Commonwealth Consolidated Acts

VETERANS' ENTITLEMENTS ACT 1986 - SCHEDULE 5

Section   197A

Part   1 -- General

1   Service pensions--changes introduced on 1   October 1995

  (1)   Despite Schedule   6, if:

  (a)   a person was receiving a service pension immediately before 1   October 1995; and

  (b)   the person was a member of a couple immediately before 1   October 1995; and

  (c)   the person's partner was not, immediately before 1   October 1995, receiving a social security pension, a service pension or an income support supplement; and

  (d)   the amount that was the person's maximum basic rate in respect of the service pension for the last payment period before 1   October 1995 exceeds the amount of the person's maximum basic rate on 1   October 1995; and

  (e)   the amount of that excess exceeds, in relation to a particular period, the sum of:

  (i)   the increased amounts (if any) for the original components of the rate of service pension payable to the person in respect of the payment period; and

  (ii)   the new components (if any) of the rate of service pension payable to the person in respect of the payment period; and

  (iii)   the increased amounts (if any) for those new components; and

  (f)   this clause has not ceased to apply to the person because of subclause   (2);

in calculating the amount of service pension payable to the person in respect of the payment period, an amount equal to the difference between:

  (g)   the amount of the excess referred to in paragraph   (d); and

  (h)   the sum referred to in paragraph   (e);

is to be added to the person's maximum basic rate.

  (2)   This clause ceases to apply if:

  (a)   the person ceases to receive that service pension; or

  (b)   the person ceases to be a member of that couple; or

  (c)   the person's partner receives a social security pension, a service pension or an income support supplement.

  (3)   In this clause:

"increased amount" , in relation to an original component or a new component, means the amount (if any) by which the amount of the component exceeds the lowest amount of the component payable in any payment period ending after 1   October 1995.

"new component" means:

  (a)   any additional amount that, in calculating a person's rate of service pension, is added to the person's maximum basic rate, being an additional amount that would not have been so added in respect of the last payment period before 1   October 1995; or

  (b)   any amount by which a person's rate of service pension has increased as a result of a change in the person's circumstances on or after 1   October 1995.

"original component" means:

  (a)   a person's maximum basic rate that was used in calculating the person's rate of service pension for the last payment period before 1   October 1995; or

  (b)   an additional amount that was added to the person's maximum basic rate in calculating the person's rate of service pension for that payment period.

"payment period" means the period in respect of which a payment of service pension is payable.

4   Rent assistance--retirement village residents (changes introduced on 12   June 1989)

  (1)   If:

  (a)   immediately before 3   November 1988:

  (i)   a person was receiving a service pension; and

  (ii)   the person's pension rate included an amount by way of rent assistance under or because of this Act as in force at that time; and

  (b)   at all times since 3   November 1988:

  (i)   the person has been entitled to a pension under this Act or a social security payment under the Social Security Act; and

  (ii)   the person's principal home has been in a retirement village; and

  (c)   immediately before the commencement of this clause, subsection   31(1) of the Social Security and Veterans' Affairs Legislation Amendment Act 1988 applied to the person;

the person is taken not to be an ineligible property owner or an excluded property owner for the purposes of this Act.

  (2)   If:

  (a)   immediately after 12   June 1989:

  (i)   a person was receiving a social security payment under the Social Security Act; and

  (ii)   the person's pension, benefit or allowance rate included an amount by way of rent assistance because of the operation of subsection   19(1) of the Social Security and Veterans' Affairs Legislation Amendment Act 1988 ; and

  (b)   after 12   June 1989, the person began or begins to receive a pension; and

  (c)   subsection   19(1) of the Social Security and Veterans' Affairs Legislation Amendment Act 1988 applied to the person at all times between 12   June 1989 and the person's beginning to receive the pension; and

  (d)   at all times since the person began to receive the pension:

  (i)   the person has continued to receive a pension; and

  (ii)   the person's principal home has continued to be in the retirement village; and

  (e)   either of the following subparagraphs applies to the person:

  (i)   if the person began to receive the pension before the commencement of this clause, subsection   31(2) of the Social Security and Veterans' Affairs Legislation Amendment Act 1988 applied to the person immediately before that commencement;

  (ii)   if the person begins to receive the pension after that commencement--that subsection would have applied to the person immediately before he or she began to receive the pension if it had not been repealed;

the person is taken not to be an ineligible property owner or an excluded property owner for the purposes of this Act.

  (3)   Despite subclause   (1) or (2), the rate of rent assistance or residential care allowance payable to a person to whom that subclause applies (whether that rate is required to be worked out under this Act (other than this Schedule) or is required to be worked out under subclause   (4) of clause   4) is reduced by the sum of any indexation or adjustment increases occurring after the commencement of this clause to the person's pension rate.

  (4)   If, because of subclause   (3), the rate of rent assistance or residential care allowance payable to a person to whom subclause   (1) or (2) applies is reduced to nil, subclause   (1) or (2), as the case may be, ceases to apply to the person.

  (5)   If subclause   (1) or (2) ceases to apply to a person, that subclause does not apply to the person again.

  (6)   In this clause:

"indexation or adjustment increase" means an increase resulting from the operation of Division   18 of Part   IIIB.

5   Rent assistance (changes introduced on 20   March 1993)

  (1)   This clause applies to a person if:

  (a)   immediately before 20   March 1993:

  (i)   the person was receiving a service pension; and

  (ii)   the person's pension included an amount by way of rent assistance; and

  (b)   immediately before the commencement of this clause, section   111 of the Veterans' Affairs Legislation Amendment Act (No.   2) 1992 applied to the person; and

  (c)   this subclause continues to apply to the person.

  (2)   If:

  (a)   a decision was made on or after 20   March 1993 under this Act that a person was entitled to rent assistance in respect of a period; and

  (b)   the period started before 20   March 1993; and

  (c)   the period continued until at least 19   March 1993;

the person is taken, for the purposes of this clause, to have been receiving rent assistance under this Act immediately before 20   March 1993.

  (3)   This clause applies to a person if:

  (a)   immediately before 20   March 1993, the person was receiving rent assistance under the Social Security Act; and

  (b)   on or after that date, the person became or becomes entitled to be paid a pension; and

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

  (i)   if the person became entitled to be paid the pension before the commencement of this clause--section   111 of the Veterans' Affairs Legislation Amendment Act (No.   2) 1992 applied to the person immediately before that commencement;

  (ii)   if the person becomes entitled to be paid the pension after that commencement--that section would have applied to the person immediately before he or she became so entitled if it had not been repealed; and

  (d)   this subclause continues to apply to the person.

  (4)   Subject to subclauses   (7), (8), (9), (10) and (11), if subclause   (1) or (3) applies to a person, the amount by way of rent assistance to be used to calculate the person's pension rate is the amount (the floor amount ) by way of rent assistance that would be included in the person's pension rate if:

  (a)   the person's pension rate were neither income reduced nor assets reduced; and

  (b)   the amount of rent assistance were calculated under this Act as in force immediately before 20   March 1993.

