Veterans' Entitlements Amendment Act 1991 - Legislation

Veterans’ Entitlements Amendment Act 1991

No. 72 of 1991

TABLE OF PROVISIONS

Section
1.	Short title
2.	Commencement
3.	Repeal of section 5 and substitution of new sections:
	5.	Index of definitions
	5a.	Repatriation Commission definitions
	5b.	War and operational area related definitions
		Allotted for duty
		End of World War 1 and 2
	5c.	Eligibility related definitions
	5d.	Injury/disease definitions
	5e.	Family relationships definitions—couples
	5f.	Family relationships definitions—children
	5g.	Australian residence definitions
	5h.	Income test definitions
	5j.	Investment income definitions
	5k.	Maintenance income definitions
	5l.	Assets test definitions
	5m.	Retirement villages definitions
	5n.	Rent definitions
	5p.	Bereavement definitions
	5q.	General definitions
	5r.	Determinations having interpretative effect
		Continuous full-time service determination; member of unit of Defence Force determination
		Allied veteran determination
		Person may be treated as not being a member of a couple determination
		Illness separated couple determination
		Respite care couple determination
		Approved respite care determination

TABLE OF PROVISIONS—continued

Section
		Prescribed student child determination.
	5s.	Date of effect of determination granting pension or allowance
4.	Insertion of new section:
	7a.	Qualifying service
5.	Repeal of Part III and substitution of new Part:
		PART III—SERVICE PENSIONS
		Division 1—General features
	35.	Order of provisions and structure of Divisions
	35a.	Eligibility for and payability of service pension
		Division 2—Claim for qualifying service
		Subdivision A—Claim
	35b.	Need for a claim
	35c.	Who can claim?
	35d.	Form of claim
	35e.	Lodgment of claim
	35f.	Withdrawal of claim
		Subdivision B—Investigation of claim
	35g.	Secretary to investigate claim and submit it to Commission
		Subdivision C—Consideration and determination of claim
	35h.	Duties of Commission in relation to claim
	35j.	Determination of qualifying service to be proof of qualifying service
		Division 3—Age service pension
		Subdivision A—Eligibility for and payability of age service pension
	36.	Eligibility for age service pension
	36a.	Age service pension may not be payable in some circumstances
	36b.	Age service pension generally not payable before claim
	36c.	Restrictions on dual pensions
		Subdivision B—Claim for age service pension
	36d.	Need for a claim
	36e.	Who can claim?
	36f.	Form of claim
	36g.	Lodgment of claim
	36h.	Claimant must be Australian resident and in Australia
	36j.	Withdrawal of claim
		Subdivision C—Investigation of claim
	36k.	Secretary to investigate claim and submit it to Commission
		Subdivision D—Consideration and determination of claim
	36l.	Duties of Commission in relation to claim
	36m.	Date of effect of determination
		Subdivision E—Rate of age service pension
	36n.	How to work out the rate of a veteran’s age service pension

TABLE OF PROVISIONS—continued

Section
	Subdivision F—Bereavement payments (death of pensioner partner)
36p.	Eligibility for payments under this Subdivision
36q.	Continued payment of partner’s pension
36r.	Lump sum payable in some circumstances
36s.	Adjustment of person’s age service pension rate
36t.	Effect of death of person entitled to payments under this Subdivision
36u.	Matters affecting payment of benefits under this Subdivision
	Subdivision G—Bereavement payments (death of dependent child)
36v.	Bereavement payments on death of dependent child
36w.	Continued payment of child-related amounts
36x.	Lump sum payable in some circumstances
	Subdivision H—Bereavement payments (death of recipient)
36y.	Death of recipient
	Division 4—Invalidity service pension
	Subdivision A—Eligibility for and payability of invalidity service pension
37.	Eligibility for invalidity service pension
37a.	Invalidity service pension may not be payable in some circumstances
37b.	Invalidity service pension generally not payable before claim
37c.	Restrictions on dual pensions
	Subdivision B—Claim for invalidity service pension
37d.	Need for a claim
37e.	Who can claim?
37f.	Form of claim
37g.	Lodgment of claim
37h.	Claimant must be Australian resident and in Australia
37j.	Withdrawal of claim
	Subdivision C—Investigation of claim
37k.	Secretary to investigate claim and submit it to Commission
	Subdivision D—Consideration and determination of claim
37l.	Duties of Commission in relation to claim
37m.	Date of effect of determination
	Subdivision E—Rate of invalidity service pension
37n.	How to work out the rate of a veteran’s invalidity service pension
	Subdivision F—Bereavement payments (death of pensioner partner)
37p.	Eligibility for payments under this Subdivision
37q.	Continued payment of partner’s pension
37r.	Lump sum payable in some circumstances
37s.	Adjustment of person’s invalidity service pension rate
37t.	Effect of death of person entitled to payments under this Subdivision
37u.	Matters affecting payment of benefits under this Subdivision

TABLE OF PROVISIONS—continued

Section
		Subdivision G—Bereavement payments (death of dependent child)
	37v.	Bereavement payments on death of dependent child
	37w.	Continued payment of child-related amounts
	37x.	Lump sum payable in some circumstances
		Subdivision H—Bereavement payments (death of recipient)
	37y.	Death of recipient
		Division 5—Wife service pension
		Subdivision A—Eligibility for and payability of wife service pension
	38.	Eligibility for wife service pension
	38a.	Wife service pension may not be payable in some circumstances
	38b.	Wife service pension generally not payable before claim
	38c.	Restrictions on dual pensions
		Subdivision B—Claim for wife service pension
	38d.	Need for a claim
	38e.	Who can claim?
	38f.	Form of claim
	38g.	Lodgment of claim
	38h.	Claimant must be Australian resident and in Australia
	38j.	Withdrawal of claim
		Subdivision C—Investigation of claim
	38k.	Secretary to investigate claim and submit it to Commission
		Subdivision D—Consideration and determination of claim
	38l.	Duties of Commission in relation to claim
	38m.	Date of effect of determination
		Subdivision E—Rate of wife service pension
	38n.	How to work out the rate of a woman’s wife service pension
		Subdivision F—Bereavement payments (death of pensioner partner)
	38p.	Eligibility for payments under this Subdivision
	38q.	Continued payment of partner’s pension
	38r.	Lump sum payable in some circumstances
	38s.	Effect of death of person entitled to payments under this Subdivision
	38t.	Matters affecting payment of benefits under this Subdivision
		Subdivision G—Bereavement payments (death of dependent child)
	38u.	Bereavement payments on death of dependent child
	38v.	Continued payment of child-related amounts
	38w.	Lump sum payable in some circumstances
		Subdivision H—Bereavement payments (death of recipient)
	38x.	Death of recipient

TABLE OF PROVISIONS—continued

Section
		Division 6—Carer service pension
		Subdivision A—Eligibility for and payability of carer service pension
	39.	Eligibility for carer service pension
	39a.	Carer service pension may not be payable in some circumstances
	39b.	Carer service pension generally not payable before claim
	39c.	Restrictions on dual pensions
		Subdivision B—Claim for carer service pension
	39d.	Need for a claim
	39e.	Who can claim?
	39f.	Form of claim
	39g.	Lodgment of claim
	39h.	Claimant must be Australian resident and in Australia
	39j.	Withdrawal of claim
		Subdivision C—Investigation of claim
	39k.	Secretary to investigate claim and submit it to Commission
		Subdivision D—Consideration and determination of claim
	39l.	Duties of Commission in relation to claim
	39m.	Date of effect of determination
		Subdivision E—Rate of carer service pension
	39n.	How to work out the rate of a person’s carer service pension
		Subdivision F—Bereavement payments (continuation of carer service pension)
	39p.	Continuation of carer service pension for bereavement period where person cared for dies
	39q.	Continued carer service pension rate
		Subdivision G—Bereavement payments (death of pensioner partner)
	39r.	Eligibility for payments under this Subdivision
	39s.	Continued payment of partner’s pension
	39t.	Lump sum payable in some circumstances
	39u.	Adjustment of person’s carer service pension rate
	39v.	Effect of death of person entitled to payments under this Subdivision
	39w.	Matters affecting payment of benefits under this Subdivision
		Subdivision H—Bereavement payments (death of dependent child)
	39x.	Bereavement payments on death of dependent child
	39y.	Continued payment of child-related amounts
	39z.	Lump sum payable in some circumstances
		Subdivision J—Bereavement payments (death of recipient)
	39za.	Death of recipient

TABLE OF PROVISIONS—continued

Section
		Division 7—Rate Calculators
		Subdivision A—General
	40.	Steps in rate calculation
	40a.	Standard categories of family situations
	40b.	Rate Calculators
	40c.	Application of income and assets test reductions for income tax purposes
		Subdivision B—Service pension rate calculator where there are no dependent children
	41.	Rate of age, invalidity, wife and carer service pension (no dependent children)

SERVICE PENSION RATE CALCULATOR WHERE THERE ARE NO DEPENDENT CHILDREN

Module A—Overall rate calculation process

Module B—Maximum basic rate

Module C—Rent assistance

Module D—Ordinary income test

Module E—Maintenance income test

Module F—Assets test

Module G—Remote area allowance

Subdivision C—Service pension rate calculator where there are dependent children

42. Rate of age, invalidity, wife and carer service pension (dependent child or children)

SERVICE PENSION RATE CALCULATOR WHERE THERE ARE DEPENDENT CHILDREN

Module A—Overall rate calculation process

Module B—Maximum basic rate

Module C—Additional amounts for dependent children

Module D—Rent assistance

Module E—Ordinary income test

Module F—Maintenance income test

Module G—Assets test

Module H—Remote area allowance

Subdivision D—Service pension rate calculator for blinded veterans

43. Rate of age and invalidity service pension (blinded veterans)

SERVICE PENSION RATE CALCULATOR FOR BLINDED VETERANS

Module A—Overall rate calculation process

Module B—Maximum basic rate

Module C—Additional amounts for dependent children

Module D—Rent assistance

Module E—Remote area allowance

TABLE OF PROVISIONS—continued

Section

Subdivision E—Service pension rate calculator for widows and non-illness separated wives

44. Rate of wife service pension for widows and non-illness separated wives

SERVICE PENSION RATE CALCULATOR FOR WIDOWS AND NON-ILLNESS SEPARATED WIVES

Module A—Overall rate calculation process

Module B—Maximum basic rate

Module C—Rent assistance

Module D—Ordinary income test

Module E—Maintenance income test

Module F—Assets test

Module G—Remote area allowance

Subdivision F—Service pension rate calculator for “frozen rate” widows

45. Rate of age, invalidity and carer service pensions (war widow)

SERVICE PENSION RATE CALCULATOR FOR “FROZEN RATE” WIDOWS

Module A—Overall rate calculation process

Module B—Ceiling rate

	Division 8—Ordinary income test—investment income
	Subdivision A—Introduction
46.	Structure of Division
46a.	Certain capital amounts not covered by other Subdivisions taken to be received over 12 months
	Subdivision B—Accruing return investments
46b.	Investments made before 1 January 1988 with friendly societies or where no immediate return
46c.	Investments made before 1 January 1988 not with friendly societies or where return is not deferred
46d.	Investments made after 1 January 1988
46e.	Actual return not be treated as income
46f.	Rate of return where it can only be approximated
46g.	Reduction of rate of return for investment costs
46h.	Conversion of investment to accruing return investment
	Subdivision C—Market-linked investments
46j.	Investments made before 9 September 1988
46k.	Special provisions about certain investments made before 9 September 1988
46l.	Investments made after 9 September 1988
46m.	Actual return not to be treated as income
46n.	Product rate of return
46p.	Determination of entitlement of person holding a market-linked investment
46q.	Reduction of rate of return for investment costs
46r.	Conversion of investments to market-linked investments

TABLE OF PROVISIONS—continued

Section
		Subdivision D—Compulsorily preserved superannuation
	46s.	Superannuation benefits received before pension age
		Subdivision E—Immediate annuities and superannuation pensions
	46t.	Immediate annuities
	46u.	Superannuation pensions
		Division 9—Ordinary income test—conversion of foreign currency amounts
	47.	Application of Division
	47a.	Conversion of foreign currency amounts
	47b.	Base exchange rate
	47c.	Re-assessed exchange rate
	47d.	Applicability of re-assessed exchange rate
	47e.	Rounding off exchange rates
		Division 10—Ordinary income test—disposal of ordinary income
	48.	Disposal of ordinary income
	48a.	Amount of disposition
	48b.	Disposal of ordinary income—not a member of a couple
	48c.	Disposal of ordinary income—members of couples
	48d.	Treatment of transactions that constitute both a disposal of ordinary income and a disposal of assets
	48e.	Dispositions more than 5 years old to be disregarded
		Division 11—Ordinary income test—earnings credit
	49.	Earnings credit account balance may be set off against ordinary income from remunerative work
	49a.	Earnings credit account
	49b.	Earnings credit account balance

EARNINGS CREDIT ACCOUNT BALANCE CALCULATOR

Module A—Overall account balance calculation

Module B—Opening balance

Module C—Earnings credit

Module D—Drawing on account

	Division 12—New Enterprise Incentive Scheme
50.	General effect of Division
50a.	Reduction in rate of payments under this Part if recipient or partner also receiving payments under NEIS
50b.	Rate reduction under this Division
	Division 13—General provisions relating to the maintenance income test
51.	Apportionment of capitalised maintenance income
51a.	In-kind housing maintenance—value of substitute for family home

TABLE OF PROVISIONS—continued

Section
		Division 14—General provisions relating to the assets test
		Subdivision A—Value of person’s assets
	52.	Certain assets to be disregarded in calculating the value of a person’s assets
	52a.	Value of annuities
	52b.	Value of annuity—change of relevant number
	52c.	Effect of charge or encumbrance on value of assets
	52d.	Loans
		Subdivision B—Disposal of assets
	52e.	Disposal of assets
	52f.	Amount of disposition
	52g.	Disposal of assets—not a member of a couple
	52h.	Disposal of assets—members of couples
	52j.	Dispositions more than 5 years old to be disregarded
		Subdivision C—Special provisions relating to retirement village residents
	52k.	Retirement village resident
	52l.	Basis for different treatment
	52m.	Entry contribution
	52n.	Extra allowable amount
	52p.	Renegotiation of retirement village agreement
	52q.	People who are not members of a couple
	52r.	Members of couples
	52s.	Members of illness separated couple (both in retirement village or villages)
	52t.	Members of illness separated couple (partner not in retirement village and partner property owner)
	52u.	Members of illness separated couple (partner not in retirement village and partner not property owner)
	52v.	Members of ordinary couple with different principal homes (both in retirement villages)
	52w.	Members of ordinary couple with different principal homes (partner not in retirement village and partner property owner)
	52x.	Members of ordinary couple with different principal homes (partner not in retirement village and partner not property owner)
		Subdivision D—Financial hardship
	52y.	Access to financial hardship rules
	52z.	Application of financial hardship rules
		Subdivision E—Pension loans scheme
	52za.	Eligibility for participation in pension loans scheme
	52zb.	Effect of participation in pension loans scheme—pension rate
	52zc.	Effect of participation in pension loans scheme—creation of debt
	52zd.	Need for a request to participate
	52ze.	Additional requirement where person’s assets valued at less than $100,000
	52zf.	Existence of debt results in charge over assets
	52zg.	Debt not to be recovered until after death
	52zh.	Enforcement of charge
	52zj.	Person ceases to participate in pension loans scheme if value of assets falls below $100,000
	52zk.	Automatic termination of participation in pension loans scheme
	52zl.	Registration of charge
	52zm.	Manner of enforcement of charge

TABLE OF PROVISIONS—continued

Section		Division 15—Fringe benefits
		Subdivision A—Introduction
	53.	Fringe benefits and treatment at Departmental expense for certain service pensioners
		Subdivision B—Fringe benefits
	53a.	Eligibility for fringe benefits
	53b.	Fringe benefits ordinary income test
	53c.	Fringe benefits assets test
		Subdivision C—Treatment at Departmental expense
	53d.	Eligibility for treatment at Departmental expense
		Division 16—Recipient obligations
	54.	Secretary may require notification of an event or change of circumstances
	54a.	Secretary may require recipient to give particular information relevant to the payment of pension
	54b.	Document served with a section 54 notice
	54c.	Interpretation
		Division 17—Pensioners in certain institutions
		Subdivision A—Imprisonment
	55.	Service pension may be suspended or forfeited when pensioner in gaol
	55a.	Instalments may be redirected to partner or child
		Subdivision B—Benevolent homes
	55b.	Application of Subdivision
	55c.	Inmate of benevolent home—male, partnered, with child add-on
	55d.	Inmate of benevolent home—other cases
	55e.	Pensioner contribution
		Division 18—Variation and termination
	56.	Automatic termination—recipient complying with section 54 notification obligations
	56a.	Automatic termination—recipient not complying with section 54 notification obligations
	56b.	Automatic rate reduction—recipient not complying with section 54 notification obligations
	56c.	Rate increase determination
	56d.	Rate reduction determination
	56e.	Cancellation and suspension determination
	56f.	Resumption of payment after suspension
	56g.	Date of effect of favourable determination
	56h.	Date of effect of adverse determination
	56j.	Pension may be cancelled at pensioner’s request
	56k.	Pension may be cancelled or suspended if Secretary loses contact with pensioner
	56l.	Commission may end suspension

TABLE OF PROVISIONS—continued

Section		Division 19—Review of decisions
	57.	Claimants and service pensioners may seek review of certain decisions
	57a.	Application for review
	57b.	Commission’s powers where request for review
	57c.	Date of effect of certain review decisions
	57d.	Commission must make written record of review decision and reasons
	57e.	Person who requested review to be notified of decision
	57f.	Powers of Commission to gather evidence
	57g.	Withdrawal of request for review
	57h.	Commission may reimburse certain expenses
		Division 20—Administration of pension payments
		Subdivision A—General administration of pension payments
	58.	Payment by instalments
	58a.	Calculation of amount of fortnightly instalment
	58b.	Effect on instalments of back-dating claim
	58c.	Manner of payment
	58d.	Agents
	58e.	Pension payday falling on public holiday etc.
	58f.	Payment into bank account etc.
	58g.	Service pension to be absolutely inalienable
	58h.	Payments to Commissioner of Taxation at pensioner’s request
	58j.	Payments to Commissioner of Taxation—section 218 Income Tax Assessment Act
		Subdivision B—Payment of service pension outside Australia
	58k.	Age, invalidity and wife service pensions generally portable
	58l.	Payment of service pension outside Australia
	58m.	No portability if claim based on short-term residence
	58n.	“Transfer” to portable pension

Veterans’ Entitlements Amendment Act 1991

No. 72 of 1991

An Act to amend the Veterans’ Entitlements Act 1986

[Assented to 25 June 1991]

The Parliament of Australia enacts:

Short title etc.

1. (1) This Act may be cited as the Veterans’ Entitlements Amendment Act 1991.

(2) In this Act, “Principal Act” means the Veterans’ Entitlements Act 19861.

Commencement

2. This Act commences on 1 July 1991.

3. Section S of the Principal Act is repealed and the following sections are substituted:

Index of definitions

“5. Each expression listed in the Index below is defined, for the purposes of this Act, in the provision listed in the Index opposite that expression.

Note: the Index does not contain every defined expression used in the Act. It contains every defined expression used in Part III and some defined expressions used elsewhere.

INDEX

account	5q (1)
accruing return investment	5j (1)
acting Commissioner	5a
Acting Deputy President	5a
Acting President	5a
actual market exchange rate	5q (1)
actual value	5m
additional amounts for dependent children	5q (1)
adopted child	5f (1)
allied country	5c (1)
allied mariner	5c (1)
allied veteran	5c (1)
allotted for duty	5b (2)
amount of rent paid or payable	5n (6), (7)
annual rate of return	5j (2)
approved deposit fund	5j (1)
approved Guide to the Assessment of Rates of Veterans’ Pensions	5q (1)
approved respite care	5r
approved Treatment Principles	5q (1)
assessable growth component	5j (1)
assessable period	5j (1)
asset	5l (1)
Australia	5q (1)
Australian mariner	5c (1)
Australian resident	5g (1)
benevolent home	5q (1)
bereavement lump sum period	5p
bereavement notification day	5p
bereavement period	5p
bereavement rate continuation period	5p
blinded in an eye	5d (3)
Board	5q (1)
board	5n (1)
building society	5q (1)
campaign medal	7a (2)
capitalised maintenance income	5k
cash maintenance	5k
child	5f
child support	5k
Commission	5a
commissioner	5a
Commonwealth country	5c (1)
Commonwealth veteran	5c (1)
compulsorily preserved	5j (5)
continuous full-time service	5c (1)
couple	5e (2), (3), (4)
credit union	5q (1)
decision	5q (1)
deductible amount	5j (1)
defence force established by a Commonwealth country	5c (1),(3)
defence force established by an allied country	5c(1)
deferred annuity	5j (1)
dependent child	5f (2), (3), (4), (5)
dependent child add-on	5q (1)
Deputy President	5a
determination of entitlement	5q (1)
disability pension	5n (1)
disease	5d (1)
dispose	5l (1)
dispose of income	5h (1)
domestic payment	5h (3)

INDEX—continued

earned, derived or received	5h (2)
eligible civilian	5c (1)
eligible investment	5J (1)
eligible war service	7
employed child	5f (3)
enemy	5c (1)
exempt assets	5l (1)
first available bereavement adjustment payday	5p
fishing vessel	5c (1)
foreign exchange period	5q (1)
friendly society	5j (1)
general rate	5q (1)
government-in-exile	5c (1)
Government rent	5n (1)
guardian allowance	5q (1)
home equity conversion agreement	5h (1)
illness separated couple	5r (5)
immediate annuity	5j (1)
incapacity from a war-caused injury, a war-caused disease	5d (2)
incapacity from a defence-caused injury, a defence-caused disease	5d (2)
incentive allowance	5q (1)
income	5h (1)
income amount	5h (1)
income from personal exertion	5h (1)
income support pension	5q (1)
Income Tax Assessment Act	5q (1)
injury	5d (1)
in-kind housing maintenance	5k
ineligible property owner	5n (1)
investment product	5j (1)
interest that gives reasonable security of tenure	5l (8)
joint ownership	5q (1)
maintained child	5K (1)
maintenance	5K (1)
maintenance agreement	5K (1)
maintenance income	5K (1)
market-linked investment	5j (1)
member of a couple	5e (1), (2), (3), (4)
member of a unit of the Defence Force	5c (1), (2)
member of the Defence Force	5c (1)
member of the Interim Forces	5c (1)
non-assessable purchase price	5j (1)
non-illness separated wife	5e (1)
operational area	5b (2)
ordinary income	5h (1)
organisation representing veterans	5q (1)
parent	5f (1)
partner	5e (5)
partnered	5e (5)
partnered (partner getting benefit)	5e (5)
partnered (partner getting neither pension nor benefit)	5e (5)
partnered (partner getting pension)	5e (5)
partnered (partner getting pension or benefit)	5e (5)
pension age	5q (1)
pension payday	5q (1)
pension increase child	5f (6)

INDEX—continued

pension period	5q (1)
pension year	5l (9)
period of hostilities	5b (1)
physically present in remote area	5q (2), (3)
PLS assets	5l (1)
port	5q (1)
prescribed educational scheme	5f (1)
prescribed student child	5f (1), 5r (9)
President	5a (1)
principal home	5l (5), (6), (7)
property owner	5l (4)
public unit trust	5j (1)
purchase price	5j (1)
qualifying service	7a
receiving full-time education at a school, college or university	5f (5)
relevant number	5j (1)
remote area	5q (1)
remunerative work	5q (1)
rent	5n (4)
residing in a nursing home	5n (8)
residual capital value	5j (1)
respite care couple	5r (6)
respite period	5q (1)
retirement village	5m
return	5j (1)
rolled-over amount	5j (1)
roll-over immediate annuity	5j (1)
roll-over purchase price	5j (1)
Secretary	5q (1)
service pension	5q (1)
service pensioner	5q (1)
Social Security Act	5q (1)
social security benefit	5q (1)
social security pension	5q (1)
special maintenance income	5K (1)
special mission	5c (1)
statutory rate of return	5j (1)
student child	5f (1)
superannuation benefit	5j (1)
superannuation fund	5j (1)
superannuation pension	5j (1)
unit of the Defence Force	5c (1)
unrealisable asset	5l (11), (12)
value	5l (2), (3)
veteran	5c (1)
war to which this Act applies	5b (1)
war widow	5e (1)
widow	5e (1)
widower	5e (1)
World War 1	5b (1), (3)
World War 2	5b (1), (3)

Repatriation Commission definitions

“5a. In this Act, unless the contrary intention appears:

‘acting commissioner’ means a person who is acting as a commissioner because of an appointment under section 191;

‘Acting Deputy President’ means a commissioner or acting commissioner who is acting as Deputy President because of an appointment under section 192;

‘Acting President’ means a commissioner or acting commissioner who is acting as President because of an appointment under section 192 or 193;

‘Commission’ means the Repatriation Commission continued in existence by section 179;

‘commissioner’ means a person holding an office of commissioner because of an appointment under section 182;

‘Deputy President’ means the Deputy President of the Commission;

‘President’ means the President of the Commission.

War and operational area related definitions

“5B. (1) In this Act, unless the contrary intention appears:

‘operational area’ means an area described in column 1 of Schedule 2 during the period specified in column 2 of Schedule 2 opposite to the description of the area in column 1;

‘period of hostilities’ means:

(a) World War 1 from its commencement on 4 August 1914 to 11 November 1918 (both included); or

(b) World War 2 from its commencement on 3 September 1939 to 3 September 1945 (both included); or

(d) the period of hostilities in respect of Malaya from 29 June 1950 to 31 August 1957 (both included); or

(e) the period of hostilities in respect of war-like operations in operational areas from 31 July 1962 to 11 January 1973 (both included);

‘war to which this Act applies’ means World War 1 or World War 2;

‘World War 1’ means:

(a) the war that commenced on 4 August 1914; and

(b) any other war in which the Crown became engaged after 4 August 1914 and before 11 November 1918;

‘World War 2’ means:

(a) the war that commenced on 3 September 1939; and

(b) any other war in which the Crown became engaged after 3 September 1939 and before 3 September 1945.

Allotted for duty

“(2) A reference in this Act to a person, or a unit of the Defence Force, that was allotted for duty in an operational area is a reference to a person, or unit of the Defence Force:

(a) that was so allotted for duty under administrative arrangements applicable in the part of the Defence Force in which the person was serving, or of which the unit formed a part; or

(b) that is, by written instrument signed by the Minister for Defence, taken to have been allotted for duty in an area described in item 4 or 8 in Schedule 2 during the period specified in that item.

End of World War 1 and 2

“(3) For the purposes of this Act:

(a) World War 1 is taken to have ended on 1 September 1921; and

(b) World War 2 is taken to have ended on 28 April 1952.

Note 1: 1 September 1921 is the date fixed by Proclamation under the Termination of the Present War (Definition) Act 1919.

Note 2: 28 April 1952 is the date on which the Treaty of Peace with Japan came into force.

Eligibility related definitions

“5c. (1) In this Act, unless the contrary intention appears: ‘allied country’ means any country (not being Australia or a Commonwealth country):

(a) that was, at the relevant time, at war with the enemy; or

(b) the forces of which were, at the relevant time, engaged in an operational area against forces against which the forces of the Commonwealth were engaged in that area;

and includes:

(c) a state, province or other territory that is one of 2 or more territories that together form, or formed at the relevant time, a discrete part of such a country; and

(d) a place that is, or was at the relevant time, a territory, dependency or colony (however described) of such a country;

‘allied mariner’ means a person who:

(a) was during the period of World War 2 from its commencement to and including 29 October 1945:

(i) a master, officer or seaman employed under agreement, or an apprentice employed under indenture, in sea-going service on a ship that was engaged in trading; or

(ii) a master, officer, seaman or apprentice employed in a lighthouse tender or pilot ship; or

(iii) employed as a pilot; or

(iv) a master, officer, seaman or apprentice employed in seagoing service on a ship (being a hospital ship, troop

transport, supply ship, tug, cable ship, salvage ship, dredge, fishing vessel or fisheries investigation vessel) that was operated by, or on behalf of, a foreign country; and

(b) was at any time during the course of that employment during the period referred to in paragraph (a) on a ship that was:

(i) operating from a port in Australia or from a port in a Commonwealth country or an allied country; or

(ii) engaged in trading with Australia or with a Commonwealth country or an allied country; or

(iii) engaged in providing assistance or support to the Defence Force, or to the forces, or any part of the forces, of a Commonwealth country or an allied country; or

(iv) engaged in providing assistance or support to Australia or to a Commonwealth country or an allied country;

but does not include:

(d) a person who has, at any time, been employed by a foreign country that was, at that time, at war with Australia; or

(e) a person who has, at any time, been employed:

(i) on a ship that operated to, or was operating from, a port in a country that was, at that time, at war with Australia; or

(ii) on a ship that was engaged in trading with a country that was, at that time, at war with Australia; or

(iii) on a ship that was engaged in providing assistance or support to the enemy or to a country that was, at that time, at war with Australia;

‘allied veteran’ means a person:

(a) who has been appointed or enlisted as a member of the defence force established by an allied country; and

(b) who has rendered continuous full-time service as such a member during a period of hostilities;

but does not include a person who has served at any time:

(c) in the forces of a country that was, at that time, at war with Australia, or in forces engaged in supporting or assisting the forces of such a country; or

(d) in forces that were, at that time, engaged in war-like operations against the Naval, Military or Air Forces of Australia;

‘Australian mariner’ means a person who was, during the period of World War 2 from its commencement to and including 29 October 1945:

(a) a master, officer or seaman employed under agreement, or an apprentice employed under indenture, in sea-going service on a

ship registered in Australia that was engaged in trading between a port in a State or Territory and any other port; or

(b) a master, officer or seaman employed under agreement, or an apprentice employed under indenture, in sea-going service on a ship registered outside Australia who was, or whose dependants were, resident in Australia for at least 12 months immediately before he or she entered into the agreement or indenture; or

(c) a master, officer, seaman or apprentice employed on a lighthouse tender, or pilot ship of the Commonwealth or of a State; or

(d) a pilot employed or licensed by Australia or a State or by an authority constituted by or under a law of the Commonwealth or of a State; or

(e) a master, officer, seaman or apprentice employed in sea-going service on a ship owned in Australia and operating from an Australian port, being a hospital ship, troop transport, supply ship, tug, cabled ship, salvage ship, dredge, fishing vessel or fisheries investigation vessel; or

(f) a member or employee of the Commonwealth Salvage Board engaged in sea-going service under the direction of that Board; or

(g) a master, officer, seaman or apprentice employed in sea-going service on a ship registered in New Zealand who the Commission is satisfied was engaged in Australia and is not entitled to compensation under a law of a Commonwealth country providing for the payment of pensions and other payments to seamen who suffered death or disablement as a result of World War 2;

‘Commonwealth country’ means a country (other than Australia) that is, or was at the relevant time, a part of the Dominions of the Crown, and includes:

(a) a state, province or other territory that is one of 2 or more territories that together form, or formed at the relevant time, a discrete part of such a country; and

(b) a place that is, or was at the relevant time, a territory, dependency or colony (however described) of a part of such a country;

‘Commonwealth veteran’ means a person who rendered continuous full-time service as a member of:

(a) the naval, military or air forces; or

(b) the nursing or auxiliary services; or

of a Commonwealth country during a period of hostilities;

‘continuous full-time service’ means:

(a) in relation to a member of the Defence Force:

(i) service in the Naval Forces of the Commonwealth of the kind known as continuous full-time naval service; or

(ii) service in the Military Forces of the Commonwealth of the kind known as continuous full-time military service; or

(iii) service in the Air Force of the Commonwealth of the kind known as continuous full-time air force service; or

(b) in relation to a member of the naval, military or air forces of a Commonwealth country or an allied country—service in those forces of a kind similar to a kind a service referred to in subparagraph (a) (i), (ii) or (iii);

Note: see also subsection SR (1).

