Social Security Legislation Amendment Act (No. 2) 1993 (Cth)

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Social Security Legislation Amendment Act (No. 2) 1993

No. 61 of 1993

TABLE OF PROVISIONS

PART 1—PRELIMINARY

Section

1. Short title etc.

2. Commencement

3. Application

PART 2—FRINGE BENEFITS

4. Insertion of new section 10A:

10A. Family payment income test and parental means test definitions

5. Benefit Rate Calculator A

6. Family Payment Rate Calculator

7. Insertion of new Part 3.12A:

TABLE OF PROVISIONS—continued

Section

PART 3.12A—GENERAL PROVISIONS RELATING TO THE FAMILY

PAYMENT INCOME TEST AND THE PARENTAL MEANS TEST

Division 1—Purpose of this Part

1157A. Purpose of Part

Division 2—Benefits that may be assessable fringe benefits

1157B. Benefits received in or outside Australia

1157C. Car benefits

1157D. Exempt car benefits

1157E. School fees benefits

1157F. Health insurance benefits

1157G. Loan benefits

1157H. Exempt loan benefits

1157I. Housing benefits

1157J. Exempt housing benefits—live-in residential care workers

Division 3—Value of car fringe benefits

1157K. Method of valuing car fringe benefits

1157L. Value of car fringe benefits

1157M. Minister may determine alternative method of valuing car fringe benefits

Division 4—Value of school fees fringe benefits

1157N. Value of school fees fringe benefits

Division 5—Value of health insurance fringe benefits

11570. Value of health insurance fringe benefits

Division 6—Value of loan fringe benefits

1157P. Method of valuing loan fringe benefits

1157Q. Value of loan fringe benefits

1157R. Minister may determine alternative method of valuing loan fringe benefits

Division 7—Value of housing fringe benefits

1157S. Method of valuing housing fringe benefits

1157T. Value of housing fringe benefits

1157U Minister may determine alternative method of valuing housing fringe benefits

Division 8—Foreign currency rates

1157V. Foreign currency rates to be used for the purposes of this Part

8. Consequential amendments of the Principal Act

PART 3—SENIORS HEALTH CARD

9. Insertion of new section 6A:

6A. Seniors health card definitions

TABLE OF PROVISIONS—continued

Section

10. General definitions

11. Insertion of new Chapter 2A:

CHAPTER 2A—BENEFITS AND CONCESSIONS OTHER THAN PAYMENTS

PART 2A.1—SENIORS HEALTH CARD

Division 1—Qualification for and entitlement to a seniors health card

Subdivision A—Qualification

1061ZA. Qualification for seniors health card

Subdivision B—Entitlement

1061ZB. Entitlement to a seniors health card

Division 2—Claim for seniors health card

1061ZC. Need for a claim

1061ZD. Form of claim

1061ZE. Lodgment of claim

1061ZF. Claimant must be an Australian resident and in Australia

1061ZG. Claim may be withdrawn

Division 3—Determination of entitlement

1061ZH. Secretary to determine claim

1061ZI. Entitlement determination

1061ZJ. Date of effect of determination

Division 4—Cardholder’s obligations

1061ZK. Secretary may require notice of the happening of event or a change in circumstances

1061ZL. Secretary may require particular information relevant to qualification for seniors health card

Division 5—Continuation, variation and termination

1061ZM. Continuing effect of determination

1061ZN. Person ceases to be entitled to card automatically—recipient complying with section 1061ZK notification obligations

1061ZO. Person ceases to be entitled to card automatically—recipient not complying with section 1061ZK notification obligations

1061ZP. Person ceases to be entitled to card automatically—given effect to by computer

1061ZQ. Determination that a person ceases to be entitled to a seniors health card

1061ZR. Person may cease to be entitled to a seniors health card for failure to comply with section 1061ZL notice

1061ZS. Changes to a person’s entitlement to a seniors health card by computer

1061ZT. Resumption of entitlement

1061ZU. Date of effect of favourable determination

1061ZV. Date of effect of adverse determination

12. Insertion of new Part 3.9:

TABLE OF PROVISIONS—continued

Section

PART 3.9—SENIORS HEALTH CARD ORDINARY INCOME TEST CALCULATOR

1071. Seniors Health Card Ordinary Income Test Calculator

13. Indexed and adjusted amounts

14. Insertion of new section 1206C:

1206C. Adjustment of seniors health card ordinary income limit

15. Secretary may review decisions

16. Application for review

17. Amendments of the National Health Act

18. Amendment of the Hearing Services Act

PART 4—FAMILY PAYMENT (FOREIGN INCOME)

19. Family payment income test and parental income test definitions

20. Family Payment Rate Calculator

21. Foreign currency rates

PART 5—CONVERSION OF FOREIGN CURRENCY AMOUNTS

22. General definitions

23. Application of Division

24. Repeal of sections 1101 to 1105 and substitution of new section 1101:

1101. Determination of value of payments received in a foreign currency

25. Non-reviewable decisions

26. SSAT review powers

PART 6—EXTENSION OF ADVANCE PHARMACEUTICAL

ALLOWANCE

27. Commencement

28. Qualification for advance pharmaceutical allowance

SCHEDULE

CONSEQUENTIAL AMENDMENTS OF THE SOCIAL SECURITY

ACT 1991

Social Security Legislation Amendment Act (No. 2) 1993

No. 61 of 1993

An Act to amend the Social Security Act 1991,and for related purposes

[Assented to 3 November 1993]

The Parliament of Australia enacts:

PART 1—PRELIMINARY

Short title etc.

1.(1) This Act may be cited as the Social Security Legislation Amendment Act (No. 2) 1993.

(2) In this Act, “Principal Act” means the Social Security Act 19911.

Commencement

2.(1) Subject to subsections (2), (3), (4) and (5), this Act commences on the day on which it receives the Royal Assent.

(2) Section 23 is taken to have commenced on 12 November 1991.

(3) Part 2 and the Schedule commence on 1 January 1994.

(4) Part 4 commences on 1 January 1994, immediately after Part 2.

(5) Part 3 commences on 1 July 1994.

Application

3.(1) The amendments made by Parts 2 and 4 apply to all payments that fall due on or after 1 January 1994.

(2) The amendments made by Part 2 apply to all fringe benefits whether received before, on or after 1 January 1994.

(3) The amendments made by Part 4 apply to foreign income whether received before, on or after 1 January 1994.

PART 2—FRINGE BENEFITS

Insertion of new section 10A

4. After section 10 of the Principal Act the following section is inserted:

Family payment income test and parental means test definitions

“10A.(1) Some of the definitions in this section are the same as definitions in the Fringe Benefits Tax Assessment Act 1986. Most of the other definitions in this section are based on definitions in that Act.

“(2) In this section and in Module G of Benefit Rate Calculator A in section 1067, Module H of the Family Payment Rate Calculator in section 1069 and Part 3.12A, unless the contrary intention appears:

‘arm’s length loan’ means a loan where the parties to the loan are dealing with each other at arm’s length in relation to the loan;

‘arm’s length transaction’ means a transaction where the parties to the transaction are dealing with each other at arm’s length in relation to the transaction;

‘arrangement’ means:

(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; and

(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise;

‘assessable fringe benefit’ means a fringe benefit that is:

(a) a car benefit (see section 1157C); or

(b) a school fees benefit (see section 1157E); or

(c) health insurance benefit (see section 1157F); or

(d) a loan benefit (see section 1157G); or

(e) a housing benefit (see section 1157I);

but does not include a car benefit, loan benefit or housing benefit that is exempt;

Note: For exempt benefits see sections 1157D (car benefits), 1157H (loan benefits) and 1157J (housing benefits).

‘associate’ has the same meaning as in the Fringe Benefits Tax Assessment Act 1986;

Note: Subsection 136(1) of the Fringe Benefits Tax Assessment Act adopts the definition of ‘associate’ in section 26AB of the Income Tax Assessment Act. Section 159 of the Fringe Benefits Tax Assessment Act modifies the way in which the income tax definition applies and also extends that definition in other ways.

‘Australian Parliament’ means:

(a) the Parliament of the Commonwealth of Australia; or

(b) the Parliament of a State; or

(c) the Legislative Assembly for the Australian Capital Territory; or

(d) the Legislative Assembly of the Northern Territory of Australia;

Note: See paragraph (d) of the definition of ‘current employee’.

‘car’ means a motor vehicle that is a road vehicle designed to carry a load of less than 1 tonne or fewer than 9 passengers but does not include a motor cycle or similar vehicle;

‘car benefit’ has the meaning given by section 1157C;

‘car fringe benefit’ means a fringe benefit that is a car benefit;

‘census population’, in relation to an urban centre, means the census count on an actual location basis of the population of that urban centre specified in the results of the Census of Population and Housing taken by the Australian Statistician on 30 June 1981, being the results published by the Australian Statistician in the document entitled “Persons and Dwellings in Local Government Areas and Urban Centres”;

‘current employee’ means:

(a) a person who is an employee within the ordinary meaning of that word; and

(b) a person who holds or performs the duties of an appointment, office or position under the Constitution or under a law of the Commonwealth, a State or a Territory; and

(c) a person who is otherwise in the service of the Commonwealth, a State or a Territory (including service as a member of the Defence Force or as a member of a police force); and

(d) a member of an Australian Parliament;

‘current employer’ means a person who pays or is liable to pay any salary or wages to an employee, and includes:

(a) in the case of an unincorporated body of persons other than a partnership—the manager or other principal officer of that body; and

(b) in the case of a partnership)—each partner; and

(c) a government body;

‘disadvantaged person’ means a person who is intellectually, psychiatrically or physically handicapped;

‘dwelling’ has the meaning given by subsection (7);

‘eligible urban area’ means:

(a) an area that:

(i) is situated in an area described in Schedule 2 to the Income Tax Assessment Act; and

(ii) is an urban centre with a census population of 28,000 or more; or

(b) any other area that is an urban centre with a census population of 14,000 or more;

Note: See paragraph (c) of the definition of ‘special housing location’ in subsection (5).

‘employee’ means:

(a) a current employee; or

(b) a future employee; or

(c) a former employee;

‘employer’ means:

(a) a current employer; or

(b) a future employer; or

(c) a former employer;

‘employment’, in relation to a person, means the holding of any office or appointment, the performance of any functions or duties, the engaging in of any work, or the doing of any acts or things that results, will result or has resulted in the person being treated as an employee;

‘former employee’ means a person who has been a current employee;

‘former employer’ means a person who has been a current employer;

‘fringe benefit’ means a benefit that is provided to an employee or to an associate of the employee by:

(a) the employer of the employee; or

(b) an associate of the employer; or

(c) a person (the ‘arranger’) other than the employer or an associate of the employer under an arrangement between:

(i) the employer or an associate of the employer; and

(ii) the arranger or another person;

and that is provided in respect of the employment of the employee;

‘future employee’ means a person who will become a current employee;

‘future employer’ means a person who will become a current employer;

‘government body’ means the Commonwealth, a State, a Territory or an authority of the Commonwealth or a State or Territory;

Note: See paragraph (c) of the definition of ‘current employer’.

‘health insurance benefit’ has the meaning given by section 1157F;

‘health insurance fringe benefit’ means a fringe benefit that is a health insurance benefit;

‘housing benefit’ has the meaning given by section 1157I;

‘housing fringe benefit’ means a fringe benefit that is a housing benefit;

‘housing loan’ has the meaning given by subsection (9);

‘housing right’, in relation to a person, means a lease or licence granted to the person to occupy or use a unit of accommodation, in so far as that lease or licence subsists at a time when the unit of accommodation is the person’s usual place of residence;

‘in respect of’, in relation to the employment of an employee, includes by reason of, by virtue of, or for or in relation directly or indirectly to, that employment;

Note: See definition of ‘fringe benefit’.