  (5)   Subclause   (1) or (3) ceases to apply to a person if:

  (a)   the person no longer receives a service pension, an income support supplement, or a social security pension under the Social Security Act; or

  (b)   the person ceases to be eligible for rent assistance; or

  (c)   the pension rate that is applicable to the person because of that subclause is equal to or less than the rate that would be the person's pension rate if that subclause did not apply to the person; or

  (d)   the Commission considers that there is a significant change in the person's circumstances that would affect the amount of rent assistance that is payable to the person apart from this clause.

  (6)   If:

  (a)   subclause   (1) or (3) ceases to apply to a person because of subclause   (5); and

  (b)   within 42 days, or any longer period that the Commission determines, after the day on which that subclause ceases to apply to the person, there is a change in the person's circumstances; and

  (c)   the Commission considers that the change in the person's circumstances is so significant that subclause   (1) or (3) should apply to the person;

the Commission may determine in writing that subclause   (1) or (3) is to apply to the person from a stated date.

  (7)   Subject to subclauses   (11) and (13), if:

  (a)   subclause   (1) or (3) applies to a person; and

  (b)   the person has become or becomes a member of a couple; and

  (c)   the person's partner is receiving a pension, or a social security payment under the Social Security Act, but:

  (i)   is not a person to whom subclause   (1) or (3) applies; and

  (ii)   is not a person to whom clause   63 of Schedule   1A to the Social Security Act applies;

the amount by way of rent assistance to be used to calculate the person's pension rate or the person's partner's pension rate is not to fall below one - half of the person's floor amount.

  (8)   Subject to subclause   (11), if:

  (a)   subclause   (1) or (3) applies to a person; and

  (b)   the person has become or becomes a member of a couple; and

  (c)   the person's partner is a person to whom subclause   (1) or (3) applies;

the amount by way of rent assistance to be used to calculate the person's pension rate or the person's partner's pension rate is not to fall below one - half of the person's floor amount or one - half of the person's partner's floor amount, whichever is the greater.

  (9)   Subject to subclause   (11), if:

  (a)   subclause   (1) or (3) applies to a person; and

  (b)   the person has become or becomes a member of a couple; and

  (c)   the person's partner is a person to whom clause   63 of Schedule   1A to the Social Security Act applies;

the amount by way of rent assistance to be used to calculate the person's pension rate is not to fall below one - half of the person's floor amount or one - half of the amount that would be the person's partner's floor amount if subsection   (1) or (3) applied to the partner, whichever is the greater.

  (10)   Subject to subclause   (11), if:

  (a)   a person is receiving a pension; and

  (b)   neither subclause   (1) nor (3) applies to the person; and

  (c)   the person has become or becomes a member of a couple; and

  (d)   the person's partner is receiving a social security payment under the Social Security Act and is a person to whom clause   63 of Schedule   1A to the Social Security Act applies;

the amount by way of rent assistance to be used to calculate the person's pension rate is not to fall below one - half of the amount that would be the person's partner's floor amount if subclause   (1) or (3) applied to the partner.

  (11)   Despite anything in the preceding provisions of this clause, the rate of rent assistance payable to a person to whom this clause applies is reduced by the sum of any indexation or adjustment increases occurring after the commencement of this clause to the person's pension rate.

  (12)   Subject to subclause   (6), if subclause   (1) or (3) ceases to apply to a person because of subclause   (5), it does not again apply to the person.

  (13)   Subclause   (7) ceases to apply to the partner of a person to whom subclause   (1) or (3) applies if the pension rate that is applicable to the partner because of subclause   (7) is equal to or less than the rate that would be the partner's pension rate if subclause   (7) did not apply to the partner.

  (14)   If subclause   (7) ceases to apply to the partner of a person to whom subclause   (1) or (3) applies, subclause   (7) does not again apply to the partner.

  (16)   In this clause:

"floor amount" has the meaning given by subsection   (4).

"indexation or adjustment increase" means an increase resulting from the operation of Division   18 of Part   IIIB.

6   Saving: Determinations under repealed sections   46Z and 46ZF

    A determination in force under section   46Z or 46ZF immediately before the commencement of this section continues to have effect after that commencement as if:

  (a)   section   46L of this Act, as in force immediately after the commencement of this section, had been in force when the determination was made; and

  (b)   the determination had been made under that section as so in force; and

  (c)   any reference in the determination to section   46W, 46ZD or 46ZE were a reference to sections   46D to 46E of this Act.

7   Transitional and saving provisions applicable to the amendments relating to the pension loans scheme

  (1)   If:

  (a)   a person has made a request to participate in the previous pension loans scheme; and

  (b)   Schedule   17 to the Amending Act commences before the first pension payday after the lodging of the request;

for the purposes of this clause, the person is to be treated as a person who is participating in the previous pension loans scheme.

  (2)   Subject to subclause   (3), in relation to a person who is participating in the previous pension loans scheme, subsections   5L(1) and 52(1) and Subdivision E of Division   11 of Part   IIIB of this Act, as in force immediately before the commencement of Schedule   17 to the Amending Act, continue to have effect as if the Amending Act had not been enacted.

  (3)   If a person who is participating in the previous pension loans scheme:

  (a)   is eligible to participate in the current pension loans scheme; and

  (b)   makes a request to participate in the current scheme;

and the Commission is satisfied that the amount of any debt that would become payable by the person to the Commonwealth under the current scheme would be readily recoverable, the current scheme applies to the person on and after the day on which the request is lodged.

  (4)   The debt owed by a person who was participating in the previous pension loans scheme and who is participating in the current pension loans scheme by operation of subclause   (3) is, for the purposes of working out the debt owed by the person under the current scheme, to be added to the basic amount of debt accrued under the current scheme.

  (5)   In this clause:

"Amending Act" means the Social Security and Veterans' Affairs Legislation Amendment Act 1995 .

"current pension loans scheme" means the pension loans scheme in operation under the provisions of this Act, as amended by the Amending Act.

"participating in the pension loans scheme" has the same meaning as in subsection   52ZAAA(3).

"previous pension loans scheme" means the pension loans scheme in operation under the provisions of this Act, as in force immediately before the commencement of Schedule   17 to the Amending Act.

8   Transitional and saving provisions: amendments relating to the transfer of carers

  (1)   If:

  (a)   a person was receiving a carer service pension immediately before the transfer day; and

  (b)   neither subclause   (2) nor (4) applies to the person;

an instalment of carer service pension is payable to the person on the transfer day at the rate worked out using the following formula:

where:

"reduced annual rate" means the rate payable in accordance with this Act on the last pension payday before the transfer day, excluding any pharmaceutical allowance payable to a person under this Act.