‘defence force established by a Commonwealth country’ means:

(a) the naval, military or air forces of the country; or

(b) the nursing and auxiliary services of the naval, military or air forces of the country; or

‘defence force established by an allied country’ means:

(a) the regular naval, military or air forces; and

(b) the nursing or auxiliary services of the regular naval, military or air forces; and

raised by an allied country and operated by the country with regular military-like lines of command, that is to say, raised and operated in such a manner that the members of those forces and services:

(d) were formally appointed to, or enlisted in, those forces or services; and

(e) were required to wear uniforms or insignia distinguishing them as members of those forces or services; and

(f) were required to carry arms openly; and

(g) were subject to the rules and conventions of warfare;

Note: for extended meaning of this term in relation to a government-in-exile, see subsection (3).

‘eligible civilian’ means a person:

(a) who was killed, or detained by the enemy, during World War 2; and

(b) who was, at the time the person was killed or first detained:

(i) a British subject; and

(ii) a resident, but not an indigenous inhabitant, of the Territory of Papua or the Territory of New Guinea; and

(i) rendering service as a member of the Defence Force; or

(ii) employed by the Commonwealth on a special mission outside Australia;

‘enemy’ means:

(a) in relation to World War 1 or World War 2—the naval, military or air forces, or any part of the naval, military or air forces, of a State at war with the Crown during that war; and

(b) in relation to service in, or a period of hostilities in respect of, an operational area—the naval, military or air forces against which the Naval, Military or Air Forces of the Commonwealth were engaged in that operational area; and

‘fishing vessel’ means a ship employed in connection with the occupation of sea fishing for profit;

‘government-in-exile’, in relation to an allied country, includes a person, or group of persons, claiming to represent, or administer, the country or a part of the country or the people of the country;

‘member of a unit of the Defence Force’ means:

(a) a member of the Defence Force; or

(b) another person who is:

(i) a member of the unit; or

(ii) attached to the unit; or

(iii) appointed for continuous full-time service with the unit;

Note: see also subsection 5r (1).

‘member of the Defence Force’ includes a person appointed for continuous full-time service with a unit of the Defence Force;

‘member of the Interim Forces’ means a person who:

(a) enlisted or re-engaged in, or was appointed or re-appointed to, the Defence Force for continuous full-time service for a term of not more than 2 years; or

(b) was appointed for continuous full-time service with a unit of the Defence Force for a term of not more than 2 years;

on or after 1 July 1947 and before 1 July 1949;

‘qualifying service’ has the meaning given in section 7a;

‘special mission’ means a mission that, in the opinion of the Commission, was of special assistance to the Commonwealth in the prosecution of a war to which this Act applies;

‘unit of the Defence Force’ means a body, contingent or detachment of the Defence Force;

‘veteran’ means:

(a) a person (including a deceased person):

(i) who is, because of section 7, taken to have rendered eligible war service; or

(ii) in respect of whom a pension is, or pensions are, payable under subsection 13 (6); and

(b) in Part III also includes a person who is:

(i) a Commonwealth veteran; or

(ii) an allied veteran; or

(iii) an Australian mariner; or

(iv) an allied mariner.

Army Medical Corps Nursing Service

“(2) For the purposes of this Act, a member of the Army Medical Corps Nursing Service who:

(a) rendered service during World War 1, either within or outside Australia; and

(b) rendered the service as such a member in accordance with an acceptance or appointment by the Director-General of Medical Services for service outside Australia;

is taken to have been serving as a member of the Defence Force while rendering that service.

‘Defence force’ of government-in-exile

“(3) In relation to any period during which there was a government-in-exile in relation to an allied country, ‘defence force established by an allied country’ includes:

(a) the regular naval, military or air forces; and

(b) the nursing or auxiliary services of the regular naval, military or air forces; and

raised by that government-in-exile and operated by it with regular military-like lines of command, that is to say, raised and operated in such a manner that the members of those forces and services:

(d) were formally appointed to, or enlisted in, those forces or services; and

(e) were required to wear uniforms or insignia distinguishing them as members of those forces or services; and

(f) were required to carry arms openly; and

(g) were subject to the rules and conventions of warfare.

Injury/disease definitions

“5D. (1) In this Act, unless the contrary intention appears:

‘disease’ includes:

(a) any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development); and

(b) the recurrence of such an ailment, disorder, defect or morbid condition;

but does not include the aggravation of such an ailment, disorder, defect or morbid condition;

‘injury’ means any physical or mental injury (including the recurrence of a physical or mental injury) but does not include:

(a) a disease; or

(b) the aggravation of a physical or mental injury.

War-caused injury; war-caused disease; defence-caused injury; defence-caused disease

“(2) In this Act, unless the contrary intention appears:

(a) a reference to the incapacity of a veteran from a war-caused injury or a war-caused disease; or

(b) a reference to the incapacity of a person who is a member of the Forces, or a member of a Peacekeeping Force (as defined by subsection 68 (1)), from a defence-caused injury or a defence-caused disease;

is a reference to the effects of that injury or disease and not a reference to the injury or disease itself.

Note: for ‘war-caused injury’ and ‘war-caused disease’ see section 9.

Blinded in an eye

“(3) For the purposes of this Act, a person is taken to have been blinded in an eye if:

(a) the person has lost the eye; or

(b) in the opinion of the Commission, the eyesight of the person in that eye is so defective that the person has no useful sight in that eye.

Family relationships definitions—couples

“5E. (1) In this Act, unless the contrary intention appears:

‘couple’ has the meaning given by subsections (2), (3) and (4);

‘member of a couple’ has the meaning given by subsections (2), (3) and (4);

‘non-illness separated wife’ means a woman:

(a) who is legally married to a veteran but is living separately and apart from him on a permanent basis; and

(b) whose separation has not resulted in a direction under subsection 5r (3); and

‘partner’, in relation to a person who is a member of a couple, means the other member of the couple;

‘partnered’ has the meaning given by subsection (5);

‘partnered (partner getting benefit)’ has the meaning given by subsection (5);

‘partnered (partner getting neither pension nor benefit)’ has the meaning given by subsection (5);

‘partnered (partner getting pension)’ has the meaning given by subsection (5);

Note: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

‘partnered (partner getting pension or benefit)’ has the meaning given by subsection (5);

‘war widow’ means a woman:

(a) who was the partner of, or was legally married to:

(i) a veteran; or

(ii) a person who was a member of the Forces for the purposes of Part II; or

(iii) a person who was a member of the Forces for the purposes of Part IV;

immediately before the death of the veteran or person; and

(b) who is receiving:

(i) a pension payable under Part II or IV at a rate determined under or by reference to subsection 30 (1); or

(ii) a pension payable under the Seamen’s War Pension and Allowances Act 1940 at a rate determined under or by reference to subsection 18 (2) of that Act; or

(iii) a pension, or compensation of a periodical nature, payable under section 13 of the Defence (Transitional Provisions) Act 1946 (other than an attendant’s allowance payable under that section); or

(iv) a pension that:

(a) is payable under the law of a foreign country; and

(b) is, in the opinion of the Commission, similar in character to a pension or payment referred to in subparagraph (i), (ii) or (iii);

‘widow’ means:

(a) a woman who was the partner of a man immediately before he died; or

(b) a woman who was legally married to a man, but living separately and apart from her on a permanent basis, immediately before he died.

‘widower’ means:

(a) a man who was a partner of a woman immediately before she died; or

(b) a man who was legally married to a woman, but living separately and apart from her on a permanent basis, immediately before she died.

Member of a couple—general

“(2) A person is a member of a couple for the purposes of this Act if:

(a) the person is legally married to another person and is not living separately and apart from the other person on a permanent basis; or

(b) all of the following conditions are met:

(i) the person is living with a person of the opposite sex (in this paragraph called the ‘partner’);

(ii) the person is not legally married to the partner;

(iii) the person and the partner are, in the Commission’s opinion (formed as mentioned in section 11a), in a marriage-like relationship;

(iv) the person and the partner are not within a prohibited relationship for the purposes of section 23b of the Marriage Act 1961.

Note 1: for ‘living with a person’ see subsection (3).

Note 2: a prohibited relationship for the purposes of section 23B of the Marriage Act 1961 is a relationship between a person and:

• an ancestor of the person; or

• a descendant of the person; or

• a brother or sister of the person (whether of the whole blood or the part-blood).

“(3) For the purposes of subparagraph (2) (b) (i), a person is to be treated as living with another person during:

(a) any temporary absence of one of those persons;

(b) an absence of one of those persons resulting from illness or infirmity;

if the Commission is of the opinion that they would, but for the absence, have been living together during that period.

Member of a couple—special excluding determination

“(4) A person is not a member of a couple if a determination under subsection 5r (3) is in force in relation to the person.

Note: subsection 5r (3) allows the Commission to treat a person who is a member of a couple as not being a member of a couple in special circumstances.

Standard family situation categories

“(5) For the purposes of this Act:

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

(b) a person is partnered (partner getting neither pension nor benefit) if the person is a member of a couple and the person’s partner:

(i) is not receiving a service pension; and

(ii) is not receiving a social security pension; and

(iii) is not receiving a social security benefit; and

(c) a person is partnered (partner getting pension or benefit) if the person is a member of a couple and the person’s partner is receiving:

(i) a service pension; or

(ii) a social security pension; or

(iii) a social security benefit; and

(d) a person is partnered (partner getting pension) if the person is a member of a couple and the person’s partner is receiving:

(i) a service pension; or

(ii) a social security pension; and

(e) a person is partnered (partner getting benefit) if the person is a member of a couple and the person’s partner is receiving a social security benefit.

Note: ‘social security pension’ includes a sheltered employment or rehabilitation allowance (see subsection 5q).

Family relationships definitions—children

“5f. (1) In this Act, unless the contrary intention appears:

‘adopted child’ means a child adopted under the law of any place, whether in Australia or not, relating to the adoption of children;

‘child’ means:

(a) a person who has not turned 16; or

(b) a person who:

(i) has turned 16 but has not turned 25; and

(ii) is receiving full-time education at a school, college or university;

but does not include such a person if the person is receiving:

(d) a wife pension; or

(e) a carer pension; or

(f) a sole parent pension; or

(g) a widow B pension; or

(h) a widowed person allowance; or

(i) a rehabilitation allowance; or

(j) a social security benefit;

under the Social Security Act.

Note: see also subsection (5) (receiving full-time education).

‘dependent child’ has the meaning given by subsections (2) to (5);

‘parent’ means, in relation to an adopted child, an adoptive parent of the child;

‘pension increase child’ has the meaning given by subsection (6);

‘prescribed educational scheme’ means:

(a) the AUSTUDY Scheme; or

(b) the ABSTUDY Scheme, to the extent that it provides means-tested allowances; or

(d) the Veterans’ Children Education Scheme; or

(e) the Post-Graduate Awards Scheme;

‘prescribed student child’ means a child in respect of whom a determination under subsection 5r (9) is in force;

‘receiving full-time education at a school, college or university’ has the meaning given by subsection (5);

‘student child’ means a person who:

(a) has turned 16 but who has not turned 25; and

(b) is receiving full-time education at a school, college or university;

Note: see also subsection (5) (receiving full-time education).

Dependent child

“(2) Subject to subsections (3) and (4), a child is a dependent child of another person if the child is a child of the person within the meaning of section 10.

Employed child

“(3) A child who has not turned 16 cannot be a dependent child if:

(a) the child is not receiving full-time education; and

(b) the child is receiving income from employment; and

Dependent child—residence requirements

“(4) For the purposes of this Act, a child is not a dependent child of another person unless:

(a) the child is an Australian resident; or

(b) the child:

(i) had been an Australian resident living with the person in Australia; and

(ii) is living with the person outside Australia.

Note: for ‘Australian resident’ see section 5G.

Receiving full-time education—education leavers

“(5) If:

(a) a person is under the age of 25 years; and

(b) the person ceases to receive full-time education at a school, college or university; and

(c) an unemployment benefit or a job search allowance is not payable to the person because of an education leavers waiting period;

the person is to be taken to be receiving full-time education at a school, college or university during the period for the purposes of this Act.

Pension increase child

“(6) A child is a pension increase child of a person if:

(a) the person’s service pension rate includes a dependent child add-on for the child; or

(b) the person’s partner’s service pension rate or social security pension rate includes a dependent child add-on for the child.

Australian residence definitions

“5g. (1) In this Act, unless the contrary intention appears, ‘Australian resident’ means a person who:

(a) resides in Australia; and

(b) is one of the following:

(i) an Australian citizen;

(ii) a person who is, within the meaning of the Migration Act 1958, the holder of a valid permanent entry permit;

(iii) a person who has been granted, or who is included in, a return endorsement, or a resident return visa, in force under that Act;

(iv) a person who:

(a) is, for the purposes of that Act, an exempt non-citizen; and

(b) is likely to remain permanently in Australia.

Note: ‘exempt non-citizen’ is defined in section 5 of the Migration Act 1958: it covers non-citizens who are diplomats, members of armed forces, ships’ crew members and others and. under section 7 of that Act, exempt non-citizens do not need an entry permit or entry visa to enter Australia.

Papua New Guinea residents

“(2) For the purposes of this Act, a person (other than an indigenous inhabitant of the Territory of Papua or the Territory of New Guinea) resident in Papua New Guinea immediately before it became an independent sovereign State, is taken to be an Australian resident so long as the person continues to reside in Papua New Guinea.

“(3) If:

(a) a service pensioner is taken to be an Australian resident under subsection (2); and

(b) the pensioner’s partner was resident in Papua New Guinea after it became an independent sovereign State;

the partner is, for the purposes of Part III, also taken to be an Australian resident.

“(4) If:

(a) a service pensioner is taken to be an Australian resident under subsection (2); and

(b) the pensioner’s non-illness separated wife was resident in Papua New Guinea after it became an independent sovereign State;

the wife is, for the purposes of Part III, also taken to be an Australian resident.

Income test definitions

“5h. (1) in this Act, unless the contrary intention appears:

‘dispose of income’ has the meaning given by section 48;

‘domestic payment’ has the meaning given by subsection (3);

‘earned, derived or received’ has the meaning given by subsection (2);

‘home equity conversion agreement’, in relation to a person, means an agreement under which the repayment of an amount paid to or on behalf of the person, or the person’s partner, is secured by a mortgage of the principal home of the person or the person’s partner;

Note: see also subsection (7).

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

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

(b) a periodical payment by way of gift or allowance; or

but does not include an amount that is excluded under subsection (4), (5) or (8);

Note 1: see also sections 46-46u (investment income).

Note 2: sections 46b to 46d provide that a person who has an accruing return investment or market-linked investment is to be taken to receive a particular rate of return on the investment as income.

Note 3: section 46e provides that any return actually received by a person from an investment to which sections 46b to 46d applies is to be treated as if it were not income of the person.

Note 4: where a person or a person’s partner has disposed of income, the person’s income may be taken to include the amount which has been disposed of—see sections 48-48e.

Note 5: amounts of maintenance income are not excluded amounts.

‘income amount’ means:

(a) valuable consideration; or

(b) personal earnings; or

(d) profits;

(whether of a capital nature or not);

‘income from personal exertion’ means an income amount that is earned, derived or received by a person by way of payment for personal exertion by the person but does not include an income amount received as compensation for the person’s inability to earn, derive or receive income through personal exertion;

‘ordinary income’ means income that is not maintenance income.

Note: for ‘maintenance income’ see subsection 5k (I).

Earned, derived or received

“(2) A reference in this Act to an income amount earned, derived or received is a reference to:

(a) an income amount earned, derived or received by any means; and

(b) an income amount earned, derived or received from any source (whether within or outside Australia).

Domestic payments

“(3) A payment received by a person is a domestic payment for the purposes of this Act if:

(a) the person receives the payment on the disposal of an asset of the person; and

(b) the asset was used, immediately before the disposal, by the person or the person’s partner wholly or substantially for private or domestic purposes; and

(i) a period of 12 months before the disposal; or

(ii) if the Commission considers it appropriate—a period of less than 12 months before the disposal.

Excluded amounts—home equity conversion (not a member of a couple)

“(4) If a person is not a member of a couple, an amount paid to or on behalf of the person under a home equity conversion agreement is an excluded amount for the person to the extent that the total amount owed by the person from time to time under home equity conversion agreements does not exceed $40,000.

Excluded amounts—home equity conversion (member of a couple)

“(5) If a person is a member of a couple, an amount paid to or on behalf of the person or the person’s partner under a home equity conversion agreement is an excluded amount for the person to the extent that the total amount owed by the person and the person’s partner under home equity conversion agreements from time to time does not exceed $40,000.

Home equity conversion (amount owed)

“(6) For the purposes of this Act, the amount owed by a person under a home equity conversion agreement is the principal amount secured by the mortgage concerned and does not include:

(a) any amount representing mortgage fees; or

(b) any amount representing interest; or

Home equity conversion (principal home)

“(7) For the purposes of the definition of ‘home equity conversion agreement’ in subsection (1), an asset cannot be a person’s principal home unless the person or the person’s partner has a beneficial interest (but not necessarily the sole beneficial interest) in the asset.

Excluded amounts—general

“(8) The following amounts are not income for the purposes of this Act:

(a) a payment under this Part;

(b) a payment of an instalment of pension under Part II or IV;

(c) a payment of an instalment of a pension (other than a pension payable in respect of a child) payable because of subsection 4 (6) or (8b) of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986;

(d) a payment of an instalment of a pension under the Seamen’s War Pensions and Allowances Act 1940;

(e) a payment (other than a payment referred to in paragraph (b), (c) or (d)) that is a payment in respect of incapacity or death resulting from employment in connection with a war or warlike operations in which the Crown has been engaged;

Note: however, a payment referred to in paragraph (b), (c), (d) or (e) is taken into account in calculating the amount of rent assistance a person is entitled to, and may reduce that amount—see Rent Assistance Module of relevant Rate Calculator.

(f) a payment by way of allowance (other than a loss of earnings allowance) under Part VI of this Act;

(g) a payment, by way of allowance, under regulation 37 of the Seamen’s War Pensions and Allowances Regulations;

(h) a payment under the Social Security Act;

(i) if the person has not reached pension age—any return on a compulsorily preserved superannuation benefit of the person;

(j) the value of emergency relief or like assistance;

(k) the value of any assistance that:

(i) is provided by an eligible organisation within the meaning of the Homeless Persons Assistance Act 1974; and

(ii) is assistance that consists of providing:

(a) accommodation or meals; or

(b) a ticket, voucher or token that may be exchanged for accommodation or meals;

(l) a payment under the Handicapped Persons Assistance Act 1974;

(m) a payment under Part III of the Disability Services Act 1986 or

the value of any rehabilitation program (including any follow-up program) provided under that Part;

(n) a payment of domiciliary nursing care benefit under Part Vb of the National Health Act 1953;

(o) a payment under a Commonwealth law, one of whose objects is that of assisting people to purchase or build their own homes;

(p) a payment made to the person for or in respect of a child of the person;

(q) insurance or compensation payments made because of the loss of, or damage to, buildings, plant or personal effects;

(r) money from an investment that is:

(i) an investment of payments of the kind referred to in paragraph (q); and

(ii) an investment for:

(a) a period of not more than 12 months after the person receives the payments; or

(b) if the Commission thinks it appropriate—of 12 months or more after the person receives those payments;

(s) an amount paid:

(i) by the Federal Republic of Germany under the laws of that Republic; or

(ii) by a State of the Federal Republic of Germany under the laws of that State;

by way of compensation for a victim of National Socialist persecution;

(t) an amount paid by the Republic of Austria under the laws of that Republic by way of compensation to a victim of National Socialist persecution;

(u) if the person pays, or is liable to pay, rent—a payment by way of rent subsidy made by the Commonwealth, by a State or Territory or by an authority of the Commonwealth or of a State or Territory to or on behalf of the person who pays or who is liable to pay rent;

(v) a payment received by a trainee in full-time training under a program included in the programs known as the Labour Force Programs, to the extent that the payment includes one or more of the following amounts:

(i) an amount calculated by reference to a rate of unemployment benefit or job search allowance under the Social Security Act;

(ii) an amount known as the training component;

(iii) an amount by way of a living away from home allowance;

(w) a payment received by a trainee in part-time training under a program included in the programs known as the Labour Force Programs, if the trainee is also receiving:

(i) a service pension; or

(ii) an age pension; or

(iii) an invalid pension; or

(iv) a wife pension; or

(v) a carer pension; or

(vi) a sole parent pension; or

(vii) a sheltered employment allowance; or

(viii) a rehabilitation allowance;

(x) a payment received by the person under the scheme known as the New Enterprise Incentive Scheme;

(y) a benefit under a law of the Commonwealth that relates to the provision of:

(i) pharmaceutical, sickness or hospital benefits; or

(ii) medical or dental services;

(z) a payment that:

(i) is made by an organisation that is registered under a law referred to in paragraph (y); and

(ii) is made in respect of expenses incurred by a person for:

(a) hospital treatment; or

(b) medical treatment; or

(za) in the case of a member of:

(i) the Australian Naval Reserve; or

(ii) the Naval Emergency Reserve Forces; or

(iii) the Australian Army Reserve; or

(iv) the Australian Air Force Reserve; or

(v) the Air Force Emergency Force; or

(vi) the Regular Army Emergency Reserve;

the pay and allowances paid to the person as such a member (other than pay and allowances in respect of continuous full-time service) and, in the case of a member of a Force referred to in subparagraph (ii), (v) or (vi), any gratuity paid to the person by reason of a calling out for continuous service of that Force or of a part of that Force;

(zb) a payment to a veteran by way of:

(i) attendant allowance under section 98; or

(ii) recreation allowance under section 104; or

(iii) an allowance for the running and maintenance of a motor vehicle under the Vehicle Assistance Scheme referred to in section 105; or

(iv) decoration allowance under section 102; or

(v) Victoria Cross allowance under section 103; or

(vi) clothing allowance under section 97; or

(vii) a bereavement payment under Part III, or section 98a; or

(viii) a funeral benefit under Part VI; or

(ix) a bereavement payment under section 24b of the Seamen’s War Pensions and Allowances Act 1940; or

(x) a funeral benefit under the Seamen’s War Pensions and Allowances Regulations;

(zc) a payment to a mariner under the Seamen’s War Pensions and Allowances Act 1940 of a kind similar to a kind of payment referred to in paragraph (zb);

(zd) a periodical payment by way of gift or allowance, or a periodical benefit by way of gift or allowance, from the person’s father, mother, son, daughter, brother or sister;

(ze) the value of board or lodging received by the person;

(zf) a domestic payment;

(zg) a payment of an education supplement to a person who:

(i) is receiving an invalidity service pension; and

(ii) would, if the person were not receiving that pension, be eligible to receive payments under the AUSTUDY scheme.

Note: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Investment income definitions

“5j. (1) In this Act, unless the contrary intention appears:

‘accruing return investment’ means an arrangement by a person that consists of or includes an investment of money, being an investment:

(a) that produces:

(i) a fixed rate or quantifiable rate of return, whether or not that rate varies from time to time; or

(ii) a rate of return that may be reasonably approximated; and

(b) the value of which from time to time is unlikely to decrease as a result of market changes;

Note: a superannuation benefit may be taken to be an investment—see subsection (4).

‘annual rate of return’ has the meaning given by subsection (2);

‘approved deposit fund’ means a fund that is an approved deposit fund for the purposes of Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act;

‘assessable growth component’, in relation to an amount of superannuation benefit, means so much (if any) of the return as is attributable to the assessable period;

‘assessable period’, in relation to a person, means any period during which the person received:

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

(b) a social security benefit;

except any such period that occurs before a continuous period of at least 2 years during which the person did not receive such a pension or benefit;

Note: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

‘deductible amount’, in relation to an immediate annuity or a superannuation pension, is the amount that would be the deductible amount in relation to the annuity or superannuation pension in relation to a year of income under subsection 27h (2) of the Income Tax Assessment Act if ‘undeducted purchase price’ had the same meaning in that subsection as ‘non-assessable purchase price’ has in this Act;

‘deferred annuity’ means an annuity that is a deferred annuity for the purposes of Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act;

‘eligible investment’ means an investment that satisfies all of the following conditions:

(a) money or property invested is paid or transferred by the investor directly or indirectly to a body corporate or into a trust fund;

(b) the assets that represent money or property invested (in this definition called the ‘investment assets’) are held otherwise than in the names of investors;

(c) the investor does not, either alone or jointly with a relative or relatives of the investor, have effective control over the management of the investment assets;

(d) the investor has a legally enforceable right to share in any distribution of the income or profits derived from the investment assets;

‘friendly society’ means:

(a) a society registered as a friendly society under a law in force in a State or Territory; or

(b) a society that had, before 13 December 1987, been approved for the purpose of the definition of ‘friendly society’ in subsection 115 (1) of the Social Security Act;

and, for the purpose of the definition of ‘market-linked investment’ in this subsection, includes:

(c) a society that has been approved for the purposes of the definition of ‘friendly society’ in subsection 115 (1) of the Social Security Act on or after 13 December 1987; and

(d) a society that is an approved friendly society for the purposes of the Social Security Act;

‘immediate annuity’ means an annuity that is presently payable;

Note: for ‘presently payable’ see subsection (3).

investment product’ means a class of market-linked investments specified in a notice under subsection 9 (2) of the Social Security Act;

‘market-linked investment’ means:

(a) an investment in:

(i) an approved deposit fund; or

(ii) a deferred annuity; or

(iii) a public unit trust; or

(iv) an insurance bond; or

(b) an investment with a friendly society; or

(d) a superannuation benefit vested in a person and held in a superannuation fund (unless a superannuation pension funded by that benefit is presently payable to the person);

other than an investment that is:

(e) an accruing return investment; or

(f) an investment consisting of the acquisition of real property, stock or shares;

‘non-assessable purchase price’:

(a) in relation to an immediate annuity other than a roll-over immediate annuity—has the same meaning as ‘undeducted purchase price’ has in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act; or

(b) in relation to a roll-over immediate annuity—means the rollover purchase price; or

(c) in relation to a superannuation pension—has the same meaning as ‘undeducted purchase price’ has in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act;

‘public unit trust’ means a unit trust that:

(a) except where paragraph (b) applies—was, in relation to the unit trust’s last year of income, a public unit trust for the purposes of Division 6b of Part III of the Income Tax Assessment Act; or

(b) where the first year of income of the unit trust has not yet finished—has, at some time since the trust was established, satisfied at least one of the paragraphs of subsection 102g (1) of the Income Tax Assessment Act;

‘purchase price’, in relation to an annuity, has the meaning that it has in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act;

‘relevant number’, in relation to an annuity, has the meaning that it has in section 27h of the Income Tax Assessment Act;

‘residual capital value’, in relation to an annuity, has the meaning that it has in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act;

‘return’, in relation to an investment (including an investment in the nature of superannuation), means any increase, whether of a capital or income nature and whether or not distributed, in the value or amount of the investment;

‘rolled-over amount’, in relation to an annuity, has the meaning that it has in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act;

‘roll-over immediate annuity’, means an immediate annuity the purchase price of which consists wholly of a rolled-over amount or rolled-over amounts;

‘roll-over purchase price’, in relation to a roll-over immediate annuity, means:

(a) except where paragraph (b) applies—either the sum of the following amounts:

(i) the amount that would, under Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act, be the undeducted purchase price of the annuity;

(ii) the amount that is the upper limit under section 159sg of the Income Tax Assessment Act for the year of income in which the annuity was purchased;

or the purchase price of the annuity, whichever is less; or

(b) where:

(i) the roll-over immediate annuity, and another roll-over immediate annuity, have been purchased using the same rolled-over amount or rolled-over amounts in the name of the same person; and

(ii) the roll-over purchase price of the other roll-over immediate annuity has previously been worked out under paragraph (a) for the purposes of this Act;

the amount that would, under Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act, be the undeducted purchase price of the annuity;

‘statutory rate of return’ means 11% per year or such lower percentage per year as is specified in a notice in force under subsection 1087 (1) of the Social Security Act;

‘superannuation benefit’, in relation to a person, means a benefit arising directly or indirectly from amounts contributed (whether by the person or by any other person) to a superannuation fund in respect of the person;

‘superannuation fund’ means a superannuation fund as defined for the purposes of Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act, other than a fund covered by subparagraph (ia)

of the definition of ‘superannuation fund’ in subsection 27a (1) of that Act;

‘superannuation pension’ has the same meaning as it has in Subdivision AA of Division 2 of Part III of the Income Tax Assessment Act.