‘lease’ includes a sub-lease;

‘loan’ includes:

(a) an advance of money; and

(b) the provision of credit or any other form of financial accommodation; and

(c) the payment of an amount for, on account of, on behalf of or at the request of a person where there is an obligation (whether expressed or implied) to repay the amount; and

(d) a transaction (whatever its terms or form) which in substance effects a loan of money;

‘loan benefit’ has the meaning given by section 1157G;

‘loan fringe benefit’ means a fringe benefit that is a loan benefit;

‘mature person’ means a person who has reached the age of 60 years;

‘metropolitan location’ has the meaning given by subsection (3);

‘non-arm’s length arrangement’ means an arrangement other than an arm’s length arrangement;

‘non-metropolitan location’ has the meaning given by subsection (4);

‘obligation’, in relation to the payment or repayment of an amount, includes an obligation that is not enforceable by legal proceedings;

‘place of residence’, in relation to a person, means:

(a) a place at which the person resides; or

(b) a place at which the person has sleeping accommodation;

whether on a permanent or temporary basis and whether or not on a shared basis;

‘private use’, in relation to a car and in relation to an employee or an associate of an employee, means any use of the car by the employee or associate that is not exclusively within the employee’s employment;

‘provide’, in relation to a benefit, includes allow, confer, give, grant or perform;

‘provider’, in relation to a benefit, means the person who provides the benefit;

‘recipient’, in relation to a benefit, means the person to whom the benefit is provided;

‘salary or wages’ means salary, wages, commission, bonuses or allowances paid (whether at piece-work rates or otherwise) to an employee as such;

‘school’ means a school, college or other educational institution that provides primary or secondary level education;

‘school fees benefit’ has the meaning given by section 1157E;

‘school fees fringe benefit’ means a fringe benefit that is a school fees benefit;

‘special housing location’ has the meaning given by subsections (5) and (6);

‘stratum unit’ has the meaning given by subsection (8);

‘surface route’ means a route other than an air route;

‘taxi’ means a motor vehicle that is licensed to operate as a taxi;

‘unit of accommodation’ includes:

(a) a house, flat or home unit; and

(b) accommodation in a house, flat or home unit; and

(c) accommodation in a hotel, hostel, motel or guesthouse; and

(d) accommodation in a bunkhouse or any living quarters; and

(e) accommodation in a ship, vessel or floating structure; and

(f) a caravan or other mobile home;

‘urban centre’ means an area that is described as an urban centre or bounded locality in the results of the Census of Population and Housing taken by the Australian Statistician on 30 June 1981 and that were published by the Australian Statistician in the document entitled “Persons and Dwellings in Local Government Areas and Urban Centres”;

‘work-related travel’, in relation to an employee, means:

(a) travel by the employee between:

(i) the employee’s place of residence; and

(ii) the employee’s place of employment or any other place from which or at which the employee performs duties of his or her employment; or

(b) travel by the employee that is incidental to travel in the course of performing the duties of his or her employment.

Metropolitan location

“(3) The following cities are metropolitan locations:

(a) Adelaide;

(b) Brisbane;

(c) Canberra;

(d) Darwin;

(e) Hobart;

(f) Melbourne;

(g) Perth;

(h) Sydney.

Non-metropolitan location

“(4) A unit of accommodation is in a non-metropolitan location if the unit of accommodation:

(a) is in Australia; and

(b) is not in a metropolitan location; and

(c) is not in a special housing location.

Special housing location

“(5) A unit of accommodation is in a special housing location if the unit of accommodation is at a location that is in Australia and one of the following paragraphs applies to the unit of accommodation:

(a) the unit of accommodation is at a location that is in an area that:

(i) is described in Schedule 2 to the Income Tax Assessment Act; and

(ii) is an urban centre with a census population of less than 28,000;

(b) the unit of accommodation is at a location that is in an area that:

(i) is not described in Schedule 2 to the Income Tax Assessment Act; and

(ii) is an urban centre with a census population of less than 14,000;

(c) at the date of commencement of this section, the unit of accommodation is at a location that is:

(i) 40 kilometres or more, by the shortest practicable surface route, from the centre point of an eligible urban area with a census population of less than 130,000; or

(ii) 100 kilometres or more, by the shortest practicable surface route, from the centre point of an eligible urban area with a census population of more than 130,000.

“(6) For the purposes of paragraph (5)(c), the distance, by the shortest practicable surface route, between a location (the ‘tested location’) and the centre point of an eligible urban area is:

(a) if there is only one location within the eligible urban area from which distances between the eligible urban area and other places are usually measured—the distance, by the shortest practicable surface route, between the tested location and that location; and

(b) if there are 2 or more locations within the eligible urban area from which distances between parts of the eligible urban area and other places are usually measured—the distance, by the shortest practicable surface route, between the tested location and the location that is the principal location of those parts.

“(7) A unit of accommodation is a ‘dwelling’ if:

(a) the unit of accommodation is constituted by, or contained in, a building; and

(b) the unit consists, in whole or in substantial part, of residential accommodation.

“(8) A unit is a ‘stratum unit’ in relation to a dwelling if:

(a) the unit is a unit on a unit plan registered under a law of a State or Territory that provides for the registration of titles of a kind known as unit titles or strata titles; and

(b) the unit comprises:

(i) a part of a building that contains the dwelling and consists of a flat or home unit; or

(ii) a part of a parcel of land and the building containing the dwelling is constructed on that part.

Housing loan

“(9) A loan is taken to be a ‘housing loan’ if:

(a) the loan is made to, or used by, a person (whether in his or her own right or jointly with his or her partner) wholly:

(i) to enable the person to acquire a prescribed interest in land on which a dwelling or a building containing a dwelling was subsequently to be constructed; or

(ii) to enable the person to acquire a prescribed interest in land and construct, or complete the construction of, a dwelling or a building containing a dwelling on the land; or

(iii) to enable the person to construct, or complete the construction of, a dwelling or a building containing a dwelling on land in which the person held a prescribed interest; or

(iv) to enable the person to acquire a prescribed interest in land on which there was a dwelling or a building containing a dwelling; or

(v) to enable the person to acquire a prescribed interest in a stratum unit in relation to a dwelling; or

(vi) to enable the person to extend a building that:

(A) is a dwelling or contains a dwelling; and

(B) is constructed on land in which the person held a prescribed interest;

by adding a room or part of a room to the building or the part of the building containing the dwelling, as the case may be; or

(vii) in a case where the person held a prescribed interest in a stratum unit in relation to a dwelling—to enable the person to extend the dwelling by adding a room or part of a room to the dwelling; or

(viii) to enable the person to repay a loan that was made to, and used by, the person wholly for a purpose mentioned in subparagraphs (i) to (vii); and

(b) at the time the loan was made, the dwelling was used or proposed to be used as the person’s usual place of residence.

Note: For prescribed interest see subsections (10) to (14).

Freehold interest

“(10) If:

(a) a person; or

(b) 2 or more persons as joint tenants or tenants in common;

acquire, hold or held an estate in fee simple in land or in a stratum unit, the person or those persons are taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit.

Leasehold interest

“(11) If:

(a) a person acquires, holds or held an interest in land or in a stratum unit as lessee or licensee under a lease or licence; and

(b) the Secretary is satisfied that the lease or licence gives or gave reasonable security of tenure to the lessee or licensee, for a period of, or for periods aggregating, 10 years or more;

the person is taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit.

Instalment contract

“(12) If:

(a) a person acquires, holds or held interest in land or in a stratum unit as purchaser of an estate in fee simple in the land or in the stratum unit under an agreement; and

(b) the agreement provides or provided for payment of the purchase price, or a part of the purchase price, to be made at a future time or by instalments;

the person is taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit.

Right to acquire leasehold

“(13) If:

(a) a person acquires, holds or held an interest in land or in a stratum unit as purchaser of a right to be granted a lease of the land or of the stratum unit under an agreement; and

(b) the agreement provides or provided for payment of the purchase price, or a part of the purchase price, for the lease to be made at a future time or by instalments; and

(c) the Secretary is satisfied that the lease will give reasonable security of tenure, to the lessee for a period of, or for periods aggregating, 10 years or more;

the person is taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit.

Two or more persons acquiring or holding interest under subsection (11), (12) or (13)

“(14) If:

(a) 2 or more persons acquire, hold or held an interest referred to in paragraph (11)(a), (12)(a) or (13)(a) in land or in a stratum unit as joint tenants or tenants in common; and

(b) paragraph (11)(b) or (12)(b) or paragraphs (13)(b) and (c) are satisfied;

those persons are taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit.”.

Benefit Rate Calculator A

5. The Rate Calculator in section 1067 of the Principal Act is amended:

(a) by omitting Steps 7 and 8 from the Method statement in point 1067-G1 and substituting the following Steps:

“

Step 7. Work out the amount of the person’s combined parental fringe benefits value for the appropriate tax year using points 1067-G14A to 1067-G14C.

Step 8. Work out the parental fringe benefits value free area using point 1067-G14D.

Step 9. Work out the person’s parental adjusted fringe benefits value using points 1067-G14E and 1067-G14F.

Step 10. Add the amount obtained in Step 6 and the amount obtained in Step 9: the result is called the parental adjusted income.

Step 11. Work out the amount of the parental income free area limit using points 1067-G16 to 1067-G18.

Step 12. Take the limit away from the parental adjusted income: the result is called the annual parental income excess.

”;

(b) by renumbering Steps 9 to 11 of the Method statement in point 1067-G1 as Steps 13 to 15;

(c) by adding at the end of point 1067-G1 the following Note:

“Note 2: It is only assessable fringe benefits that are used to work out the person’s combined parental fringe benefits value. An assessable fringe benefit is a fringe benefit that is a car benefit, school fees benefit, health insurance benefit, loan benefit or housing benefit. However, if one of these kinds of benefits is an exempt benefit, it is not an assessable fringe benefit. For ‘assessable fringe benefit’ see section 10A.”;

(d) by inserting after point 1067-G14 the following points:

Combined parental fringe benefits value

“1067-G14A. If a person has only one means test parent and that parent does not have a partner, the person’s combined parental fringe benefits value for the appropriate tax year is the sum of the values of all the assessable fringe benefits received by the parent in that tax year.

Note 1: For ‘means test parent’ see points 1067-G4 to 1067-G7 above.

Note 2: For ‘appropriate tax year’ see point 1067-G15 below.

“1067-G14B. If a person has only one means test parent and that parent has a partner, the person’s combined parental fringe benefits value for the appropriate tax year is the sum of:

(a) the values of all the assessable fringe benefits received by the parent in that tax year; and

(b) the values of all the assessable fringe benefits received by the parent’s partner in that tax year.

Note 1: For ‘means test parent’ see points 1067-G4 to 1067-G7 above.

Note 2: For ‘appropriate tax year’ see point 1067-G15 below.

“1067-G14C. If a person has 2 means test parents, the person’s combined parental fringe benefits value for the appropriate tax year is the sum of the values of all the assessable fringe benefits received by both parents in that tax year.

Note 1: For ‘means test parent’ see points 1067-G4 to 1067-G7 above.

Note 2: For ‘appropriate tax year’ see point 1067-G15 below.

Parental fringe benefits value free area

“1067-G14D. The parental fringe benefits value free area is $1,000.00.

Parental adjusted fringe benefits value

“1067-G14E. If the person’s combined parental fringe benefits value exceeds the free area, the person’s parental adjusted fringe benefits value is the person’s combined parental fringe benefits value less the free area.

“1067-G14F. If the person’s combined parental fringe benefits value does not exceed the free area, the person’s parental adjusted fringe benefits value is nil.”.