"pharmaceutical allowance" means the amount of pharmaceutical allowance that would have been included in the person's carer service pension if the payment was an instalment under section   58A.

  (2)   Subject to subclause   (5), if:

  (a)   a person (the carer ) was receiving a carer service pension immediately before the transfer day; and

  (b)   the veteran partner who is being cared for by the carer is receiving an age service pension or an invalidity service pension; and

  (c)   the carer would, apart from subsection   38(1B), be eligible for a partner service pension;

this Act continues to apply to the person in relation to carer service pension as if the amendments made by Division   1 of Part   5 of Schedule   1 to the amending Act had not been made.

  (3)   Subject to subclause   (5), if:

  (a)   a person was receiving income support supplement immediately before the transfer day; and

  (b)   subsection   45AB(1) applied to the person; and

  (c)   the person would, apart from paragraph   45A(1)(b) and section   45AB, be eligible for income support supplement;

this Act continues to apply to the person in relation to income support supplement as if the amendments made by Division   1 of Part   5 of Schedule   1 to the amending Act had not been made.

  (4)   Subject to subclause   (5), if:

  (a)   a person (the carer ) is receiving a carer service pension immediately before the transfer day; and

  (b)   the veteran who is being cared for by the carer is not receiving an age service pension or an invalidity service pension but passes the income test under section   53AA and either passes the assets test under section   53AD or is the subject of a decision in force under section   53AN that the assets test does not apply to the veteran;

this Act continues to apply to the person in relation to carer service pension as if the amendments made by Division   1 of Part   5 of Schedule   1 to the amending Act had not been made.

  (5)   If carer service pension or income support supplement ceases to be payable to the person after the transfer day, then subclause   (2), (3) or (4), as the case requires, ceases to apply to the person.

  (6)   References in this clause to other provisions of this Act are references to those provisions as they would be if the amendments made by Division   1 of Part   5 of Schedule   1 to the amending Act had not been made.

  (7)   In this clause:

"amending Act" means the Veterans' Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 .

"transfer day" means the day on which Part   5 of Schedule   1 to the amending Act commences.

9   Transitional provisions applicable to the amendments relating to amounts in respect of children

  (1)   If:

  (a)   a determination is made on or after 1   January 1998 that a claim for a service pension or income support supplement is to be granted; and

  (b)   because of section   36M or 45R, the determination takes effect before that date; and

  (c)   had the amendments made by Schedule   1 to the Veterans' Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 not been made, an instalment of the pension or supplement that was payable on a pension pay - day that occurred before that date would have included a child - related amount;

the instalment is to include that amount.

  (2)   If the amount of an instalment of a service pension or income support supplement that was payable on a pension pay - day before 1   January 1998 would, had the amendments made by Schedule   1 to the Veterans' Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 not been made, be taken to have been increased so as to include a child - related amount, the instalment is taken to have been so increased.

  (3)   In this clause:

"child-related amount" , at any relevant time, means an amount that was required at that time to be included in a service pension under Module C or Module D (as Module C or Module D was affected by Module DAA) of the Service Pension Rate Calculator at the end of section   42, or in an income support supplement under Module F or Module G (as Module F or Module G was affected by Module H) of the Income Support Supplement Rate Calculator at the end of section   45Y, of the Veterans' Entitlements Act 1986 as in force at that time.

10   Saving provisions applicable to the amendments relating to amounts in respect of children

  (1)   This clause applies to a person if:

  (a)   immediately before 1   January 1998 a service pension or income support supplement was payable to the person at a rate that included one or more pension/supplement child - related amounts in respect of a child or children; and

  (b)   the Commission determines on or before 31   March 1998, or after that date as a result of an application made by the person to the Commission on or before that date, that, on 1   January 1998, the person's notional pension/supplement child - related amount was or will be greater than the notional family allowance child - related amount in relation to the person or the person's partner.

  (2)   The rate of service pension or income support supplement payable to the person from time to time includes the person's notional pension/supplement child - related amount at that time until, in accordance with subclause   (2A), it is no longer to be so included.

  (2A)   For the purposes of subclause   (2), the rate of service pension or income support supplement payable to the person is no longer to include the person's notional pension/supplement child - related amount:

  (a)   in respect of any payment made at any time before 1   July 2000--if the person's notional pension/supplement child - related amount ceases to be greater than the notional family allowance child - related amount in relation to the person or the person's partner at that time; and

  (b)   in respect of any payment made at any time on or after 1   July 2000--if the person has elected, by written notice given to the Secretary, no longer to be covered by this clause.

  (2B)   For the purposes of Part   IIIC, the rate of invalidity service pension, partner service pension, or income support supplement, that is payable to a person who has not reached pension age does not include the notional pension/supplement child - related amount.

  (3)   If:

  (a)   at any time before 1   July 2000, the person's notional pension/supplement child - related amount ceases to be greater than the notional family allowance child - related amount in relation to the person or person's partner; and

  (b)   because of this fact, the rate of service pension or income support supplement payable to a person is no longer to include the first - mentioned amount;

the rate of that pension or supplement is never thereafter to include the person's notional pension/supplement child - related amount even though that amount may again become greater than the notional family allowance child - related amount in relation to the person or the person's partner.

  (3A)   Subclause   (2) ceases to apply to the rate of service pension or income support supplement payable to a person:

  (a)   from the start of the day the Social Security Legislation Amendment (Youth Allowance) Act 1998 commences, if the child or youngest child because of whom this clause applies to the person is 16 or over then; or

  (b)   from the start of the 16th birthday of the child or youngest child because of whom this clause applies to the person, if that child is under 16 on the day that Act commences.

  (3B)   In working out the amount of:

  (a)   a person's notional pension/supplement child - related amount; and

  (b)   the notional family allowance child - related amount for a person or his or her partner;

at a time at or after the commencement of the Social Security Legislation Amendment (Youth Allowance) Act 1998 , disregard a child who is 16 or over at the time.

  (4)   In this clause:

"notional family allowance child-related amount" , in relation to a person or a person's partner at any time before 1   July 2000, means the amount by which the rate of family allowance that would be payable to the person or the person's partner at that time under the Social Security Act except for point 1069 - B8 of that Act, would be more than the minimum family allowance rate.

"notional pension/supplement child-related amount" , in relation to a person at any time, means:

  (a)   if the time is a time occurring before 1   July 2000--the total of the pension supplement child - related amounts that would have been included at that time in the rate of the service pension or income support supplement payable to the person in respect of any child or children referred to in paragraph   (1)(a) if the amendments made by Schedule   1 to the Veterans Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 had not been made; and

  (b)   if the time is a time occurring on or after 1   July 2000--an amount that has been determined by the Commission, by instrument in writing, to be the amount of the pension/supplement child - related amount at that time, having regard to the indexation of the Part A rate of family tax benefit to that time under the A New Tax System (Family Assistance) Act 1999 .