“(2) Where the value or amount at a particular time of a market-linked investment included in an investment product is equal to or less than the value or amount of that market-linked investment 12 months previously, the annual rate of return at that first-mentioned time for market-linked investments included in that investment product is to be taken, for the purposes of a determination under this Act, to be 0%.

“(3) For the purposes of this Act, an annuity or superannuation pension is to be taken to be presently payable at all times after, but not before, the commencement of the first period in respect of which the annuity or superannuation pension is payable.

“(4) For the purposes of the definition of ‘accruing return investment’ in subsection (1), a superannuation benefit vested in a person that is held in a superannuation fund is to be taken to be an investment of that person, unless a superannuation pension funded by that benefit is presently payable to the person.

“(5) For the purposes of this Act, a person’s superannuation benefit is compulsorily preserved if the person’s access to the benefit is restricted under:

(a) paragraph 23 (ja) of the Income Tax Assessment Act as in force at any time before 18 December 1987; or

(b) section 23fb of the Income Tax Assessment Act as in force at any time before 18 December 1987; or

(d) a provision of the trust deed or contract concerned that imposes restrictions corresponding to the restrictions imposed by a provision of the regulations made under section 7 or 8 of the Occupational Superannuation Standards Act 1987.

Maintenance income definitions

“5k. (1) In this Act, unless the contrary intention appears:

‘capitalised maintenance income’, in relation to a person, means maintenance income of the person:

(a) that is neither a periodic amount nor a benefit provided on a periodic basis; and

(b) the amount or value of which exceeds $1,500;

Note 1: see also section 51 (apportionment of capitalised maintenance income).

Note 2: if maintenance income is caught by paragraphs (a) and (b) of the definition, the whole amount or value of the maintenance income is capitalised maintenance income, not just the part of the maintenance income that exceeds the $1,500 limit.

‘cash maintenance’, in relation to a person, means maintenance income of the person that consists of the amount of a payment received by the person or by a child of the person;

Note: a ‘payment’ of an ‘amount’ would have to be a payment of money or the equivalent of a payment of money (e.g. a cheque, money order or electronic funds transfer (EFT)).

‘child support’ means financial support under the Child Support (Assessment) Act 1989 and includes financial support:

(a) by way of lump sum payment; or

(b) by way of transfer or settlement of property;

‘in-kind housing maintenance’, in relation to a person, means maintenance income of the person that is not cash maintenance and is received in relation to the provision of a residence that is, or is to be, the person’s principal home;

Note: see also subsections (4) and (5) and section 51a.

‘maintained child’, in relation to another person (in this definition called the ‘adult’), means a child who is:

(a) a dependant of the adult; and

(b) wholly or substantially dependent on the adult;

‘maintenance’ includes child support;

‘maintenance agreement’ means a written agreement (whether made within or outside Australia) that provides for the maintenance of a person (whether or not it also makes provision in relation to other matters), and includes such an agreement that varies an earlier maintenance agreement;

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

(a) child maintenance—that is, the amount of a payment or the value of a benefit that is received by the person for the maintenance of a maintained child of the person and is received from:

(i) a parent of the child; or

(ii) the partner or former partner of a parent of the child; or

(b) partner maintenance—that is, the amount of a payment or the value of a benefit that is received by the person for the person’s own maintenance and is received from the person’s partner or former partner; or

(c) direct child maintenance—that is, the amount of a payment or the value of a benefit that is received by a maintained child of the person for the child’s own maintenance and is received from:

(i) a parent of the child; or

(ii) the partner or former partner of a parent of the child;

Note: see also subsection (3) and section 51 (capitalised maintenance income).

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

(a) in-kind housing maintenance of the person; or

(b) in-kind maintenance of the person (other than in-kind housing maintenance or capitalised maintenance income) received from the person’s partner or former partner during the period of 6 months following the person’s separation from the partner or former partner; or

(c) maintenance income of the person provided in relation to expenses arising directly from a physical, intellectual or psychiatric disability, or a learning difficulty, of a maintained child of the person where the disability or difficulty is likely to be permanent or to last for an extended period.

Note: see also subsection 51a (1) (in-kind housing maintenance—value of substitute for former family home).

“(2) For the purposes of the definition of ‘maintenance income’ in subsection (1):

(a) a payment received under subsection 76 (1) of the Child Support (Registration and Collection) Act 1988 in relation to a registered maintenance liability (within the meaning of that Act) is taken to be received from the person who is the payer (within the meaning of that Act) in relation to the liability; and

(b) a reference to a benefit received by a person includes a reference to a benefit received by the person because of a payment made to, or a benefit conferred on, another person (including a payment made or benefit conferred under a liability owed to the other person); and

(i) directly or indirectly from the person; and

(ii) out of any assets of, under the control of, or held for the benefit of, the person; and

(iii) from the person under or as a result of a court order, a court registered or approved maintenance agreement or otherwise.

“(3) For the purposes of the definition of ‘in-kind housing maintenance’ in subsection (1), maintenance received in relation to the provision of a residence includes maintenance consisting of:

(a) a benefit received because of the transfer or settlement of a right or interest in relation to the residence; and

(b) where there is a secured housing loan on the residence—a benefit received because of:

(i) the payment of interest, charges or other amounts under the loan; or

(ii) the repayment of amounts borrowed under the loan; and

(c) a benefit received because of the payment of rent (including Government rent), or a like payment, in relation to the residence.

“(4) For the purposes of paragraph (3) (b), there is a secured housing loan on a residence if:

(a) there is a loan that is secured by a mortgage or other interest in relation to the residence; and

(b) the sole or principal purpose of the loan is to enable the residence, or a right or interest in relation to the residence, to be acquired.

Assets test definitions

“5l. (1) In this Act, unless the contrary intention appears:

‘asset’ means property (including property outside Australia);

‘dispose’, in relation to an asset:

(a) has its ordinary meaning in Subdivision E of Division 14 (pension loans scheme); and

(b) has the meaning given by section 52e in the rest of the Act;

‘exempt assets’ means assets described in any of paragraphs 52 (1) (e) to (n);

‘interest that gives reasonable security of tenure’ has the meaning given by subsection (8);

‘pension year’ has the meaning given by subsection (9);

‘PLS assets’, in relation to a person, means all the person’s assets (other than exempt assets):

(a) that cannot readily be sold or realised; or

(b) that:

(i) the person does not wish to sell or realise; and

(ii) are not of a kind that the person could reasonably be expected to sell or realise;

Note: this definition is relevant only to the pension loans scheme (Division 14, Subdivision E).

‘principal home’ has the meaning given by subsections (5), (6) and (7);

‘property owner’ has the meaning given by subsection (4);

‘unrealisable asset’ has the meaning given by subsections (11) and (12);

‘value’ has the meaning given by subsections (2) and (3).

Note: see also sections 52 (certain assets to be disregarded in calculating the value of a person’s assets), 52c (effect of charge or encumbrance on value of property) and 52k-52x (retirement villages).

“(2) A reference in this Act to the value of a particular asset of a person is, if the asset is owned by the person jointly or in common with another person or persons, a reference to the value of the person’s interest in the asset.

“(3) A reference in this Act to the value of a charge or encumbrance on an asset of a person is, if the asset is owned by the person jointly or in common with another person or persons, a reference to the value of that charge or encumbrance in so far as it relates to the person’s interest in the asset.

Property owner

“(4) For the purposes of this Act:

(a) a person who is not a member of a couple is a property owner if:

(i) the person has a right or interest in the person’s principal home; and

(ii) the person’s right or interest in the home gives the person reasonable security of tenure in the home; and

(b) a person who is a member of a couple is a property owner if:

(i) the person, or the person’s partner, has a right or interest in one residence that is:

(a) the person’s principal home; or

(b) the partner’s principal home; or

(ii) the person’s right or interest, or the partner’s right or interest, in the home gives the person or the person’s partner reasonable security of tenure in the home; and

(i) the person has sold the person’s principal home not more than 12 months previously; and

(ii) the person is likely to apply some or all of the proceeds of the sale in acquiring another residence that is to be the person’s principal home.

Note: see also sections 52k-52x (retirement villages).

Principal home

“(5) A reference in this Act to the principal home of a person includes a reference to:

(a) if the principal home is a dwelling-house—the private land adjacent to the dwelling-house to the extent that the private land, together with the area of the ground floor of the dwelling-house, does not exceed 2 hectares; or

(b) if the principal home is a flat or home unit—a garage or storeroom that is used primarily for private or domestic purposes in association with the flat or home unit.

Note: for ‘private land’ see subsection (6).

“(6) A reference in subsection (5) to private land adjacent to a dwelling-house is a reference to land that is adjacent to the dwelling-house and that is used primarily for private or domestic purposes in association with that dwelling-house.

“(7) A residence of a person is to be taken to continue to be the person’s principal home during:

(a) any period (not exceeding 12 months) during which the person is temporarily absent from the residence; and

(b) any period (not exceeding 2 years) during which the person is:

(i) residing in a benevolent home or in premises at which accommodation is provided exclusively or principally for persons who have a mental disability; or

(ii) residing in a nursing home; or

(iii) a nursing-home type patient, within the meaning of the Health Insurance Act 1973, of a hospital.

Note: for ‘residing in a nursing home’ see subsection 5n (1).

“(8) If a person has a right or interest in the person’s principal home, the person is to be taken to have a right or interest that gives the person reasonable security of tenure in the home unless the Commission is satisfied that the right or interest does not give the person reasonable security of tenure in the home.

Pension year—disposal of assets

“(9) A reference in sections 52e to 52j (disposal of assets) to a pension year, in relation to a person who is receiving a service pension or a social security pension is a reference to:

(a) if the person is a member of a couple and the person and the person’s partner were, immediately before they became members of that couple, receiving such a pension—the period of 12 months commencing on the day on which they became members of that couple; or

(b) in a case (not being a case referred to in paragraph (a)) where the person is a member of a couple and the person’s partner is receiving such a pension—the period of 12 months commencing on the day on which such a pension first became payable to the person or to the person’s partner, whichever was the earlier; or

and to each succeeding and each preceding period of 12 months.

“(10) The lending of money after 22 May 1986 is not a disposition of an asset for the purposes of section 52e.

Unrealisable asset

“(11) An asset of a person is an unrealisable asset if:

(a) the person cannot sell or realise the asset; and

(b) the person cannot use the asset as a security for borrowing.

“(12) For the purposes of the application of this Act to a service pension, an asset of a person is also an unrealisable asset if:

(a) the person could not reasonably be expected to sell or realise the asset; and

(b) the person could not reasonably be expected to use the asset as a security for borrowing.

Retirement villages definitions

“5m. (1) In this Act:

‘actual value’ has the meaning given by subsection (5);

‘retirement village’ has the meaning given by subsections (3) and (4).

“(2) A person is a member of an ordinary couple with different principal homes if:

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

(b) the person does not share the person’s principal home with the person’s partner; and

“(3) Premises constitute a retirement village for the purposes of this Act if:

(a) the premises are residential premises; and

(b) accommodation in the premises is primarily intended for persons who are at least 55 years old; and

(i) one or more of the following kinds of accommodation:

(a) self-care units;

(b) serviced units;

(ii) communal facilities for use by occupants of the units referred to in subparagraph (i).

“(4) Residential premises are also to be taken to constitute a retirement village for the purposes of this Act if, in the Commission’s opinion, the premises have similar functions to those referred to in subsection (3).

“(5) In Subdivision C of Division 14 (retirement villages) a reference to the actual value of the assets of a member of a couple is a reference to the value of the assets that are actually assets of the person rather than the person’s partner, that is, the value than would be the value of the person’s assets apart from the couple’s assets deeming provisions.

“(6) In subsection (5):

‘couple’s assets deeming provisions’ means:

(a) Service Pension Rate Calculator Where There Are No Dependent Children (point 41-F2); and

(b) Service Pension Rate Calculator Where There Are Dependent Children (point 42-G2); and

Rent definitions

“5n. (1) In this Act, unless the contrary intention appears:

‘amount of rent paid or payable’ has the meaning given by subsections (6) and (7);

‘board’, when used in the expression ‘board and lodging’, means the provision of meals on a regular basis in connection with the provision of lodging;

‘disability pension’, for the purposes of Part III, means:

(a) a pension under Part II or IV; or

(b) temporary incapacity allowance under Part VI; or

(c) a pension payable because of subsection 4 (6) or (8b) of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986 (other than a pension payable in respect of a child); or

(d) a pension under the Seamen’s War Pensions and Allowances Act 1940; or

(e) temporary incapacity allowance under regulation 38b of the Seamen’s War Pensions and Allowances Regulations; or

(f) a payment (other than a pension referred to in paragraph (a), (c) or (d) of this definition) that is a payment in respect of incapacity or death resulting from employment in connection with a war or war-like operations in which the Crown has been engaged;

‘Government rent’ means rent payable to any of the following authorities:

(a) New South Wales Land and Housing Corporation;

(b) the Director, within the meaning of the Housing Act 1983 of the State of Victoria;

(d) The Corporation of the Director of Aboriginal and Islanders Advancement established by a law of Queensland;

(e) the South Australian Housing Trust;

(f) The State Housing Commission established by a law of Western Australia;

(g) the Director-General of Housing and Construction holding office under a law of Tasmania;

(h) the Northern Territory Housing Commission;

(i) The Commissioner for Housing within the meaning of the Housing Assistance Act 1987 of the Australian Capital Territory;

‘ineligible property owner’ means a property owner other than:

(a) a person who is a property owner by virtue of paragraph 5l (4) (c) (proceeds of sale of principal home disregarded for 12 months); or

(b) a person who:

(i) is a member of a couple; and

(ii) is in approved respite care; and

(iii) has remained, or in the Commission’s opinion is likely to remain, in approved respite care for at least 14 consecutive days; or

(d) a person who pays amounts for the use of a site for a caravan or other vehicle, or a structure, that is the person’s principal home; or

(e) a person who pays amounts for the right to moor a vessel that is the person’s principal home;

Note: for ‘retirement village’ see subsections 5m (3) and (4), for ‘property owner’ see subsection 5l(4), for ‘principal home’ see subsections 5l (5), (6) and (7) and for ‘approved respite care’ see subsection 5r (8).

‘rent’ has the meaning given by subsection (2);

‘residing in a nursing home’ has the meaning given by subsection (8).

“(2) Amounts are rent in relation to the person if:

(a) the amounts are payable by the person:

(i) as a condition of occupancy of premises, or of a part of premises, occupied by the person as the person’s principal home; or

(ii) for services provided in a retirement village that is the person’s principal home; or

(iii) if the person is residing in a nursing home that is the person’s principal home—for accommodation in the nursing home; or

(iv) for lodging in premises that are the person’s principal home; or

(v) for the use of a site for:

(a) a caravan or other vehicle; or

(b) a structure;

occupied by the person as the person’s principal home; or

(vi) for the right to moor a vessel that is occupied by the person as the person’s principal home; and

(b) either:

(i) the amounts are payable every 3 months or more frequently; or

(ii) the amounts are payable at regular intervals (greater than 3 months) and the Commission is satisfied that the amounts should be treated as rent for the purposes of this Act.

Note: for ‘retirement village’ see subsections 5m (3) and (4) and for ‘principal home’ see subsections 5l (5), (6) and (7).

“(3) Subparagraphs (2) (a) (ii) to (vi) (inclusive) do not limit the generality of subparagraph (2) (a) (i).

“(4) Amounts are rent in relation to a person if:

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

(b) the amounts are paid by the person, or the person’s partner, for approved respite care for the person in a nursing home; and

(c) the person has remained, or is in the Commission’s opinion likely to remain, in the approved respite care for at least 14 consecutive days.

Note: for ‘approved respite care’ see subsection 5r (8).

“(5) If a law of a State or of the Northern Territory alters the name of an authority referred to in the definition of ‘Government rent’ in subsection (1), a reference to that authority in that definition is to be read as a reference to the authority under the new name.

Board and lodging

“(6) Where:

(a) a person pays, or is liable to pay, amounts for board and lodging; and

(b) it is not possible to work out the part of each of those amounts that is paid or payable for lodging;

the amount of rent paid or payable by the person is, for the purposes of this Act, to be taken to be two-thirds of the amounts paid or payable as mentioned in paragraph (a).

Nursing homes

“(7) Where:

(a) a person who is residing in a nursing home pays, or is liable to pay, amounts for accommodation and other services in the nursing home; and

(b) it is not possible to work out the part of each of those amounts that is paid or payable in respect of accommodation;

the amount of rent paid or payable by the person is, for the purposes of this Act, to be taken to be two-thirds of the amounts paid or payable as mentioned in paragraph (a).

“(8) Unless the contrary intention appears, a reference in this Act to a person residing in a nursing home is a reference to a person who is:

(a) residing in a benevolent home or in premises at which accommodation is provided exclusively or principally for persons who have a mental disability; or

(b) residing in premises that are:

(i) an approved nursing home for the purposes of the National Health Act 1953 or the Nursing Homes Assistance Act 1974; or

(ii) an approved home for the purposes of the Aged or Disabled Persons Homes Act 1954; or

(iii) an approved hostel for the purposes of the Aged or Disabled Persons Hostels Act 1972; or

(d) residing in premises made available for the accommodation of the person by an approved organisation providing hostel care services or personal care services to the person for the purposes of Part III of the Aged or Disabled Persons Homes Act 1954.

Bereavement definitions

“5p. For the purposes of this Act, if a person dies:

(a) the bereavement period in relation to the person’s death is the period of 14 weeks from the day on which the person dies; and

(b) the bereavement notification day in relation to the person’s death is the day on which the Commission becomes aware of the death; and

(c) the first available bereavement adjustment payday in relation to the person’s death is the first payday after the bereavement notification day for which it is practicable to terminate or adjust payments under this Act to take account of the person’s death; and

(d) the bereavement rate continuation period in relation to the person’s death is the period:

(i) that begins on the day on which the bereavement period begins; and

(ii) that ends:

(a) if the first available bereavement adjustment payday is before the end of the bereavement period—on the day before the first available bereavement adjustment payday; or

(b) if the first available bereavement adjustment payday occurs on or after the day on which the bereavement period ends—the day on which the bereavement period ends; and

(e) there is a bereavement lump sum period in relation to the person’s death if the first available bereavement adjustment payday occurs before the end of the bereavement period and the bereavement lump sum period is the period that begins on the first available bereavement adjustment payday and ends on the day on which the bereavement period ends.

General definitions

“5q. (1) In this Act, unless the contrary intention appears: ‘account’, in relation to a credit union or building society, means an account maintained by a person with the credit union or building society to which is credited money received on deposit by the credit union or building society from that person;

‘actual market exchange rate’ in relation to a foreign currency, means the on-demand airmail buying rate in relation to that foreign currency available at the Commonwealth Bank of Australia;

‘additional amounts for dependent children’ means amounts added to the maximum basic rate of a service pension by way of dependent child add-on or guardian allowance;

‘approved Guide to the Assessment of Rates of Veterans’ Pensions’ means:

(a) the document, prepared by the Commission under section 29 under the title ‘Guide to the Assessment of Rates of Veterans’ Pensions’, that has been approved by the Minister and is for the time being in force; or

(b) if an instrument varying that document has been approved by the Minister, that document as so varied;

‘approved Treatment Principles’ means:

(a) the document, prepared by the Commission under section 90 under the title ‘Treatment Principles’, that has been approved by the Minister, and is for the time being in force; or

(b) if an instrument varying that document has been approved by the Minister, that document as so varied;

‘Australia’ includes the external territories for the purposes of Part III;

‘benevolent home’ means a home that is a benevolent home for the purposes of the Social Security Act;

‘Board’ means the Veterans’ Review Board continued in existence by section 134;

‘building society’ means an organisation registered as a permanent building society under a law of a State or Territory;

‘credit union’ means an organisation registered as a credit union under a law of a State or Territory;

‘decision’ includes a determination and an assessment;

‘dependent child add-on’ means an amount included in a person’s service pension rate under:

(a) point 42-C1 of Service Pension Rate Calculator Where There are Dependent Children; or

(b) point 43-C3 of the Service Pension Rate Calculator for Blinded Veterans (items 1, 2 and 3 of Table C-2);

‘determination of entitlement’, in relation to a person means a determination:

(a) whether the person is eligible for a pension under this Act; or

(b) whether a pension under this Act is payable to the person; or

‘foreign exchange period’ means:

(a) the period commencing 20 September and ending on the day before the pension payday that falls closest to the middle of the 6 month period commencing 20 September; and

(b) the period starting from the pension payday referred to in paragraph (a) and ending on 19 March; and

(c) the period commencing 20 March and ending on the day before the pension payday that falls closest to the middle of a 6 month period commencing 20 March; and

(d) the period starting from the pension payday referred to in paragraph (c) and ending on 19 September;

‘general rate’ means the maximum rate per fortnight specified in subsection 22 (3);

‘guardian allowance’ means an amount included in a person’s service pension rate under:

(a) point 42-C5 of the Service Pension Rate Calculator Where There Are Dependent Children; or

(b) point 43-C3 of the Service Pension Rate Calculator for Blinded Veterans (item 4 of Table C-3);

‘incentive allowance’ means an incentive allowance under the Social Security Act;

‘income support pension’ means:

(a) a service pension; or

(b) a social security pension; or

‘Income Tax Assessment Act’ means the Income Tax Assessment Act 1936;

‘joint ownership’ includes ownership as joint tenants or tenants in common;

‘organisation representing veterans’ means:

(a) an organisation:

(i) whose members include veterans throughout the Commonwealth; and

(ii) whose objects include that of representing veterans throughout the Commonwealth; or

(b) an organisation:

(i) whose members include persons throughout the Commonwealth who are receiving or eligible to receive pensions under Part II as dependants of veterans; and

(ii) whose objects include that of representing those persons throughout the Commonwealth;

‘pension age’ means:

(a) for a veteran who is a woman—the age of 55 years; or

(b) for a veteran who is a man—the age of 60 years; or

(d) for any other man—the age of 65 years;

‘pension payday’ means:

(a) the Thursday falling on 11 July 1991; and

(b) each succeeding alternate Thursday;

‘pension period’ means a period of 2 weeks that:

(a) starts immediately after a pension payday; and

(b) ends at the end of the next pension payday;

‘physically present in a remote area’ has the meaning given by subsection (2);

‘port’ includes airport;

‘remote area’ means:

(a) those parts of Australia referred to in paragraphs 1 and 2 of Part I of Schedule 2 to the Income Tax Assessment Act; and

(b) the Territory of Cocos (Keeling) Islands; and

‘remunerative work’ includes any remunerative activity;

‘respite period’ in relation to a person who is in approved respite care, means the period:

(a) starting when the person is admitted to that care; and

(b) ending when the person:

(i) is discharged from that care; or

(ii) dies while still in that care;

‘Secretary’ means the Secretary to the Department;

‘service pension’ means:

(a) an age service pension; or

(b) an invalidity service pension; or

(d) a carer service pension;

‘service pensioner’ means a person who is receiving a service pension;

‘Social Security Act’ means the Social Security Act 1991;

‘social security benefit’ means:

(a) unemployment benefit under Part 2.9; or

(b) job search allowance under Part 2.10; or

(d) special benefit under Part 2.13;

of the Social Security Act;

‘social security pension’ means:

(a) age pension under Part 2.1; or

(b) invalid pension under Part 2.2; or

(d) carer pension under Part 2.4; or

(e) sole parent pension under Part 2.5; or

(f) widowed person allowance under Part 2.6; or

(g) widow B pension under Part 2.12; or

(h) sheltered employment allowance under Part 2.7; or

(i) rehabilitation allowance under Part 2.8;

of the Social Security Act.

“(2) If:

(a) a person’s usual place of residence is in the remote area; and

(b) the person is absent from the remote area for a period;

the person is to be taken to be physically present in the remote area during:

(d) if the period exceeds 8 weeks—the first 8 weeks of that period.

“(3) Subsection (2) does not apply to a person in respect of a period during which the person is outside Australia.

Determinations having interpretative effect

Continuous full-time service determination; member of unit of Defence Force determination

“5r. (1) The Minister may, by notice in writing published in the Gazette, make, in respect of a person, or of persons included in a class of persons, specified in the notice, all or any of the following determinations:

(a) a determination that this Act, or specified provisions of this Act, are to apply to and in relation to the person, or a person included in that class of persons, as if he or she was, while he or she was rendering service of a kind specified in the notice (in this subsection referred to as ‘relevant service’), a member of the Defence Force who was rendering continuous full-time service;

(b) a determination that this Act, or specified provisions of this Act, are to apply to and in relation to the person (being a member of the Defence Force), or a person included in that class of persons (being members of the Defence Force), as if he or she was, while he or she was rendering relevant service, rendering continuous full-time service;

(c) a determination that this Act, or specified provisions of this Act, are to apply to and in relation to the person, or a person included in that class of persons, as if he or she was, while he or she was rendering relevant service, a member of a specified unit of the Defence Force;

and, if the Minister does so, this Act applies, or the specified provisions of this Act apply, as the case may be, accordingly.

Note: for ‘continuous full-time service’ and ‘member of a unit of the Defence Force’ see subsection 5c (1).

Allied veteran determination

“(2) If a person who is a claimant for an age service pension or an invalidity service pension satisfies the Commission:

(a) that the person had been appointed or enlisted as a member of the forces or services of:

(i) an allied country, being forces or services of a kind referred to in the definition of ‘defence force established by an allied country’; or

(ii) the government-in-exile of an allied country, being forces or services of a kind referred to in subsection 5c (3); and

(b) that those forces or services were raised and operated in such a manner that the members of those forces and services:

(i) were formally appointed to, or enlisted in, those forces or services; and

(ii) were subject to the rules and conventions of warfare; and

(c) that the person was not required, as such a member, to wear a uniform or insignia distinguishing the person as a member of those forces or services or to carry arms at all or to carry arms openly; and

(d) that it would have been unreasonable, having regard to the conditions existing, at the time the person served in those forces or services, in the parts of that country in which the person so could serve, for the person to have been required to wear a uniform or insignia or to carry arms or to carry arms openly;

the Commission must determine that the person is, for the purposes of the definition of ‘allied veteran’ in subsection 5c (1) to be treated as a person who has been appointed or enlisted as a member of the defence force established by that allied country or that government-in-exile.

Person may be treated as not being a member of a couple

“(3) The Commission may determine, for any special reason, that a person who is a member of a couple is not to be treated as a member of a couple for the purposes of this Act.

Note: for ‘member of a couple’ see subsection 5e (2).

“(4) The determination must be in writing.

Illness separated couple determination

“(5) If the Commission is satisfied that:

(a) 2 people are members of a couple; and

(b) they are unable to live together in a matrimonial home as a result of the illness or infirmity of either or both of them; and

(c) because of that inability to live together, their living expenses are, or likely to be greater than they would otherwise be; and

(d) that inability is likely to continue indefinitely;

the Commission may make a written determination that the 2 people are members of an illness separated couple for the purposes of this Act.

Respite care couple determination

“(6) If the Commission is satisfied that:

(a) 2 people are members of a couple; and

(b) one of the members of the couple has entered approved respite care; and

(c) the member who has entered the approved respite care has remained, or is likely to remain, in that care for at least 14 consecutive days;

the Commission may make a written determination that the 2 people are members of a respite care couple for the purposes of this Act.

“(7) A determination under subsection (6) takes effect from the day specified by the Commission in the determination, being a day not earlier than 3 months before the Commission is notified that the person has entered approved respite care.

Approved respite care determination

“(8) For the purposes of Part III, a person is in approved respite care if:

(a) the person is a benefit respite care patient as defined in the National Health Act 1953 (as modified by the National Health (Nursing Home Respite Care) Regulations); or

(b) the person is a leave respite care patient as defined in the National Health Act 1953 (as modified by the National Health (Nursing Home Respite Care) Regulations); or

(c) the person is an eligible person as defined in the Aged or Disabled Persons Home Act 1954 and is occupying a respite care place as defined in that Act.