Family Payment Rate Calculator

6.(1) The Rate Calculator in section 1069 of the Principal Act is amended:

(a) by omitting Step 4 from the Method statement in point 1069-A1 and substituting the following Step:

“

Step 4. Apply the family payment income test in Submodule 3 of MODULE H to work out whether the person satisfies the family payment income test.

Note: If the person does not satisfy the family payment income test, family payment is not payable to the person.

”;

(b) by omitting Step 9 from the Method statement in point 1069-A1 and substituting the following Step:

“

Step 9. Apply the family payment income test in Submodule 4 of MODULE H to the person’s provisional additional payment to work out any reduction for income. Take any reduction away from the person’s provisional additional payment: the result is the person’s income tested amount.

”;

(c) by omitting the heading to Module H and substituting the following heading:

“MODULE H—FAMILY PAYMENT INCOME TEST”;

(d) by omitting point 1069-H1 and substituting the following point:

Persons to whom the income test applies

“1069-H1. The income tests in Submodules 3 and 4 apply to a person unless the person, or the person’s partner, is receiving:

(a) a social security pension or benefit or a service pension; or

(b) payments under a prescribed educational scheme.

Note: For ‘prescribed educational scheme’ see subsection 5(1).”;

(e) by inserting after point 1069-H2 the following points:

Fringe benefits value

“1069-H2A. For the purposes of this Module, if a person is not a member of a couple, the person’s fringe benefits value for a tax year is the sum of the values of all the assessable fringe benefits received by the person in that tax year.

“1069-H2B. For the purposes of this Module, if a person is a member of a couple, the person’s fringe benefits value for a tax year is the sum of:

(a) the values of all the assessable fringe benefits received by the person in that tax year; and

(b) the values of all the assessable fringe benefits received by the person’s partner in that tax year.”;

(f) by omitting “taxable” (wherever occurring) from point 1069-H13;

(g) by adding at the end of point 1069-H13 the following Note:

“Note: For ‘income’ see point 1069-H21.”;

(h) by omitting “taxable” (wherever occurring) from paragraph 1069-H14(b);

(i) by omitting Note 2 to point 1069-H14 and substituting the following Note:

“Note 2: For ‘income free area’ see Table H.”;

(j) by adding at the end of point 1069-H14 the following Note:

“Note 4: For ‘income’ see point 1069-H21.”;

(k) by omitting “taxable” (wherever occurring) from paragraph 1069-H15(c);

(l) by adding at the end of point 1069-H15 the following Note:

“Note: For ‘income’ see point 1069-H21.”;

(m) by omitting “taxable” (wherever occurring) from paragraph 1069-H16(b);

(n) by adding at the end of point 1069-H16 the following Note:

“Note 2: For ‘income’ see point 1069-H21.”;

(o) by omitting “taxable” (wherever occurring) from paragraph 1069-H17(c);

(p) by adding at the end of point 1069-H17 the following Note:

“Note: For ‘income’ see point 1069-H21.”;

(q) by omitting “taxable” (wherever occurring) from paragraph 1069-H19(c);

(r) by adding at the end of point 1069-H19 the following Note:

“Note: For ‘income’ see point 1069-H21.”;

(s) by inserting after point 1069-H20 the following point in Submodule 2 of Module H:

Income

“1069-H21. In points 1069-H13, 1069-H14, 1069-H15, 1069-H16, 1069-H17 and 1069-H19:

‘income’, in relation to a person, means the person’s taxable income and the person’s adjusted fringe benefits value.”;

(t) by omitting Submodules 3, 4 and 5 from Module H and substituting the following Submodules:

“Submodule 3—Family payment income test

Satisfying the family payment income test

“1069-H22. This is how to work out whether a person satisfies the family payment income test:

Method statement

Step 1. Work out the person’s appropriate tax year using Submodule 2.

Step 2. Work out the person’s taxable income for that tax year.

Note: For the treatment of the taxable income of members of a couple see point 1069-H2.

Step 3. Work out the person’s fringe benefits value for that tax year using points 1069-H2A and 1069-H2B.

Step 4. Work out the fringe benefits value free area using point 1069-H23.

Step 5. Work out the person’s adjusted fringe benefits value using points 1069-H24 and 1069-H25.

Step 6. Add the amount obtained in Step 2 and the amount obtained in Step 5: the result is called the person’s adjusted income.

Step 7. Work out the person’s income ceiling using point 1069-H26.

Step 8. If the person’s adjusted income does not exceed the income ceiling, the person satisfies the family payment income test and the person’s basic family payment rate is not affected.

Step 9. If the person’s adjusted income exceeds the income ceiling, the person does not satisfy the family payment income test and the person’s basic family payment rate is nil.

Note: It is only assessable fringe benefits that are used to work out the person’s fringe benefits value. An assessable fringe benefit is a fringe benefit that is a car benefit, school fees benefit, health insurance benefit, loan benefit or housing benefit. However, if one of these kinds of benefits is an exempt benefit, it is not an assessable fringe benefit. For ‘assessable fringe benefit’ see section 10A.

Fringe benefits value free area

“1069-H23. A person’s fringe benefits value free area is $1,000.00.

Person’s adjusted fringe benefits value

“1069-H24. If the person’s fringe benefits value exceeds the fringe benefits value free area, the person’s adjusted fringe benefits value is the person’s fringe benefits value less the free area.

“1069-H25. If the person’s fringe benefits value does not exceed the fringe benefits value free area, the person’s adjusted fringe benefits value is nil.

Income ceiling

“1069-H26. A person’s income ceiling is worked out using Table H. A person’s income ceiling is the basic ceiling amount in column 1 plus an additional amount in column 2 for each FP child of the person (after the first).

TABLE H

FAMILY PAYMENT BASE RATE—INCOME CEILING

column 1

column 2

basic ceiling

additional amount for each FP child (after the first)

$64,938.00

$3,249.00

Note: The basic ceiling is indexed in line with CPI increases (see sections 1191 to 1194).

“Submodule 4—Additional family payment:

effect of family payment income test

Effect of income test on additional family payment

“1069-H27. This is how to work out the effect of a person’s income on the person’s additional family payment rate:

Method statement

Step 1. Work out the person’s appropriate tax year using Submodule 2.

Step 2. Work out the person’s taxable income for that tax year.

Note: For the treatment of the taxable income of members of a couple see point 1069-H2.

Step 3. Work out the person’s fringe benefits value for that tax year using points 1069-H2A and 1069-H2B.

Step 4. Work out the fringe benefits value free area using point 1069-H28.

Step 5. Work out the person’s adjusted fringe benefits value using points 1069-H29 and 1069-H30.

Step 6. Add the amount obtained in Step 2 and the amount obtained in Step 5: the result is called the person’s adjusted income.

Method statement—continued

Step 7. Work out the person’s income free area using point 1069-H31.

Note: A person’s income free area is the amount of income that the person can have without any deduction being made from the person’s additional family payment.

Step 8. Work out whether the person’s adjusted income exceeds the person’s income free area.

Step 9. If the person’s adjusted income does not exceed the person’s income free area, the person’s annual income excess is nil.

Step 10. If the person’s adjusted income exceeds the person’s income free area, the person’s annual income excess is the person’s adjusted income less the person’s income free area.

Step 11. Convert the annual income excess into a fortnightly excess using point 1069-H33.

Step 12. Work out the amount of the person’s reduction for income using point 1069-H34.

Note: It is only assessable fringe benefits that are used to work out the person’s fringe benefits value. An assessable fringe benefit is a fringe benefit that is a car benefit, school fees benefit, health insurance benefit, loan benefit or housing benefit. However, if one of these kinds of benefits is an exempt benefit, it is not an assessable fringe benefit. For ‘assessable fringe benefit’ see section 10A.

Fringe benefits value free area

“1069-H28. A person’s fringe benefits value free area is $1,000.00.

Adjusted fringe benefits value

“1069-H29. If the person’s fringe benefits value exceeds the fringe benefits value free area, the person’s adjusted fringe benefits value is the person’s fringe benefits value less the free area.

“1069-H30. If the person’s fringe benefits value does not exceed the fringe benefits value free area, the person’s adjusted fringe benefits value is nil.

Income free area

“1069-H31. A person’s income free area is worked out using Table HA. A person’s income free area is the AFP basic free area amount in column 1 plus an additional amount in column 2 for each AFP child of the person (after the first).

TABLE HA

ADDITIONAL FAMILY PAYMENT—INCOME FREE AREA

column 1

column 2

AFP basic free area

additional amount for each AFP child (after the first)

$21,350.00

$624.00

Note: The AFP basic free area is indexed in line with CPI increases (see sections 1191 to 1194).

AFP child in point 1069-H31 includes children receiving prescribed educational scheme payments and “shared” children

“1069-H32. In point 1069-H31, ‘AFP child’ includes:

(a) a student child who:

(i) has reached 16 but has not reached 18; and

(ii) is receiving payments under a prescribed educational scheme; or

(b) a child in relation to whom the Secretary has made a declaration under subsection 869(1).

Fortnightly income excess

“1069-H33. The fortnightly income excess is:

annual income excess

26

Reduction for income

“1069-H34. The reduction for income is:

fortnightly income excess

2

.”.

(2) The indexation of the AFP basic free area that occurs on 1 January 1994 (see item 16 of the CPI Indexation Table in section 1191 of the Principal Act) operates on the amount in Table HA in point 1069-H31 that is being inserted in the Principal Act by Part 2 of this Act.

Insertion of new Part 3.12A

7. After Part 3.12 of the Principal Act the following Part is inserted:

“PART 3.12A—GENERAL PROVISIONS RELATING TO THE FAMILY PAYMENT INCOME TEST AND THE PARENTAL MEANS TEST

“Division 1—Purpose of this Part

Purpose of Part

“1157A.(1) Division 2 of this Part describes the kind of benefits that can be assessable fringe benefits. Division 3 to 7 tell you how to work out the value of the assessable fringe benefits received by a person in a tax year. Division 8 deals with foreign currency conversions. These provisions are necessary for the purposes of:

(a) the family payment income test; and

(b) the parental means test for social security benefits.

Note 1: For the family payment income test see Module H of the Family Payment Rate Calculator in section 1069.

Note 2: For the parental means test see Module G of Benefit Rate Calculator A in section 1067.

Note 3: For ‘assessable fringe benefit’ see section 10A.

Note 4: A fringe benefit is one that is provided by an employer to an employee in respect of the employee’s employment (see section 10A).

“(2) Section 10A contains many of the definitions that are relevant to the provisions of this Part.

“Division 2—Benefits that may be assessable fringe benefits

Benefits received in or outside Australia

“1157B. This Part applies to a fringe benefit whether the benefit is received in or outside Australia.

Car benefits

“1157C.(1) A person (the ‘employee’) receives a car benefit if:

(a) a car held by another person (the ‘provider’):

(i) is applied to a private use by the employee or an associate of the employee; or

(ii) is taken under subsection (2), (3) or (4) to be available for the private use of the employee or an associate of the employee; and

(b) either:

(i) the provider is the employer, or an associate of the employer, of the employee; or

(ii) the car is applied or available in that way under an arrangement between:

(A) the provider or another person; and

(B) the employer or an associate of the employer.

“(2) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if:

(a) the car is held by a person who is:

(i) the employer; or

(ii) an associate of the employer; or

(iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and

(b) the car is garaged or kept at or near a place of residence of the employee or of an associate of the employee.

“(3) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if:

(a) the car is held by a person who is:

(i) the employer; or

(ii) an associate of the employer; or

(iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and

(b) the car is not at business premises of:

(i) the employer; or

(ii) an associate of the employer; or

(iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and

(c) either:

(i) the employee is entitled to apply the car to a private use at that time; or

(ii) the employee is not performing the duties of his or her employment at that time and has custody or control of the car; or

(iii) an associate of the employee is entitled to use the car at that time; or

(iv) an associate of the employee has custody or control of the car at that time.

