rentier;

but does not include employment (whether or not the employment is remunerated by wages or salary).

38   Paragraph   1067G - F24(b)

Repeal the paragraph, substitute:

  (b)   the student is undertaking full - time study in a course of study or instruction that the Employment Minister has determined, under section   5D of the Student Assistance Act 1973 , to be a tertiary course for the purposes of that Act; and

39   Paragraph   1067G - F24(d)

After "student", insert "is".

40   Point 1067G - G1

Omit all the words to and including "limit", substitute "This is how to work out the effect (if any) of the actual means of a person's family on the person's maximum payment rate in respect of a particular youth allowance payment period".

41   Point 1067G - G1 (after step 1 of the method statement)

Insert:

42   Point 1067G - G1 (step 2 of the method statement)

Omit all the words to and including "work", substitute "Work".

43   Point 1067G - G1 (after step 2 of the method statement)

Insert:

44   Point 1067G - G1 (step 3 of the method statement)

Before "actual", insert "family".

45   After point 1067G - G2

Insert:

Appropriate tax year

  1067G - G2A   The appropriate tax year for a youth allowance payment period is to be identified as provided in the regulations.

46   After point 1067G - G3

Insert:

Family actual means free area

  1067G - G3A   A person's family actual means free area is to be worked out in the way specified in the regulations.

47   Point 1067G - G4

Before "actual", insert "family".

Note:   The heading to point 1067G - G4 is altered by inserting " family " before " actual ".

48   Points 1067G - H11 to 1067G - H14 (inclusive)

Repeal the points, substitute:

Certain leave payments taken to be ordinary income--employment continuing

  1067G - H11   If:

  (a)   a person is employed; and

  (b)   the person is on leave for a period; and

  (c)   the person is or was entitled to receive a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise) in respect of a part or all of a leave period;

the person is taken to have received ordinary income for a period (the income maintenance period ) equal to the leave period to which the leave payment entitlement relates.

Certain leave payments taken to be ordinary income--employment terminated

  1067G - H12   If:

  (a)   a person's employment has been terminated; and

  (b)   the person receives a leave payment (whether as a lump sum payment, as a payment that is one of a series of regular payments or otherwise);

the person is taken to have received ordinary income for a period (the income maintenance period ) equal to the leave period to which the payment relates.

More than one leave payment on a day

  1067G - H13   If:

  (a)   the person is covered by point 1067G - H12; and

  (b)   the person receives more than one leave payment on a day;

the income maintenance period is worked out by adding the leave periods to which the payments relate.

Start of income maintenance period--employment continuing

  1067G - H14   If the person is covered by point 1067G - H11, the income maintenance period starts on the first day of the leave period to which the leave payment entitlement relates.

Start of income maintenance period--employment terminated

  1067G - H14A   If the person is covered by point 1067G - H12, the income maintenance period starts, subject to point 1067G - H14B, on the day the person is paid the leave payment.

Commencement of income maintenance period where there is a second leave payment--employment terminated

  1067G - H14B   If a person who is covered by point 1067G - H12 is subject to an income maintenance period (the first period ) and the person is paid another leave payment during that period (the second leave payment ), the income maintenance period for the second leave payment commences the day after the end of the first period.

49   Point 1067G - H18

Repeal the point, substitute:

Single payment in respect of different kinds of leave--employment terminated

  1067G - H18   If a person who is covered by point 1067G - H12 receives a single payment in respect of different kinds of leave, then, for the purposes of the application of points 1067G - H10 to 1067G - H17 (inclusive), each part of the payment that is in respect of a different kind of leave is taken to be a separate payment and the income maintenance period in respect of the single payment is worked out by adding the leave periods to which the separate payments relate.

50   Point 1067G - H23

Omit "1067G - H24 and 1067G - H25", substitute "1067G - H23A, 1067 - H23B, 1067G - H24 and 1067G - H25 and section   1073".

51   After point 1067G - H23

Insert:

Claimant or recipient receives lump sum amount for remunerative work

  1067G - H23A   If a person whose claim for youth allowance has been granted receives, after the claim was made, a lump sum amount that:

  (a)   is paid to him or her in relation to remunerative work; and

  (b)   is not a payment to which point 1067G - H24 applies; and

  (c)   is not an exempt lump sum;

the person is, for the purposes of this Module, taken to receive one fifty - second of that amount as ordinary income during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount.

Partner of claimant or recipient receives lump sum amount for remunerative work

  1067G - H23B   If:

  (a)   a person whose claim for youth allowance has been granted is a member of a couple; and

  (b)   after the person had made the claim, the person's partner receives a lump sum amount that:

  (i)   is paid to him or her in relation to remunerative work; and

  (ii)   is not a payment to which point 1067G - H24 applies; and

  (iii)   is not an exempt lump sum;

the partner is, for the purposes of this Module, taken to receive one fifty - second of that amount as ordinary income during each week in the 12 months commencing on the day on which the partner becomes entitled to receive that amount.

Operation of points 1067G - H23A and 1067G - H23B

  1067G - H23C   Points 1067G - H23A and 1067G - H23B have effect even if the person who has made the claim:

  (a)   is subject to a liquid assets test waiting period or an income maintenance period in respect of the allowance claimed; or

  (b)   is subject to a seasonal work preclusion period;

during the period of 12 months referred to in those points.

52   Point 1067G - H26

Repeal the point, substitute:

Partner income free area

  1067G - H26   The partner income free area for a person is:

  (a)   if the person's partner is not receiving a social security benefit and has not turned 21--the amount of income of the partner (rounded up to the nearest dollar) beyond which youth allowance would not be payable to the partner if the partner were qualified for a youth allowance and were not undertaking full - time study (see section   541B); or

  (b)   if the person's partner is not receiving a social security benefit and has turned 21--the amount of income of the partner (rounded up to the nearest dollar) beyond which newstart allowance would not be payable to the partner if the partner were qualified for a newstart allowance; or

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

53   Point 1067G - K8

Omit "payment" (wherever occurring), substitute "allowance".

54   Point 1067G - K8 (note 2)

Omit " payment ", substitute " allowance ".

55   Section   1067G (table items   19 and 27 in Module L of the Youth Allowance Rate Calculator)

Repeal the items.