Prescribed student child determination

“(9) Where the Commission is satisfied that payments:

(a) under the Tertiary Education Assistance Scheme or the Secondary Allowance Scheme; or

(b) under:

(i) the Veterans’ Children Education Scheme; or

(ii) the AUSTUDY Scheme; or

(iii) the Assistance for Isolated Children Scheme; or

are being or will be made to or in respect of a child who has turned 16 (other than a child by reference to whom the rate of those payments is increased) the Commission must, by determination in writing, declare that child to be a prescribed student child for the purposes of this Act as from a day specified in the determination.

“(10) The day specified in the determination may be a day before the day on which the determination is made but must not be a day before:

(a) in a case to which paragraph (8) (a) applies—1 January 1986; or

(b) in a case to which (8) (b) applies—1 January 1987; or

Date of effect of determination granting pension or allowance

“5s. Where a determination has been made under this Act that a pension or allowance is payable as from a particular day (in this subsection called the ‘day of effect’) that is not a pension payday, the pension or allowance is payable on and from the next pension payday after the day of effect.”.

4. After section 7 of the Principal Act the following section is inserted:

Qualifying service

“7a. (1) For the purposes of Part III, a person has rendered qualifying service:

(a) if the person has, as a member of the Defence Force:

(i) rendered service, during a period of hostilities specified in paragraph (a) or (b) of the definition of ‘period of hostilities’ in subsection 5b (1), at sea, in the field or in the air in naval, military or aerial operations against the enemy in an area, or on an aircraft or ship of war, at a time when the person incurred danger from hostile forces of the enemy in that area or on that aircraft or ship; or

(ii) rendered service after 29 October 1945 in respect of which the person has been awarded, or has become eligible to be awarded, the Naval General Service Medal or the General Service Medal (Army and Royal Air Force) with the Minesweeping 1945-51 Clasp, the Bomb-Mine Clearance 1945-53 Clasp, the Bomb and Mine Clearance 1945-49 Clasp or the Bomb and Mine Clearance 1945-56 Clasp; or

(iii) rendered service outside Australia:

(a) as a member of a unit of the Defence Force that was allotted for duty; or

(b) while the person was allotted for duty;

in an area described in item 1, 2, 4, 5, 6, 7 or 8 of Schedule 2 (in column 1) during the period specified in column 2 of that Schedule opposite to that description; or

(iv) rendered service outside Australia:

(a) as a member of a unit of the Defence Force that was allotted for duty; or

(b) while the person was allotted for duty;

in an area described in item 3 of Schedule 2 (in column 1) during the period specified in column 2 of that Schedule opposite to that description, being service in respect of which the person has been awarded, or has become eligible to be awarded, a British General Service Medal with the Malaya Clasp; or

(v) rendered service as a member of the United Nations Transition Assistance Group (UNTAG) Namibia, being a force that is designated as required to be armed, in the area described in item 9 of Schedule 2 (in column 1) during the period specified in column 2 of that Schedule opposite to that description; or

(b) if, during a period of hostilities, the person has, as a member of the defence force established by a Commonwealth country, rendered, in connection with war or war-like operations in which the Naval, Military or Air Forces of Australia were engaged (not being war or war-like operations so engaged in as part of, or in association with, the British Commonwealth Far East Strategic Reserve):

(i) service, in an area outside that country, at a time when the person incurred danger from hostile forces of the enemy in that area; or

(ii) service within that country, being service in respect of which the person has been awarded, or has become eligible to be awarded, a campaign medal; or

(c) if the person is an allied veteran who, during a period of hostilities, has, as a member of the defence force established by an allied country, rendered, in connection with a war, or war like operations, in which the Naval, Military or Air Forces of Australia were engaged, service in an area within or outside the country in which the person enlisted in those forces, being service in respect of which the person incurred danger from hostile forces of the enemy; or

(d) if the person was, during a period of hostilities specified in paragraph (a) or (b) of the definition of ‘period of hostilities’ in subsection 5b (1), employed by the Commonwealth on a special mission outside Australia, and, in the course of carrying out that mission, incurred danger from hostile forces of the enemy; or

(e) if the person is an eligible civilian within the meaning of subsection 5c (1) who was, during a period of hostilities specified in paragraph 5b (1) (b) of the definition of ‘period of hostilities’, detained by the enemy; or

(f) if the person is a person in respect of whom a pension is payable in pursuance of subsection 13 (6); or

(g) if the person is an Australian mariner as defined by subsection 5c (1) who, in the course of:

(i) any service rendered by the person in employment of a kind specified in paragraph (a), (b), (c), (e) or (g) of that definition; or

(ii) any service rendered by the person as a pilot referred to in paragraph (d) of that definition; or

(iii) any service rendered by the person as a member or employee of the Commonwealth Salvage Board;

was on a ship or in an area at a time when the person incurred danger from hostile forces of the enemy on the ship or in the area, as the case may be; or

(h) if the person is an allied mariner who, in the course of any service rendered by the person in employment of a kind to which paragraphs (a) and (b) of the definition of ‘allied mariner’ in subsection 5 (1) applies:

(i) was detained by the enemy; or

(ii) was in an area service in which would, if the person had been a member of the Defence Force, have entitled the person to the award of a campaign medal and incurred, while he or she was in that area, danger from hostile forces of the enemy.

“(2) In subparagraphs (1) (b) (ii) and (1) (h) (ii):

‘campaign medal’, in relation to service during the period of World War 2 from its commencement to and including 29 October 1945, means:

(a) any of the following medals:

(i) 1939-45 Star;

(ii) Atlantic Star;

(iii) Air Crew Europe Star;

(iv) Africa Star;

(v) Pacific Star;

(vi) Burma Star;

(vii) Italy Star;

(viii) France and Germany Star; or

(b) any other medal declared by the regulations to be a campaign medal in relation to service during that period.”.

Repeal of Part III and substitution of new Part

5. Part III of the Principal Act is repealed and the following Part is substituted:

“PART III—SERVICE PENSIONS

“Division 1—General features

Order and structure of Divisions

“35. (1) In this Part:

(a) Division 2 deals with claims for qualifying service; and

(b) Divisions 3, 4, 5 and 6 deal with the 4 kinds of service pension (age, invalidity, wife and carer service pension respectively); and

(d) the remaining Divisions deal with provisions of general application to the 4 kinds of service pension (for example, the assets test and income test and recipient obligations).

“(2) In Divisions 3, 4, 5 and 6 (dealing with each kind of service pension) this is the order in which the provisions are presented:

(a) eligibility provisions (who is entitled to the pension);

(b) claim provisions (how a claim is made);

(d) bereavement payments (payments available when a person’s partner or child has died).

“(3) Other relevant provisions are referred to in notes at the bottom of key provisions in the Division.

Eligibility for and payability of service pension

“35a. Before a person can be paid a service pension under this Part:

(a) the person must be eligible for the pension; and

(b) there must be nothing in this Act that makes the pension not payable to the person (for example, a dual pension provision): the pension must be ‘payable to the person’.

“Division 2—Claim for qualifying service

“Subdivision A—Claim

Need for a claim

“35b. A veteran who wants to establish that he or she has rendered qualifying service must make a proper claim for a determination that he or she has rendered such service.

Note 1: a veteran will need to establish the rendering of qualifying service in order to be eligible for age service pension or invalidity service pension (see subsections 36 (1) and 37 (1)).

Note 2: for ‘qualifying service’ see section 7a.

Who can claim?

“35c. (1) Subject to subsection (2), a claim for a qualifying service determination must be made by:

(a) the veteran who wants to establish that he or she has rendered qualifying service; or

(b) with the approval of the veteran—another person on the veteran’s behalf.

“(2) If the veteran is unable, because of physical or mental incapacity, to approve another person to make the claim on his or her behalf, the Commission may approve another person to make the claim.

Form of claim

“35d. To be a proper claim, the claim must be:

(a) made in writing; and

(b) in accordance with a form approved by the Commission; and

Lodgment of claim

“35e. (1) To be a proper claim, the claim must be lodged:

(a) at an office of the Department in Australia; or

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

“(2) The claim is taken to have been lodged on the day it is received:

(a) at an office of the Department in Australia; or

(b) at a place approved under subsection (1); or

as the case may be.

Withdrawal of claim

“35f. (1) The claimant may withdraw the claim at any time before it is determined by the Commission.

“(2) To withdraw the claim, the claimant must give written notice of withdrawal to the Secretary and the notice must be lodged at an office of the Department in Australia.

“(3) A claimant who withdraws a claim may subsequently make another claim for a determination that he or she has rendered qualifying service.

“Subdivision B—Investigation of claim

Secretary to investigate claim and submit it to Commission

“35g. (1) If a veteran makes a proper claim for a determination that he or she has rendered qualifying service, the Secretary must cause an investigation to be made into the matters to which the claim relates.

“(2) When the investigation is completed, the Secretary must cause the claim to be submitted to the Commission for consideration and determination.

“(3) When the claim is submitted to the Commission it must be accompanied by:

(a) any evidence supplied by the claimant in support of the claim; and

(b) any documents or other evidence obtained by the Department in the course of the investigation that are relevant to the claim; and

“Subdivision C—Consideration and determination of claim

Duties of Commission in relation to claim

“35h. (1) When the claim is submitted to the Commission, the Commission must consider all matters that are, in the Commission’s opinion, relevant to the claim and must then determine the claim.

“(2) In considering the claim, the Commission must:

(a) satisfy itself with respect to; or

(b) determine;

(as the case requires) all matters relevant to the determination of the claim.

“(3) Without limiting subsection (1), the Commission, in considering the claim, must consider:

(a) the evidence submitted with the claim under section 35g; and

(b) any further evidence subsequently submitted to the Commission in relation to the claim.

Note: a claimant may apply to the Commission for review of a determination made under this section (see Division 19).

Determination of qualifying service to be proof of qualifying service

“35j. A determination by the Commission that a veteran has rendered qualifying service is proof, for all purposes of this Act, that the veteran has rendered qualifying service.

Note: this provision also applies to a decision of the Administrative Appeals Tribunal that a person has rendered qualifying service. This is because subsection 43 (6) of the Administrative Appeals Tribunal Act 1975 provides that the Tribunal’s decision is taken to be the decision of the original decision-maker (in this case, the Commission).

“Division 3—Age service pension

“Subdivision A—Eligibility for and payability of age service pension

Eligibility for age service pension

“36. (1) Subject to subsection (4), a person is eligible for an age service pension if the person:

(a) is a veteran; and

(b) has rendered qualifying service; and

(i) if the person is a woman—55; or

(ii) if the person is a man—60.

Note: for ‘qualifying service’ see section 7a.

Additional eligibility criterion for Commonwealth veterans, allied veterans and allied mariners

“(2) A person who is a veteran by reason only of being a Commonwealth veteran, an allied veteran or an allied mariner must, in addition to meeting the requirements of subsection (1), have been an Australian resident for a continuous period of at least 10 years.

“(3) Where:

(a) a veteran has been an Australian resident during more than one period; and

(b) the longer or longest of those periods is less than 10 years but is not less than 5 years; and

in the application of subsection (2) to the veteran, the period of 10 years specified in that subsection is to be reduced by a period equal to the period by which the aggregate is more than 10 years.

“(4) If:

(a) a veteran lodges a proper claim for an age service pension

before meeting the eligibility requirements referred to in subsection (1); and

(b) the veteran ceases to be an Australian resident after lodging the claim and before the claim is determined;

the veteran is not eligible for age service pension unless:

(d) the day from which age service pension would, if the claim were granted, be payable;

are earlier than the day on which the veteran ceased to be an Australian resident.

Age service pension may not be payable in some circumstances

“36a. (1) Even though a veteran is eligible for an age service pension, the pension may not be payable to the veteran because:

(a) the pension has not commenced to be payable (see section 36b); or

(b) the veteran is in gaol (see sections 55 and 55a); or

“(2) An age service pension is not payable to a veteran if the veteran’s age service pension rate would be nil.

Note: a veteran whose rate might otherwise be nil under the relevant Pension Rate Calculator may not have a nil rate after the application of the financial hardship provisions (sections 52y and 52z).

Age service pension generally not payable before claim

“36b. (1) An age service pension is not payable to a veteran before the day on which the veteran claims the age service pension.

Initial incorrect claim followed by proper claim

“(2) If:

(a) a veteran makes a claim (in this subsection called the ‘initial claim’) for age service pension; and

(b) the claim is not a proper claim; and

(d) the veteran subsequently makes a proper claim:

(i) within 3 months after being notified that the initial claim was not a proper claim; or

(ii) if the veteran was not so notified—at any time;

then:

(e) subsection (1) does not apply to the veteran; and

(f) age service pension is not payable to the veteran before the day on which the initial claim was lodged.

Restrictions on dual pensions

“36c. An age service pension is not payable to a veteran if the veteran is receiving:

(a) another service pension; or

(b) a social security pension; or

Note: ‘social security pension’ includes sheltered employment and rehabilitation allowances and ‘social security benefit’ includes job search allowance.

“Subdivision B—Claim for age service pension

Need for a claim

“36d. A veteran who wants to be granted an age service pension must make a proper claim for that pension.

Who can claim?

“36e. (1) Subject to subsection (2), the claim must be made by:

(a) the veteran who wants to be granted the age service pension; or

(b) with the approval of the veteran—another person on the veteran’s behalf.

Form of claim

“36f. To be a proper claim, the claim must be:

(a) made in writing; and

(b) in accordance with a form approved by the Commission; and

Lodgment of claim

“36g. (1) To be a proper claim, the claim must be lodged:

(a) at an office of the Department in Australia; or

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

“(2) A claim for age service pension is taken to have been lodged on the day it is received:

(a) at an office of the Department in Australia; or

(b) at a place approved under subsection (1); or

as the case may be.

Claimant must be Australian resident and in Australia

“36h. (1) Subject to subsection (2), a claim is not a proper claim unless the veteran making the claim, or on whose behalf the claim is being made, is:

(a) an Australian resident; and

(b) in Australia;

on the day on which the claim is lodged.

Note: for ‘Australian resident’ see section 5g.

“(2) Subsection (1) does not apply to a veteran’s claim if:

(a) the veteran is outside Australia and is receiving:

(i) invalidity service pension; or

(ii) wife service pension; or

(iii) any of the following under the Social Security Act:

(a) age pension;

(b) invalid pension;

(d) carer pension;

(e) sole parent pension;

(f) widow person’s allowance;

(g) widow B pension; and

(b) the veteran would, if that pension or allowance were cancelled, be eligible for age service pension.

Note: if the veteran ceases to be an Australian resident after having made a proper claim and after having met all the eligibility requirements (section 36), the veteran’s eligibility is not affected.

Withdrawal of claim

“36j. (1) A claimant for age service pension may withdraw the claim at any time before it is determined by the Commission.

“(2) To withdraw the claim, the claimant must give written notice of withdrawal to the Secretary and the notice must be lodged at an office of the Department in Australia.

“(3) A claimant who withdraws a claim may subsequently make another claim for an age service pension.

“Subdivision C—Investigation of claim

Secretary to investigate claim and submit it to Commission

“36k. (1) If a person makes a proper claim for age service pension, the Secretary must cause an investigation to be made into the matters to which the claim relates.

“(2) When the investigation is completed, the Secretary must cause the claim to be submitted to the Commission for consideration and determination.

“(3) When the claim is submitted to the Commission it must be accompanied by:

(a) any evidence supplied by the claimant in support of the claim; and

(b) any documents or other evidence obtained by the Department in the course of the investigation that are relevant to the claim; and

“Subdivision D—Consideration and determination of claim

Duties of Commission in relation to claim

“36l. (1) When the claim is submitted to the Commission, the Commission must consider all matters that are, in the Commission’s opinion, relevant to the claim and must then determine the claim.

“(2) In considering the claim, the Commission must:

(a) satisfy itself with respect to; or

(b) determine;

(as the case requires) all matters relevant to the determination of the claim.

“(3) Without limiting subsection (1), the Commission, in considering the claim, must consider:

(a) the evidence submitted with the claim under section 36k; and

(b) any further evidence subsequently submitted to the Commission in relation to the claim.

Note: a claimant may apply to the Commission for review of a determination made under this section (see Division 19).

Date of effect of determination

“36m. If the Commission determines that the claim is to be granted, the determination 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.

“Subdivision E—Rate of age service pension

How to work out the rate of a veteran’s age service pension

“36n. (1) Subject to subsection (2), a veteran’s age service pension rate is worked out using the Service Pension Rate Calculator Where There Are No Dependent Children at the end of section 41 (see Division 7).

“(2) The veteran’s age service pension rate is worked out using:

(a) if the veteran has a dependent child or dependent children— the Service Pension Rate Calculator Where There Are Dependent Children at the end of section 42 (see Division 7); or

(b) if the veteran is permanently blinded in both eyes—the Service Pension Rate Calculator for Blinded Veterans at the end of section 43 (see Division 7); or

(i) a pension under Part II or IV at a rate determined under or by reference to subsection 30 (1); or

(ii) a pension under the Seamen’s War Pensions and Allowances Act 1940 at a rate determined under subsection 18 (2) of that Act;

the ‘Frozen Rate’ Widow Service Pension Rate Calculator at the end of section 45.

Note: before using a Service Pension Rate Calculator see sections 40 to 40c.

“Subdivision F—Bereavement payments (death of pensioner partner)

Eligibility for payments under this Subdivision

“36p. (1) If:

(a) a person is receiving an age service pension; and

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

(d) immediately before the partner died, the partner was receiving:

(i) a service pension; or

(ii) any of the following under the Social Security Act:

(a) an age pension; or

(b) an invalid pension; or

(d) a sole parent pension under subparagraph 249 (1) (a) (iv) of the Social Security Act (illness separated couple); or

(e) a sheltered employment allowance instead of an invalid pension; or

(f) a rehabilitation allowance instead of a pension referred to in sub-subparagraph (a) or (b); or

(g) a special needs age, invalid or sole parent pension; the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: section 36q provides for the payment to the person, up to the first available bereavement adjustment payday, of amounts equal to the instalments that would have been paid to the person’s partner during that period if the partner had not died.

Note 2: section 36r provides for a lump sum that represents the instalments that would have been paid to the person’s partner, between the first available bereavement adjustment payday and the end of the bereavement period, if the partner had not died.

Note 3: if one member of a couple is receiving a social security payment and the other member is receiving a veterans payment and one of them dies, the bereavement payments will be paid under the Act that governs the survivor’s payment (that is, if the person who dies was receiving a social security payment and the survivor was receiving a veterans payment, the bereavement payments will be made under this Act, but if the person who dies was receiving a veterans payment and the survivor was receiving a social security payment, the bereavement payments will be made under the Social Security Act).

“(2) A person who is eligible for payments under this Subdivision may choose not to receive payments under this Subdivision.

“(3) An election under subsection (2):

(a) must be made by written notice to the Commission; and

(b) may be made after the person has been paid an amount or amounts under this Subdivision; and

“(4) If a person is eligible for payments under this Subdivision in relation to the partner’s death, the rate at which age service pension is payable to the person during the bereavement period is, unless the person has made an election under subsection (2), governed by section 36s.

“(5) If the person and the person’s partner were an illness separated or a respite care couple immediately before the partner died, this Subdivision applies to the calculation of rates during the bereavement period as if they were not members of an illness separated or a respite care couple.

Continued payment of partner’s pension

“36q. If a person is eligible for payments under this Subdivision in relation to the death of the person’s partner, there is payable to the person, on each of the pension paydays in the bereavement rate continuation period, an amount equal to the amount that would have been payable to the person’s partner on that payday if the partner had not died.

Lump sum payable in some circumstances

“36r. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

there is payable to the person as a lump sum an amount worked out using the lump sum calculator at the end of this section.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if the person’s partner had not died, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday; and
	(b)	the amount that, if the partner had not died, would have been payable to the partner on the pension payday immediately before the first available bereavement adjustment payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount that, but for section 36s, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the partner’s instalment component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

Adjustment of person’s age service pension rate

“36s. If:

(a) a person is eligible for payments under this Subdivision; and

(b) the person does not elect under subsection 36p (2) not to receive payments under this Subdivision;

the rate of the person’s age service pension during the bereavement period is worked out as follows:

(c) during the bereavement rate continuation period, the rate of age service pension payable to the person is the rate at which the pension would have been payable to the person if the person’s partner had not died;

(d) during the bereavement lump sum period (if any), the rate at which age service pension is payable to the person is the rate

at which the pension would be payable to the person apart from this Subdivision.

Effect of death of person entitled to payments under this Subdivision

“36t. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the person dies within the bereavement period; and

there is payable, to such person as the Commission thinks appropriate, as a lump sum, an amount worked out using the lump sum calculator at the end of this section.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if neither the person nor the person’s partner had died, would have been payable to the person on the pension payday immediately after the day on which the person dies; and
	(b)	the amount that, if neither the person nor the person’s partner had died, would have been payable to the person’s partner on that pension payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount that, but for section 36s, would have been payable to the person on the pension payday immediately after the day on which the person died if the person had not died: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the period that commences on the day after the person dies and ends on the day on which the bereavement period ends.
Step 5.	Multiply the partner’s instalment component by the number obtained in Step 4: the result is the amount of the lump sum payable under this section.

Matters affecting payment of benefits under this Subdivision

“36u. (1) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) after the person’s partner died, an amount to which the partner would have been entitled if the partner had not died has been paid under this Part or under the Social Security Act; and

the following provisions have effect:

(d) the amount referred to in paragraph (b) is not recoverable from the person or from the personal representative of the person’s partner, except to the extent (if any) that the amount exceeds the amount payable to the person under this Subdivision;

(e) the amount payable to the person under this Subdivision is to be reduced by the amount referred to in paragraph (b).

“(2) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) an amount to which the person’s partner would have been entitled if the person’s partner had not died has been paid under this Part or under the Social Security Act, within the bereavement period, into an account with a bank, credit union or building society (in this subsection called the ‘financial institution’); and

(c) the financial institution pays to the person, out of the account, an amount not exceeding the total of the amounts paid as mentioned in paragraph (b);

the financial institution is, in spite of anything in any other law, not liable to any action, claim or demand by the Commonwealth, the personal representative of the person’s partner or anyone else in respect of the payment of that money to the person.

“Subdivision G—Bereavement payments (death of dependent child)

Bereavement payments on death of dependent child

“36v. If:

(a) a person is receiving an age service pension; and

(b) a child dies; and

(i) a dependent child add-on in respect of the child; or

(ii) guardian allowance in respect of the child;

the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: section 36w provides for age service pension to be paid to the person, up to the first available bereavement adjustment payday, at the rate at which it would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 2: section 36x provides for a lump sum to be paid to the person if the first available bereavement adjustment payday occurs before the end of the bereavement period: the lump sum represents the difference, over the bereavement lump sum period, between the person’s new age service pension rate and the rate at which the pension would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 3: the additional payments preserved by this Subdivision are:

• dependent child add-on;

• guardian allowance;

• additional rent assistance;

• additional remote area allowance.

Continued payment of child-related amounts

“36w. If a person is eligible for payments under this Subdivision in relation to the death of a child, the person’s age service pension rate during the bereavement rate continuation period is to be calculated as if:

(a) the child had not died; and

(b) the child was disregarded in calculating the person’s ordinary income free area and maintenance income free area.

Lump sum payable in some circumstances

“36x. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of a child; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

a lump sum (worked out using the lump sum calculator at the end of this section) is payable to the person.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Work out the instalment of age service pension payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the continued rate.
	Note: section 36w applies in working out the amount of this instalment because the payday on which it is payable is within the bereavement rate continuation period.
Step 2.	Work out the instalment of age service pension that would have been payable to the person on the payday immediately before the first available bereavement adjustment payday if the person’s age service pension rate were not calculated under section 36w: the result is called the new rate.
Step 3.	Take the new rate away from the continued rate: the result is called the deceased child component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the deceased child component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

“Subdivision H—Bereavement payments (death of recipient)

Death of recipient

“36y. (1) If:

(a) a person is receiving age service pension; and

(b) either:

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

(ii) the person is a member of a couple and the person’s partner:

(a) is not receiving a service pension; and

(b) is not receiving a social security pension; and

there is payable, to such person as the Commission thinks appropriate, an amount equal to the amount that would have been payable to the person under this Part on the pension payday after the person’s death if the person had not died.

“(2) If an amount is paid under subsection (1) in respect of a person, the Commonwealth is not liable to any action, claim or demand for any further payment under that subsection in respect of the person.

Note: for death of a person eligible for bereavement payments under Subdivision A see section 36t.

“Division 4—Invalidity service pension

“Subdivision A—Eligibility for and payability of invalidity service pension

Eligibility for invalidity service pension

“37. (1) Subject to subsection (6), a person is eligible for an invalidity service pension if the person:

(a) is a veteran; and

(b) has rendered qualifying service; and

(d) is under:

(i) if a woman—60; or

(ii) if a man—65.

Note: for ‘qualifying service’ see section 7a.

“(2) For the purposes of this section, a person is taken to be permanently incapacitated for work if:

(a) the degree of the permanent incapacity for work is 85% or more; or

(b) the person is permanently blinded in both eyes.

Additional eligibility criterion for Commonwealth veterans, allied veterans and allied mariners

“(3) A person who is a veteran by reason only of being a Commonwealth veteran, an allied veteran or an allied mariner must, in addition to meeting the requirements of subsection (1), have been an Australian resident for a continuous period of at least 10 years.

“(4) For the purpose of applying subsection (3), where:

(a) a veteran has been an Australian resident during more than one period; and

(b) the longer or longest of those periods is less than 10 years but is not less than 5 years; and

in the application of subsection (3) to the veteran, the period of 10 years specified in that subsection is to be reduced by a period equal to the period by which the aggregate is more than 10 years.

“(5) Subsection (3) does not apply to a veteran if:

(a) the veteran became permanently incapacitated for work while the veteran was an Australian resident; and

(b) the veteran’s permanent incapacity for work was not brought about with a view to obtaining a service pension or a social security pension; and

(c) the veteran does not have an enforceable claim against any person, under any law or contract, for adequate compensation in respect of the permanent incapacity.

“(6) If:

(a) a veteran lodges a proper claim for an invalidity service pension before meeting the eligibility requirements referred to in subsection (1); and

(b) the veteran ceases to be an Australian resident after lodging the claim and before the claim is determined;

the veteran is not eligible for invalidity service pension unless:

(d) the day from which invalidity service pension would, if the claim were granted, be payable;

are earlier than the day on which the veteran ceased to be an Australian resident.

Invalidity service pension may not be payable in some circumstances

“37a. (1) Even though a veteran is eligible for an invalidity service pension, the pension may not be payable to the veteran because:

(a) the pension has not commenced to be payable (see section 37b); or

(b) the veteran is in gaol (see sections 55 and 55a); or

“(2) An invalidity service pension is not payable to a veteran if the veteran’s invalidity service pension rate would be nil.

Note: a veteran whose rate might otherwise be nil under the relevant Pension Rate Calculator may not have a nil rate after the application of the financial hardship provisions (sections 52y and 52z).

Invalidity service pension generally not payable before claim

“37b. (1) An invalidity service pension is not payable to a veteran before the day on which the veteran claims the invalidity service pension.

Initial incorrect claim followed by proper claim

“(2) If:

(a) a veteran makes a claim (in this subsection called the ‘initial claim’) for invalidity service pension; and

(b) the claim is not a proper claim; and

(d) the veteran subsequently makes a proper claim:

(i) within 3 months after being notified that the initial claim was not a proper claim; or

(ii) if the veteran was not so notified—at any time;

then:

(e) subsection (1) does not apply to the veteran; and

(f) invalidity service pension is not payable to the veteran before the day on which the initial claim was lodged.

Restrictions on dual pensions

“37c. An invalidity service pension is not payable to a veteran if the veteran is receiving:

(a) another service pension; or

(b) a social security pension; or

Note: ‘social security pension’ includes sheltered employment and rehabilitation allowances and ‘social security benefit’ includes job search allowance.

“Subdivision B—Claim for invalidity service pension

Need for a claim

“37d. A veteran who wants to be granted an invalidity service pension must make a proper claim for that pension.

Who can claim?

“37e. (1) A veteran may not claim an invalidity service pension if the veteran has turned:

(a) if a woman—60; or

(b) if a man—65.

“(2) Subject to subsection (3), a claim for invalidity service pension must be made by:

(a) the veteran who wants to be granted the invalidity service pension; or

(b) with the approval of the veteran—another person on the veteran’s behalf.

“(3) If the veteran is unable, because of physical or mental incapacity, to approve another person to make the claim on his or her behalf, the Commission may approve another person to make the claim.

Form of claim

“37f. To be a proper claim, the claim must be:

(a) made in writing; and

(b) in accordance with a form approved by the Commission; and

Lodgment of claim

“37g. (1) To be a proper claim, the claim must be lodged:

(a) at an office of the Department in Australia; or

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

“(2) A claim for invalidity service pension is taken to have been lodged on the day it is received:

(a) at an office of the Department in Australia; or

(b) at a place approved under subsection (1); or

as the case may be.

Claimant must be Australian resident and in Australia

“37h. (1) Subject to subsection (2), a claim is not a proper claim unless the veteran making the claim, or on whose behalf the claim is being made, is:

(a) an Australian resident; and

(b) in Australia;

on the day on which the claim is lodged.

Note: for ‘Australian resident’ see section 5G.

“(2) Subsection (1) does not apply to a veteran’s claim if:

(a) the veteran is outside Australia and is receiving:

(i) age service pension; or

(ii) wife service pension; or

(iii) any of the following under the Social Security Act:

(a) age pension;

(b) invalid pension;

(d) carer pension;

(e) sole parent pension;

(f) widowed person’s allowance;

(g) widow B pension; and

(b) the veteran would, if that pension or allowance were cancelled, be eligible for invalidity service pension.

