EXPLANATORY STATEMENT
Social Security (Modification of Asset Deprivation Rules) Amendment Principles 2002 (No. 1)
Summary
The purpose of this instrument is to amend clause 1 of the Social Security (Modification of Asset Deprivation Rules) Principles 2002.
Background
The Social Security and Veterans’ Entitlements Legislation Amendment (Private Trusts and Private Companies – Integrity of Means Testing) Act 2000 amended the Social Security Act to give effect to a measure in the Government's 2000-2001 Budget to revise the means test treatment of private companies and private trusts. The measure aims to ensure that customers who hold their assets in private companies or private trusts receive comparable treatment under the means test to those customers who hold their assets directly. The assets and income of the structure will be attributed to the person or persons who control the company or trust, or to the person or persons who were the source of the capital or corpus of the company or trust.
Sections 1208K, 1208L, 1208N and 1208P of the Social Security Act define the way in which the ‘disposal of assets rules’ in the Act, which appear at Division 2 of Part 3.12, section 93U and sections 198F to 198MA (inclusive), will operate in relation to an individual affected by this measure. These decision-making principles being amended assist the Secretary in modifying the application of those disposal rules, where this is necessary.
Explanation of the provisions
Section 1 of the Principles states the name of the disallowable instrument and section 2 states that the Principles are taken to have commenced on 18 January 2002.
Section 3 states that the amendments to Social Security (Modification of Asset Deprivation Rules) Principles 2002 appear at Schedule 1 of the instrument.
Schedule 1
Item 1 substitutes a new section 1 into the Social Security (Modification of Asset Deprivation Rules) Principles 2002 in place of the existing section 1. In effect, this means that the amended instrument will now have a name, which was inadvertently missing in the original instrument when it was made.