“(4) For the purposes of subsection (3), if a prohibition on the use of a car, or on the application of a car for a private use, by a person is not consistently enforced, the person is taken to be entitled to use the car, or to apply the car to a private use, despite the prohibition.

“(5) For the purposes of this section, a car that is let on hire to a person under a hire-purchase agreement is taken:

(a) to have been purchased by the person at the time when the person first took the car on hire; and

(b) to have been owned by the person at all material times.

“(6) A reference in this Part to a car held by a person (the ‘provider’) does not include a reference to:

(a) a taxi let on hire to the provider; or

(b) a car let on hire to the provider under an agreement of a kind that is ordinarily entered into by persons taking cars on hire intermittently as occasion requires on an hourly, daily, weekly or other short-term basis.

“(7) Paragraph (6)(b) does not apply if the car has been or may reasonably be expected to be on hire under successive agreements of a kind that result in substantial continuity of the hiring of the car.

Exempt car benefits

“1157D.(1) Except in so far as section 1157C provides that the application or availability of a car held by a person is a car benefit, the application or availability of a car held by a person is exempt.

“(2) A car benefit provided in respect of the employment of the employee is exempt if:

(a) the car is:

(i) a taxi, panel van or utility truck; or

(ii) any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passengers); and

(b) the only private use of the car at a time when the benefit was provided was:

(i) work-related travel of the employee; and

(ii) other minor, infrequent and irregular private use by the employee or an associate of the employee.

“(3) A car benefit provided in respect of the employment of the employee is exempt if the car was unregistered at all times when the car was held by the person who provided the car.

School fees benefits

Payment to recipient

“1157E.(1) If:

(a) a person (the ‘provider’) pays an amount to another person (the ‘recipient’); and

(b) the amount is for fees for:

(i) tuition at primary or secondary level provided by a school; or

(ii) books or equipment provided by the school in relation to that tuition; and

(c) the tuition, books or equipment is provided to:

(i) a dependent child of the recipient or the recipient’s partner; or

(ii) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a job search allowance or a sickness allowance;

the payment constitutes a school fees benefit provided by the provider to the recipient.

Note: For ‘school’ see section 10A.

Payment to or on behalf of the school

“(2) If:

(a) a person (the ‘provider’) pays an amount to or on behalf of a school; and

(b) the amount is for fees for:

(i) tuition at primary or secondary level provided by the school; or

(ii) books or equipment provided by the school in relation to that tuition; and

(c) the tuition, books or equipment is provided to:

(i) a dependent child of a person (the ‘recipient’) or the recipient’s partner; or

(ii) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a job search allowance or a sickness allowance;

the payment constitutes a school fees benefit provided by the provider to the recipient.

Note: For ‘school’ see section 10A.

Boarding fees

“(3) For the purposes of subsections (1) and (2), if:

(a) a school is providing tuition at primary or secondary level to a dependent child of a person; and

(b) the child is boarding at the school;

the fees that are payable for the child to board at the school are taken to be fees for the tuition provided by the school to the child.

Health insurance benefits

Payment to recipient

“1157F.(1) If:

(a) a person (the ‘provider’) pays an amount to another person (the ‘recipient’); and

(b) the amount is for the cost of health insurance; and

(c) the health insurance covers:

(i) the recipient; or

(ii) the recipient’s partner; or

(iii) a dependent child of the recipient or the recipient’s partner; or

(iv) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a job search allowance or a sickness allowance;

the payment constitutes a health insurance benefit provided by the provider to the recipient.

Payment to the health insurance fund

“(2) If:

(a) a person (the ‘provider’) pays an amount to a health insurance fund; and

(b) the amount is for the cost of health insurance; and

(c) the health insurance covers:

(i) a person (the ‘recipient’); or

(ii) the recipient’s partner; or

(iii) a dependent child of the recipient or the recipient’s partner; or

(iv) a person who would be a dependent child of the recipient or the recipient’s partner if the person was not receiving a job search allowance or a sickness allowance;

the payment constitutes a health insurance benefit provided by the provider to the recipient.

Loan benefits

“1157G.(1) If a person (the ‘provider’) makes a loan to another person (the ‘recipient’), the making of the loan constitutes a loan benefit provided by the provider to the recipient.

Late payment of debt

“(2) For the purposes of this section, if:

(a) a person (the ‘debtor’) is under an obligation to pay or repay an amount (the ‘principal amount’) to another person (the ‘creditor’); and

(b) the principal amount is not the whole or a part of the amount of a loan; and

(c) after the due date for payment or repayment of the principal amount, the whole or part of the principal amount remains unpaid;

the following provisions have effect:

(d) the creditor is taken, immediately after the due date, to have made a loan (the ‘deemed loan’) of the principal amount to the debtor;

(e) at any time when the debtor is under an obligation to repay any part of the principal amount, the debtor is taken to be under an obligation to repay that part of the deemed loan;

(f) the deemed loan is taken to have been made:

(i) if interest accrues on so much of the principal amount as remains from time to time unpaid—at the rate of interest at which that interest accrues; or

(ii) in any other case—at a nil rate of interest.

“(3) Subject to subsection (4), a loan is a deferred interest loan if interest is payable on the loan at a rate that exceeds nil.

“(4) A loan is not a deferred interest loan if:

(a) the whole of the interest is due for payment within 6 months after the loan is made; or

(b) all of the following conditions are satisfied:

(i) interest on the loan is payable by instalments;

(ii) the intervals between instalments do not exceed 6 months;

(iii) the first instalment is due for payment within 6 months after the loan is made.

“(5) For the purposes of this section, if a person (the ‘provider’) makes a deferred interest loan (the ‘principal loan’) to another person (the ‘recipient’), the following provisions apply:

(a) the provider is taken, at the end of:

(i) the period of 6 months starting on the day on which the principal loan was made; and

(ii) each subsequent period of 6 months;

to have made a loan (the ‘deemed loan’) to the recipient;

(b) the amount of the loan is taken to be equal to the amount by which the interest (the ‘accrued interest’) that has accrued on the principal loan in respect of the period exceeds the amount (if any) paid in respect of the accrued interest before the end of the period;

(c) if any part of the accrued interest becomes payable or is paid after the time when the deemed loan is taken to have been made, the deemed loan is to be reduced accordingly;

(d) the deemed loan is taken to have been made at a nil rate of interest.

“(6) Paragraph (5)(a) only applies to a period of 6 months if the recipient is under an obligation during the whole of the period to repay the whole or a part of the principal loan.

“(7) For the purposes of this Part, if no interest is payable in respect of a loan, a nil rate of interest is taken to be payable in respect of the loan.

Exempt loan benefits

“1157H.(1) The making of a loan is exempt if:

(a) the loan is made by a person who carries on a business that consists of or includes making loans to members of the public; and

(b) the rate of interest payable in respect of the loan:

(i) is specified in a document in existence at the time the loan is made; and

(ii) is not less than the rate of interest in respect of a similar arm’s length loan made by the person, at or about that time, to a member of the public in the ordinary course of carrying on that business; and

(iii) cannot be varied.

“(2) The making of a loan is exempt if:

(a) the loan is made by a person who carries on a business that consists of or includes making loans to members of the public; and

(b) the rate of interest from time to time payable in respect of the loan is not less than the rate of interest applicable at the time the loan is made in respect of a similar arm’s length loan made by the person, at or about that time, to a member of the public in the ordinary course of carrying on that business.

“(3) The making of a loan is exempt if:

(a) the loan consists of an advance by the employer to the employee; and

(b) the sole purpose of the making of the loan is to enable the employee to meet the expenses incurred by the employee:

(i) in the course of performing the duties of that employment; and

(ii) not later than 6 months after the loan is made; and

(c) the amount of the loan is not substantially greater than the amount of those expenses that could reasonably be expected to be incurred by the employee; and

(d) the employee is required:

(i) to account to the employer, not later than 6 months after the loan is made, for expenses met from the loan; and

(ii) to repay (whether by set-off or otherwise) any amount not so accounted for.

“(4) The making of a loan is exempt if:

(a) the loan consists of an advance by the employer to the employee; and

(b) the sole purpose of the making of the loan is to enable the employee to pay any of the following amounts payable by the employee in respect of accommodation:

(i) a rental bond;

(ii) a security deposit in respect of electricity, gas or telephone services;

(iii) any similar amount; and

(c) the employee is required to repay (whether by set-off or otherwise) the loan not later than 12 months after the loan is made.

Housing benefits

“1157I. The subsistence of a housing right granted by a person (the ‘provider’) to another person (the ‘recipient’) constitutes a housing benefit provided by the provider to the recipient.

Exempt housing benefits—live-in residential care workers

“1157J.(1) If, during a period:

(a) the employer of an employee is:

(i) a government body; or

(ii) a religious institution; or

(iii) a non-profit company;

whose activities consist of, or include, caring for mature persons or disadvantaged persons; and

(b) the duties of the employee’s employment consist of, or consist principally of, caring for mature or disadvantaged persons; and

(c) in the performance of those duties, the employee lives, together with mature persons or disadvantaged persons, in residential premises of the employer; and

(d) the fact that the employee lives in those premises is directly related to the provision, in the course of the performance of the duties of the employee’s employment, of care to the mature persons or disadvantaged persons living in those premises;

any benefit arising from the provision, during that period, of that accommodation to the employee or to the employee and a partner or dependent child of the employee who resides in those premises with the employee is exempt.

“(2) In this section:

‘residential premises’ means a house or hostel used exclusively for the provision of residential accommodation to:

(a) mature persons or disadvantaged persons and dependent children of mature persons or disadvantaged persons; and

(b) persons the duties of whose employment consist of, or consist principally of, caring for persons referred to in paragraph (a); and

(c) partners and children of persons referred to in paragraph (b)

“Division 3—Value of car fringe benefits

Method of valuing car fringe benefits

“1157K.(1) Subject to subsection (2), the value of a car fringe benefit is to be worked out in accordance with section 1157L.

“(2) If a determination is in force under section 1157M, the value of a car fringe benefit is to be worked out in accordance with the determination.

Value of car fringe benefits

“1157L.(1) This is how to work out the value of a car fringe benefit:

Method statement

Step 1. Work out the engine capacity of the car and go to the relevant Part of the Car Fringe Benefits Value Table.

Step 2. Work out how old the car is and go to the appropriate row in the Table.

Step 3. Work out how many complete months in the appropriate tax year the person had or will have the car fringe benefit and go to the appropriate column in the Table: the number where that row and column intersect is the value of the car fringe benefit.

Note: If the person is a member of a couple, the value of the car fringe benefit is to be halved in certain circumstances (see subsection (3)).

“(2) The following Table is to be used in working out the value of a car fringe benefit:

CAR FRINGE BENEFITS VALUE TABLE

PART A—Car engine size up to 1600cc

car age (years)

Period of use (completed months)

item

1

2

3

4

5

6

7

8

9

10

11

12

1.

1

93.8

188

281

375

469

563

656

750

844

938

1031

1125

2.

2

83.6

168

252

336

420

504

588

672

756

840

923.8

1008

3.

3

74.2

148

223

297

371

445

520

594

668

742

816.4

890.6

4.

4

64.5

129

193

258

322

387

451

516

580

645

709

773.4

5.

5

54.7

109

164

219

273

328

383

438

492

547

601.6

656.3

6.

6

44.9

89.8

135

180

225

270

314

359

404

449

494.1

539.1

7.

7

35.2

70.3

105

141

176

211

246

281

316

352

386.7

421.9

8.