Note: if the veteran ceases to be an Australian resident after having made a proper claim and after having met all the eligibility requirements (section 37), the veteran’s eligibility is not affected.

Withdrawal of claim

“37j. (1) A claimant for invalidity service pension may withdraw the claim at any time before it is determined by the Commission.

“(2) To withdraw the claim, the claimant must give written notice of withdrawal to the Secretary and the notice must be lodged at an office of the Department in Australia.

“(3) A claimant who withdraws a claim may subsequently make another claim for an invalidity service pension.

“Subdivision C—Investigation of claim

Secretary to investigate claim and submit it to Commission

“37k. (1) If a veteran makes a proper claim for an invalidity service pension, the Secretary must cause an investigation to be made into the matters to which the claim relates.

“(2) When the investigation is completed, the Secretary must cause the claim to be submitted to the Commission for consideration and determination.

“(3) When the claim is submitted to the Commission it must be accompanied by:

(a) any evidence supplied by the claimant in support of the claim; and

(b) any documents or other evidence obtained by the Department in the course of the investigation that are relevant to the claim; and

“Subdivision D—Consideration and determination of claim

Duties of Commission in relation to claim

“37l. (1) When the claim is submitted to the Commission, the Commission must consider all matters that are, in the Commission’s opinion, relevant to the claim and must then determine the claim.

“(2) In considering the claim, the Commission must:

(a) satisfy itself with respect to; or

(b) determine;

(as the case requires) all matters relevant to the determination of the claim.

“(3) Without limiting subsection (1), the Commission, in considering the claim, must consider:

(a) the evidence submitted with the claim under section 37k; and

(b) any further evidence subsequently submitted to the Commission in relation to the claim.

Note: a claimant may apply to the Commission for review of a determination made under this section (see Division 19).

Date of effect of determination

“37m. If the Commission determines that the claim is to be granted, the determination 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.

“Subdivision E—Rate of invalidity service pension

How to work out the rate of a veteran’s invalidity service pension

“37n. (1) Subject to subsection (2), a veteran’s invalidity service pension rate is worked out using the Service Pension Rate Calculator Where There Are No Dependent Children at the end of section 40c (see Division 7).

“(2) The veteran’s invalidity service pension is worked out using:

(a) if the veteran has a dependent child or dependent children and is not permanently blinded in both eyes—the Service Pension Rate Calculator Where There Are Dependent Children at the end of section 42 (see Division 7); or

(b) if the veteran is permanently blinded in both eyes—the Service Pension Rate Calculator For Blinded Veterans at the end of section 43 (see Division 7); or

(i) a pension under Part II or IV at a rate determined under or by reference to subsection 30 (1); or:

(ii) a pension under the Seamen’s War Pensions and Allowances Act 1940 at a rate determined under subsection 18 (2) of that Act;

the ‘Frozen Rate’ Widow Service Pension Rate Calculator at the end of section 45.

Note: before using a Service Pension Rate Calculator see sections 40 to 40c.

“Subdivision F—Bereavement payments (death of pensioner partner)

Eligibility for payments under this Subdivision

“37p. (1) If:

(a) a person is receiving an invalidity service pension; and

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

(d) immediately before the partner died, the partner was receiving:

(i) a service pension; or

(ii) any of the following under the Social Security Act:

(a) an age pension; or

(b) an invalid pension; or

(d) a sole parent pension under subparagraph 249 (1) (a) (iv) of the Social Security Act (illness separated couple); or

(e) a sheltered employment allowance instead of an invalid pension; or

(f) a rehabilitation allowance instead of a pension referred to in sub-subparagraph (a) or (b); or

(g) a special needs age, invalid or sole parent pension;

the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: section 37q provides for the payment to the person, up to the first available bereavement adjustment payday, of amounts equal to the instalments that would have been paid to the person’s partner during that period if the partner had not died.

Note 2: section 37r provides for a lump sum that represents the instalments that would have been paid to the person’s partner, between the first available bereavement adjustment payday and the end of the bereavement period, if the partner had not died.

“(2) A person who is eligible for payments under this Subdivision may choose not to receive payments under this Subdivision.

“(3) An election under subsection (2):

(a) must be made by written notice to the Commission; and

(b) may be able after the person has been paid an amount or amounts under this Subdivision; and

“(4) If a person is eligible for payments under this Subdivision in relation to the partner’s death, the rate at which invalidity service pension is payable to the person during the bereavement period is, unless the person has made an election under subsection (2), governed by section 37s.

Continued payment of partner’s pension

“37q. If a person is eligible for payments under this Subdivision in relation to the death of the person’s partner, there is payable to the person, on each of the pension paydays in the bereavement rate continuation period, an amount equal to the amount that would have been payable to the person’s partner on that payday if the partner had not died.

Lump sum payable in some circumstances

“37r. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

there is payable to the person as a lump sum an amount worked out using the lump sum calculator at the end of this section.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if the person’s partner had not died, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday; and
	(b)	the amount that, if the partner had not died, would have been payable to the partner on the pension payday immediately before the first available bereavement adjustment payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount that, but for section 37s, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the partner’s instalment component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

Adjustment of person’s invalidity service pension rate

“37s. If:

(a) a person is eligible for payments under this Subdivision; and

(b) the person does not elect under subsection 37p (2) not to receive payments under this Subdivision;

the rate of the person’s invalidity service pension during the bereavement period is worked out as follows:

(c) during the bereavement rate continuation period, the rate of invalidity service pension payable to the person is the rate at which the pension would have been payable to the person if the person’s partner had not died;

(d) during the bereavement lump sum period (if any), the rate at which invalidity service pension is payable to the person is the

rate at which the pension would be payable to the person apart from this Subdivision.

Effect of death of person entitled to payments under this Subdivision

“37t. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the person dies within the bereavement period; and

there is payable, to such person as the Commission thinks appropriate, as a lump sum, an amount worked out using the lump sum calculator at the end of this section.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if neither the person nor the person’s partner had died, would have been payable to the person on the pension payday immediately after the day on which the person dies; and
	(b)	the amount that, if neither the person nor the person’s partner had died, would have been payable to the person’s partner on that pension payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount that, but for section 37s, would have been payable to the person on the pension payday immediately after the day on which the person died if the person had not died: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the period that commences on the day after the person dies and ends on the day on which the bereavement period ends.
Step 5.	Multiply the partner’s instalment component by the number obtained in Step 4: the result is the amount of lump sum payable under this section.

Matters affecting payment of benefits under this Subdivision

“37u. (1) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) after the person’s partner died, an amount to which the partner would have been entitled if the partner had not died has been paid under this Part or under the Social Security Act; and

the following provisions have effect:

(e) the amount payable to the person under this Subdivision is to be reduced by the amount referred to in paragraph (b).

“(2) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(c) the financial institution pays to the person, out of the account, an amount not exceeding the total of the amounts paid as mentioned in paragraph (b);

“Subdivision G—Bereavement payments (death of dependent child)

Bereavement payments on death of dependent child

“37v. If:

(a) a person is receiving an invalidity service pension; and

(b) a child dies; and

(i) a dependent child add-on in respect of the child; or

(ii) guardian allowance in respect of the child;

the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: section 37w provides for invalidity service pension to be paid to the person, up to the first available bereavement adjustment payday, at the rate at which it would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 2: section 37x provides for a lump sum to be paid to the person if the first available bereavement adjustment payday occurs before the end of the bereavement period: the lump sum represents the difference, over the bereavement lump sum period, between the person’s new invalidity service pension rate and the rate at which the pension would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 3: the additional payments preserved by this Subdivision are:

• dependent child add-on;

• guardian allowance;

• additional rent assistance;

• additional remote area allowance.

Continued payment of child-related amounts

“37w. If a person is eligible for payments under this Subdivision in relation to the death of a child, the person’s invalidity service pension rate during the bereavement rate continuation period is to be calculated as if:

(a) the child had not died; and

(b) the child was disregarded in calculating the person’s ordinary income free area and maintenance income free area.

Lump sum payable in some circumstances

“37x. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of a child; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

a lump sum (worked out using the lump sum calculator at the end of this section) is payable to the person.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Work out the instalment of invalidity service pension payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the continued rate.
	Note: section 37w applies in working out the amount of this instalment because the payday on which it is payable is within the bereavement rate continuation period.
Step 2.	Work out the instalment of invalidity service pension that would have been payable to the person on the payday immediately before the first available bereavement adjustment payday if the person’s invalidity service pension rate were not calculated under section 37W: the result is called the new rate.
Step 3.	Take the new rate away from the continued rate: the result is called the deceased child component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the deceased child component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

“Subdivision H—Bereavement payments (death of recipient)

Death of recipient

“37y. (1) If:

(a) a person is receiving invalidity service pension; and

(b) either:

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

(ii) the person is a member of a couple and the person’s partner:

(a) is not receiving a service pension; and

(b) is not receiving a social security pension; and

“(2) If the amount is paid under subsection (1) in respect of a person, the Commonwealth is not liable to any action, claim or demand for further payment under that subsection in respect of the person.

Note: for death of a person eligible for bereavement payments under Subdivision A see section 37t.

“Division 5—Wife service pension

“Subdivision A—Eligibility for and payability of wife service pension

Eligibility for wife service pension

“38. (1) Subject to subsection (4), a person is eligible for a wife service pension if the person:

(a) is a woman:

(i) who is a member of a couple; and

(ii) whose partner is a veteran who is receiving age service pension or invalidity service pension; or

(b) is a woman:

(i) who is the non-illness separated wife of a veteran; and

(ii) whose husband is receiving age service pension or invalidity service pension; or

(i) who is the widow of a veteran; and

(ii) who was receiving wife service pension immediately before the veteran’s death; or

(d) is a woman:

(i) who is the widow of a veteran; and

(ii) who had, before the veteran’s death, made a claim for wife service pension which had not been determined at the date of the death; and

(iii) whose partner or husband (as the case requires):

(a) was, immediately before his death, receiving age service pension or invalidity service pension; or

(b) had, before his death, made a claim for age service pension or invalidity service pension which had not been determined at the date of the death but which the Commission determines would have been granted if the veteran had not died.

“(2) If a veteran:

(a) makes a claim for age service pension or invalidity service pension at a time when the veteran is receiving age pension or invalid pension under the Social Security Act; and

(b) the veteran dies before the claim is determined;

the Commission is, for the purpose of the determination under sub-subparagraph (1) (d) (iii) (b), to disregard the fact that the veteran was receiving social security pension at the time of the claim.

“(3) If:

(a) a woman is eligible for wife service pension because of paragraph (1) (c) or (d); and

(b) the woman becomes legally married to a man after the death of the veteran;

her eligibility under paragraph (1) (c) or (d) ceases.

“(4) If:

(a) a woman lodges a proper claim for a wife service pension before meeting the eligibility requirements referred to in subsection (1); and

(b) the woman ceases to be an Australian resident after lodging the claim and before the claim is determined;

the woman is not eligible for wife service pension unless:

(d) the day from which age service pension would, if the claim were granted, be payable;

are earlier than the day on which she ceased to be an Australian resident.

Wife service pension may not be payable in some circumstances

“38a. (1) Even though a woman is eligible for a wife service pension, the pension may not be payable to her because:

(a) the pension has not commenced to be payable (see section 38b); or

(b) she is in gaol (see sections 55 and 55a); or

“(2) A wife service pension is not payable to a woman if her wife service pension rate would be nil.

Note: a woman whose rate might otherwise be nil under the relevant Pension Rate Calculator may not have a nil rate after the application of the financial hardship provisions (sections 52y and 52z).

Wife service pension generally not payable before claim

“38b. (1) A wife service pension is not payable to a woman before the day on which she claims the wife service pension.

Initial incorrect claim followed by proper claim

“(2) If:

(a) a woman makes a claim (in this subsection called the ‘initial claim’) for wife service pension; and

(b) the claim is not a proper claim; and

(d) she subsequently makes a proper claim:

(i) within 3 months after being notified that the initial claim

was not a proper claim; or

(ii) if she was not so notified—at any time;

then:

(e) subsection (1) does not apply to the woman; and

(f) wife service pension is not payable to the woman before the day on which the initial claim was lodged.

Restrictions on dual pensions

“38c. (1) A wife service pension is not payable to a woman if she is receiving:

(a) another service pension; or

(b) a social security pension; or

Note: ‘social security pension’ includes sheltered employment and rehabilitation allowances and ‘social security benefit’ includes job search allowance.

“(2) A wife service pension is not payable to a war widow.

Note: for ‘war widow’ see subsection 5e (1).

“Subdivision B—Claim for wife service pension

Need for a claim

“38d. A woman who wants to be granted a wife service pension must make a proper claim for that pension.

Who can claim?

“38e. (1) Subject to subsection (2), the claim must be made by:

(a) the woman who wants to be granted the wife service pension; or

(b) with the approval of the woman—another person on the woman’s behalf.

“(2) If the woman is unable, because of physical or mental incapacity, to approve another person to make the claim on her behalf, the Commission may approve another person to make the claim.

Form of claim

“38f. To be a proper claim, the claim must be:

(a) made in writing; and

(b) in accordance with a form approved by the Commission; and

Lodgment of claim

“38g. (1) To be a proper claim, a claim must be lodged:

(a) at an office of the Department in Australia; or

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

“(2) A claim for wife service pension is taken to have been lodged on the day it is received:

(a) at an office of the Department in Australia; or

(b) at a place approved under subsection (1); or

Claimant must be Australian resident and in Australia

“38h. (1) Subject to subsection (2), a claim is not a proper claim unless the woman making the claim, or on whose behalf the claim is being made, is:

(a) an Australian resident; and

(b) in Australia;

on the day on which the claim is lodged.

Note: for ‘Australian resident’ see section 5g.

“(2) Subsection (1) does not apply to a woman’s claim if:

(a) the woman is outside Australia and is receiving:

(i) age service pension; or

(ii) invalidity service pension; or

(iii) any of the following under the Social Security Act:

(a) age pension;

(b) invalid pension;

(d) carer pension;

(e) sole parent pension;

(f) widow person’s allowance; or

(g) widow B pension; and

(b) the woman would, if that pension or allowance were cancelled, be eligible for wife service pension.

Note: if the woman ceases to be an Australian resident after having made a proper claim and after having met all the eligibility requirements (section 38), her eligibility for wife service pension is not affected.

Withdrawal of claim

“38j. (1) A claimant for wife service pension may withdraw the claim at any time before it is determined by the Commission.

“(2) To withdraw the claim, the claimant must give written notice of withdrawal to the Secretary and the notice must be lodged at an office of the Department in Australia.

“(3) A claimant who withdraws a claim may subsequently make another claim for a wife service pension.

“Subdivision C—Investigation of claim

Secretary to investigate claim and submit it to Commission

“38k. (1) If a woman makes a proper claim for a wife service pension, the Secretary must cause an investigation to be made into the matters to which the claim relates.

“(2) When the investigation is completed, the Secretary must cause the claim to be submitted to the Commission for consideration and determination.

“(3) When the claim is submitted to the Commission it must be accompanied by:

(a) any evidence supplied by the claimant in support of the claim; and

(b) any documents or other evidence obtained by the Department in the course of the investigation that are relevant to the claim; and

“Subdivision D—Consideration and determination of claim

Duties of Commission in relation to claim

“38l. (1) When the claim is submitted to the Commission, the Commission must consider all matters that are, in the Commission’s opinion, relevant to the claim and must then determine the claim.

“(2) In considering the claim, the Commission must:

(a) satisfy itself with respect to; or

(b) determine;

(as the case requires) all matters relevant to the determination of the claim.

“(3) Without limiting subsection (1), the Commission, in considering the claim, must consider:

(a) the evidence submitted with the claim under section 38k; and

(b) any further evidence subsequently submitted to the Commission in relation to the claim.

Note: a claimant may apply to the Commission for review of a determination made under this section (see Division 19).

Date of effect of determination

“38m. If the Commission determines that the claim is to be granted, the determination 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.

“Subdivision E—Rate of wife service pension

How to work out the rate of a woman’s wife service pension

“38n. (1) Subject to subsections (2) and (3), a woman’s wife service pension rate is worked out using the Service Pension Rate Calculator Where There Are No Dependent Children at the end of section 41 (see Division 7).

“(2) A woman’s wife service pension rate is worked out using the Service Pension Rate Calculator Where There Are Dependent Children at the end of section 42 (see Division 7) if the woman has a dependent child or dependent children.

“(3) A woman’s wife service pension rate is worked out using the Widow or Non-illness Separated Wife Rate Calculator at the end of section 44 if:

(a) the woman is a widow of a veteran and is not receiving an age service pension or an invalidity service pension; or

(b) the woman is a non-illness separated wife.

Note: before using a Service Pension Rate Calculator see sections 40 to 40c.

“Subdivision F—Bereavement payments (death of pensioner partner)

Eligibility for payments under this Subdivision

“38p. (1) If:

(a) a person is receiving a wife service pension; and

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

(d) immediately before the partner died, the partner was receiving:

(i) a service pension; or

(ii) any of the following under the Social Security Act:

(a) an age pension; or

(b) an invalid pension; or

(d) a sole parent pension under paragraph

249 (1) (a) (iv) of the Social Security Act (illness separated couple); or

(e) a sheltered employment allowance instead of an invalid pension; or

(f) a rehabilitation allowance instead of a pension referred to in sub-subparagraph (a) or (b); or

(g) a special needs age, invalid or sole parent pension; the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: section 38q provides for the payment to the person, up to the first available bereavement adjustment payday, of amounts equal to the instalments that would have been paid to the person’s partner during that period if the partner had not died.

Note 2: section 38r provides for a lump sum that represents the instalments that would have been paid to the person’s partner, between the first available bereavement adjustment payday and the end of the bereavement period, if the partner had not died.

Note 3: a wife service pensioner can continue receiving the pension after her veteran husband’s death (see section 38); she can continue to receive the pension even though she has entered into a de facto relationship (her entitlement only ceases on remarriage); so the situation of a wife service pensioner with a social security recipient partner is possible and sub-subparagraphs (d) (a) to (g) are necessary.

Note 4: if one member of a couple is receiving a social security payment and the other member is receiving a veterans payment and one of them dies, the bereavement payments will be paid under the Act that governs the survivor’s payment (that is, if the person who dies was receiving a social security payment and the survivor was receiving a veterans payment, the bereavement payments will be made under this Act, but if the person who dies was receiving a veterans payment and the survivor was receiving a social security payment, the bereavement payments will be made under the Social Security Act).

“(2) A person who is eligible for payments under this Subdivision may choose not to receive payments under this Subdivision.

“(3) An election under subsection (2):

(a) must be made by written notice to the Commission; and

(b) may be made after the person has been paid an amount or amounts under this Subdivision; and

“(4) If the person and the person’s partner were an illness separated or a respite care couple immediately before the partner died, this Subdivision applies to the calculation of rates during the bereavement period as if they were not members of an illness separated or a respite care couple.

Continued payment of partner’s pension

“38q. (1) If a person is eligible for payments under this Subdivision in relation to the death of the person’s partner, there is payable to the person, on each of the pension paydays in the bereavement rate continuation period, an amount equal to the amount that would have been payable to the person’s partner on that payday if the partner had not died.

“(2) If the couple was an illness separated couple immediately before the partner’s death, this section applies as if the couple were not an illness separated couple.

Lump sum payable in some circumstances

“38r. (1) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

there is payable to the person as a lump sum an amount worked out using the lump sum calculator at the end of this section.

“(2) If the couple was an illness separated couple immediately before the partner’s death, this section applies as if the couple were not an illness separated couple.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if the person’s partner had not died, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday; and
	(b)	the amount that, if the partner had not died, would have been payable to the partner on the pension payday immediately before the first available bereavement adjustment payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount of wife service pension that was payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the partner’s instalment component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

Effect of death of person entitled to payments under this Subdivision

“38s. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the person dies within the bereavement period; and

there is payable, to such person as the Commission thinks appropriate, as a lump sum, an amount worked out using the lump sum calculator at the end of this section.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if neither the person nor the person’s partner had died, would have been payable to the person on the pension payday immediately after the day on which the person dies; and
	(b)	the amount that, if neither the person nor the person’s partner had died, would have been payable to the person’s partner on that pension payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount that, but for section 38q, would have been payable to the person on the pension payday immediately after the day on which the person died if the person had not died: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the period that commences on the day after the person dies and ends on the day on which the bereavement period ends.
Step 5.	Multiply the partner’s instalment component by the number obtained in Step 4: the result is the amount of the lump sum payable under this section.

Matters affecting payment of benefits under this Subdivision

“38t. (1) If:

(a) a person is eligible for payments under this Subdivison in relation to the death of the person’s partner; and

(b) after the person’s partner died, an amount to which the partner would have been entitled if the partner had not died has been paid under this Part or under the Social Security Act; and

the following provisions have effect:

(d) the amount referred to in paragraph (b) is not recoverable from the person or from the personal representative of the person’s

partner, except to the extent (if any) that the amount exceeds the amount payable to the person under this Subdivision;

(e) the amount payable to the person under this Subdivision is to be reduced by the amount referred to in paragraph (b).

“(2) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(c) the financial institution pays to the person, out of that account, an amount not exceeding the total of the amounts paid as mentioned in paragraph (b);

“Subdivision G—Bereavement payments (death of dependent child)

Bereavement payments on death of dependent child

“38u. If:

(a) a person is receiving a wife service pension; and

(b) a child dies; and

(i) a dependent child add-on in respect of the child; or

(ii) guardian allowance in respect of the child;

the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: paragraph (c) will only be met if the person and her partner are members of an illness-separated couple.

Note 2: section 38v provides for wife service pension to be paid to the person, up to the first available bereavement adjustment payday, at the rate at which it would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 3: section 38w provides for a lump sum to be paid to the person if the first available bereavement adjustment payday occurs before the end of the bereavement period: the lump sum represents the difference, over the bereavement lump sum period, between the person’s new wife service pension rate and the rate at which the pension would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 4: the additional payments preserved by this Subdivision are:

• dependent child add-on;

• guardian allowance;

• additional rent assistance;

• additional remote area allowance.

Continued payment of child-related amounts

“38v. If a person is eligible for payments under this Subdivision in relation to the death of a child, the person’s wife service pension rate during the bereavement rate continuation period is to be calculated as if:

(a) the child had not died; and

(b) the child was disregarded in calculating the person’s ordinary income free area and maintenance income free area.

Lump sum payable in some circumstances

“38w. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of a child; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

a lump sum (worked out using the lump sum calculator at the end of this section) is payable to the person.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Work out the instalment of wife service pension payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the continued rate.
	Note: section 38v applies in working out the amount of this instalment because the payday on which it is payable is within the bereavement rate continuation period.
Step 2.	Work out the instalment of wife service pension that would have been payable to the person on the payday immediately before the first available bereavement adjustment payday if the person’s wife service pension rate were not calculated under section 38v: the result is called the new rate.
Step 3.	Take the new rate away from the continued rate: the result is called the deceased child component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the deceased child component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

“Subdivision H—Bereavement payments (death of recipient)

Death of recipient

“38x. (1) If:

(a) a person is receiving wife service pension; and

(b) either:

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

(ii) the person is a member of a couple and the person’s partner:

(a) is not receiving a service pension; and

(b) is not receiving a social security pension; and

Note: the situation described in subparagraph (1) (b) (ii) could arise if a widow who is receiving wife service pension becomes a member of a couple but does not become legally married to her new partner. In these circumstances she is still eligible for her wife service pension even though she has a partner who may not be receiving service pension.

Note: for death of a person eligible for bereavement payments under Subdivision A see section 38s.

“Division 6—Carer service pension

“Subdivision A—Eligibility for and payability of carer service pension

Eligibility for carer service pension

“39. (1) A person is eligible for a carer service pension if the person:

(a) personally provides constant care for a severely handicapped veteran; and

(b) provides that care in a home that is the home of both the person and the veteran.

“(2) Where:

(a) a person is personally providing constant care for a severely handicapped veteran; and

(b) the person temporarily ceases to provide that care; and

(i) not more than 28 days in any calendar year; or

(ii) another period that the Commission, for any special reason in the particular case, approves in writing;

the person does not cease to be eligible for a carer service pension merely because of that cessation.

“(3) In this section:

‘care’ includes attention and supervision;

‘severely handicapped veteran’ means a veteran who:

(a) has a physical, intellectual or psychiatric disability; and

(b) because of that disability:

(i) requires frequent care in connection with the veteran’s bodily functions; or

(ii) requires constant supervision to prevent injury to the veteran or to another person;

permanently or for an extended period; and

Carer service pension may not be payable in some circumstances

“39a. (1) Even though a person is eligible for a carer service pension, the pension may not be payable to the person because:

(a) the pension has not commenced to be payable (see section 39b); or

(b) the person is in gaol (see sections 55 and 55a); or

(d) the person is receiving another pension or benefit (see section 39c).

“(2) A carer service pension is not payable to a person if the person’s carer service pension rate would be nil.

Note: a person whose rate might otherwise be nil under the relevant Pension Rate Calculator may not have a nil rate after the application of the financial hardship provisions (sections 52y and 52z).

Carer service pension generally not payable before claim

“39b. (1) A carer service pension is not payable to a person before the day on which the person claims the carer service pension.

Initial incorrect claim followed by proper claim

“(2) If:

(a) a person makes a claim (in this subsection called the ‘initial claim’) for carer service pension; and

(b) the claim is not a proper claim; and

(d) the person subsequently makes a proper claim:

(i) within 3 months after being notified that the initial claim was not a proper claim; or

(ii) if the person was not so notified—at any time;

then:

(e) subsection (1) does not apply to the person; and

(f) carer service pension is not payable to the person before the day on which the initial claim was lodged.

Restrictions on dual pensions

“39c. A carer service pension is not payable to a person if the person is receiving:

(a) another service pension; or

(b) a social security pension; or

Note: ‘social security pension’ includes sheltered employment and rehabilitation allowances and ‘social security benefit’ includes job search allowance.

“Subdivision B—Claim for carer service pension

Need for a claim

“39d. A person who wants to be granted a carer service pension must make a proper claim for that pension.

Who can claim?

“39e. (1) The claim must be made by:

(a) the person who wants to be granted the carer service pension; or

(b) with the approval of the person—another person on the person’s behalf.

“(2) If the claimant is unable, because of physical or mental incapacity, to approve another person to make the claim on his or her behalf, the Commission may approve another person to make the claim.

Form of claim

“39f. To be a proper claim, the claim must be:

(a) made in writing; and

(b) in accordance with a form approved by the Commission; and

Lodgment of claim

“39g. (1) To be a proper claim, the claim must be lodged:

(a) at an office of the Department in Australia; or

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

“(2) A claim for carer service pension is taken to have been lodged on the day it is received:

(a) at an office of the Department in Australia; or

(b) at a place approved under subsection (1); or

as the case may be.

Claimant must be Australian resident and in Australia

“39h. (1) A claim is not a proper claim unless the claimant is:

(a) an Australian resident; and

(b) in Australia;

on the day on which the claim is lodged.

Note: for ‘Australian resident’ see section 5g.

“(2) Subsection (1) does not apply to a claim if:

(a) the claimant is outside Australia and is receiving:

(i) age service pension; or

(ii) invalidity service pension; or

(iii) wife service pension; or

(iv) social security pension; and

(b) the claimant would, if that pension were cancelled, be eligible for carer service pension.

Note: although this section allows certain people to claim carer service pension from outside Australia, carer service pension is not payable to the person until he or she returns to Australia.

Withdrawal of claim

“39j. (1) A claimant for carer service pension may withdraw the claim at any time before it is determined by the Commission.

“(2) To withdraw the claim, the claimant must give written notice of withdrawal to the Secretary and the notice must be lodged at an office of the Department in Australia.

“(3) A claimant who withdraws a claim may subsequently make another claim for a carer service pension.

“Subdivision C—Investigation of claim

Secretary to investigate claim and submit it to Commission

“39k. (1) If a person makes a proper claim for a carer service pension, the Secretary must cause an investigation to be made into the matters to which the claim relates.

“(2) When the investigation is completed, the Secretary must cause the claim to be submitted to the Commission for consideration and determination.

“(3) When the claim is submitted to the Commission it must be accompanied by:

(a) any evidence supplied by the claimant in support of the claim; and

(b) any documents or other evidence obtained by the Department in the course of the investigation that are relevant to the claim; and

“Subdivision D—Consideration and determination of claim

Duties of Commission in relation to claim

“39l. (1) When the claim is submitted to the Commission, the Commission must consider all matters that are, in the Commission’s opinion, relevant to the claim and must then determine the claim.

“(2) In considering the claim, the Commission must:

(a) satisfy itself with respect to; or

(b) determine;

(as the case requires) all matters relevant to the determination of the claim.

“(3) Without limiting subsection (1), the Commission, in considering the claim, must consider:

(a) the evidence submitted with the claim under section 39k; and

(b) any further evidence subsequently submitted to the Commission in relation to the claim.

Note: a claimant may apply to the Commission for review of a determination made under this section (see Division 19).

Date of effect of determination

“39m. If the Commission determines that the claim is to be granted, the determination 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.

“Subdivision E—Rate of carer service pension

How to work out the rate of a person’s carer service pension

“39n. (1) Subject to subsection (2), a person’s carer service pension rate is worked out using the Service Pension Rate Calculator Where There Are No Dependent Children at the end of section 41 (see Division 7).