"pension/supplement child-related amount" , at any relevant time, means an amount that was or would be required at that time to be included in a service pension under Module C or Module D (as Module C or Module D was affected by Module DAA) of the Service Pension Rate Calculator at the end of section   42, or in an income support supplement under Module F or Module G (as Module F or Module G was affected by Module H) of the Income Support Supplement Rate Calculator at the end of section   45Y, of the Veterans' Entitlements Act 1986 as in force immediately before 1   January 1998.

11   Saving provisions applicable to certain people who cease to be service pensioners on 1   January 1998

  (1)   Subject to subclause   (2), this clause applies to a person at a particular time (the relevant time ) if:

  (a)   a service pension is not payable to the person; and

  (b)   a service pension was payable to the person immediately before 1   January 1998 at a rate that included one or more pension child - related amounts in respect of a child or children; and

  (c)   a service pension would have been payable to the person at the relevant time at a rate that included one or more pension child - related amounts in respect of that child or those children if the amendments made by Schedule   1 to the Veterans' Affairs Legislation Amendment (Budget and Simplification Measures) Act 1997 had not been made.

  (2)   This clause ceases to apply to a person, and does not afterwards again apply to the person, if:

  (a)   the service pension referred to in paragraph   (1)(c) would have ceased to be payable to the person; or

  (b)   family payment under the Social Security Act is no longer payable to the person or the person's partner or is no longer payable to the person or the person's partner at a rate higher than the minimum family payment rate; or

  (c)   service pension becomes payable to the person.

  (3)   A person to whom this clause applies is taken for the purposes of subsection   85(7) to be in receipt of a service pension under Part   III.

  (4)   In this clause:

"pension child-related amount" , at any relevant time, means an amount that would be required at that time to be included in a service pension under Module C or Module D (as Module C or Module D was affected by Module DAA) of the Service Pension Rate Calculator at the end of section   42 of the Veterans' Entitlements Act 1986 as in force immediately before 1   January 1998.

11A   Amendments relating to treatment of income streams

  (1)   If:

  (a)   a person who had entered into a binding arrangement for the provision to the person of an income stream was, on 19   September 1998, receiving a service pension, an income support supplement or a social security payment; and

  (b)   the Minister declares, in writing, that the Minister is satisfied that the application of this Act (as amended by the amending Act) would cause the person significant disadvantage in relation to the treatment of the person's income stream;

this Act applies to the person in relation to the income stream as if the amendments made by Part   2 of Schedule   3 to the amending Act had not been made.

  (2)   Subclause   (1) ceases to have effect if:

  (a)   the service pension, income support supplement or social security payment referred to in subclause   (1)(a) (the original payment ) ceases to be payable to the person; and

  (b)   another service pension, income support supplement or social security payment does not become payable to the person immediately after the original payment ceases to be payable.

  (3)   If a person was receiving a service pension, an income support supplement or a social security payment on 19   September 1998, the person's annual rate of ordinary income from:

  (a)   an asset - test exempt income stream; or

  (b)   an asset - tested income stream (long term);

that is a defined benefit income stream whose commencement day is earlier than 20   September 1998 is to be worked out as if the amendment made by item   81 of Schedule   3 to the amending Act had not been made.

  (4)   In this clause:

"amending Act" means the Social Security and Veterans' Affairs Legislation Amendment (Budget and Other Measures) Act 1998 .

"binding arrangement" , in relation to a person, means:

  (a)   an arrangement that does not allow the person to commute an income stream; or

  (b)   an arrangement that may only be terminated on terms that are, in the opinion of the Commission, likely to cause severe detriment to the person.

11B   Transitional definition of deductible amount (commencing 1   July 2007)

  (1)   This clause applies if:

  (a)   a person has received at least one payment from a defined benefit income stream before 1   July 2007, and is still receiving payments from the income stream; and

  (b)   the person receives income support payment in respect of a continuous period starting before, and ending on or after, the person's trigger day (see subclause   (5)); and

  (c)   the amount of the income support payment received before the person's trigger day was affected by the deduction of a deductible amount (within the meaning of this Act or the Social Security Act, as the case requires, apart from this clause) from the amount of the payments payable to the person for a year under the income stream; and

  (d)   if the person's trigger day is after 1   July 2007--the income stream has not been partially commuted on or after 1   July 2007 and before the person's trigger day.

Note 1:   If the income stream is wholly commuted, this clause will stop applying because the person will no longer be receiving payments from the income stream (see paragraphs   (1)(a) and (d)).

Note 2:   For the deduction of a deductible amount from amounts payable under certain defined benefit income streams, see sections   46V and 46Y of this Act and sections   1099A and 1099D of the Social Security Act.

  (2)   Despite the amendment of this Act by Part   2 of Schedule   9 to the Tax Laws Amendment (Simplified Superannuation) Act 2007 , for the purposes of working out the amount of any service pension or income support supplement received by the person on or after the trigger day in respect of the remaining part of the period mentioned in paragraph   (1)(b), the deductible amount , in relation to the income stream for a year, is the greater of the following amounts:

  (a)   the deductible amount mentioned in paragraph   (1)(c);

  (b)   the sum of the amounts that are the tax free components (worked out under subsections   307 - 125(4) to (7) of the Income Tax (Transitional Provisions) Act 1997 ) of the payments received from the income stream during the year.

Note:   Service pension and income support supplement are income support payments within the meaning of the Social Security Act (see subsection   23(1) of that Act).

  (3)   However, this clause stops applying to an income stream immediately after the time (if any) that the deductible amount in relation to the income stream is, under subclause   (2), the amount mentioned in paragraph   (2)(b).

  (4)   For the purposes of this clause, without limiting paragraph   (1)(b), if the form of a person's income support payment mentioned in paragraph   (1)(b) changes during a period, the continuity of the period is not broken by the change.

Example:   The form of a person's income support payment may change from one kind of payment (for instance, a social security pension under the Social Security Act) to another (for instance, a service pension under this Act).

  (5)   In this clause:

"income support payment" has the same meaning as in the Social Security Act.

"trigger day" , for a person, means:

  (a)   if the person is under 60 years at the end of 30   June 2007--the day the person turns 60; or

  (b)   if the person is 60 years or over at the end of 30   June 2007--1   July 2007.

Part   2 -- Aged care accommodation bonds: certain transactions before 6   November 1997

12   Overview of Part

  (1)   The following is a basic summary of this Part.

  (2)   For people who either:

  (a)   became liable to pay an accommodation bond at any time from the beginning of 1   October 1997 until the end of 5   November 1997 but then agreed to switch to an accommodation charge; or

  (b)   sold their principal home on or before 5   November 1997 in order to be able to pay certain accommodation bonds;

and for the partners of such people, certain amounts relating to refunds of such bonds, or to the proceeds of such sales, are excluded from the income and assets tests under this Act.