8

25.4

50.8

76.2

102

127

152

178

203

229

254

279.3

304.7

9.

9

15.6

31.3

46.9

62.5

78.1

93.8

109

125

141

156

171.9

187.5

10.

10+

5.86

11.7

17.6

23.4

29.3

35.2

41

46.9

52.7

58.6

64.45

70.31

PART B—Car engine size 1601cc to 2850cc

11.

1

229

458

688

917

1146

1375

1604

1833

2063

2292

2521

2750

12.

2

210

422

633

844

1055

1266

1477

1688

1898

2109

2320

2531

13.

3

193

385

578

771

964

1156

1349

1542

1734

1927

2120

2313

14.

4

174

349

523

698

872

1047

1221

1396

1570

1745

1919

2094

15.

5

156

313

469

625

781

938

1094

1250

1406

1563

1719

1875

16.

6

138

276

414

552

690

828

966

1104

1242

1380

1518

1656

17.

7

120

240

359

479

599

719

839

958

1078

1198

1318

1438

18.

8

102

203

305

406

508

609

711

813

914

1016

1117

1219

19.

9

83.3

167

250

333

417

500

583

667

750

833

916.7

1000

20.

10+

65.1

130

195

260

326

391

456

521

586

651

716.1

781.3

PART C—Car engine size more than 2850cc

21.

1

354

708

1063

1417

1771

2125

2479

2833

3188

3542

3896

4250

22.

2

327

656

984

1313

1641

1969

2297

2625

2953

3281

3609

3938

23.

3

302

604

906

1208

1510

1813

2115

2417

2719

3021

3323

3625

24.

4

276

552

828

1104

1380

1656

1932

2208

2484

2760

3036

3313

25.

5

250

500

750

1000

1250

1500

1750

2000

2250

2500

2750

3000

26.

6

224

448

672

896

1120

1344

1568

1792

2016

2240

2464

2688

27.

7

198

396

594

792

990

1188

1385

1583

1781

1979

2177

2375

28.

8

172

344

516

688

859

1031

1203

1375

1547

1719

1891

2063

29.

9

146

292

438

583

729

875

1021

1167

1313

1458

1604

1750

30.

10+

120

240

359

479

599

719

839

958

1078

1198

1318

1438

“(3) If:

(a) the person is a member of a couple; and

(b) the person’s partner receives a car fringe benefit in the appropriate tax year; and

(c) the person’s and the partner’s car fringe benefits relate to the same car;

the value of the car fringe benefit is to be halved.

Minister may determine alternative method of valuing car fringe benefits

“1157M.(1) The Minister may determine an alternative method for valuing car fringe benefits.

“(2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

“(3) A determination in subsection (1):

(a) starts to have effect on the day on which it is notified in the Gazette; and

(b) ceases to have effect at the end of 6 months after the day on which it is notified in the Gazette if it has not been revoked before then.

“Division 4—Value of school fees fringe benefits

Value of school fees fringe benefits

“1157N. The value of a school fees fringe benefit is the amount of the payment that constitutes the school fees benefit.

“Division 5—Value of health insurance fringe benefits

Value of health insurance fringe benefits

“11570. The value of a health insurance fringe benefit is the amount of the payment that constitutes the health insurance benefit.

“Division 6—Value of loan fringe benefits

Method of valuing loan fringe benefits

“1157P.(1) Subject to subsection (2), the value of a loan fringe benefit is to be worked out in accordance with section 1157Q.

“(2) If a determination is in force under section 1157R, the value of a loan fringe benefit is to be worked out in accordance with the determination.

Value of loan fringe benefits

“1157Q.(1) This is how to work out the value of a loan fringe benefit:

Method statement

Step 1. Work out whether the loan is a housing loan or another type of loan.

Step 2. Work out the notional rate of interest for the loan using subsection (2) or (3).

Step 3. Work out the actual rate of interest for the loan in the appropriate tax year using subsection (5).

Step 4. Work out whether the actual rate of interest exceeds the notional rate of interest.

Step 5. If the actual rate of interest is equal to or exceeds the notional rate of interest, the value of the loan fringe benefit is nil.

Note: If the value of the loan fringe benefit is nil, you do not have to go any further in the Method statement.

Step 6. If the actual rate of interest is less than the notional rate of interest, take the actual rate of interest away from the notional rate of interest.

Step 7. Work out the amount of the loan (both the principal and interest) that is outstanding in the appropriate tax year using subsection (6).

Step 8. Multiply the rate of interest obtained in Step 6 and the amount obtained in Step 7: the result is the interim value of the loan.

Step 9. Work out how many complete weeks in the appropriate tax year the person had or will have the loan: the result is the number of allowable weeks.

Step 10. Apply the formula:

Step 11. The amount obtained by applying the formula in Step 10 is the value of the loan fringe benefit.

Note: If the person is a member of a couple, the value of the loan fringe benefit is to be halved in certain circumstances (see subsection (7)).

“(2) The notional rate of interest for the tax year ending 30 June 1993 is:

(a) 10% for a housing loan; and

(b) 13.5% for any other loan.

“(3) The notional rate of interest for the tax year ending 30 June 1994 is:

(a) 6.95% for a housing loan; and

(b) 11.75% for any other loan.

“(4) The notional rate of interest for any subsequent tax year is:

(a) 6.95% for a housing loan; and

(b) 11.75% for any other loan.

“(5) The actual rate of interest for the loan is:

(a) if the loan starts after 1 July in the appropriate tax year—the rate of interest that is payable under the loan on the day on which the loan starts; and

(b) in any other case—the rate of interest that is payable under the loan on 1 July in the appropriate tax year.

“(6) The amount of the loan that is outstanding is:

(a) if the loan starts after 1 July in the appropriate tax year—the amount that is outstanding on the day on which the loan starts; and

(b) in any other case—the amount that is outstanding on 1 July in the appropriate tax year.

“(7) If:

(a) the person is a member of a couple; and

(b) the person’s partner receives a loan fringe benefit in the appropriate tax year; and

(c) the person’s and the partner’s loan fringe benefits relate to the same loan;

the value of the loan fringe benefit obtained in Step 11 of the Method statement is to be halved.

Minister may determine alternative method of valuing loan fringe benefits

“1157R.(1) The Minister may determine an alternative method for valuing loan fringe benefits.

“(2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

“(3) A determination in subsection (1):

(a) starts to have effect on the day on which it is notified in the Gazette; and

(b) ceases to have effect at the end of 6 months after the day on which it is notified in the Gazette if it has not been revoked before then.

“Division 7—Value of housing fringe benefits

Method of valuing housing fringe benefits

“1157S.(1) Subject to subsection (2), the value of a housing fringe benefit is to be worked out in accordance with section 1157T.

“(2) If a determination is in force under section 1157U, the value of a housing fringe benefit is to be worked out in accordance with the determination.

Value of housing fringe benefits

“1157T.(1) This is how to work out the value of a housing fringe benefit:

Method statement

Step 1. Work out the location of the unit of accommodation and go to the appropriate row of the Housing Fringe Benefits Value Table.

Step 2. Work out the type of accommodation and go to the appropriate column in the Table: the number where the row and column intersect is the weekly market rent of the unit of accommodation.

Note: If the person is a member of a couple, the weekly market rent is to be halved in certain circumstances (see subsection (4)).

Step 3. Work out how many complete weeks in the appropriate tax year the unit of accommodation was or will be available to the person.

Step 4. Multiply the weekly market rent of the unit of accommodation and the number of weeks obtained in Step 3: the result is the provisional value of the housing fringe benefit.

Step 5. Work out the allowable rent for the unit of accommodation in the appropriate tax year using subsection (3).

Note: If the person is a member of a couple, the allowable rent is to be halved in certain circumstances (see subsection (4)).

Step 6. Take the allowable rent away from the provisional value of the housing benefit: the result is the value of the housing fringe benefit.

“(2) The following Table is to be used in working out the value of a housing fringe benefit:

HOUSING FRINGE BENEFITS VALUE TABLE

Type of accommodation

House, flat or home unit

Location

3 or more bedrooms

1-2 bedrooms

Any other unit of accommodation

Metropolitan

140

120

85

Non-metropolitan

100

90

70

Special housing

80

80

25

Outside Australia

140

120

85

Note 1: For ‘unit of accommodation’, ‘metropolitan location’, ‘non-metropolitan location’ and ‘special housing location’ see section 10A.

Note 2: A housing fringe benefit that is received outside Australia is to be valued (see section 1157B).

Note 3: For ‘Australia’ see subsection 23(1).

“(3) The allowable rent is the amount of rent that the Secretary is satisfied is payable for the unit of accommodation in the appropriate tax year by:

(a) if the person is not a member of a couple—the person; or

(b) if the person is a member of a couple—the person and the person’s partner.

“(4) If:

(a) the person is a member of a couple; and

(b) the person’s partner receives a housing fringe benefit in the appropriate tax year; and

(c) the person’s and the partner’s housing fringe benefits relate to the same unit of accommodation;

the weekly market rent obtained in Step 2 of the Method statement and the allowable rent obtained in Step 5 of the Method statement are both to be halved.

Minister may determine alternative method of valuing housing fringe benefits

“1157U.(1) The Minister may determine an alternative method for valuing housing fringe benefits.

“(2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

“(3) A determination in subsection (1):

(a) starts to have effect on the day on which it is notified in the Gazette; and

(b) ceases to have effect at the end of 6 months after the day on which it is notified in the Gazette if it has not been revoked before then.

“Division 8—Foreign currency rates

Foreign currency rates to be used for the purposes of this Part

“1157V.(1) If:

(a) it is necessary, for the purposes of this Part, to work out an amount or value of a fringe benefit; and

(b) the amount or value of the benefit is expressed in a foreign currency;

the amount or value in Australian currency is to be worked out using the market exchange rate for 1 July in the appropriate tax year.

“(2) If there is no market exchange rate for 1 July in the appropriate tax year (for example, because of a national public holiday), the market exchange rate to be used is the market exchange rate that applied on the last working day immediately before that 1 July.

“(3) For the purposes of this section, the market exchange rate of a foreign currency is the on-demand airmail buying rate for that currency available at the Commonwealth Bank of Australia.”.

Consequential amendments of the Principal Act

8. The Principal Act is amended as set out in the Schedule.

PART 3—SENIORS HEALTH CARD

Insertion of new section 6A

9. After section 6 of the Principal Act the following section is inserted:

Seniors health card definitions

“6A.(1) In this Act, unless the contrary intention appears:

‘holder of a seniors health card’ has the meaning given by subsection (2).

“(2) A person is the ‘holder of a seniors health card’ while there is in force a determination under section 1061ZI or 1061ZT that the person is entitled to a seniors health card.”.

General definitions

10. Section 23 of the Principal Act is amended:

(a) by adding at the end of the definition of “recipient notification notice” in subsection (1) the following word and paragraph:

“; or (r) section 1061ZK (seniors health card)”;

(b) by adding at the end of the definition of “recipient statement notice” in subsection (1) the following word and paragraph:

“; or (r) section 1061ZL (seniors health card)”.

Insertion of new Chapter 2A

11. After Chapter 2 of the Principal Act the following Chapter is inserted:

“CHAPTER 2A—BENEFITS AND CONCESSIONS OTHER THAN

PAYMENTS

“PART 2A.1—SENIORS HEALTH CARD

“Division 1—Qualification for and entitlement to a seniors health card

“Subdivision A—Qualification

Qualification for seniors health card

Women who have reached 60 and men who have reached 65

“1061ZA.(1) A person is qualified for a seniors health card if the person:

(a) has reached:

(i) if the person is a woman—60; or

(ii) if the person is a man—65; and

(b) is an Australian resident; and

(c) is in Australia; and

(d) satisfies the seniors health card ordinary income test; and

(e) is not receiving a social security pension or benefit; and

(f) is not receiving a service pension.