“(2) The person’s carer service pension is worked out using:

(a) if the person has a dependent child or dependent children—the Service Pension Rate Calculator Where There Are Dependent Children at the end of section 42 (see Division 7); or

(b) if the person is a war widow who is receiving:

(i) a pension under Part II or IV at a rate determined under or by reference to subsection 30 (1); or

(ii) a pension under the Seamen’s War Pensions and Allowances Act 1940 at a rate determined under subsection 18 (2) of that Act;

the ‘Frozen Rate’ Widow Service Pension Calculator at the end of section 45.

Note: before using a Service Pension Rate Calculator see section 40 to 40c.

“Subdivision F—Bereavement payments (continuation of carer service pension)

Continuation of carer service pension for bereavement period where person cared for dies

“39p. (1) If:

(a) a person is receiving a carer service pension; and

(b) the person is caring for another person who is not the partner of the first person; and

the first person remains eligible for the carer service pension during the bereavement period as if the person being cared for had not died.

“(2) A person’s entitlements under this Subdivision are instead of, and not in addition to, any entitlements the person would, but for this section, have to a service pension or a social security pension or benefit.

“(3) A person to whom subsection (1) applies may, by written notice to the Commission, choose not to receive payments under this Subdivision and to receive instead any payments to which the person would be entitled but for subsection (2).

“(4) If a person makes an election under subsection (3):

(a) this Part, or the Social Security Act, has effect accordingly; and

(b) the person may not withdraw the election after the department has taken all the action required to give effect to the election.

Continued carer service pension rate

“39q. If a person is eligible for a carer service pension solely because of section 39p, the rate at which the pension is payable is to be determined having regard to the person’s actual circumstances.

“Subdivision G—Bereavement payments (death of pensioner partner)

Eligibility for payments under this Subdivision

“39r. (1) If:

(a) a person is receiving a carer service pension; and

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

(d) immediately before the partner died, the partner was receiving:

(i) a service pension; or

(ii) any of the following under the Social Security Act:

(a) an age pension; or

(b) an invalid pension; or

(d) a sole parent pension under subparagraph 249 (1) (a) (iv) of the Social Security Act (illness separated couple); or

(e) a sheltered employment allowance instead of an invalid pension; or

(f) a rehabilitation allowance instead of a pension referred to in sub-subparagraph (a), (b) or (c); or

(g) a special needs age, invalid or sole parent pension;

the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: section 39s provides for the payment to the person, up to the first available bereavement adjustment payday, of amounts equal to the instalments that would have been paid to the person’s partner during that period if the partner had not died.

Note 2: section 39t provides for a lump sum that represents the instalments that would have been paid to the person’s partner, between the first available bereavement adjustment payday and the end of the bereavement period, if the partner had not died.

“(2) A person who is eligible for payments under this Subdivision may choose not to receive payments under this Subdivision.

“(3) An election under subsection (2):

(a) must be made by written notice to the Commission; and

(b) may be made after the person has been paid an amount or amounts under this Subdivision; and

“(4) If a person is eligible for payments under this Subdivision in relation to the partner’s death, the rate at which carer service pension is payable to the person during the bereavement period is, unless the person has made an election under subsection (2), governed by section 39u.

“(5) If the person and the person’s partner were an illness separated or a respite care couple immediately before the partner died, this

Subdivision applies to the calculation of rates during the bereavement period as if they were not members of an illness separated or a respite care couple.

Continued payment of partner’s pension

“39s. If a person is eligible for payments under this Subdivision in relation to the death of the person’s partner, there is payable to the person, on each of the pension paydays in the bereavement rate continuation period, an amount equal to the amount that would have been payable to the person’s partner on that payday if the partner had not died.

Lump sum payable in some circumstances

“39t. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

there is payable to the person as a lump sum an amount worked out using the lump sum calculator at the end of this section.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if the person’s partner had not died, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday; and
	(b)	the amount that, if the partner had not died, would have been payable to the partner on the pension payday immediately before the first available bereavement adjustment payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount that, but for section 39u, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the partner’s instalment component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

Adjustment of person’s carer service pension rate

“39u. If:

(a) a person is eligible for payments under this Subdivision; and

(b) the person does not elect under subsection 39r (2) not to receive payments under this Subdivision;

the rate of the person’s carer service pension during the bereavement period is worked out as follows:

(c) during the bereavement rate continuation period, the rate of carer service pension payable to the person is the rate at which the pension would have been payable to the person if the person’s partner had not died;

(d) during the bereavement lump sum period (if any), the rate at

which carer service pension is payable to the person is the rate at which the carer service pension would be payable to the person apart from this subdivision.

Effect of death of person entitled to payments under this Subdivision

“39v. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) the person dies within the bereavement period; and

there is payable, to such person as the Commission thinks appropriate, as a lump sum, an amount worked out using the lump sum calculator at the end of this section.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Add up:
	(a)	the amount that, if the person’s partner had not died, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday; and
	(b)	the amount that, if the partner had not died, would have been payable to the partner on the pension payday immediately before the first available bereavement adjustment payday;
	the result is called the combined pensioner couple rate.
Step 2.	Work out the amount that, but for section 39u, would have been payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the person’s individual rate.
Step 3.	Take the person’s individual rate away from the combined pensioner couple rate: the result is called the partner’s instalment component.
Step 4.	Work out the number of pension paydays in the period that commences on the day after the person dies and ends on the day on which the bereavement period ends.
Step 5.	Multiply the partner’s instalment component by the number obtained in Step 4: the result is the amount of the lump sum payable under this section.

Matters affecting payment of benefits under this Subdivision

“39w. (1) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(b) after the person’s partner died, an amount to which the partner would have been entitled if the partner had not died has been paid under this Part or under the Social Security Act; and

the following provisions have effect:

(d) the amount referred to in paragraph (b) is not recoverable from the person or from the personal representative of the person’s

partner, except to the extent (if any) that the amount exceeds the amount payable to the person under this Subdivision;

(e) the amount payable to the person under this Subdivision is to be reduced by the amount referred to in paragraph (b).

“(2) If:

(a) a person is eligible for payments under this Subdivision in relation to the death of the person’s partner; and

(c) the financial institution pays to the person, out of that account, an amount not exceeding the total of the amounts paid as mentioned in paragraph (b);

“Subdivision H—Bereavement payments (death of dependent child)

Bereavement payments on death of dependent child

“39x. If:

(a) a person is receiving a carer service pension; and

(b) a child dies; and

(i) a dependent child add-on in respect of the child; or

(ii) guardian allowance in respect of the child;

the person is eligible for payments under this Subdivision to cover the bereavement period.

Note 1: section 39y provides for carer service pension to be paid to the person, up to the first available bereavement adjustment payday, at the rate at which it would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 2: section 39z provides for a lump sum to be paid to the person if the first available bereavement adjustment payday occurs before the end of the bereavement period: the lump sum represents the difference, over the bereavement lump sum period, between the person’s new carer service pension rate and the rate at which the pension would have been paid if the child had not died but were disregarded for the purposes of working out the person’s income test free areas.

Note 3: the additional payments preserved by this Subdivision are:

• dependent child add-on;

• guardian allowance;

• additional rent assistance;

• additional remote area allowance.

Continued payment of child-related amounts

“39y. If a person is eligible for payments under this Subdivision in relation to the death of a child, the person’s carer service pension rate during the bereavement rate continuation period is to be calculated as if:

(a) the child had not died; and

(b) the child was disregarded in calculating the person’s ordinary income free area and maintenance income free area.

Lump sum payable in some circumstances

“39z. If:

(a) a person is eligible for payments under this Subdivision in relation to the death of a child; and

(b) the first available bereavement adjustment payday occurs before the end of the bereavement period;

a lump sum (worked out using the lump sum calculator at the end of this section) is payable to the person.

“LUMP SUM CALCULATOR

This is how to work out the amount of the lump sum:

Method statement
Step 1.	Work out the instalment of carer service pension payable to the person on the pension payday immediately before the first available bereavement adjustment payday: the result is called the continued rate.
	Note: section 39Y applies in working out the amount of this instalment because the payday on which it is payable is within the bereavement rate continuation period.
Step 2.	Work out the instalment of carer service pension that would have been payable to the person on the payday immediately before the first available bereavement adjustment payday if the person’s carer service pension rate were not calculated under section 39y: the result is called the new rate.
Step 3.	Take the new rate away from the continued rate: the result is called the deceased child component.
Step 4.	Work out the number of pension paydays in the bereavement lump sum period.
Step 5.	Multiply the deceased child component by the number of pension paydays in the bereavement lump sum period: the result is the amount of the lump sum payable to the person under this section.

“Subdivision J—Bereavement payments (death of recipient)

Death of recipient

“39za. (1) If:

(a) a person is receiving a carer service pension; and

(b) either:

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

(ii) the person is a member of a couple and the person’s partner:

(a) is not receiving a service pension; and

(b) is not receiving a social security pension; and

there is payable, to such person as the Commission thinks appropriate, an amount equal to the amount that would have been payable to the person under this Act on the pension payday after the person’s death if the person had not died.

Note: for death of a person eligible for bereavement payments under Subdivision B see section 39v.

“Division 7—Rate Calculators

“Subdivision A—General

Steps in rate calculation

“40. (1) The following are the usual steps in the rate calculation process:

(a) start with a maximum basic rate;

(b) add any additional amounts that are subject to income or assets testing;

(d) add any additional amounts that are not subject to income or assets testing.

Note: additional amounts are amounts added for dependent children and rent assistance.

“(2) The overall rate calculation process is described in Module A of the relevant Rate Calculator.

Standard categories of family situations

“40a. (1) The Rate Calculators use the following standard categories of family situations:

• not member of a couple;

• member of a couple (or partnered);

• partnered (partner getting neither pension nor benefit);

• partnered (partner getting pension or benefit);

• partnered (partner getting pension);

• partnered (partner getting benefit).

Note: see section 5e for definitions of those terms.

“(2) Where it is necessary to distinguish between the members of sub-categories of these standard categories further words of description are added to the standard category label.

Rate Calculators

“40b. (1) For the purposes of this Act, a Rate Calculator is to be taken to be part of the section immediately preceding the Rate Calculator.

“(2) Rate Calculators are divided into Modules (for example, Module A).

“(3) A Module of a Rate Calculator is divided into points.

“(4) The points in a Module are numbered as follows:

(a) the initial number (followed by a dash) identifies the section that immediately precedes the Rate Calculator;

(b) the letter following the dash is the letter allocated to the Module in which the point occurs;

Example: point 41-E8 is the eighth point in Module E of the Rate Calculator at the end of section 41.

Note: paragraph (4) (a) has been adopted so that if a reader is looking for a particular section of the Act and opens a page that happens to be in the middle of a Rate Calculator, the reader will know whether the section the reader is looking for is before or after that page.

Application of income and assets test reductions for income tax purposes

“40c. (1) If:

(a) the rate of a service pension applicable to a person is increased under the additional amounts for children Module of a Rate Calculator or the rent assistance Module of a Rate Calculator; and

(b) the rate of that pension is to be reduced under the ordinary income test Module, the maintenance income test Module or the assets test Module of the Rate Calculator;

the reduction is to be applied:

(c) first, to the rate of the pension apart from any increase under the additional amounts for children Module or the rent assistance Module; and

(d) then, to the amount of any increase under the rent assistance Module; and

(e) finally, to the amount of any increase under the additional amounts for children Module.

“(2) The following Table sets out details of the Modules relevant to subsection (1):

TABLE
RELEVANT MODULES TABLE
column 1	column 2	column 3	column 4	column 5	column 6
Pension Rate Calculator	additional amounts for children Module	rent assistance Module	ordinary income test Module	maintenance income test Module	assets test Module
Service	Not	Module C	Module D	Module E	Module F
Pension	applicable
Rate
Calculator
Where There
Are No
Dependent
Children
(section 41)
Service	Module C	Module D	Module E	Module F	Module G
Pension
Rate
Calculator
Where There
Are
Dependent
Children
(section 42)
Widow or	Not	Module C	Module D	Module E	Module F
Non-Illness	applicable
Separated
Wife
Service
Pension
Rate
Calculator
(section 44)

Note: those parts of the Table dealing with Service Pension Rate Calculator Where There Are No Dependent Children and Service Pension Rate Calculator Where There Are Dependent Children will also be relevant to a ‘frozen rate’ widow whose provisional rate of service pension is to be calculated under either of those Rate Calculators (see section 45).

“Subdivision B—Service Pension Rate Calculator Where There Are No Dependent Children

Rate of age, invalidity, wife and carer service pension (no dependent children)

“41. (1) The rate of:

(a) age service pension; and

(b) invalidity service pension; and

(d) carer service pension;

is, subject to subsections (2), (3), (4) and (5), to be calculated in accordance with the Rate Calculator at the end of this section.

Note 1: Module A of the Rate Calculator establishes the overall rate calculation process and the remaining Modules provide for the calculation of the component amounts used in the overall rate calculation.

Note 2: the rate obtained by applying the Rate Calculator may be reduced because of the receipt of payments under the New Enterprise Incentive Scheme (see Division 12).

“(2) Subsection (1) does not apply to an age, invalidity, wife or carer service pension payable to a person who has a dependent child or dependent children.

Note: the rate for a service pension payable to a veteran who has a dependent child or dependent children is dealt with in section 42.

“(3) Subsection (1) does not apply to an age or invalidity service pension payable to a veteran who is permanently blind.

Note: the rate for an age service pension or invalidity service pension payable to a veteran who is permanently blind is dealt with in section 43.

“(4) Subsection (1) does not apply to an age, invalidity or carer service pension payable to a war widow referred to in section 45 (‘Frozen Rate’ Widow Service Pension Rate Calculator).

Note: however, a war widow referred to in section 45 may need to use this Rate Calculator as part of the calculation process in the Rate Calculator at the end of section 45.

“(5) If:

(a) a veteran is a member of a couple; and

(b) the veteran’s partner is not receiving a service pension or a social security pension or benefit;

the veteran’s service pension rate is not to exceed twice the rate at which a service pension would be payable to the veteran if the veteran’s partner were receiving a social security pension or benefit.

“SERVICE PENSION RATE CALCULATOR WHERE THERE ARE NO DEPENDENT CHILDREN

MODULE A—OVERALL RATE CALCULATION PROCESS

Method of calculating rate

41-A1. The rate of pension is an annual rate (fortnightly amounts are provided for information only):

Method statement
Step 1.	Work out the person’s maximum basic rate using MODULE B below.
Step 2.	Work out the amount per year (if any) for rent using MODULE C below.
Step 3.	Add up the amounts obtained in Steps 1 and 2: the result is called the maximum payment rate.
Step 4.	Apply the ordinary income test using MODULE D below to work out the reduction for ordinary income.
Step 5.	Apply the maintenance income test using MODULE E below to work out the reduction for maintenance income.
Step 6.	Add up the reduction for ordinary income and the reduction for maintenance income: the result is called the total income reduction.
Step 7.	Take the total income reduction away from the maximum payment rate: the result is called the income reduced rate.
Step 8.	Apply the assets test using MODULE F below to work out the reduction for assets.
Step 9.	Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 10.	Compare the income reduced rate and the assets reduced rate: the rate of pension is: (a) the income reduced rate if it is lower than the assets reduced rate; or (b) the assets reduced rate if it is lower than the income reduced rate; or (c) the income reduced rate if the income reduced rate and the assets reduced rate are exactly equal; plus any amount per year payable by way of remote area allowance (see MODULE G below).

Note 1: if a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with:

• financial hardship (sections 52y and 52z);

• pensions loan scheme (sections 52za to 52zm).

Note 2: if a person’s rate is reduced under Step 10 the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 40c (maximum basic rate first, then rent assistance).

Note 3: the rate calculation for a member of a couple is affected by the operation of point 41-A2.

Members of a couple

41-A2. Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 41-D2, 41-E2 and 41-F2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see points 41-C8 and 41-C9 below).

MODULE B—MAXIMUM BASIC RATE

Maximum basic rate

41-B1. A person’s maximum basic rate depends on the person’s family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3.

TABLE B
MAXIMUM BASIC RATES
column 1	column 2	column 3	column 4
item	person’s family situation	rate per year	rate per fortnight
1.	Not member of a couple	$7,342.40	$282.40
2.	Partnered (partner getting neither pension nor benefit)	$7,342.40	$282.40
3.	Partnered (partner getting pension or benefit)	$6,120.40	$235.40
4.	Member of an illness separated or respite care couple	$7,342.40	$282.40

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’, ‘partnered (partner getting pension or benefit)’ see section 5e, and for ‘illness separated couple’ and ‘respite care couple’ see subsections 5r (5) and (6).

Note 2: the maximum basic rates are indexed 6 monthly in line with CPI increases.

MODULE C—RENT ASSISTANCE

Rent assistance

41-C1. Rent assistance is an amount that may be added to the maximum basic rate to help cover the cost of rent. A person who is eligible for rent assistance under point 41-C2 can have added to his or

her maximum basic rate the amount applying to that person under Table C-1. This is the provisional amount of rent assistance the person is entitled to. However, if the person or the person’s partner receives disability pension, the provisional amount of rent assistance may be reduced under point 41-C10.

Note: for ‘disability pension’ see section 5n.

Eligibility for rent assistance

41-C2. Rent assistance is to be added to a person’s maximum basic rate if:

(a) the person is not an ineligible property owner; and

(b) the person pays, or is liable to pay, rent (other than Government rent); and

(d) the person is in Australia.

Note: for ‘rent’, ‘Government rent’ and ‘ineligible property owner’ see section 5N.

No rent assistance if partner getting incentive allowance under the Social Security Act

41-C3. If a person is a member of a couple and the person’s partner is living with the person in their home, an additional amount is not to be added to the person’s maximum basic rate under point 41-C2 if an amount by way of incentive allowance is being added to the maximum basic rate of the person’s partner.

Note: for ‘incentive allowance’ see subsection 5q (1).

Factors affecting rate of rent assistance

41-C4. The rate of rent assistance depends on:

(a) the annual rent paid or payable by the person; and

(b) whether or not the person or the person’s partner is receiving a disability pension; and

(d) whether or not the person has a partner with a rent increased pension.

Note: for ‘disability pension’ see section 5n.

Partner with rent increased pension

41-C5. A person has a partner with a rent increased pension, for the purposes of this Module, if:

(a) the partner is living with the person in their home; and

(b) the partner is receiving a service pension or social security pension; and

Note 1: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 2: for the treatment of rent paid by a member of a couple see points 41-C8 and 41-C9.

Rate of rent assistance

41-C6. The rate of rent assistance is whichever is the lesser of rate A and rate B applicable to the person in accordance with Table C-1.

TABLE C-1 RATE OF RENT ASSISTANCE
column 1	column 2	column 3	column 4
item	family situation	rate A	rate B
1.	Not member of a couple	Annual rent–$1,040	$1,560
		2
2.	Partnered—partner does not have rent increased pension	Annual rent–$1,040	$1,560
	Partnered—partner does not have rent increased pension	2
3.	Partnered—partner has rent increased pension	Annual rent–$1,040	$780
	Partnered—partner has rent increased pension	4

Note 1: for ‘member of a couple’ and ‘partnered’ see section 5e.

Note 2: for ‘partner with a rent increased pension’ see point 41-C5.

Note 3: the Rate B amounts are indexed 6 monthly in line with CPI increases.

Annual rent

41-C7. Annual rent is the annual rent paid or payable by the person whose pension rate is being calculated.

Rent paid by a member of a couple

41-C8. Where a person is a member of a couple and the person’s partner is living with the person in their home, any rent that the person’s partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person.

Note: for ‘member of a couple’ see section 5E.

Rent paid by a member of an illness separated or respite care couple

41-C9. Where a person is a member of an illness separated or respite care couple, any rent that the person’s partner pays or is liable to pay in respect of the premises occupied by the person is to be treated as paid or payable by the person.

Note: for ‘member of an illness separated couple’ and ‘respite care couple’ see subsections 5r (5) and (6).

Effect of disability pension on rate of rent assistance

41-C10. This is how to work out the effect of a person’s disability pension on the person’s rate of rent assistance:

Method statement
Step 1.	Work put the amount of the person’s disability pension on a yearly basis: the result is the person’s disability income.
	Note 1: for ‘disability pension’ see section 5N.
	Note 2: for the treatment of the amount of disability pension of members of a couple see point 41-C11.
Step 2.	Work out the person’s rent assistance free area (see point 41-C12 below).
Step 3.	Work out whether the person’s disability pension income exceeds the person’s rent assistance free area.
Step 4.	If the person’s rent assistance free area exceeds the person’s disability pension income, the person’s rate of rent assistance worked out under Table C-1 is not affected.
Step 5.	If the person’s rent assistance free area does not exceed the person’s disability pension income, take the person’s rent assistance free area away from the person’s disability pension income: the result is the person’s disability income excess.
Step 6.	Halve the person’s disability pension income excess: the result is the rent assistance reduction amount.
Step 7.	Take the person’s rent assistance reduction amount away from the rate of rent assistance worked out under Table C-1: the result is the person’s rate of rent assistance.

Members of couples receiving disability pension

41-C11. If a person is a member of a couple and the person’s partner also receives disability pension, add the couple’s disability pensions (on a yearly basis) and divide by 2 to work out the amount of the disability pension income of each of them for the purposes of this Module.

How to calculate a person’s rent assistance free area

41-C12. A person’s rent assistance free area is worked out using Table C-2. Work out which family situation in Table C-2 applies to the person.

TABLE C-2 RENT ASSISTANCE FREE AREA
column 1	column 2	column 3	column 4
item	category of person	free area per year	free area per fortnight
1.	Not member of a couple	$2,080	$80
2.	Partnered (partner getting neither pension nor benefit)	$1,820	$70
3.	Partnered (partner getting benefit)	$1,820	$70
4.	Partnered (partner getting pension)	$1,820	$70

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’, ‘partnered (partner getting benefit)’, ‘partnered (partner getting pension)’ see section 5e.

Note 2: items 2, 3 and 4 of Table C-2 apply to members of illness separated and respite care couples.

Note 3: the basic free area is indexed annually in line with CPI increases.

RENT ASSISTANCE EXAMPLES

Example 1:

William is a service pensioner who is not a member of a couple. He pays $100 per week rent for his flat.

He does not receive any disability pension.

Item 1 in Table C-1 applies to William.

Rate A for William is:

Rate B for William is $1,300. The lesser rate is $1,300. This is the yearly rate of William’s rent assistance amount.

Example 2:

John and Mary are members of a pensioner couple. They rent a house for $150 per week.

John receives 100% disability pension ($5,085.60 per year) and Mary receives a 50% disability pension ($105.30 per year).

Item 3 applies to them.

Rate A for John is:

Rate B for John is $650. The lesser rate is $650. This is the maximum rate of Rent Assistance John can receive. As he and Mary receive disability pension, the Rent Assistance Income Test applies.

John’s Disability Pension Income is:

Item 3 of Table C-2 applies. John’s disability pension excess is:

Therefore the rent assistance John will receive is $262.30 ($650 – $387.70).

The same calculation applies to Mary’s yearly rate of rent assistance amount.

MODULE D—ORDINARY INCOME TEST

Effect of income on maximum payment rate

41-D1. This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:

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 41-D2.
Step 2.	Work out the person’s ordinary income free area (see points 41-D3 to 41-D4 below).
	Note: a person’s ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the person’s ordinary income exceeds the person’s ordinary income free area.
Step 4.	If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.
Step 5.	If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Step 6.	Use the person’s ordinary income excess to work out the person’s reduction for ordinary income using points 41-D5 and 41-D6 below.

Note 1: see point 41-A1 (Steps 4 to 10) for the significance of the person’s reduction for ordinary income.

Note 2: the application of the ordinary income test is affected by provisions concerning:

• investment income (sections 46–46U);

• disposal of income (sections 48–48E);

• earnings credit (section 49).

Ordinary incomes of members of couples

41-D2. 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 Module.

Ordinary income free area

41-D3. A person’s ordinary income free area is the amount of ordinary income the person can have without any deduction being made from the person’s maximum payment rate.

How to calculate a person’s ordinary income free area

41-D4. A person’s ordinary income free area is worked out using Table D-1. Work out which family situation in Table D-1 applies to the person. The ordinary income free area is the corresponding amount in column 3.

TABLE D-1 ORDINARY INCOME FREE AREA
column 1	column 2	column 3	column 4
item	category of person	free area per year	free area per fortnight
1.	Not member of a couple	$2,080	$80
2.	Partnered (partner getting neither pension nor benefit)	$1,820	$70
	Partnered (partner getting neither pension nor benefit)
3.	Partnered (partner getting benefit)	$1,820	$70
4.	Partnered (partner getting pension)	$1,820	$70

Note 1: for ‘member of a couple’, ‘partnered (partner getting pension nor benefit)’, ‘partnered (partner getting benefit)’, ‘partnered (partner getting pension)’ see section 5e.

Note 2: items 2, 3 and 4 of Table D-1 apply to members of illness separated and respite care couples.

Note 3: the free area is indexed annually in line with CPI increases.

Pension reduction for ordinary income in excess of ordinary income free area

41-D5. A person’s reduction for ordinary income is worked out using Table D-2. Work out which family situation applies to the person. The reduction for ordinary income is the amount per year worked out using the corresponding calculation in column 3.

TABLE D-2 REDUCTION FOR ORDINARY INCOME
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not member of a couple	ordinary income excess
		2
2.	Partnered (partner getting neither pension nor benefit)	ordinary income excess
	Partnered (partner getting neither pension nor benefit)	2
3.	Partnered (partner getting benefit)	ordinary income excess
	Partnered (partner getting benefit)	2
4.	Partnered (partner getting pension)	ordinary income excess
	Partnered (partner getting pension)	2

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’, ‘partnered (partner getting benefit)’ and ‘partnered (partner getting pension)’ see section 5e.

Note 2: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 3: for ‘ordinary income excess’ see point 41-D6 below.

Ordinary income excess

41-D6. A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

MODULE E—MAINTENANCE INCOME TEST

Effect of maintenance income on maximum payment rate

41-E1. This is how to work out the effect of a person’s maintenance income on the person’s maximum payment rate:

Method statement
Step 1.	Work out the amount of the person’s maintenance income on a yearly basis.
	Note 1: for the treatment of the maintenance income of members of a couple see points 41-E2 and 41-E3.
	Note 2: ‘special maintenance income’ (see subsection 5k (1)) can in some circumstances be disregarded under points 41-E4 and 41-E5.
Step 2.	Work out the person’s maintenance income free area (see points 41-E6 and 41-E7 below).
	Note: a person’s maintenance income free area is the maximum amount of maintenance income the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the person’s maintenance income exceeds the person’s maintenance income free area.
Step 4.	If the person’s maintenance income does not exceed the person’s maintenance income free area, the person’s maintenance income excess is nil.
Step 5.	If the person’s maintenance income exceeds the person’s maintenance income free area, the person’s maintenance income excess is the person’s maintenance income less the person’s maintenance income free area.
Step 6.	Use the person’s maintenance income excess to work out the person’s reduction for maintenance income using points 41-E8 and 41-E9 below.

Note 1: see point 41-A1 (Steps 5 to 10) for the significance of the person’s reduction for maintenance income.

Note 2: the application of the maintenance income test is affected by provisions concerning:

• apportionment of capitalised maintenance income (section 51);

• in-kind housing maintenance—value of substitute for family home (section 51a).

Maintenance incomes of members of couples

41-E2. If the person is a member of a couple, add the couple’s maintenance incomes (on a yearly basis) and divide by 2 to work out the amount of the person’s maintenance income for the purposes of this Module.

41-E3. Point 41-E2 does not apply to a person if the person’s partner:

(a) is not receiving:

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

(ii) a social security benefit; and

(b) does not have maintenance income.

Note: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Special maintenance income

41-E4. If a person has special maintenance income in excess of the ceiling applicable to the person, the excess is disregarded for the purposes of this Module.

Note: see subsection 5k (1) for ‘special maintenance income’.

41-E5. The ceiling applicable to a person under this Module is the amount equal to the person’s maintenance income free area plus:

How to calculate a person’s maintenance income free area

41-E6. A person’s maintenance income free area is worked out using Table E-1. Work out which family situation in Table E-1 applies to the person. The maintenance income free area is the corresponding amount in column 3.

TABLE E-1 MAINTENANCE INCOME FREE AREA
column 1	column 2	column 3	column 4
item	person’s family situation	free area per year	free area per fortnight
1.	Not member of a couple	$780.00	$30.00
2.	Partnered (partner getting neither pension nor benefit)	$780.00	$30.00
3.	Partnered (partner getting pension or benefit)—both the person and the partner are receiving maintenance income	$780.00	$30.00
4.	Partnered (partner getting pension or benefit)—either the person or the partner (but not both) are receiving maintenance income	$390.00	$15.00

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’, ‘partnered (partner getting pension or benefit)’ see section 5e.

Note 2: items 2, 3 and 4 of Table E-1 apply to members of illness separated and respite care couples.

41-E7. In determining whether or not item 3 or 4 of Table E-1 applies to a person point 41-E2 is to be disregarded. This has the effect of taking into account only maintenance income that the person actually receives rather than any income that the person is to be taken to receive because of maintenance income received by the person’s partner.

Pension reduction for maintenance income in excess of maintenance income free area

41-E8. A person’s reduction for maintenance income is worked out using Table E-2. Work out which family situation applies to the person. The reduction for maintenance income is the amount per year worked out using the corresponding calculation in column 3.

TABLE E-2 REDUCTION FOR MAINTENANCE INCOME
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not a member of a couple	maintenance income excess
		2
2.	Partnered (partner getting neither pension nor benefit)	maintenance income excess
	Partnered (partner getting neither pension nor benefit)	2
3.	Partnered (partner getting pension or benefit)	maintenance income excess
	Partnered (partner getting pension or benefit)	2

Note 2: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 3: for ‘maintenance income excess’ see point 41-E9 below.