Note:   Accommodation bond and accommodation charge have the same meanings as in the Aged Care Act 1997 : see subsection   5L(1) of this Act.

13   Scope of Part

  (1)   This Part applies to a person if:

  (a)   at any time from the beginning of 1   October 1997 until the end of 5   November 1997, the person became liable to pay an accommodation bond for entry to a residential care service; and

  (b)   either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section   44 - 8B and Division   57A of the Aged Care (Transitional Provisions) Act 1997 been in force at the time of the entry; and

  (c)   the person later made an agreement (a refund agreement ) with the provider of the service that the person's liability to pay an accommodation bond for the entry was to be replaced with a liability to pay an accommodation charge for the entry, and that any payment of any of the bond was to be refunded to the person.

Note 1:   Accommodation bond and accommodation charge have the same meanings as in the Aged Care Act 1997 : see subsection   5L(1) of this Act.

Note 2:   Charge exempt resident has the same meaning as in the Aged Care (Transitional Provisions) Act 1997 : see clause   17 of this Schedule.

  (2)   This Part also applies to a person if the Commission is satisfied that:

  (a)   on or before 5   November 1997, the person sold his or her principal home for the sole or principal purpose of raising money to pay an accommodation bond for entry to a residential care service; and

  (b)   either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section   44 - 8B and Division   57A of the Aged Care (Transitional Provisions) Act 1997 been in force at the time of the entry.

Note 1:   Accommodation bond and accommodation charge have the same meanings as in the Aged Care Act 1997 : see subsection   5L(1) of this Act.

Note 2:   Charge exempt resident has the same meaning as in the Aged Care (Transitional Provisions) Act 1997 : see clause   17 of this Schedule.

  (3)   This Part also applies to the partner of a person covered by subclause   (1) or (2) (even if the person so covered is now deceased).

  (4)   For the purposes of subclause   (2), the time at which a person sells his or her home is the time when he or she comes under a legal obligation to transfer the home to the buyer.

14   Person's ordinary income reduced using financial asset rules

  (1)   For the purposes of this clause, assume that the person's exempt bond amount (see clause   16) were a financial asset of the person.

  (2)   The person's ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division   3 of Part   IIIB of this Act (Deemed income from financial assets).

  (3)   In working out that reduction, assume that the total value of the person's financial assets exceeded the person's deeming threshold ( deeming threshold is a term used in that Division).

15   Value of person's assets reduced

    For the purposes of this Act (other than sections   52FA, 52G, 52GA, 52H, 52JA, 52JB, 52JC and 52JD), the total value of the person's assets is reduced by the person's exempt bond amount (see clause   16).

16   Meaning of exempt bond amount

  (1)   The following is how to work out a person's exempt bond amount .

  (2)   If the person is covered by subclause   13(1) (but not subclause   13(2)), the person's exempt bond amount is any amount of accommodation bond payment refunded to the person under the refund agreement mentioned in that subclause.

  (3)   If the person is covered by subclause   13(2) (but not subclause   13(1)), the person's exempt bond amount is the gross proceeds of the sale mentioned in that subclause, less:

  (a)   any costs incurred in the course of the sale; and

  (b)   the amount of any debt the person or the person's partner owed immediately before the sale, so far as the debt was secured by the home at that time.

  (4)   If the person is covered by both subclauses   13(1) and (2), the person's exempt bond amount is the greater of the 2 amounts worked out under subclauses   (2) and (3) of this clause.

  (5)   If the person is covered by subclause   13(3), the person's exempt bond amount is equal to the exempt bond amount of the person's partner, as worked out under subclause   (2), (3) or (4) of this clause.

  (6)   But in all of the above cases, if the person currently has a partner (who is not deceased), the person's exempt bond amount is half of what it would otherwise be.

Part   2A -- Charge exempt residents under the Aged Care (Transitional Provisions) Act 1997

17   Meaning of charge exempt resident

    In this Part:

"charge exempt resident" has the same meaning as in the Aged Care (Transitional Provisions) Act 1997 .

17A   Persons who became charge exempt residents before commencement

  (1)   This clause applies if a person first became a charge exempt resident before the commencement of this clause.

  (2)   If, at any time after becoming a charge exempt resident but before the commencement of this clause, the person, or the person's partner, was earning, deriving or receiving any rent from the person's principal home from another person, any such rent earned, derived or received while the person is a charge exempt resident is not income in relation to the person, or the person's partner, for the purposes of this Act.

Note 1:   For rent , see subsection   5N(2).

Note 2:   Under subsections   5LA(8) and (9), and subclause   (3) of this clause, the principal home of a person in a care situation may be a place other than the place where the person receives care.

  (3)   A residence of a person is taken to be the person's principal home for the purposes of this Act during:

  (a)   if:

  (i)   the Commission is satisfied that the residence was previously the person's principal home but that the person left it for the purpose of going into a care situation or becoming an aged care resident; and

  (ii)   at any time after leaving the residence but before the commencement of this clause, the person, or the person's partner, earned, derived or received rent for the residence from another person;

    any period during which:

  (iii)   the person is a charge exempt resident; and

  (iv)   the person, or the person's partner, is earning, deriving or receiving rent for the residence from another person; and

  (b)   any period during which the residence is, because of paragraph   (a), the principal home of the person's partner.

Note 1:   For rent see subsection   5N(2). For in a care situation see subsection   5NC(2). For aged care resident see subsection   5NC(5).

Note 2:   This subclause is not meant to imply that a person may have more than one principal home at the same time.

17B   Refunds of accommodation charge

  (1)   Clauses   17C and 17D apply to an amount (the refunded amount ) that is refunded as mentioned in paragraph   56 - 1(kc) or 56 - 3(ic) of the Aged Care Act 1997 (as in force before 1   July 2014) to a person because the person is or was a charge exempt resident.

  (2)   Those clauses also apply to an amount (also called the refunded amount ) that is paid to a person under paragraph   44 - 8A(6)(b) of the Aged Care (Transitional Provisions) Act 1997 because the person is or was a charge exempt resident.

  (3)   To avoid doubt, those clauses do not apply if the amount is paid to the person's estate or to any other person.

17C   Person's ordinary income reduced using financial asset rules

  (1)   For the purposes of this clause, assume that the refunded amount were a financial asset of the person.

  (2)   The person's ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division   3 of Part   IIIB of this Act (Deemed income from financial assets).

  (3)   In working out that reduction, assume that the total value of the person's financial assets exceeded the person's deeming threshold ( deeming threshold is a term used in that Division).

17D   Value of person's assets reduced

    For the purposes of this Act (other than sections   52FA, 52G, 52GA, 52H, 52JA, 52JB, 52JC and 52JD), the total value of the person's assets is reduced by the refunded amount.

17E   Application of Part

    This Part applies in relation to a person who is a charge exempt resident at any time, whether before or after the commencement of the Part.