Note 1: For ‘Australian resident’ see subsections 7(2) and (3).

Note 2: For ‘seniors health card ordinary income test’ see section 1071.

Women who have not reached 60 and men who have not reached 65

“(2) A person is qualified for a seniors health card if the person:

(a) has reached:

(i) if the person is a woman—55 but not 60; or

(ii) if the person is a man—60 but not 65; and

(b) is an Australian resident as defined in section 5G of the Veterans’ Entitlement Act; and

(c) is in Australia; and

(d) satisfies the seniors health card ordinary income test; and

(e) either:

(i) is eligible for an age service pension under Part 3 of the Veterans’ Entitlements Act; or

(ii) would be eligible for such a pension if the person had been an Australian resident as defined in section 5G of that Act for a continuous period of at least 10 years; and

(f) is not receiving a social security pension or benefit; and

(g) is not receiving a service pension.

Note 1: For ‘seniors health card ordinary income test’ see section 1071.

Note 2: Section 36 of the Veterans’ Entitlements Act deals with eligibility for an age service pension.

“Subdivision B—Entitlement

Entitlement to a seniors health card

“1061ZB. Even though a person is qualified for a seniors health card, benefits and concessions of various kinds relating to the person’s health may be made available to the person by the Commonwealth only if the person is the holder of a seniors health card.

Note 1: If there is a determination in force that a person is entitled to a seniors health card, the person is the holder of a seniors health card. For ‘holder of a seniors health card’ see section 6A.

Note 2: A person who is the holder of a seniors health card generally has access to concessional pharmaceutical benefits under the National Health Act 1953 and hearing aid concessions under the Hearing Services Act 1991.

“Division 2—Claim for seniors health card

Need for a claim

“1061ZC.(1) A person who wants to be granted a seniors health card must make a proper claim.

“(2) For the purposes of subsection (1), if:

(a) a claim is made by or on behalf of a person; and

(b) at the time when the claim is made, a determination that the person is entitled to a seniors health card cannot be made because the person is not qualified for that card;

the claim is taken not to have been made.

Note: For ‘proper claim’ see section 1061ZD (form), section 1061ZE (manner of lodgment) and section 1061ZF (residence/presence in Australia).

Form of claim

“1061ZD. To be a proper claim, a claim must be made in writing and must be in accordance with a form approved by the Secretary.

Lodgment of claim

“1061ZE.(1) To be a proper claim, a claim must be lodged:

(a) at an office of the Department; or

(b) at a place approved for the purpose by the Secretary; or

(c) with a person approved for the purpose by the Secretary.

“(2) A place or person approved under subsection (1) must be a place or person in Australia.

Claimant must be an Australian resident and in Australia

“1061ZF. A claim by a person is not a proper claim unless the person is:

(a) an Australian resident; and

(b) in Australia;

on the day on which the claim is lodged.

Note: For ‘Australian resident’ see subsections 7(2) and (3).

Claim may be withdrawn

“1061ZG.(1) A claimant for a seniors health card or a person on behalf of a claimant may withdraw a claim that has not been determined.

“(2) A claim that is withdrawn is taken to have not been made.

“(3) A withdrawal may be made orally or in writing.

“Division 3—Determination of entitlement

Secretary to determine claim

“1061ZH. The Secretary must, in accordance with this Act, determine the claim.

Entitlement determination

“1061ZI. If the Secretary is satisfied that a claimant is qualified for a seniors health card, the Secretary is to determine that the claimant is entitled to the card.

Date of effect of determination

“1061ZJ.(1) Subject to subsections (2), (3) and (4), a determination under section 1061ZI takes effect on the day on which the determination is made or on such later day or earlier day as is specified in the determination.

Notified decision—review sought within 3 months

“(2) If:

(a) a decision (the ‘previous decision’) is made that a person is not entitled to a seniors health card; and

(b) a notice is given to the person advising the person of the making of the previous decision; and

(c) the person applies to the Secretary under section 1240, within 3 months after the notice is given, for review of the previous decision; and

(d) a determination that the person is entitled to a seniors health card is made as a result of the claim for review;

the determination takes effect on the day on which the previous decision took effect.

Notified decision—review sought after 3 months

“(3) If:

(a) a decision (the ‘previous decision’) is made that a person is not entitled to a seniors health card; and

(b) a notice is given to the person advising the person of the making of the previous decision; and

(c) the person applies to the Secretary under section 1240, more than 3 months after the notice is given, for review of the previous decision; and

(d) a determination that the person is entitled to a seniors health card is made as a result of the claim for review;

the determination takes effect on the day on which the person sought the review.

Decision not notified

“(4) If:

(a) a decision (the ‘previous decision’) is made that a person is not entitled to a seniors health card; and

(b) no notice is given to the person advising the person of the making of the previous decision; and

(c) the person applies to the Secretary under section 1240, more than 3 months after the notice is given, for review of the previous decision; and

(d) a determination that the person is entitled to a seniors health card is made as a result of the claim for review;

the determination takes effect on the day on which the previous decision took effect.

“Division 4—Cardholder’s obligations

Secretary may require notice of the happening of event or a change in circumstances

“1061ZK.(1) The Secretary may give a person who is the holder of a seniors health card a notice that requires the person to inform the Department if:

(a) a specified event or change of circumstances occurs; or

(b) the person becomes aware that a specified event or change of circumstances is likely to occur.

Note: For ‘holder of a seniors health card’ see section 6A.

“(2) An event or change of circumstances is not to be specified in a notice under subsection (1) unless the occurrence of the event or change of circumstances might affect the person’s qualification for the card.

“(3) A notice under subsection (1):

(a) must be in writing; and

(b) may be given personally or by post; and

(c) must specify how the person is to give the information to the Department; and

(d) must specify the period within which the person is to give the information to the Department; and

(e) must specify that the notice is a recipient notification notice given under this Act.

“(4) The period specified under paragraph (3)(d) must end at least 14 days after:

(a) the day on which the event or change of circumstances occurs; or

(b) the day on which the person becomes aware that the event or change of circumstances is likely to occur.

“(5) A person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person is capable of complying with the notice.

Penalty: Imprisonment for 6 months.

Note: Subsections 4B(2) and (3) of the Crimes Act 1914 allow a court to impose an appropriate fine instead of, or in addition to, a term of imprisonment.

“(6) This section extends to:

(a) acts, omissions, matters and things outside Australia whether or not in a foreign country; and

(b) all persons irrespective of their nationality or citizenship.

Secretary may require particular information relevant to qualification for seniors health card

“1061ZL.(1) The Secretary may give a person who is the holder of a seniors health card a notice that requires the person to give the Department a statement about a matter that might affect the person’s qualification for the card.

Note: For ‘holder of a seniors health card’ see section 6A.

“(2) A notice under subsection (1):

(a) must be in writing; and

(b) may be given personally or by post; and

(c) must specify how the statement is to be given to the Department; and

(d) must specify the period within which the person is to give the statement to the Department; and

(e) must specify that the notice is a recipient statement notice given under this Act.

“(3) The period specified under paragraph (2)(d) must end at least 14 days after the day on which the notice is given.

“(4) A statement given in response to a notice under subsection (1) must be in writing and in accordance with a form approved by the Secretary.

“(5) A person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person is capable of complying with the notice.

Penalty: Imprisonment for 6 months.

Note: Subsections 4B(2) and (3) of the Crimes Act 1914 allow a court to impose an appropriate fine instead of, or in addition to, a term of imprisonment.

“(6) This section extends to:

(a) acts, omissions, matters and things outside Australia whether or not in a foreign country; and

(b) all persons irrespective of their nationality or citizenship.

“Division 5—Continuation, variation and termination

Continuing effect of determination

“1061ZM. A determination that a person is entitled to a seniors health card continues in effect until:

(a) the person ceases to be entitled to the card under section 1061ZN or 1061ZO; or

(b) a further determination under section 1061ZQ or 1061ZR has taken effect.

Person ceases to be entitled to card automatically—recipient complying with section 1061ZK notification obligations

“1061ZN. If:

(a) a person who is the holder of a seniors health card is given a notice under section 1061ZK; and

(b) the notice requires the person to inform the Department of the occurrence of an event or change in circumstances with a specified period (the ‘notification period’); and

(c) the event or change in circumstances occurs; and

(d) the person informs the Department of the occurrence of the event or change in circumstances within the notification period in accordance with the notice; and

(e) because of the occurrence of the event or change in circumstances the person ceases to be qualified for the card; and

(f) a determination is not made that the person ceases to be entitled to the card before the end of the notification period;

the person continues to be entitled to the card until the end of the notification period and the person then ceases to be entitled to the card.

Note: For ‘holder of a seniors health card’ see section 6A.

Person ceases to be entitled to card automatically—recipient not complying with section 1061ZK notification obligations

“1061ZO. If:

(a) a person who is the holder of a seniors health card is given a notice under section 1061ZK; and

(b) the notice requires the person to inform the Department of the occurrence of an event or change in circumstances within a specified period (the ‘notification period’); and

(c) the event or change in circumstances occurs; and

(d) the person does not inform the Department of the occurrence of the event or change in circumstances within the notification period in accordance with the notice; and

(e) because of the occurrence of the event or the change in circumstances the person ceases to be qualified for the card;

the person ceases to be entitled to the card immediately after the day on which the event or change in circumstances occurs.

Note: For ‘holder of a seniors health card’ see section 6A.

Person ceases to be entitled to card automatically—given effect to by computer

“1061ZP. If:

(a) a person is entitled to a seniors health card on the basis of data in a computer; and

(b) the person ceases to be entitled automatically to the card by the operation of section 1061ZN or 1061ZO; and

(c) the automatic cessation is given effect to by the operation of a computer program approved by the Secretary;

there is taken to be a decision by the Secretary that section 1061ZN or 1061ZO applies to the person.

Note: The decision that is taken to have been made is a decision of an officer for the purposes of review by the Secretary (see section 1239 and 1240) and the Social Security Appeals Tribunal (see section 1247).

Determination that a person ceases to be entitled to a seniors health card

“1061ZQ. If the Secretary is satisfied that a person is, or was, the holder of a seniors health card when the person is not, or was not, qualified for the card, the Secretary is to determine that the person ceases to be entitled to the card.

Note 1: For ‘holder of a seniors health card’ see section 6A.

Note 2: A determination under this section is not necessary in a case where an automatic disqualification is produced by section 1061ZN or 1061ZO.

Note 3: For the date of effect of a determination under this section see section 1061ZV.

Person may cease to be entitled to a seniors health card for failure to comply with section 1061ZL notice

“1061ZR. If:

(a) a person who is the holder of a seniors health card is given a notice under section 1061ZL; and

(b) the person does not comply with the requirements set out in the notice;

the Secretary may determine that the person ceases to be entitled to the card.

Note 1: For ‘holder of a seniors health card’ see section 6A.

Note 2: This section will not apply in a case where section 1061ZQ applies.

Note 3: For the date of effect of a determination under this section see section 1061ZV.

Changes to a person’s entitlement to a seniors health card by computer

“1061ZS. If:

(a) a person is entitled to a seniors health card on the basis of data in a computer; and

(b) the person ceases to be entitled to the card because of the operation of a computer program approved by the Secretary; and

(c) the program causes the change for a reason for which the Secretary could determine the change;

the change is taken to have been made because of a determination by the Secretary for that reason.

Note: The determination that is taken to have been made is a decision of an officer for the purposes of review by the Secretary (see sections 1239 and 1240) and the Social Security Appeals Tribunal (see section 1247).