Maintenance income excess

41-E9. A person’s maintenance income excess is the person’s maintenance income less the person’s maintenance income free area.

MODULE F—ASSETS TEST

Effect of assets on maximum payment rate

41-F1. This is how to work out the effect of a person’s assets on the person’s maximum payment rate:

Method statement
Step 1.	Work out the value of the person’s assets.
	Note 1: for the treatment of the assets of members of a couple see point 41-F2.
	Note 2: for the assets that are to be disregarded in valuing a person’s assets see section 52.
	Note 3: for the valuation of an asset that is subject to a charge or encumbrance see section 52c.
Step 2.	Work out the person’s assets value limit (see point 41-F3 below).
	Note: a person’s assets value limit is the maximum value of assets the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the value of the person’s assets exceeds the person’s assets value limit.
Step 4.	If the value of the person’s assets does not exceed the person’s assets value limit, the person’s assets excess is nil.
Step 5.	If the value of the person’s assets exceeds the person’s assets value limit, the person’s assets excess is the value of the person’s assets less the person’s assets value limit.
Step 6.	Use the person’s assets excess to work out the person’s reduction for assets using points 41-F4 to 41-F6 below.

Note 1: see point 41-A1 (Steps 8 to 10) for the significance of the person’s reduction for assets.

Note 2: the application of the assets test is affected by provisions concerning:

• disposal of assets (sections 52e-52j);

• retirement villages (sections 52k.-52x);

• financial hardship (sections 55y and 55z);

• the pensions loans scheme (sections 52za-52zm).

Value of assets of members of couples

41-F2. For the purposes of this Module:

(a) the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

(i) the value of the person’s assets; and

(ii) the value of the person’s partner’s assets; and

(b) the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

(i) the value of the person’s assets of that kind; and

(ii) the value of the person’s partner’s assets of that kind.

Assets value limit

41-F3. A person’s assets value limit is worked out using Table F-1. Work out the person’s family situation and property ownership situation. The assets value limit is the corresponding amount in column 3.

TABLE F-1 ASSETS VALUE LIMIT
column 1	column 2	column 3 assets value limit
item	person’s family situation	column 3a either person or partner property owner	column 3b neither person nor partner property owner
1.	Not member of couple	$103,500	$177,500
2.	Partnered (partner getting neither pension nor benefit)	$73,750	$110,750
3.	Partnered (partner getting pension or benefit)	$73,750	$110,750

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’ and ‘partnered (partner getting pension or benefit)’ see section 5e.

Note 2: for ‘property owner’ see section 5l.

Note 3: items 2 and 3 apply to members of illness separated and respite care couples.

Note 4: the assets value limits are indexed annually in line with CPI increases.

Pension reduction for assets in excess of assets value limit

41-F4. A person’s reduction for assets is worked out using Table F-2. Work out which family situation applies to the person. The reduction for assets is the amount per year worked out using the corresponding calculation in column 3.

TABLE F-2 REDUCTION FOR ASSETS
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not member of a couple	[assets excess] × 26
		250
2.	Partnered (partner getting neither pension nor benefit)	[assets excess] × 26
	Partnered (partner getting neither pension nor benefit)	250
3.	Partnered (partner getting benefit)	[assets excess] × 26
		250
4.	Partnered (partner getting pension)	[assets excess] × 26
		250

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit’, ‘partnered (partner getting benefit’ and ‘partnered (partner getting pension)’ see section 5e.

Note 2: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 3: for ‘assets excess’ see point 41-F5 below.

Assets excess

41-F5. A person’s assets excess is the value of the person’s assets less the person’s assets value limit.

41-F6. In calculating a person’s assets excess under point 41-F5 disregard any part of the excess that is not a multiple of $250.

MODULE G—REMOTE AREA ALLOWANCE

Remote area allowance

41-G1. An amount by way of remote area allowance is to be added to a person’s rate of pension if:

(a) the person’s usual place of residence is situated in the remote area; and

(b) the person is physically present in the remote area.

Note: for ‘remote area’ and ‘physically present in the remote area’ see section 5q.

Rate of remote area allowance

41-G2. The rate of remote area allowance payable to a person is worked out using Table G. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3.

TABLE G REMOTE AREA ALLOWANCE
column 1	column 2	column 3	column 4
item	person’s family situation	allowance per year	allowance per fortnight
1.	Not member of a couple	$364.00	$14.00
2.	Partnered—partner receiving remote area allowance	$312.00	$12.00
3.	Partnered—partner not receiving remote area allowance	$364.00	$14.00

Note: for ‘member of a couple’ and ‘partnered’ see section 5e.

Illness separated and respite care couples

41-G3. For the purposes of Table G in point 41-G2, a member of an illness separated couple or a respite care couple is to be treated as not being a member of a couple.

“Subdivision C—Service Pension Rate Calculator Where There Are Dependent Children

Rate of age, invalidity, wife and carer service pension (dependent child or children)

“42. (1) The rate of:

(a) age service pension; and

(b) invalidity service pension; and

(d) carer service pension;

payable to a person who has a dependent child or dependent children is, subject to subsections (2), (3) and (4), to be calculated in accordance with the Rate Calculator at the end of this section.

Note 2: the rate obtained by applying the Rate Calculator may be reduced because of the receipt of payments under the New Enterprise Incentive Scheme (see Division 12).

“(2) Subsection (1) does not apply to an age or invalidity service pension payable to a veteran who is permanently blind.

Note: the rate for an age pension or invalidity pension payable to a veteran who is permanently blind is dealt with in section 43.

“(3) Subsection (1) does not apply to an age, invalidity or carer service pension payable to a war widow referred to in section 45 (‘Frozen Rate’ Widow Service Pension Rate Calculator).

Note: however, a war widow referred to in section 45 may need to use this Rate Calculator as part of the calculation process in the Rate Calculator at the end of section 45.

“(4) If:

(a) a veteran is a member of a couple; and

(b) the veteran’s partner is not receiving a service pension or a social security pension or benefit;

“SERVICE PENSION RATE CALCULATOR WHERE THERE ARE DEPENDENT CHILDREN

MODULE A—OVERALL RATE CALCULATION PROCESS

Method of calculating rate

42-A1. The rate of pension is an annual rate (fortnightly amounts are provided for information only):

Method statement
Step 1.	Work out the person’s maximum basic rate using MODULE B below.
Step 2.	Work out the amount per year (if any) for dependent children using MODULE C below.
Step 3.	Work out the amount per year (if any) for rent using MODULE D below.
Step 4.	Add up the amounts obtained in Steps 1, 2 and 3: the result is called the maximum payment rate.
Step 5.	Apply the ordinary income test using MODULE E below to work out the reduction for ordinary income.
Step 6.	Apply the maintenance income test using MODULE F below to work out the reduction for maintenance income.
Step 7.	Add up the reduction for ordinary income and the reduction for maintenance income: the result is called the total income reduction.
Step 8.	Take the total income reduction away from the maximum payment rate: the result is called the income reduced rate.
Step 9.	Apply the assets test using MODULE G below to work out the reduction for assets.
Step 10.	Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 11.	Compare the income reduced rate and the assets reduced rate: the rate of pension is:
	(a) the income reduced rate if it is lower than the assets reduced rate; or
	(b) the assets reduced rate if it is lower than the income reduced rate; or
	(c) the income reduced rate if the income reduced rate and the assets reduced rate are exactly equal;
	plus any amount per year payable by way of remote area allowance (see MODULE H below).

Note 1: if a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with:

• financial hardship (sections 52y and 52z);

• pensions loan scheme (section 52za).

Note 2: if a person’s rate is reduced under Step 11 the order in which the reduction is to be made against the components of the maximum payment rate is laid down by section 40c (maximum basic rate first, then rent assistance and finally child amounts).

Note 3: the rate calculation for a member of a couple is affected by the operation of point 42-A2.

Note 4: points 42-A3 and 42-A4 explain the special treatment given to certain members of couples with dependent children.

Members of a couple

42-A2. Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 42-E2, 42-F2 and 42-F3 and 42-G2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see points 42-D7, 42-D8 and 42-D9 below).

Explanation/background information—pensioner couples with dependent children

42-A3. This Rate Calculator has special income and assets test rules for pensioner couples with dependent children (see points 42-E10 to 42-E12, points 42-F11 to 42-F13 and points 42-G4 to 42-G7 below). Without these special rules, pensioner couples with dependent children could, in some circumstances, receive unfairly favourable treatment compared with other couples. This could arise because:

(a) the member of a pensioner couple to whom dependent children are allocated (see point 42-C2 below) starts from a maximum payment rate that is higher than that of the other member of the couple (see Module C below); and

(b) the ordinary income, maintenance income and assets of the couple are taken to be shared between them on a 50/50 basis (see points 42-E2, 42-F2 and 42-F3 and 42-G2 below); and

(c) the member of the couple who starts from the lower maximum payment rate could reach a nil income reduced rate or a nil assets reduced rate while the other member has an income reduced rate or an assets reduced rate higher than nil; and

(d) if this occurs, part of the couple’s ordinary income, maintenance income or assets would not be ‘taken into account’ in the operation of the income and assets tests.

42-A4. To remove this potentially unfairly favourable treatment, this Rate Calculator provides for:

(a) an initial double reduction for excess income or assets against the additional amounts for dependent children (these are in the hands of the member who is receiving those additional amounts); and

(b) if any excess income or assets remains—a normal reduction for the remaining excess against the maximum payment rate of each member.

Under these rules, both members of pensioner couples with dependent children should always reach a nil income reduced rate or a nil assets reduced rate at the same time.

MODULE B—MAXIMUM BASIC RATE

Maximum basic rate

42-B1. A person’s maximum basic rate depends on the person’s family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3.

TABLE B MAXIMUM BASIC RATES
column 1	column 2	column 3	column 4
item	person’s family situation	rate per year	rate per fortnight
1.	Not member of a couple	$7,342.40	$282.40
2.	Partnered (partner getting neither pension nor benefit)	$7,342.40	$282.40
3.	Partnered (partner getting pension or benefit)	$6,120.40	$235.40
4.	Member of an illness separated or respite care couple	$7,342.40	$282.40

Note 2: the maximum basic rates are indexed 6 monthly in line with CPI increases.

MODULE C—ADDITIONAL AMOUNTS FOR DEPENDENT CHILDREN

Additional amounts for dependent children

42-C1. This is how to work out the amount per year to be added to a person’s maximum basic rate for dependent children:

Method statement
Step 1.	Work out the amount of the child add-on (if any) for each dependent child of the person using points 42-C3 and 42-C4.
Step 2.	Work out the amount per year of the person’s guardian allowance (if any) using points 42-C5 to 42-C7.
Step 3.	Add up all of the amounts obtained in Steps 1 and 2: the result is called the DC total and is the amount to be added to the person’s maximum basic rate under this Module.

Note: guardian allowance is a single amount per year for a person who is not a member of a couple or who is a member of an illness separated couple.

Children of a couple

42-C2. If:

(a) a man and a woman are the members of a couple; and

(b) either or both of them have dependent children;

use Table C-1 to work out how the dependent children are to be taken into account for the purposes of this Module: work out the column that applies to the man’s payment entitlement (if any) using the horizontal axis and then work out the item that applies to the woman’s payment entitlement (if any) using the vertical axis; find the box for that item in that column; if the box contains the word ‘man’, a dependent child of the woman is to be taken into account as a dependent child of the man; if the box contains the word ‘woman’, a dependent child of the man is to be taken into account as a dependent child of the woman.

TABLE C-1 ALLOCATION OF DEPENDENT CHILDREN
	column 1	column 2	column 3	column 4	column 5	column 6	column 7
item	man woman	Service age	Service invalidity	Service illness separated	Service carer	Social Security	Nothing
1.	Service age	man	man	woman	woman	man	woman
2.	Service invalidity	man	man	woman	woman	man	woman
3.	Service wife	man	man	woman	man	man	woman
4.	Service illness separated	man	man		man	man	woman
5.	Service carer	man	man	woman	woman	man	woman
6.	Social Security	man	man	woman	woman
7.	Nothing	man	man	man	man

KEY

Service age	= age service pension
Service invalidity	= invalidity service pension
Service carer	= carer service pension
Service wife	= wife service pension
Social Security	= social security pension
Service illness separated (man)	= the person is receiving an age service or invalidity service pension and the couple is an illness separated couple because of the person’s illness or infirmity.
Nothing	= the person is receiving neither service pension under this Act nor a social security pension.

Dependent child add-ons

42-C3. If a person has a dependent child, there is, subject to point 42-C4, a dependent child add-on for the child. The amount of the add-on depends on the child’s age and is worked out using Table C-2.

TABLE C-2 ADD-ON FOR DEPENDENT CHILD
column 1	column 2	column 3	column 4
item	child’s age	rate per year	rate per fortnight
1.	under 13	$1,255.80	$48.30
2.	13 or over but under 16	$1,833	$70.50
3.	16 or over	$884	$34

Note 1: the item 1 rate is adjusted annually so that the combined family allowance and additional pension amounts for children covered by this item do not fall below 15% of the combined pensioner couple maximum basic rate.

Note 2: the item 2 rate is adjusted annually so that the combined family allowance and additional pension amounts for children covered by this item do not fall below 20% of the combined pensioner couple maximum basic rate.

Note 3: the item 3 rate is not indexed.

No add-on for prescribed student children

42-C4. Once a dependent child of a person turns 16, there is no dependent child add-on for the child if the child is a prescribed student child.

Note 1: for ‘prescribed student child’ and ‘dependent child’ see section 5F.

Note 2: even though no child add-on applies to a particular dependent child the child:

(a) may attract guardian allowance under points 42-C5 to 42-C7; and

(b) will attract additional free area under point 42-E4 for the purposes of the ordinary income test.

Guardian allowance

42-C5. Subject to point 42-C6, a person who has a dependent child or dependent children is to have a single amount per year by way of guardian allowance if:

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

(b) the person is a member of an illness separated couple.

No guardian allowance in respect of certain dependent children who have turned 18

42-C6. Once a dependent child of a person turns 18, the child is not to be taken into account for the purposes of point 42-C5 unless:

(a) the child is a student child but not a prescribed student child; or

(b) the person receives child disability allowance under the Social Security Act in respect of the child.

Rate of guardian allowance

42-C7. The rate of guardian allowance is $670.80 a year ($25.80 a fortnight).

MODULE D—RENT ASSISTANCE

Rent assistance

42-D1. Rent assistance is an amount that may be added to the maximum basic rate to help cover the cost of rent. A person who is eligible for rent assistance under point 42-D2 can have added to his or her maximum basic rate the amount applying to that person under Table D-1. This is the provisional amount of rent assistance the person is entitled to. However, if the person or the person’s partner receives disability pension, the provisional amount of rent assistance may be reduced under point 42-D10.

Note: for ‘disability pension’ see section 5n.

Eligibility for rent assistance

42-D2. Rent assistance is to be added to a person’s maximum basic rate if:

(a) the person is not an ineligible property owner; and

(b) the person pays, or is liable to pay, rent (other than Government rent); and

(d) the person is in Australia.

Note: for ‘rent’, ‘Government rent’ and ‘ineligible property owner’ see section 5n.

No rent assistance if partner getting incentive allowance under the Social Security Act

42-D3. If a person is a member of a couple and the person’s partner is living with the person in their home, an additional amount is not to be added to the person’s maximum basic rate under point 42-D2 if an amount by way of incentive allowance is being added to the maximum basic rate of the person’s partner.

Factors affecting rate of rent assistance

42-D4. The rate of rent assistance depends on:

(a) the annual rent paid or payable by the person; and

(b) whether or not the person or the person’s partner is receiving a disability pension; and

(d) whether or not the person has a partner with a rent increased pension.

Note 1: for ‘disability pension’ see section 5n.

Note 2: for ‘pension increase child’ see subsection 5f (6).

Partner with rent increased pension

42-D5. A person has a partner with a rent increased pension, for the purposes of this Module, if:

(a) the partner is living with the person in their home; and

(b) the partner is receiving a service pension or social security pension; and

Note 1: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 2: for the treatment of rent by a member of a couple see point 42-D8.

Rate of rent assistance

42-D6. The rate of rent assistance is whichever is the lesser of Rate A and Rate B applicable to the person in accordance with Table D-1.

TABLE D-1 RATE OF RENT ASSISTANCE
column 1	column 2	column 3	column 4
item	family situation	rate A	rate B
			column 4a	column 4b
			1 or 2 pension increase children	3 or more pension increase children
1.	Not member of a couple	Annual rent – $1.040	$1,820	$2,080
		2
2.	Partnered—partner does not have rent increased pension	Annual rent – $1,040	$1,820	$2,080
	Partnered—partner does not have rent increased pension	2
3.	Partnered—partner has rent increased pension	Annual rent – $1,040	$910	$1,040
	Partnered—partner has rent increased pension	4

Note 1: for ‘member of a couple’ and ‘partnered’ see section 5e.

Note 2: for ‘partner with a rent increased pension’ see point 42-D5.

Note 3: the Rate B amounts are indexed 6 monthly in line with CPI increases.

Annual rent

42-D7. Annual rent is the annual rent paid or payable by the person whose pension rate is being calculated.

Rent paid by a member of a couple

42-D8. Where a person is a member of a couple and the person’s partner is living with the person in their home, any rent that the person’s partner pays or is liable to pay in respect to the home is to be treated as paid or payable by the person.

Note: for ‘member of a couple’ see section 5e.

Rent paid by a member of an illness separated or respite care couple

42-D9. Where a person is a member of an illness separated or respite care couple, any rent that the person’s partner pays or is liable to pay in respect of the premises occupied by the person is to be treated as paid or payable by the person.

Note: for ‘member of an illness separated couple’ and ‘respite care couple’ see subsections 5r (5) and (6).

Effect of disability pension on rate of rent assistance

42-D10. This is how to work out the effect of a person’s disability pension on the person’s rate of rent assistance:

Method statement
Step 1.	Work out the amount of the person’s disability pension on a yearly basis: the result is the person’s disability income.
	Note: for the treatment of the amount of disability pension of members of a couple see point 42-D11.
Step 2.	Work out the person’s rent assistance free area (see points 42-D12 to 42-D16 below).
Step 3.	Work out whether the person’s disability pension income exceeds the person’s rent assistance free area.
Step 4.	If the person’s rent assistance free area exceeds the person’s disability pension income, the person’s rate of rent assistance worked out under Table D-1 is not affected.
Step 5.	If the person’s rent assistance free area does not exceed the person’s disability pension income, take the person’s rent assistance free area away from the person’s disability pension income: the result is the person’s disability income excess.
Step 6.	Halve the person’s disability pension income excess: the result is the rent assistance reduction amount.
Step 7.	Take the person’s rent assistance reduction amount away from the rate of rent assistance worked out under Table D-l: the result is the person’s rate of rent assistance.

Members of couples receiving disability pension

42-D11. If a person is a member of a couple and the person’s partner also receives disability pension, add the couple’s disability pensions (on a yearly basis) and divide by 2 to work out the amount of the disability pension income of each of them for the purposes of this Module.

Note: for ‘disability pension’ see section 5n.

How to calculate a person’s rent assistance free area

42-D12. A person’s rent assistance free area is worked out using Table D-2. Work out which family situation in Table D-2 applies to the person. The rent assistance free area is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each dependent child of the person.

TABLE D-2 RENT ASSISTANCE FREE AREA
column 1	column 2	column 3	column 4	column 5	column 6
item	category of person	basic free area per year	basic free area per fortnight	additional free area per year	additional free area per fortnight
1.	Not member of a couple	$2,080	$80	$624	$24
2.	Partnered (partner getting neither	$1,820	$70	$624	$24
3.	pension nor benefit) Partnered (partner getting pension)	$1,820	$70	$312	$12

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’, ‘partnered (partner getting benefit)’, ‘partnered (partner getting pension)’ and ‘dependent child’ see sections 5e and 5f.

Note 2: items 2, 3 and 4 of Table D-2 apply to members of illness separated and respite care couples.

Note 3: the basic free area is indexed annually in line with CPI increases.

No additional free area for certain prescribed student children

42-D13. No additional free area is to be added for a dependent child who:

(a) has turned 18; and

(b) is a prescribed student child;

unless the person whose rate is being calculated, or the person’s partner, receives child disability allowance under the Social Security Act for the child.

Reduction of additional free area for dependent children

42-D14. The additional free area for a dependent child of a person to whom item 1, 2 or 3 of Table D-2 applies is reduced by the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 42-D16 do not result in a reduction.

42-D15. The additional free area for a dependent child of a person to whom item 4 of Table D-2 applies is reduced by 50% of the annual

amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 42-D16 do not result in a reduction.

42-D16. No reduction is to be made under point 42-D14 or 42-D15 for a payment:

(a) under this Act; or

(b) of maintenance income; or

(d) under the AUSTUDY scheme; or

(e) under the Assistance for Isolated Children Scheme; or

(f) that is similar in nature to family allowance and that prevents a family allowance from being paid under section 837 of the Social Security Act.

RENT ASSISTANCE EXAMPLES

Example 1:

Frederick is a service pensioner who is not a member of a couple. Frederick pays $100 per week rent for a flat and does not receive any disability pension. He has one dependent child.

Item 1 in Table D-1 applies to Frederick.

Rate A for Frederick is:

Rate B for Frederick is $1,820. The lesser rate is $1,820. This is the yearly rate of Frederick’s rent assistance amount.

Example 2:

Peter and Cheryl are members of a pensioner couple. They rent a house for $150 per week. They have one dependent child. Peter receives 100% disability pension ($5,085.60 per year) and Cheryl receives a 50% disability pension ($105.30 per year). Item 3 applies to them.

Rate A for Peter is:

Rate B for Peter is $910. The lesser rate is $910. This is the provisional rate of rent assistance for Peter. As he and Cheryl receive disability pension, the rent assistance income test applies.

Peter’s disability pension income is:

Item 3 of Table D-2 applies. Peter’s disability pension excess is:

Therefore, the rate of rent assistance Peter will receive is $884.30 ($910 - $25.70).

The same calculation applies to Cheryl’s yearly rate of rent assistance amount.

MODULE E—ORDINARY INCOME TEST

Effect of income on maximum payment rate

42-E1. This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:

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 42-E2.
Step 2.	Work out the person’s ordinary income free area (see points 42-E4 to 42-E10 below).
	Note: a person’s ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the person’s ordinary income exceeds the person’s ordinary income free area.
Step 4.	If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.
Step 5.	If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Step 6.	Use the person’s ordinary income excess to work out the person’s reduction for ordinary income using points 42-E10 to 42-E12 below.

Note 1: see point 42-A1 (Steps 5 to 11) for the significance of the person’s reduction for ordinary income.

Note 2: the application of the ordinary income test is affected by provisions concerning:

• investment income (sections 46-46U);

• disposal of income (sections 48-48E);

• earnings credit (section 49).

Ordinary incomes of members of couples

42-E2. 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 Module.

Ordinary income free area

42-E3. A person’s ordinary income free area is the amount of ordinary income the person can have without any deduction being made from the person’s maximum payment rate.

How to calculate a person’s ordinary income free area

42-E4. A person’s ordinary income free area is worked out using Table E-1. Work out which family situation in Table E-1 applies to the person. The ordinary income free area is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each dependent child of the person.

TABLE E-1 ORDINARY INCOME FREE AREA
column 1	column 2	column 3	column 4	column 5	column 6
item	category of person	basic free area per year	basic free area per fortnight	additional free area per year	additional free area per fortnight
1.	Not member of a couple	$2,080	$80	$624	$24
2.	Partnered (partner getting neither pension nor benefit)	$1,820	$70	$624	$24
3.	Partnered (partner getting benefit)	$1,820	$70	$624	$24
4.	Partnered (partner getting pension)	$1,820	$70	$312	$12

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit’, ‘partnered (partner getting benefit)’, ‘partnered (partner getting pension)’ and ‘dependent child’ see sections 5e and 5f.

Note 2: items 2, 3 and 4 of Table E-1 apply to members of illness separated and respite care couples.

Note 3: the basic free area is indexed annually in line with CPI increases.

Maintenance obligation

42-E5. For the purposes of point 42-E4, a child is a dependent child of a person if the person is liable to maintain the child under a law of the Commonwealth, a State or a Territory.

Additional free area for children in some cases 42-E6. If:

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

(b) the person’s partner is receiving an age service pension or invalidity service pension; and

the person’s ordinary income free area is to be increased by $312 for the child or for each of the children.

No additional free area for certain prescribed student children

42-E7. No additional free area is to be added for a dependent child who:

(a) has turned 18; and

(b) is a prescribed student child;

unless the person whose rate is being calculated, or the person’s partner, receives child disability allowance under the Social Security Act for the child.

Reduction of additional free area for dependent children

42-E8. The additional free area for a dependent child of a person to whom item 1, 2 or 3 of Table E-1 applies is reduced by the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 42-E10 do not result in a reduction.

42-E9. The additional free area for a dependent child of a person to whom item 4 of Table E-1 applies is reduced by 50% of the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 42-E10 do not result in a reduction.

42-E10. No reduction is to be made under point 42-E8 or 42-E9 for a payment:

(a) under this Act; or

(b) of maintenance income; or

(d) under the AUSTUDY scheme; or

(e) under the Assistance for Isolated Children Scheme; or

(f) that is similar in nature to family allowance and that prevents a family allowance from being paid under section 837 of the Social Security Act.

ORDINARY INCOME FREE AREA EXAMPLES

Example 1:

Facts:

Wayne and Mary are members of a couple. They both receive pensions. They have 2 dependent children—Max and Angela. Angela is being fostered by Wayne and Mary and they receive $15 per week from the NSW Government by way of a foster care payment in respect of Angela.

Application:

The foster care payment calculated on a yearly basis is $15 × 52=$780. As point 42-E8 applies to Wayne and Mary (they are covered by item 4 of Table E-1 in point 42-E4). The reduction is at the 50% rate (i.e. $390 per year). The possible additional amount for Angela ($312) is therefore reduced to nil.

The amount that Wayne gets for Max is not subject to reduction and is $312 per year. Mary gets $312 for Max as well.

Wayne’s ordinary income free area is $1,820 + $312 = $2,132. Mary’s ordinary income free area limit is the same.

Example 2:

If Wayne and Mary received only $10 per week ($520 per year) foster care payment for Angela, the amount each of them would be allowed for Angela would be:

Then each would have an ordinary income free area of $1,820 - $312 + $52 = $2,184.

Pension reduction for ordinary income in excess of ordinary income free area

42-E11. A person’s reduction for ordinary income is worked out using Table E-2. Work out which family situation applies to the person. The reduction for ordinary income is the amount per year worked out using the corresponding calculation in column 3.

TABLE E-2 REDUCTION FOR ORDINARY INCOME
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not member of a couple	ordinary income excess
		2
2.	Partnered (partner getting neither pension nor benefit)	ordinary income excess
	Partnered (partner getting neither pension nor benefit)	2
3.	Partnered (partner getting benefit)	ordinary income excess
		2
4.	Partnered (partner getting pension) person has additional amounts for dependent children	DC excess + remaining excess
		2
5.	Partnered (partner getting pension) partner has additional amounts for dependent children	remaining excess
		2

Note 2: for ‘additional amounts for dependent children’ see subsection 5q (1).

Note 3: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 4: for ‘ordinary income excess’ see point 42-E11 below.

Note 5: for ‘DC excess’ and ‘remaining excess’ see point 42-E13 below.

Note 6: for background information on the special treatment given to people covered by items 4 and 5 of Table E-2 see points 42-A3 and 42-A4 above.

Ordinary income excess

42-E12. A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Working out DC excess and remaining excess

42-E13. For the purposes of Table E-2, where a member of a couple (in this point called the ‘DC partner’) has additional amounts for dependent children:

(a) the additional amounts for dependent children total (the ‘DC total’) is the sum of the amounts the DC partner has by way of additional amounts for dependent children; and

(b) if the DC partner’s ordinary income excess (see point 42-E12 above) is less than or equal to the DC total:

(i) the DC excess is the DC partner’s ordinary income excess; and

(ii) the remaining excess is nil; and

(i) the DC excess is the DC total; and

(ii) the remaining excess is the DC partner’s ordinary income excess less the DC total.

MODULE F—MAINTENANCE INCOME TEST

Effect of maintenance income on maximum payment rate

42-F1. This is how to work out the effect of a person’s maintenance income on the person’s maximum payment rate:

Method statement
Step 1.	Work out the amount of the person’s maintenance income on a yearly basis.
	Note 1: for the treatment of the maintenance income of members of a couple see points 42-F2 and 42-F3.
	Note 2: ‘special maintenance income’ (see subsection 5k (1)) can in some circumstances be disregarded under points 42-F4 to 42-F8.
Step 2.	Work out the person’s maintenance income free area (see points 42-F9 and 42-F10 below).
	Note: a person’s maintenance income free area is the maximum amount of maintenance income the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the person’s maintenance income exceeds the person’s maintenance income free area.
Step 4.	If the person’s maintenance income does not exceed the person’s maintenance income free area, the person’s maintenance income excess is nil.
Step 5.	If the person’s maintenance income exceeds the person’s maintenance income free area, the person’s maintenance income excess is the person’s maintenance income less the person’s maintenance income free area.
Step 6.	Use the person’s maintenance income excess to work out the person’s reduction for maintenance income using points 42-F11 to 42-F13 below.