Part   3 -- Transitional provisions: changes made by the Social Security and Veterans' Affairs Legislation Amendment (Payment Processing) Act 1998

18   Definitions

    In this Part:

"amending Act" means the Social Security and Veterans' Affairs Legislation Amendment (Payment Processing) Act 1998 .

"pension" means service pension under Part   III or income support supplement under Part   IIIA.

19   Payability and payment of pension during transition period

  (1)   In spite of the commencement of Schedule   4 to the amending Act, until and including 12   July 1999, the question whether pension is payable to a person is to be determined in accordance with this Act as in force immediately before 1   July 1999.

  (2)   In spite of the commencement of Schedule   4 to the amending Act, until and including 15   July 1999, instalments of pension are to be paid in accordance with this Act as in force immediately before 1   July 1999.

20   Continued operation of Act in relation to cancellation etc. of pensions

  (1)   In spite of the commencement of Schedule   4 to the amending Act, this Act, as in force immediately before 1   July 1999, continues to apply in relation to the cancellation and suspension of pensions, and the variation of the rates of such pensions, until and including 12   July 1999.

  (2)   Without limiting subclause   (1), that subclause has effect:

  (a)   in relation to the day on which a cancellation, suspension or variation takes effect; and

  (b)   whether the cancellation, suspension or variation is effected by the operation of a provision of this Act or by a determination under this Act.

  (3)   A cancellation, suspension or variation that, but for this subclause, would have taken effect on 15   July 1999 takes effect on 13   July 1999.

21   First pension period

    A pension period under this Act, as amended by Schedule   4 to the amending Act, must not commence earlier than 13   July 1999.

22   Continued operation of certain notices given before 13   July 1999

    If:

  (a)   at any time before 13   July 1999, the Secretary has given a person a notice under section   54; and

  (b)   the notice has not been revoked;

the notice continues to have effect on and after 13   July 1999 as if:

  (c)   the notice had been given under this Act as amended by Schedule   4 to the amending Act; and

  (d)   the notification period specified in the notice had been so specified in accordance with this Act as so amended.

23   Consequences of occurrence of certain events etc.

  (1)   If:

  (a)   the Secretary has, before 13   July 1999, given a person a notice under section   54; and

  (b)   an event or change in circumstances specified in the notice occurs before 13   July 1999; and

  (c)   the person to whom the notice was given notifies the Secretary, before 13   July 1999, of the occurrence of the event or change in circumstances;

this Act, as in force immediately before the commencement of Schedule   4 to the amending Act, has effect in relation to the day on which any cancellation or suspension of the pension that is being received by the person, or any variation of the rate of the pension, takes effect.

  (2)   If:

  (a)   the Secretary has, before 13   July 1999, given a person a notice under section   54; and

  (b)   an event or change in circumstances specified in the notice occurs before 13   July 1999; and

  (c)   the person to whom the notice was given does not notify the Department of the occurrence of the event or change in circumstances before 13   July 1999;

this Act, as amended by Schedule   4 to the amending Act, has effect, subject to subclause   20(3), in relation to the day on which any cancellation or suspension of the pension being received by the person, or any variation of the rate of the pension, takes effect.

24   Transitional regulations

  (1)   Regulations made under section   216 may prescribe matters in relation to any transitional matters (including prescribing any saving or application provisions) arising out of amendments of this Act made by Schedule   4 to the amending Act.

  (2)   Without limiting subclause   (1), and in spite of any other provision in this or any other Act, regulations made by virtue of subclause   (1) may:

  (a)   modify the effect of a provision of this Part (other than this clause); or

  (b)   substitute another provision for any provision of this Part (other than this clause).

Part   4 -- Transitional provisions: changes made by Schedule   5 to the Veterans' Affairs Legislation Amendment (Budget Measures) Act 2000

25   Definitions

    In this Part:

"amending Act" means the Veterans' Affairs Legislation Amendment (Budget Measures) Act 2000 .

"pension" means a pension under Part   II or Part   IV or an allowance under Part   VI.

26   Payability and payment of pension during transition period

  (1)   In spite of the commencement of Schedule   5 to the amending Act, until and including 9   July 2001, the question whether pension is payable to a person is to be determined in accordance with this Act as in force immediately before 1   July 2001.

  (2)   In spite of the commencement of Schedule   5 to the amending Act, until and including 12   July 2001, instalments of pension are to be paid in accordance with this Act as in force immediately before 1   July 2001.

27   Continued operation of Act in relation to cancellation etc. of pensions

  (1)   In spite of the commencement of Schedule   5 to the amending Act, this Act, as in force immediately before 1   July 2001, continues to apply in relation to the cancellation and suspension of pensions, and the variation of the rates of such pensions, until and including 9   July 2001.

  (2)   Without limiting subclause   (1), that subclause has effect:

  (a)   in relation to the day on which a cancellation, suspension or variation takes effect; and

  (b)   whether the cancellation, suspension or variation is effected by the operation of a provision of this Act or by a determination under this Act.

  (3)   A cancellation, suspension or variation that, but for this subclause, would have taken effect on 12   July 2001 takes effect on 10   July 2001.

28   First pension period

    A pension period under this Act, as amended by Schedule   5 to the amending Act, must not commence earlier than 10   July 2001.

29   Transitional regulations

  (1)   Regulations made under section   216 may prescribe matters in relation to any transitional matters (including prescribing any saving or application provisions) arising out of amendments of this Act made by Schedule   5 to the amending Act.

  (2)   Without limiting subclause   (1), and in spite of any other provision in this or any other Act, regulations made by virtue of subclause   (1) may:

  (a)   modify the effect of a provision of this Part (other than this clause); or

  (b)   substitute another provision for any provision of this Part (other than this clause).

Part   5 -- Transitional provisions: changes on 20   September 2009

30   Transitional rates of service pension and income support supplement on and after 20   September 2009

Application

  (1)   This clause applies if:

  (a)   on 19   September 2009 a person was receiving one of the following payments:

  (i)   service pension or income support supplement;

  (ii)   age pension, disability support pension, carer payment, bereavement allowance or special needs pension under the Social Security Act; and

  (b)   either:

  (i)   the person continues (without a break) to receive one of those payments (whether or not of the same sort as the one the person received on that day); or

  (ii)   subclause   (1A) applies to the person.

  (1A)   This subclause applies to a person if:

  (a)   a payment by the Thalidomide Australia Fixed Trust:

  (i)   is made to, or applied for the benefit of, the person as a beneficiary of the Trust; or

  (ii)   is made to, or applied for the benefit of, the person's partner as a beneficiary of the Trust; or

  (iii)   is made to the person or the person's partner in respect of a beneficiary of the Trust; and

  (b)   subparagraph   (1)(b)(i) applies to the person immediately before the payment is made; and

  (c)   any of the payments mentioned in paragraph   (1)(a) is payable to the person at the commencement of item   7 of Schedule   4 to the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Election Commitments and Other Measures) Act 2011 ; and

  (d)   after that commencement, that payment, or any of the other payments referred to in paragraph   (1)(a), continues (without a break) to be payable to the person.