Resumption of entitlement

“1061ZT.(1) If the Secretary:

(a) determines that a person ceases to be entitled to a seniors health card under section 1061ZQ or 1061ZR; and

(b) reconsiders that decision; and

(c) becomes satisfied that because of that decision:

(i) the person was not entitled to a seniors health card when in fact the person was entitled to the card; or

(ii) the person is not entitled to a seniors health card when in fact the person is entitled to the card;

the Secretary is to determine that the person was or is entitled to the card.

“(2) The reconsideration referred to in paragraph (1)(b) might be a reconsideration on a claim under section 1240 for review or a reconsideration on the Secretary’s own initiative.

Note: For the date of effect of a determination under this section see section 1061ZU.

Date of effect of favourable determination

“1061ZU.(1) The day on which a determination under section 1061ZT (the ‘favourable determination’) takes effect is worked out in accordance with this section.

Notified decision—review sought within 3 months

“(2) If:

(a) a decision (the ‘previous decision’) is made in relation to a person’s entitlement to a seniors health card; and

(b) a notice is given to the person advising the person of the making of the previous decision; and

(c) the person applies to the Secretary under section 1240, within 3 months after the notice is given, for review of the previous decision; and

(d) the favourable determination is made as a result of the claim for review;

the determination takes effect on the day on which the previous decision took effect.

Notified decision—review sought after 3 months

“(3) If:

(a) a decision (the ‘previous decision’) is made in relation to a person’s entitlement to a seniors health card; and

(b) a notice is given to the person advising the person of the making of the previous decision; and

(c) the person applies to the Secretary under section 1240, more than 3 months after the notice is given, for review of the previous decision; and

(d) the favourable determination is made as a result of the claim for review;

the determination takes effect on the day on which the person sought the review.

Decision not notified

“(4) If:

(a) a decision (the ‘previous decision’) is made in relation to a person’s entitlement to a seniors health card; and

(b) no notice is given to the person advising the person of the making of the previous decision; and

(c) the person applies to the Secretary under section 1240, more than 3 months after the notice is given, for review of the previous decision; and

(d) the favourable determination is made as a result of the claim for review;

the determination takes effect on the day on which the previous decision took effect.

Date of effect of adverse determination

“1061ZV.(1) The day on which a determination under section 1061ZQ or 1061ZR (the ‘adverse determination’) takes effect is worked out in accordance with this section.

“(2) The adverse determination takes effect on:

(a) the day on which the determination is made; or

(b) if another day is specified in the determination—on that day.

“(3) Subject to subsections (4) and (5), the day specified under paragraph (2)(b) must be later than the day on which the determination is made.

Contravention of Act

“(4) If:

(a) the person’s entitlement to a seniors health card is affected by the adverse determination and the person has contravened a provision of this Act (other than section 1061ZL, 1306 or 1307); and

(b) the contravention causes a delay in making the determination;

the day specified under paragraph (2)(b) may be earlier than the day on which the determination is made.

False statement or misrepresentation

“(5) If:

(a) a person has made a false statement or misrepresentation; and

(b) because of the false statement or misrepresentation, the person became the holder of a seniors health card when in fact the person was not qualified for the card;

the day specified under paragraph (2)(b) may be earlier than the day on which the determination is made.”.

Insertion of new Part 3.9

12. After Part 3.7 of the Principal Act the following Part is inserted:

“PART 3.9—SENIORS HEALTH CARD

ORDINARY INCOME TEST CALCULATOR

Seniors Health Card Ordinary Income Test Calculator

“1071. The Seniors Health Card Ordinary Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the seniors health card ordinary income test for the purposes of this Act.

SENIORS HEALTH CARD ORDINARY INCOME TEST

CALCULATOR

Satisfying the seniors health card ordinary income test

“1071-1. This is how to work out whether a person satisfies the seniors health card ordinary income test:

Method statement

Step 1. Work out the amount of the person’s ordinary income on a yearly basis.

Note: For the treatment of the ordinary income of members of a couple see point 1071-2 Step 2.

Step 2. Work out the person’s seniors health card ordinary income limit using point 1071-3.

Step 3. Work out whether the person’s ordinary income exceeds the person’s seniors health card ordinary income limit.

Step 4. If the person’s ordinary income is less than the person’s seniors health card ordinary income limit, the person satisfies the seniors health card ordinary income test.

Step 5. If the person’s ordinary income is equal to or exceeds the person’s seniors health card ordinary income limit, the person does not satisfy the seniors health card ordinary income test.

Note: The application of the ordinary income test is affected by provisions concerning:

• investment income (sections 1073 to 1099);

• attributed (deemed) income (sections 1099A to 1099Q);

• disposal of income (sections 1106 to 1112).

Ordinary income of members of couples

“1071-2. If a person is a member of a couple, add the couple’s ordinary incomes (on a yearly basis) and divide by 2 to work out the amount of the person’s ordinary income for the purposes of this Part.

Seniors health card ordinary income limit

“1071-3. A person’s seniors health card ordinary income limit is worked out using the Seniors Health Card Ordinary Income Limit Table. Work out which family situation in the Table applies to the person. The person’s seniors health card ordinary income limit is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each dependent child of the person.

SENIORS HEALTH CARD ORDINARY INCOME LIMIT TABLE

column 1

column 2

column 3

column 4

additional dependent child

item

person’s family situation

amount per year

amount per year

1.

Not member of couple

$18,787.60

$624.00

2.

Partnered

$15,646.80

$624.00

3.

Member of illness separated couple

$18,475.60

$624.00

4.

Member of respite care couple

$18,475.60

$624.00

5.

Partnered (partner in gaol)

$18,475.60

$624.00

Note 1: For ‘member of couple’, ‘partnered’, ‘illness separated couple’, ‘respite care couple’ and ‘partnered (partner in gaol)’ see section 4.

Note 2: For ‘dependent child’ see section 5.

Note 3: The ordinary income limit amounts are adjusted 4 times per year in line with CPI changes (see section 1206C).

Adjustment of ordinary income limits before this Part commences

“1071-4. The amounts in column 3 of the Seniors Health Card Ordinary Income Limit Table in point 1071-3 are to be adjusted on 20 September 1993, 1 January 1994, 20 March 1994 and 1 July 1994 under section 1206C as if that section had commenced on 20 September 1993.”.

Indexed and adjusted amounts

13. Section 1190 of the Principal Act is amended by adding at the end of the Indexed and Adjusted Amounts Table the following items:

“

58.

Ordinary income limit for a seniors health card for a person who is not a member of couple

SHC unpartnered limit

[Seniors Health Card Ordinary Income Test Calculator—point 1071-1—Seniors Health Card Ordinary Income Limit Table—column 3—item 1]

59.

Ordinary income limit for a seniors health card for a person who is partnered

SHC partnered limit

[Seniors Health Card Ordinary Income Test Calculator—point 1071-1—Seniors Health Card Ordinary Income Limit Table—column 3—item 2]

60.

Ordinary income limit for a seniors health card for a person who is a member of illness separated couple

SHC illness separated couple limit

[Seniors Health Card Ordinary Income Test Calculator—point 1071-1—Seniors Health Card Ordinary Income Limit Table—column 3—item 3]

61.

Ordinary income limit for a seniors health card for a person who is a member of respite care couple

SHC respite care couple limit

[Seniors Health Card Ordinary Income Test Calculator—point 1071-1—Seniors Health Card Ordinary Income Limit Table—column 3—item 4]

62.

Ordinary income limit for a seniors health card for a person who is partnered and whose partner is in gaol

SHC partnered (partner in gaol) limit

[Seniors Health Card Ordinary Income Test Calculator—point 1071-1—Seniors Health Card Ordinary Income Limit Table—column 3—item 5]

”.

Insertion of new section 1206C

14. After section 1206B of the Principal Act the following section is inserted in Division 4 of Part 3.16:

Adjustment of seniors health card ordinary income limit

“1206C.(1) This Act has effect as if, on 1 January, 20 March, 1 July and 20 September each year, the amount worked out in accordance with the following formula were substituted for the SHC unpartnered limit:

where:

‘pensioner unpartnered maximum basic rate’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 1 in column 3 of Table B in point 1064-B1 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner unpartnered pharmaceutical allowance’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 1 in column 3 of the Pharmaceutical Allowance Amount Table in point 1064-C8 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner unpartnered income free area’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 1 in column 3 of Table E-1 in point 1064-E4 of Pension Rate Calculator A, to a person to whom the Table applies.

“(2) This Act has effect as if, on 1 January, 20 March, 1 July and 20 September each year, the amount worked out in accordance with the following formula were substituted for the SHC partnered limit:

where:

‘pensioner partnered maximum basic rate’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 2 in column 3 of Table B in point 1064-B1 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner partnered pharmaceutical allowance’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 2 in column 3 of the Pharmaceutical Allowance Amount Table in point 1064-C8 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner partnered income free area’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 2 in column 3 of Table E-1 in point 1064-E4 of Pension Rate Calculator A, to a person to whom the Table applies.

“(3) This Act has effect as if, on 1 January, 20 March, 1 July and 20 September each year, the amount worked out in accordance with the following formula were substituted for the SHC illness separated couple limit:

where:

‘pensioner illness separated couple maximum basic rate’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 3 in column 3 of Table B in point 1064-B1 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner illness separated couple pharmaceutical allowance’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 3 in column 3 of the Pharmaceutical Allowance Amount Table in point 1064-C8 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner illness separated couple income free area’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 2 in column 3 of Table E-1 in point 1064-E4 of Pension Rate Calculator A, to a person to whom the Table applies.

“(4) This Act has effect as if, on 1 January, 20 March, 1 July and 20 September each year, the amount worked out in accordance with the following formula were substituted for the SHC respite care couple limit:

where:

‘pensioner respite care couple maximum basic rate’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 4 in column 3 of Table B in point 1064-B1 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner respite care couple pharmaceutical allowance’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 4 in column 3 of the Pharmaceutical Allowance Amount Table in point 1064-C8 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner respite care couple income free area’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 2 in column 3 of Table E-1 in point 1064-E4 of Pension Rate Calculator A, to a person to whom the Table applies.

“(5) This Act has effect as if, on 1 January, 20 March, 1 July and 20 September each year, the amount worked out in accordance with the following formula were substituted for the SHC partnered (partner in gaol) limit:

where:

‘pensioner partnered (partner in gaol) maximum basic rate’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 5 in column 3 of Table B in point 1064-B1 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner partnered (partner in gaol) pharmaceutical allowance’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 6 in column 3 of the Pharmaceutical Allowance Amount Table in point 1064-C8 of Pension Rate Calculator A, to a person to whom the Table applies;

‘pensioner partnered (partner in gaol) income free area’ is the current figure, as at that 1 January, 20 March, 1 July or 20 September, for the amount applicable, under item 2 in column 3 of Table E-1 in point 1064-E4 of Pension Rate Calculator A, to a person to whom the Table applies.”.

Secretary may review decisions

15. Section 1239 of the Principal Act is amended by adding at the end of subsection (1) the following Note:

“Note 2: If a person ceases to be entitled to a seniors health card because of the operation of section 1061ZN or 1061ZO and a computer program gives effect to this, there is still a decision of an officer for review purposes (see section 1061ZP). If a person ceases to be entitled to a seniors health card because of the operation of a computer program and the Secretary could have made a determination having the same effect, section 1061ZS provides that the determination is taken to have been made.”.

Application for review

16. Section 1240 of the Principal Act is amended by adding at the end of subsection (1) the following Note:

“Note 2: If a person ceases to be entitled to a seniors health card because of the operation of section 1061N or 1061O and a computer program gives effect to this, there is still a decision of an officer for review purposes (see section 1061ZP). If a person ceases to be entitled to a seniors health card because of the operation of a computer program and the Secretary could have made a determination having the same effect, section 1061ZS provides that the determination is taken to have been made.”.