Purpose

  (2)   This clause has effect for the purposes of working out the rate of service pension or income support supplement under this Act for the person for a day (the relevant day ) after 19   September 2009 under subpoint SCH6 - A1(2), (3), (4) or (6).

Note:   This clause does not make a person entitled to receive service pension or income support supplement if the person is not otherwise entitled to receive it.

Provisional payment rate for service pension

  (3)   For working out the person's rate of service pension, the person's provisional payment rate is taken to be the amount worked out under subclause   (4) if that amount is greater than the person's provisional payment rate (for that purpose) apart from this clause.

Note:   The provisional payment rate is an amount worked out under the method statement in subpoint SCH6 - A1(2). That subpoint may be relevant of its own force or because of subpoint SCH6 - A1(3) or (4).

  (4)   The amount is the one that would be the provisional payment rate under subpoint SCH6 - A1(2) if:

  (a)   the maximum payment rate under that subpoint for the person were the total of:

  (i)   the amount worked out under whichever of subclauses   31(1), (2), (3) and (4) is relevant to the person; and

  (ia)   the person's energy supplement (if any) worked out using Module BB of the Rate Calculator; and

  (ii)   the amount (if any) per year calculated for the person under Module C of the Rate Calculator (for rent assistance);

    reduced, if subclause   31(1) or (2) is relevant to the person and an election by the person under subsection   60A(1) (about quarterly pension supplement) is in force, by the person's minimum pension supplement amount; and

  (b)   the amendments made by Schedules   6 and 7 to the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been made.

Note 1:   The maximum payment rate is an amount used in subpoint SCH6 - A1(2).

Note 2:   Subclause   31(1) deals with a person in Australia who is not a member of a couple or is a member of an illness separated couple or respite care couple.

Note 3:   Subclause   31(2) deals with a person in Australia who is a member of a couple (but not a member of an illness separated couple or respite care couple).

Note 4:   Subclause   31(3) deals with a person who has been outside Australia for more than 6 weeks and is not a member of a couple or is a member of an illness separated couple or respite care couple.

Note 5:   Subclause   31(4) deals with a person who has been outside Australia for more than 6 weeks and is a member of a couple (but not a member of an illness separated couple or respite care couple).

Note 6:   The amount described in subparagraph   (4)(a)(i) is indexed under Subdivision B (CPI indexation) of Division   18 of Part   IIIB on and after 20   March 2010.

Note 7:   Section   65A may affect the inclusion of the energy supplement described in subparagraph   (4)(a)(ia).

Provisional payment rate for income support supplement

  (5)   For working out the person's rate of income support supplement, the person's provisional payment rate is taken to be the amount worked out under subclause   (6) if that amount is greater than the person's provisional payment rate (for that purpose) apart from this clause.

Note:   The provisional payment rate is an amount worked out under the method statement in subpoint SCH6 - A1(6).

  (6)   The amount is the one that would be the provisional payment rate under subpoint SCH6 - A1(6) if:

  (a)   the maximum payment rate under that subpoint for the person were the total of:

  (i)   the amount worked out under whichever of subclauses   32(1) and (2) is relevant to the person; and

  (ii)   the amount (if any) per year calculated for the person under Module C of the Rate Calculator (for rent assistance); and

    reduced, if an election by the person under subsection   60A(1) (about quarterly pension supplement) is in force, by the person's minimum pension supplement amount; and

  (b)   the amendments made by Schedules   6 and 7 to the Veterans' Affairs and Other Legislation Amendment (Pension Reform) Act 2009 had not been made; and

  (c)   the increased rate were the amount worked out under subclause   32(3).

Note 1:   The maximum payment rate and increased rate are amounts used in subpoint SCH6 - A1(6).

Note 2:   Subclause   32(1) deals with a person who is not a member of a couple or is a member of an illness separated couple or respite care couple.

Note 3:   Subclause   32(2) deals with a person who is a member of a couple (but not a member of an illness separated couple or respite care couple).

Note 4:   The amount described in subparagraph   (6)(a)(i) is indexed under Subdivision B (CPI indexation) of Division   18 of Part   IIIB on and after 20   March 2010.

Note 5:   The amount described in paragraph   (6)(c) is affected by indexation because the components of that amount are indexed.

Limit on application of subclauses   (3) and (5)

  (7)   Neither subclause   (3) nor subclause   (5) applies for working out the rate of service pension or income support supplement of the person for the relevant day if the relevant day is after a day for which one of the following conditions was met:

  (a)   the amount worked out for the day under subclause   (4) (in a previous application of this clause) was less than or equal to the person's provisional payment rate for service pension apart from this clause;

  (b)   the amount worked out for the day under subclause   (6) (in a previous application of this clause) was less than or equal to the person's provisional payment rate for income support supplement apart from this clause;

  (c)   the amount worked out for the day under subclause   146(4) of Schedule   1A to the Social Security Act was less than or equal to the person's provisional annual payment rate, apart from clause   146 of that Schedule, for a social security pension described in that clause.

  (8)   However, subclause   (7) does not prevent subclause   (3) or (5) from applying for working out the rate of service pension or income support supplement of the person for the relevant day if:

  (a)   on the relevant day the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and

  (b)   on each day for which a condition in paragraph   (7)(a), (b) or (c) was met, the person was a member of a respite care couple; and

  (c)   on a day before all the days described in paragraph   (b):

  (i)   the person was a member of a couple, but not a member of an illness separated couple or respite care couple, and not partnered (partner in gaol) within the meaning of the Social Security Act; and

  (ii)   either this clause affected the rate at which service pension or income support supplement was payable to the person or clause   146 of Schedule   1A to the Social Security Act affected the rate at which a social security pension described in that clause was payable to the person.

Note:   For member of a couple , illness separated couple and respite care couple see subsections   5E(1) and 5R(5) and (6) respectively.

31   Amounts affecting transitional rate of service pension

Single Australian resident in Australia

  (1)   For the purposes of subparagraph   30(4)(a)(i), work out the amount as follows if, on the relevant day:

  (a)   the person's family situation is any of the following:

  (i)   not a member of a couple;

  (ii)   member of an illness separated couple;

  (iii)   member of a respite care couple; and

  (b)   the person is residing in Australia; and

  (c)   the person either:

  (i)   is in Australia; or

  (ii)   is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.

Note 1:   For member of a couple , illness separated couple and respite care couple see subsections   5E(1) and 5R(5) and (6) respectively.

Note 2:   Subsection   5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3:   Section   59A explains the abbreviations used in Division   18 of Part   IIIB.

Partnered Australian resident in Australia

  (2)   For the purposes of subparagraph   30(4)(a)(i), work out the amount as follows if, on the relevant day:

  (a)   the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and

  (b)   the person is residing in Australia; and

  (c)   the person either:

  (i)   is in Australia; or

  (ii)   is temporarily absent from Australia and has been so for a continuous period not exceeding 6 weeks.

Note 1:   For member of a couple , illness separated couple and respite care couple see subsections   5E(1) and 5R(5) and (6) respectively.

Note 2:   Subsection   5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3:   Section   59A explains the abbreviations used in Division   18 of Part   IIIB.

Single person not covered by subclause   (1)

  (3)   For the purposes of subparagraph   30(4)(a)(i), work out the amount as follows if, on the relevant day:

  (a)   the person's family situation is any of the following:

  (i)   not a member of a couple;

  (ii)   member of an illness separated couple;

  (iii)   member of a respite care couple; and

  (b)   the person either:

  (i)   is not residing in Australia; or

  (ii)   is absent from Australia and has been so for a continuous period exceeding 6 weeks.

Note 1:   For member of a couple , illness separated couple and respite care couple see subsections   5E(1) and 5R(5) and (6) respectively.

Note 2:   Subsection   5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3:   Section   59A explains the abbreviations used in Division   18 of Part   IIIB.

Partnered person not covered by subclause   (2)

  (4)   For the purposes of subparagraph   30(4)(a)(i), work out the amount as follows if, on the relevant day:

  (a)   the person is a member of a couple, but not a member of an illness separated couple or respite care couple; and

  (b)   the person either:

  (i)   is not residing in Australia; or

  (ii)   is absent from Australia and has been so for a continuous period exceeding 6 weeks.

Note 1:   For member of a couple , illness separated couple and respite care couple see subsections   5E(1) and 5R(5) and (6) respectively.

Note 2:   Subsection   5G(1A) is relevant to determining whether a person is residing in Australia.

Note 3:   Section   59A explains the abbreviations used in Division   18 of Part   IIIB.

32   Amounts affecting transitional rate of income support supplement

Single person's component of maximum basic rate

  (1)   For the purposes of subparagraph   30(6)(a)(i), work out the amount as follows if, on the relevant day, the person's family situation is:

  (a)   not a member of a couple; or

  (b)   member of an illness separated couple; or

  (c)   member of a respite care couple.

Note:   For member of a couple , illness separated couple and respite care couple see subsections   5E(1) and 5R(5) and (6) respectively.

Partnered person's component of maximum basic rate

  (2)   For the purposes of subparagraph   30(6)(a)(i), work out the amount as follows if, on the relevant day, the person is a member of a couple, but not a member of an illness separated couple or respite care couple:

Note:   For member of a couple , illness separated couple and respite care couple see subsections   5E(1) and 5R(5) and (6) respectively.

Increased rate

  (3)   For the purposes of paragraph   30(6)(c), work out the amount for the person as follows:

33   Rate of payments to partners of persons affected by clause   30

  (1)   This clause applies if clause   30 applies to a person who is a member of a couple and that clause affects the rate at which service pension or income support supplement is payable to the person.

  (2)   In working out the amount of a payment under this Act payable to a partner of the person, assume that the service pension or income support supplement payable to the person is payable at the rate at which it would be payable if clause   30 had not been enacted.

34   Payment and income tax consequences of receiving service pension or income support supplement at rate affected by clause   30

Application

  (1)   This clause applies if clause   30 affects the rate at which service pension or income support supplement is payable to a person.

Purpose

  (2)   The purpose of this clause is to ensure that the person is treated appropriately in relation to the payment, and income taxation, of the pension or supplement by modifying the operation of this Act (and thus affecting the related income tax law) in relation to the person and the pension or supplement.

Note:   This clause does not modify the operation of subsection   5GA(3), which provides for working out the person's minimum pension supplement amount.

Pension supplement amount

  (3)   This Act applies in relation to the person's pension or supplement as if each of the following:

  (a)   the amount described in subparagraph   30(4)(a)(i), as affected by any indexation and any relevant reduction described in paragraph   30(4)(a);

  (b)   the amount described in subparagraph   30(6)(a)(i), as affected by any indexation and any relevant reduction described in paragraph   30(6)(a);

were an amount worked out and added under the pension supplement Module of the Rate Calculator.

Note 1:   One effect of subclause   (3) is that whichever of the amounts described in paragraphs   (3)(a) and (b) is relevant is the person's pension supplement amount (as defined in subsection   5Q(1) of this Act).

Note 2:   If that amount exceeds the person's pension supplement basic amount (as affected by subclause   (4)), another effect of subclause   (3) is that the excess affects the tax - exempt pension supplement under subsection   5GA(5) of this Act in some cases.

Note 3:   Yet another effect of subclause   (3) is that clause   4 of Schedule   6 will affect the operation of reductions of the maximum payment rate because of the income test and assets test in some cases.

Pension supplement basic amount

  (4)   This Act applies in relation to the person's service pension or income support supplement as if:

  (a)   each reference in the table in subsection   5GA(4) to $509.60 were a reference to $14,903.20; and

  (b)   the reference in the table in subsection   5GA(4) to $426.40 were a reference to $12,448.80.

Note 1:   This affects the person's pension supplement basic amount.

Note 2:   The provisions for indexing amounts in the table in subsection   5GA(4) apply to the higher figures mentioned in this subclause.

Energy supplement

  (5)   If subclause   31(1) or (2) is relevant to the person, this Act applies in relation to the person's service pension as if the person's energy supplement (if any) resulting from Module BB of the Rate Calculator were used to work out the rate of the person's service pension.

Note 1:   This energy supplement is included in the total worked out under paragraph   30(4)(a) (see subparagraph   30(4)(a)(ia)).

Note 2:   Subclause   (5) causes section   62E to apply. If quarterly energy supplement is payable, then no energy supplement will be available to be included in the total worked out under paragraph   30(4)(a) (see point SCH6 - BB2 of the Rate Calculator).

Note 3:   Other effects of subclause   (5) include:

(a)   the possibility of the minimum amount of fortnightly instalments of the pension being affected under section   58A; and

(b)   clause   4 of Schedule   6 affecting the operation of reductions of the maximum payment rate because of the ordinary/adjusted income test and assets test.

35   Special rules for indexation of rates payable under clause   30

  (1)   This clause applies if clause   30 affects the rate at which service pension is payable to a person for a day on or after 20   March 2013.

  (2)   Subsection   198MA(2), and the definition of brought forward CPI indexation amount (except paragraph   (b) of that definition) in subsection   198MA(3), apply in relation to the amount described in subparagraph   30(4)(a)(i) of this Schedule for the person in the same way as they apply in relation to the person's PS minimum rate.

  (3)   The following provisions do not affect the rate of the person's service pension worked out under clause   30 or an amount worked out in relation to the person's pension because of clause   34:

  (a)   subparagraph   198MA(2)(b)(vi);

  (b)   section   198MB.