Amendments of the National Health Act

17. Section 84 of the National Health Act 1953 is amended:

(a) by inserting after paragraph (ab) of the definition of “concessional beneficiary” in subsection (1) the following paragraph:

“(ac) a person who is the holder of a seniors health card within the meaning of the Social Security Act 1991; or

Note: For ‘holder of a seniors health card’ see section 6A of the Social Security Act.”;

(b) by omitting from subsection (1) the definition of “dependant” and substituting the following definition:

“ ‘dependant’ has the meaning given by subsections (4), (5) and

(6);”;

(c) by adding at the end the following subsections:

“(4) A dependant, in relation to a person to whom paragraph (a) or (b) of the definition of ‘concessional beneficiary’ applies, is:

(i) the spouse of the person; or

(ii) a child under the age of 16 years who is in the custody, care and control of the person or of the spouse of the person; or

(iii) a person who:

(A) has attained the age of 16 years but is under the age of 25 years; and

(B) is receiving full time education at a school, college or university; and

(C) is not being paid a disability support pension under the Social Security Act 1991 or, in a case where the person is being paid a rehabilitation allowance under that Act, was not eligible to receive an invalid pension immediately before the person became eligible to receive that allowance; and

(D) is wholly or substantially dependent on the person or on the spouse of the person.

“(5) A dependant, in relation to a person to whom paragraph (c) of the definition of ‘concessional beneficiary’ applies, is a person who is, within the meaning of the Health Insurance Act 1973, a dependant of that person.

“(6) For the purposes of this Part, if:

(a) paragraph (ac) of the definition of ‘concessional beneficiary’ applies to a person (the ‘seniors health card holder’); and

(b) no other paragraph of the definition of ‘concessional beneficiary’ applies to the seniors health card holder;

a person who, apart from this subsection, would be a dependant of the seniors health card holder is taken not to be a dependant of the seniors health card holder.

Note: Paragraph (ac) of the definition of concessional beneficiary applies to a person who is the holder of a seniors health card within the meaning of the Social Security Act 1991.”.

Amendment of the Hearing Services Act

18. Section 5 of the Hearing Services Act 1991 is amended by inserting before paragraph (1)(b) the following paragraph:

“(ac) a person who is the holder of a seniors health card within the meaning of the Social Security Act 1991; or

Note: For ‘holder of a seniors health card’ see section 6A of the Social Security Act.”.

PART 4—FAMILY PAYMENT (FOREIGN INCOME)

Family payment income test and parental means test definitions

19. Section 10A of the Principal Act is amended by inserting the following definitions in subsection (2):

“ ‘foreign income’, in relation to a person, means:

(a) an income amount earned, derived or received by the person from a source outside Australia for the person’s own use or benefit; or

(b) a periodical payment by way of gift or allowance from a source outside Australia; or

(c) a periodical benefit by way of gift or allowance from a source outside Australia;

Note 1: For ‘income amount’ see subsection 8(1).

Note 2: For ‘earned, derived or received’ see subsection 8(2).

Note 3: This definition does not make use of the definition of ‘income’ in subsection 8(1) and, as a result, the exclusions provided for by subsections 8(4), (5) and (8) do not apply to foreign income.

‘target foreign income’ means foreign income that is not:

(a) taxable income; or

(b) received in the form of a fringe benefit;”.

Family Payment Rate Calculator

20. The Family Payment Rate Calculator in section 1069 is amended:

(a) by inserting after point 1069-H2B the following point:

Foreign income of members of a couple to be added

“1069-H2C. For the purposes of this Module, if a person is a member of a couple, the person’s target foreign income for a tax year includes the target foreign income for that year of the person’s partner.

Note: For ‘target foreign income’ see subsection 10A(2).”;

(b) by omitting point 1069-H21 and substituting the following point:

Income

“1069-H21. In points 1069-H13, 1069-H14, 1069-H15, 1069-H16, 1069-H17 and 1069-H19:

‘income’, in relation to a person, means:

(a) the person’s taxable income; and

(b) the person’s adjusted fringe benefits value; and

(c) the person’s target foreign income.

Note: For ‘target foreign income’ see subsection 10A(2).”;

(c) by omitting Steps 6 to 9 from the Method statement in point 1069-H22 and substituting the following Steps:

“

Step 6. Work out the person’s target foreign income for that tax year.

Note: For the treatment of target foreign income of members of a couple see point 1069-H2C.

Step 7. Add the amounts obtained in Steps 2, 5 and 6: the result is called the person’s adjusted income.

Step 8. Work out the person’s income ceiling using point 1069-H27.

Step 9. If the person’s adjusted income does not exceed the income ceiling, the person satisfies the family payment income test and the person’s basic family payment rate is not affected.

Step 10. If the person’s adjusted income exceeds the income ceiling, the person does not satisfy the family payment income test and the person’s basic family payment rate is nil.

”;

(d) by adding at the end of point 1069-H22 the following Note:

“Note 2: For ‘target foreign income’ see subsection 10A(2).”;

(e) by omitting Steps 6 to 12 from the Method statement in point 1069-H27 and substituting the following Steps:

“

Step 6. Work out the person’s target foreign income for that tax year.

Note: For the treatment of the target foreign income of members of a couple see point 1069-H2C.

Step 7. Add the amounts obtained in Steps 2, 5 and 6: the result is called the person’s adjusted income.

Step 8. Work out the person’s income free area using point 1069-H31.

Note: A person’s income free area is the amount of income that the person can have without any deduction being made from the person’s additional family payment.

Step 9. Work out whether the person’s adjusted income exceeds the person’s income free area.

Method statement—continued

Step 10. If the person’s adjusted income does not exceed the person’s income free area, the person’s annual income excess is nil.

Step 11. If the person’s adjusted income exceeds the person’s income free area, the person’s annual income excess is the person’s adjusted income less the person’s income free area.

Step 12. Convert the annual income excess into a fortnightly excess using point 1069-H33.

Step 13. Work out the amount of the person’s reduction for income using point 1069-H34.

”.

Foreign currency rates

21. Section 1157V of the Principal Act is amended by inserting after subsection (1) the following subsection:

“(1A) If it is necessary, for the purposes of the Family Payment Rate Calculator, to work out an amount of foreign income expressed in a foreign currency, the amount in Australian currency is to be worked out using the market exchange rate for 1 July in the appropriate tax year.”.

PART 5—CONVERSION OF FOREIGN CURRENCY AMOUNTS

General definitions

22. Section 23 of the Principal Act is amended by omitting from subsection (1) the definitions of “actual market exchange rate” and “foreign exchange period”.

Application of Division

23. Section 1100 of the Principal Act is amended by omitting paragraph (3)(a) and substituting the following paragraph:

“(a) sections 1064, 1065, 1066, 1066A and 1066B (Pension Rate Calculators A, B, C, D and E); and”.

Repeal of sections 1101 to 1105 and substitution of new section 1101

24. Sections 1101 to 1105 of the Principal Act are repealed and the following section is substituted:

Determination of value of payments received in a foreign currency

“1101.(1) If:

(a) a person’s social security pension rate is being worked out as at a particular pension payday (the ‘reference payday’); and

(b) a payment received by the person in a foreign currency needs to be taken into account in working out the rate;

the value in Australian currency of the payment is to be worked out using the market exchange rate for the pension payday immediately before the reference payday concerned.

“(2) If there is no market exchange rate for that pension payday (for example, because of a national public holiday), the market exchange rate to be used is the market exchange rate that applied on the last working day immediately before that payday.

“(3) For the purposes of this section, the market exchange rate of a foreign currency for a particular day is the on-demand airmail buying rate for that currency available at the Commonwealth Bank of Australia as at the start of business in Australia on that day.”.

Non-reviewable decisions

25. Section 1250 of the Principal Act is amended by omitting paragraph (1)(1).

SSAT review powers

26. Section 1253 of the Principal Act is amended by omitting paragraph (4)(j).

PART 6—EXTENSION OF ADVANCE PHARMACEUTICAL ALLOWANCE

Commencement

27. Subsection 2(6) of the Social Security Legislation Amendment Act (No. 4) 1991 is omitted and the following subsection is substituted:

“(6) Section 49 commences on 1 January 1995.”.

Qualification for advance pharmaceutical allowance

28. Section 1061F of the Principal Act is amended by adding at the end of subsection (1) the following Note:

“Note: This Part is subject to a sunset provision: see subsection 2(6) and section 49 of the Social Security Legislation Amendment Act (No. 4) 1991. The Part is due to be repealed on 1 January 1995.”.

SCHEDULE Section 8

CONSEQUENTIAL AMENDMENTS OF THE

SOCIAL SECURITY ACT 1991

1.Paragraph 561(1)(c):

Omit “taxable” (twice occurring).

2.Section 561:

Add at the end:

“(4) In this section:

‘income’, in relation to a person’s income test parent, means the parent’s taxable income and the person’s parental adjusted fringe benefits value.”.

3.Paragraph 713(1)(c):

Omit “taxable” (twice occurring).

4.Section 713:

Add at the end:

“(4) In this section:

‘income’, in relation to a person’s income test parent, means the parent’s taxable income and the person’s parental adjusted fringe benefits value.”.

5.Paragraph 838(1)(c):

Omit “taxable” (twice occurring).

6.Subsection 838(1) (Note 2):

Omit “taxable”.

7.Section 838:

Add at the end:

“(4) In this section:

‘income’, in relation to a person, means the person’s taxable income and the person’s adjusted fringe benefits value.”.

8.Subparagraph 886(d)(ii):

Omit “taxable”.

9.Section 886 (Note 3):

Omit the Note, substitute:

“Note 3: For income free area see point 1069-H31.”.

SCHEDULE— continued

10.Paragraph 894(b):

Omit “taxable” (twice occurring).

11.Subparagraph 953(b)(iii):

Omit the subparagraph, substitute:

“(iii) Submodule 3 of Module H of the Family Payment Rate Calculator (family payment income test); or”.

12.Subparagraph 999(1)(a)(iii):

Omit the subparagraph, substitute:

“(iii) Submodule 3 of Module H of the Family Payment Rate Calculator (family payment income test); or”.

13.Paragraph 1061P(1)(b):

Omit “taxable”, substitute “family payment”.

14.Paragraph 1061P(2)(b):

Omit “taxable”, substitute “family payment”.

15.Section 1069 (Family Payment Rate Calculator—point 1069–D10—Note):

Omit “taxable”.

16.Section 1069 (Family Payment Rate Calculator—point 1069–14—definition of “FP add-ons”):

Omit “taxable”, substitute “family payment”.

17.Section 1190 (Indexed and Adjusted Amounts Table—Item 21—column 2):

Omit “Taxable income”, substitute “Income”.

18.Section 1190 (Indexed and Adjusted Amounts Table—Item 21—column 4):

Omit “Item 1—column 3”, substitute “column 1”.

19.Section 1190 (Indexed and Adjusted Amounts Table—Item 22—column 2):

Omit “Taxable income”, substitute “Income”.

SCHEDULE—continued

20.Section 1190 (Indexed and Adjusted Amounts Table—Item 22—column 4):

Omit “Table H—Item 3”, substitute “Table HA—column 1”.

21.Subsection 1194(4):

Omit “taxable”.

NOTE

1. No. 46, 1991, as amended. For previous amendments see Nos. 68, 69, 70, 73, 74, 115, 116, 141, 175, 194 and 208, 1991; Nos. 12, 69, 81, 94, 118, 133, 134, 138, 228, 229, 230 and 241, 1992; and Nos. 20, 24, 25 and 36, 1993.

[Minister’s second reading speech made in—

House of Representatives on 19 August 1993

Senate on 2 September 1993

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