Note 1: see point 42-A1 (Steps 5 to 11) for the significance of the person’s reduction for maintenance income.

Note 2: the application of the maintenance income test is affected by provisions concerning:

• apportionment of capitalised maintenance income (section 51);

• in-kind housing maintenance—value of substitute for family home (section 51a).

Maintenance incomes of members of couples

42-F2. If the person is a member of a couple, add the couples maintenance incomes (on a yearly basis) and divide by 2 to work out the amount of the person’s maintenance income for the purposes of this Module.

42-F3. Point 42-F2 does not apply to a person if the person’s partner:

(a) is not in receipt of:

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

(ii) a social security benefit; and

(b) does not have maintenance income.

Note: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Special maintenance income

42-F4. Subject to points 42-F7 and 42-F8, if a person has special maintenance income in excess of the ceiling applicable to the person, the excess is disregarded for the purposes of this Module.

Note: see subsection 5k (1) for ‘special maintenance income’.

42-F5. If a person:

(a) is a member of a couple; and

(b) has a maintained child; and

the ceiling applicable to the person is the amount equal to the person’s maintenance income free area plus:

where:

‘combined maximum rates’ is the sum of:

(a) the maximum payment rate of pension applicable to the person; and

(b) the maximum payment rate of service pension or social security pension applicable to the person’s partner; and

Note 1: for ‘maintained child’ see subsection 5k (1).

Note 2: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

42-F6. If a person is not covered by point 42-F5, the ceiling applicable to the person is the amount equal to the person’s maintenance income free area plus:

Special maintenance income not disregarded where child support available

42-F7. No amount is to be disregarded under point 42-F4 if:

(a) child support is not payable under the Child Support (Assessment) Act 1989 to the person for a child; and

(b) the person is entitled to make an application for assessment of child support under Part V of that Act for the child payable by another person; and

(i) neither:

(a) properly made such an application; nor

(b) properly made an application under Part VI of that Act for acceptance of an agreement in relation to the child; or

(ii) the person has properly made an application of either kind, but:

(a) the person has subsequently withdrawn the application; or

(b) after child support has become payable by the other person under that Act for the child, the person has ended the entitlement to child support.

42-F8. No amount is to be disregarded under point 42-F4 if:

(a) child support is payable under the Child Support (Assessment) Act 1989 to the person for a child; and

(b) the person is entitled to make an application under section 128 of that Act; and

How to calculate a person’s maintenance income free area

42-F9. A person’s maintenance income free area is worked out using Table F-1. Work out which family situation in Table F-1 applies to the person. The maintenance income free area is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each maintained child after the first.

TABLE F-1 MAINTENANCE INCOME FREE AREA
column 1	column 2	column 3	column 4	column 5	column 6
item	person’s family situation	basic free area per year	basic free area per fortnight	additional free area per year	additional free area per fortnight
1.	Not member of a couple	$780.00	$30.00	$260.00	$10.00
2.	Partnered (partner getting neither pension nor benefit)	$780.00	$30.00	$260.00	$10.00
3.	Partnered (partner getting pension or benefit)—both the person and the partner are receiving maintenance income	$780.00	$30.00	$130.00	$5.00
4.	Partnered (partner getting pension or benefit)—either the person or the partner (but not both) are receiving maintenance income	$390.00	$15.00	$130.00	$5.00

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’, ‘partnered (partner getting pension or benefit)’ and ‘maintained child’ see sections 5e and 5k.

Note 2: items 2, 3 and 4 of Table F-l apply to members of illness separated and respite care couples.

42-F10. In determining whether or not item 3 or 4 of Table F-1 applies to a person point 42-F2 is to be disregarded. This has the effect of taking into account only maintenance income that the person actually receives rather than any income that the person is to be taken to receive because of maintenance income received by the person’s partner.

Pension reduction for maintenance income in excess of maintenance income free area

42-F11. A person’s reduction for maintenance income is worked out using Table F-2. Work out which family situation applies to the person. The reduction for maintenance income is the amount per year worked out using the corresponding calculation in column 3.

TABLE F-2 REDUCTION FOR MAINTENANCE INCOME
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not member of a couple	maintenance income excess
		2
2.	Partnered (partner getting neither pension nor benefit)	maintenance income excess
	Partnered (partner getting neither pension nor benefit)	2
3.	Partnered (partner getting benefit)	maintenance income excess
		2
4.	Partnered (partner getting pension) person has additional amounts for dependent children	DC excess – remaining excess
		2
5.	Partnered (partner getting pension) partner has additional amounts for dependent children	remaining excess
		2

Note 2: for ‘additional amounts for dependent children’ see subsection 5q (1).

Note 3: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 4: for ‘maintenance income excess’ see point 42-F12 below.

Note 5: for ‘DC excess’ and ‘remaining excess’ see point 42-F13 below.

Note 6: for background information on the special treatment given to people covered by items 4 and 5 of Table F-2 see points 42-A3 and 42-A4 above.

Maintenance income excess

42-F12. A person’s maintenance income excess is the person’s maintenance income less the person’s maintenance income free area.

Working out DC excess and remaining excess

42-F13. For the purposes of Table F-2, where a member of a couple (in this point called the ‘DC partner’) has additional amounts for dependent children:

(a) the additional amounts for dependent children total (the ‘DC total’) is the sum of the amounts the DC partner has by way of additional amounts for dependent children; and

(b) if the DC partner’s ordinary income excess (see point 42-E11 above) plus the DC partner’s maintenance income excess (see point 42-F12 above) are less than or equal to the DC total:

(i) the DC excess is the DC partner’s maintenance income excess; and

(ii) the remaining excess is nil; and

(i) the DC partner’s ordinary income excess (see point 42-E11 above) plus the DC partner’s maintenance income excess (see point 42-F12 above) is greater than the DC total; and

(ii) the DC partner’s ordinary income excess is greater than or equal to the DC total;

then:

(iii) the DC excess is nil; and

(iv) the remaining excess is the DC partner’s maintenance income excess; and

(d) if:

(i) the DC partner’s ordinary income excess (see point 42-E11 above) plus the DC partner’s maintenance income excess (see point 42-F12 above) is greater than the DC total; and

(ii) the DC partner’s ordinary income excess is less than the DC total;

then:

(iii) the DC excess is the DC total less the DC partner’s ordinary income excess; and

(iv) the remaining excess is the DC partner’s maintenance income excess less the DC excess.

MODULE G—ASSETS TEST

Effect of assets on maximum payment rate

42-G1. This is how to work out the effect of a person’s assets on the person’s maximum payment rate:

Method statement
Step 1.	Work out the value of the person’s assets.
	Note 1: for the treatment of the assets of members of a couple see point 42-G2.
	Note 2: for the assets that are to be disregarded in valuing a person’s assets see section 52.
	Note 3: for the valuation of an asset that is subject to a charge or encumbrance see section 52c.
Step 2.	Work out the person’s assets value limit (see point 42-G3 below).
	Note: a person’s assets value limit is the maximum value of assets the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the value of the person’s assets exceeds the person’s assets value limit.
Step 4.	If the value of the person’s assets does not exceed the person’s assets value limit, the person’s assets excess is nil.
Step 5.	If the value of the person’s assets exceeds the person’s assets value limit, the person’s assets excess is the value of the person’s assets less the person’s assets value limit.
Step 6.	Use the person’s assets excess to work out the person’s reduction for assets using points 42-G4 to 42-G7 below.

Note 1: see point 42-A1 (Steps 9 to 11) for the significance of the person’s reduction for assets.

Note 2: the application of the assets test is affected by provisions concerning:

• disposal of assets (sections 52e-52j);

• retirement villages (sections 52k-52x);

• financial hardship (sections 55y and 55z);

• the pensions loans scheme (sections 52za-52zm).

Value of assets of members of couples

42-G2. For the purposes of this Module:

(a) the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

(i) the value of the person’s assets; and

(ii) the value of the person’s partner’s assets; and

(b) the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

(i) the value of the person’s assets of that kind; and

(ii) the value of the person’s partner’s assets of that kind.

Assets value limit

42-G3. A person’s assets value limit is worked out using Table G-1. Work out the person’s family situation and property ownership situation. The assets value limit is the corresponding amount in column 3.

TABLE G-1 ASSETS VALUE LIMIT
column 1	column 2	column 3
item	person’s family situation	assets value limit
		column 3a	column 3b
		either person or partner property owner	neither person nor partner property owner
1.	Not a member of a couple	$103,500	$177,500
2.	Partnered (partner getting neither pension nor benefit)	$73,750	$110,750
3.	Partnered (partner getting pension or benefit)	$73,750	$110,750

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’ and ‘partnered (partner getting pension or benefit)’ see section 5e

Note 2: for ‘property owner’ see section 5l.

Note 3: items 2 and 3 apply to members of illness separated or respite care couples.

Note 4: the assets value limits are indexed annually in line with CPI increases.

Pension reduction for assets in excess of assets value limit

42-G4. A person’s reduction for assets is worked out using Table G-2. Work out which family situation applies to the person. The reduction for assets is the amount per year worked out using the corresponding calculation in column 3.

TABLE-G-2 REDUCTION FOR ASSETS
column 1 item	column 2 person’s family situation	column 3 reduction
1.	Not member of a couple	[assets excess] × 26
		250
2.	Partnered (partner getting neither pension nor benefit)	[assets excess] × 26
	Partnered (partner getting neither pension nor benefit)	250
3.	Partnered (partner getting benefit)	[assets excess] × 26
		250
4.	Partnered (partner getting pension) person has additional amounts for dependent children	[DC excess] × 52 + [remaining excess] × 26
		250 250
5.	Partnered (partner getting pension) partner has additional amounts for dependent children	[remaining excess] × 26
		250

Note 2: for ‘additional amounts for dependent children’ see subsection 5q (1).

Note 3: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 4: for ‘assets excess’ see point 42-G5 below.

Note 5: for ‘DC excess’ and ‘remaining excess’ see point 42-G6 below.

Note 6: for background information on the special treatment given to people covered by items 4 and 5 of Table G-2 see points 42-A3 and 42-A4 above.

Assets excess

42-G5. A person’s assets excess is the value of the person’s assets less the person’s assets value limit.

Working out DC excess and remaining excess

42-G6. For the purposes of Table G-2, where a member of a pensioner couple (in this point called the ‘DC partner’) has additional amounts for dependent children:

(a) the additional amounts for dependent children total (the ‘DC total’) is the sum of the amounts that the DC partner has by way of additional amounts for dependent children; and

(b) the assets equivalent of the DC total (the ‘DC assets total’) is:

; and

(i) the DC excess is the assets excess; and

(ii) the remaining excess is nil; and

(d) if the DC partner’s assets excess (see point 42-G5 above) is greater than the DC assets total:

(i) the DC excess is the DC assets excess; and

(ii) the remaining excess is the assets excess less the DC assets total.

42-G7. In calculating a person’s assets excess under point 42-G5, disregard any part of the excess that is not a multiple of $250.

MODULE H—REMOTE AREA ALLOWANCE

Remote area allowance

42-H1. An amount by way of remote area allowance is to be added to a person’s rate of pension if:

(a) the person’s usual place of residence is situated in the remote area; and

(b) the person is physically present in the remote area.

Note: for ‘remote area’ and ‘physically present in the remote area’ see section 5q.

Rate of remote area allowance

42-H2. The rate of remote area allowance payable to a person is worked out using Table H. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each veteran pensioner add-on child of the person.

TABLE H REMOTE AREA ALLOWANCE
column 1	column 2	column 3	column 4	column 5	column 6
item	person’s family situation	basic allowance per year	basic allowance per fortnight	additional allowance per year	additional allowance per fortnight
1.	Not member of a couple	$364.00	$14.00	$182.00	$7.00
2.	Partnered—partner receiving remote area allowance	$312.00	$12.00	$182.00	$7.00
3.	Partnered—partner not receiving remote area allowance	$364.00	$14.00	$182.00	$7.00

Note 1: for ‘member of a couple’ and ‘partnered’ see section 5e.

Note 2: for ‘veteran pensioner add-on child’ see point 42-H4.

Illness separated couples

42-H3. For the purposes of Table H in point 42-H2, a member of an illness separated couple is to be treated as not being a member of a couple.

Veteran pensioner add-on child

42-H4. A person has a veteran pensioner add-on child if:

(a) the person is receiving age or invalidity service pension; and

(b) the person has a child; and

Dependent children must be physically present in Australia

42-H5. Additional allowance is not payable for a child unless the child is physically present in Australia.

“Subdivision D—Service Pension Rate Calculator for Blinded Veterans

Rate of age and invalidity service pension (blinded veterans)

“43. (1) The rate of:

(a) age service pension payable to a veteran who is permanently blind; and

(b) invalidity service pension payable to a veteran who is permanently blind;

is, subject to subsections (2) and (3), to be calculated in accordance with the Rate Calculator at the end of this section.

Note: Module A of the Rate Calculator establishes the overall rate calculation process and the remaining Modules provide for the calculation of the component amounts used in the overall rate calculation.

“(2) Subsection (1) does not apply to an age or invalidity service pension payable to a war widow referred to in section 45 (‘Frozen Rate’ Widow Service Pension Rate Calculator).

Note: however, a war widow referred to in section 45 may need to use this Rate Calculator as part of the calculation process in the Rate Calculator at the end of section 45.

“(3) If:

(a) a veteran is a member of a couple; and

(b) the veteran’s partner is not receiving a service pension or a social security pension or benefit;

“SERVICE PENSION RATE CALCULATOR FOR BLINDED VETERANS

MODULE A—OVERALL RATE CALCULATION PROCESS

Method of calculating rate

43-A1. The rate of pension is an annual rate (fortnightly amounts are provided for information only):

Method statement
Step 1.	Work out the veteran’s maximum basic rate using MODULE B below.
Step 2.	Work out the amount per year (if any) for dependent children using MODULE C below.
Step 3.	Work out the amount per year (if any) for rent using MODULE D below.
Step 4.	Add up the amounts obtained in Steps 1, 2 and 3: the result is called the maximum payment rate.
Step 5.	Add to the maximum payment rate any amount per year payable by way of remote area allowance (see MODULE E below).

Income test, maintenance income test and assets test generally not to apply

43-A2. The pension is not subject to an income test (compare Module E of Service Pension Rate Calculator Where There Are Dependent Children), a maintenance income test (compare Module F of Service Pension Rate Calculator Where There Are Dependent Children) or an assets test (compare Module G of Service Pension Rate Calculator Where There Are Dependent Children).

MODULE B—MAXIMUM BASIC RATE

Maximum basic rate

43-B1. A veteran’s maximum basic rate depends on the veteran’s family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3 of the Table.

TABLE B MAXIMUM BASIC RATE
column 1	column 2	column 3	column 4
item	veteran’s family situation	rate per year	rate per fortnight
1.	Not member of a couple	$7,324.40	$282.40
2.	Partnered (partner getting neither pension nor benefit)	$7,342.40	$282.40
3.	Partnered (partner getting pension or benefit)	$6,120.40	$235.40
4.	Member of an illness separated or respite care couple	$7,342.40	$282.40

Note 2: the maximum basic rates are indexed 6 monthly in line with CPI increases.

MODULE C—ADDITIONAL AMOUNTS FOR DEPENDENT CHILDREN

Additional amounts for dependent children

43-C1. This is how to work out the amount per year to be added to a person’s maximum basic rate for dependent children:

Method statement
Step 1.	Work out which one of the amounts applicable to the person under point 43-C3 is the highest: the result is called the provisional add-on.
Step 2.	Work out the amount that the person would receive under Module C of the Service Pension Rate Calculator Where There Are Dependent Children if that Rate Calculator applied to the person: the result is called the notional income/assets tested add-on.
	Note: this requires the application of the income and assets tests in the Service Pension Rate Calculator Where There Are Dependent Children (Modules E, F and G) and of section 40c (order of reduction against components of the maximum payment rate: first against maximum basic rate then against rent then against dependent child amount).
Step 3.	Compare the provisional add-on and the notional income/ assets tested add-on: the amount to be added to the person’s maximum basic rate is:
	(a) the provisional add-on if the provisional add-on is greater than or equal to the notional income/assets tested add-on; or
	(b) the notional income/assets tested add-on if that add-on is greater than the provisional add-on.

Children of a couple

43-C2. If:

(a) a man and a woman are the members of a couple; and

(b) either or both of them have dependent children;

TABLE C-1 ALLOCATION OF DEPENDENT CHILDREN
	column 1	column 2	column 3	column 4	column 5	column 6	column 7
item	man woman	Service age	Service invalidity	Service illness separated	Service carer	Social Security	Nothing
1.	Service age	man	man	woman	woman	man	woman
2.	Service invalidity	man	man	woman	woman	man	woman
3.	Service wife	man	man	woman	man	man	woman
4.	Service illness separated	man	man		man	man	woman
5.	Service carer	man	man	woman	woman	man	woman
6.	Social Security	man	man	woman	woman
7.	Nothing	man	man	man	man

KEY

Service age	= age service pension
Service invalidity	= invalidity service pension
Service carer	= carer service pension
Service wife	= wife service pension
Social Security	= social security pension
Service illness separated (man)	= the person is receiving an age service or invalidity service pension and the couple is an illness separated couple because of the person’s illness or infirmity.
Nothing	= the person is receiving neither pension under this Act nor a social security pension.

Applicable amounts

43-C3. If a person has a dependent child or dependent children, the amounts (if any) applicable to the person under this point are worked out using Table C-2.

TABLE C-2 APPLICABLE AMOUNT FOR DEPENDENT CHILDREN
column 1	column 2	column 3	column 4
item	additional amount	rate per year	rate per fortnight
1.	Amount applicable if veteran has a dependent child who has not turned 13	$1,255.80	$48.30
2.	Amount applicable if veteran has a dependent child who has turned 13 but has not turned 16	$1,833	$70.50
3.	Amount applicable if veteran has a dependent child who has turned 16 (over 16 child add-on)	$884	$34
4.	Amount applicable if the veteran has a dependent child or dependent children and either is not a member of a couple or is a member of an illness separated couple	$670.80	$25.80

Note 3: the item 3 rate is not adjusted.

No additional amount for prescribed student children

43-C4. Once a dependent child of a person turns 16, the child is not to be taken into account for the purposes of item 3 of Table C-2 if the child is a prescribed student child.

Note 1: for ‘prescribed student child’ and ‘dependent child’ see section 5F.

Note 2: even though a child does not attract an additional amount under items 1, 2 and 3 of Table C-2 in point 43-C3, the child may attract guardian allowance under item 4 of the Table.

Item 4 does not apply to dependent children who have turned 18

43-C5. Once a dependent child of a person turns 18, the child is not to be taken into account for the purposes of item 4 of Table C-2 unless:

(a) the child is a student child but not a prescribed student child; or

(b) the person receives child disability allowance under the Social Security Act in respect of the child.

MODULE D—RENT ASSISTANCE

Rent assistance

43-D1. Rent assistance is an amount that may be added to the maximum basic rate to help cover the cost of rent of a person who is eligible for rent assistance under point 43-D2.

Eligibility for rent assistance

43-D2. Rent assistance is to be added to the person’s maximum basic rate if:

(a) the person is not an ineligible property owner; and

(b) the person pays, or is liable to pay, rent (other than Government rent); and

(d) the person is in Australia; and

(e) the person would be entitled to an additional amount by way of rent assistance under Module D of Service Pension Rate Calculator Where There Are Dependent Children if that Rate Calculator applied to the person.

Note 1: for ‘ineligible property owner’, ‘rent’ and ‘Government rent’ see section 5n.

Note 2: Service Pension Rate Calculator Where There Are Dependent Children is found in section 42.

No rent assistance if person or partner getting incentive allowance under the Social Security Act

43-D3. If a person is a member of a couple and the person’s partner is living with the person in their home, an additional amount is not to be added to the person’s maximum basic rate under point 43-D2 if an amount by way of incentive allowance is being added to the maximum basic rate of the person or the person’s partner.

Rate of rent assistance

43-D4. The rate of rent assistance is the rate at which rent assistance would be payable to the person if the Service Pension Rate Calculator Where There Are Dependent Children applied to the person.

Note 1: if the Service Pension Rate Calculator Where There Are Dependent Children (see section 42) applied to the person, the person would be subject to an ordinary income test (Module E), a maintenance income test (Module F) and an assets test (Module G).

Note 2: if the Service Pension Rate Calculator Where There Are Dependent Children applied to a person and there was to be a reduction in pension rate because of the application of the ordinary income test, the maintenance income test or the assets test, section 40c would govern the order in which the reduction would be made against the components of the maximum payment rate (first against maximum basic rate, then against the rent, then against dependent child amount.

MODULE E—REMOTE AREA ALLOWANCE

Remote area allowance

43-E1. An amount by way of remote area allowance is to be added to a person’s rate of pension if:

(a) the person’s usual place of residence is situated in the remote area; and

(b) the person is physically present in the remote area.

Note: for ‘remote area’ and ‘physically present in the remote area’ see section 5q.

Rate of remote area allowance

43-E2. The rate of remote area allowance payable to a person is worked out using Table E. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3 plus an additional corresponding amount in column 5 for each veteran pensioner add-on child of the person.

TABLE E REMOTE AREA ALLOWANCE
column 1	column 2	column 3	column 4	column 5	column 6
item	veteran’s family situation	basic allowance per year	basic allowance per fortnight	additional allowance per year	additional allowance per fortnight
1.	Not member of a couple	$364.00	$14.00	$182.00	$7.00
2.	Partnered—partner eligible to receive remote area allowance	$312.00	$12.00	$182.00	$7.00
3.	Partnered—partner not eligible to receive remote area allowance	$364.00	$14.00	$182.00	$7.00

Note 1: for ‘member of a couple’, ‘partnered’ and ‘dependent child’ see sections 5e and 5f.

Note 2: for ‘veteran pensioner add-on child’ see point 43-E4.

Illness separated couples

43-E3. For the purposes of Table E in point 43-E2, a member of an illness separated couple is to be treated as not being a member of a couple.

Veteran pensioner add-on child

43-E4. A person has a veteran pensioner add-on child if:

(a) the person is a veteran; and

(b) the person has a child; and

Dependent children must be physically present in Australia

43-E5. Additional allowance is not payable for a child unless the child is physically present in Australia.

“Subdivision E—Service Pension Rate Calculator for Widows and Non-illness Separated Wives

Rate of wife service pension for widows and non-illness separated wives

“44. The rate of wife service pension for:

(a) a woman who is:

(i) the widow of a deceased veteran; and

(ii) is not receiving age or invalidity service pension; or

(b) a woman who is a non-illness separated wife;

is to be calculated in accordance with the Rate Calculator at the end of this section.

Note 2: the rate obtained by applying the Rate Calculator may be reduced because of the receipt of payments under the New Enterprise Incentive Scheme (see Division 12).

Note 3: for ‘non-illness separated wife’ see subsection 5e (1).

Note 4: usually a woman to whom this Rate Calculator applies will not be a member of couple. However, it is possible that she has entered a de facto relationship since she was widowed or separated. This is why the Rate Calculator covers situations where the woman is a member of a couple.

Note 5: if a woman receiving wife service pension as a widow or non-illness separated wife becomes legally married to another service pensioner, her rate is not calculated under this Rate Calculator.

‘SERVICE PENSION RATE CALCULATOR FOR WIDOWS AND NON-ILLNESS SEPARATED WIVES

MODULE A—OVERALL RATE CALCULATION PROCESS

Method of calculating rate

44-A1. The rate of pension is an annual rate (fortnightly amounts 5 are provided for information only):

Method statement
Step 1.	Work out the person’s maximum basic rate using MODULE B below.
Step 2.	Work out the amount per year (if any) for rent using MODULE C below.
Step 3.	Add up the amounts obtained in Steps 1 and 2: the result is called the maximum payment rate.
Step 4.	Apply the ordinary income test using MODULE D below to work out the reduction for ordinary income.
Step 5.	Apply the maintenance income test using MODULE E below to work out the reduction for maintenance income.
Step 6.	Add up the reduction for ordinary income and the reduction for maintenance income: the result is called the total income reduction.
Step 7.	Take the total income reduction away from the maximum payment rate: the result is called the income reduced rate.
Step 8.	Apply the assets test using MODULE F below to work out the reduction for assets.
Step 9.	Take the reduction for assets away from the maximum payment rate: the result is called the assets reduced rate.
Step 10.	Compare the income reduced rate and the assets reduced rate: the rate of pension is:
	(a) the income reduced rate if it is lower than the assets reduced rate; or
	(b) the assets reduced rate if it is lower than the income reduced rate; or
	(c) the income reduced rate if the income reduced rate and the assets reduced rate are exactly equal; plus any amount per year payable by way of remote area allowance (see MODULE G below).

Note 1: if a person’s assets reduced rate is less than the person’s income reduced rate, the person may be able to take advantage of provisions dealing with:

• financial hardship (sections 52y and 52z);

• pensions loan scheme (sections 52za-52zm).

Note 2: if a person’s rate is reduced under Step 10 the order in which the reduction is to be made against the components of the maximum payment rate is laid down in section 40c (maximum basic rate first and then rent assistance).

MODULE B—MAXIMUM BASIC RATE

Maximum basic rate

44-B1. A person’s maximum basic rate depends on the person’s family situation. Work out which family situation in Table B applies to the person. The maximum basic rate is the corresponding amount in column 3.

TABLE B MAXIMUM BASIC RATES
column 1	column 2	column 3	column 4
item	person’s family situation	rate per year	rate per fortnight
1.	Not member of a couple	$6,120.40	$235.40
2.	Partnered (partner getting neither pension nor benefit)	$6,120.40	$235.40
3.	Partnered (partner getting pension or benefit)	$6,120.40	$235.40

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’ and ‘partnered (partner getting pension or benefit)’ see section 5e.

Note 2: the maximum basic rates are indexed 6 monthly in line with CPI increases.

MODULE C—RENT ASSISTANCE

Rent assistance

44-C1. Rent assistance is an amount that may be added to the maximum basic rate to help cover the cost of rent. A person who is eligible for rent assistance under point 44-C2 can have added to the person’s maximum basic rate the amount applying to that person under Table C-1. This is the provisional amount of rent assistance the person is entitled to. However, if the person or the person’s partner receives disability pension, the provisional amount of rent assistance may be reduced under point 44-C10.

Note: for ‘disability pension’ see section 5m.

Eligibility for rent assistance

44-C2. Rent assistance is to be added to a person’s maximum basic rate if:

(a) the person is not an ineligible property owner; and

(b) the person pays, or is liable to pay, rent (other than Government rent); and

(d) the person is in Australia.

Note: for ‘rent’, ‘Government rent’ and ‘ineligible property owner’ see section 5n.

No rent assistance if partner getting incentive allowance under the Social Security Act

44-C3. If a person is a member of a couple and the person’s partner is living with the person in their home, an additional amount is not to be added to the person’s maximum basic rate under point 44-C2 if an amount by way of incentive allowance is being added to the maximum basic rate of the person’s partner.

Factors affecting rate of rent assistance

44-C4. The rate of rent assistance depends on:

(a) the annual rent paid or payable by the person; and

(b) whether or not the person or the person’s partner is receiving a disability pension; and

(d) the number of pension increase children (if any) that the person has.

Note: for ‘pension increase child’ see subsection 5f (6). In this Rate Calculator only paragraph (b) of the definition of ‘pension increase child’ is relevant.

Partner with rent increased pension

44-C5. A person has a partner with a rent increased pension, for the purposes of this Module, if:

(a) the partner is living with the person in their home; and

(b) the partner is receiving a service pension or social security pension; and

Note 1: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 2: for the treatment of rent paid by a member of a couple see point 44-C8.

Rate of rent assistance

44-C6. The rate of rent assistance is the lesser of rate A and B applicable to the person in accordance with Table C-1.

TABLE C-1 RATE OF RENT ASSISTANCE
col. 1	column 2	column 3	column 4
item	family situation	rate A	rate B
			column 4a	column 4b	column 4c
			no pension increase children	1 or 2 pension increase children	3 or more pension increase children
1.	Not member of a couple	Annual rent – $1,040	$1,560	—	—
		2
2.	Partnered—partner does not have rent increased pension	Annual rent – $1,040	$1,560	—	—
	Partnered—partner does not have rent increased pension	2
3.	Partnered—partner has rent increased pension	Annual rent – $1,040	$780	$910	$1,040
	Partnered—partner has rent increased pension	4

Note 1: for ‘member of a couple’ and ‘partnered’ see section 5e.

Note 2: for ‘partner with a rent increased pension’ see section 44-C5.

Annual rent

44-C7. Annual rent is the annual rent paid or payable by the person whose pension rate is being calculated.

Rent paid by a member of a couple

44-C8. Where a person is a member of a couple and the person’s partner is living with the person in their home, any rent that the person’s partner pays or is liable to pay in respect of the home is to be treated as paid or payable by the person.

Note: for ‘member of a couple’ see section 5e.

Rent paid by a member of an illness separated or respite care couple

44-C9. Where a person is a member of an illness separated or respite care couple, any rent that the person’s partner pays or is liable to pay in respect of the premises occupied by the person is to be treated as paid or payable by the person.

Note: for ‘member of an illness separated couple’ and ‘respite care couple’ see subsections 5r (5) and (6).

Effect of disability pension on rate of rent assistance

44-C10. This is how to work out the effect of a person’s disability pension on the person’s rate of rent assistance:

Method statement
Step 1.	Work out the amount of the person’s disability pension on a yearly basis: the result is the person’s disability income. Note: for the treatment of the amount of disability pension of members of a couple see point 44-C11.
Step 2.	Work out the person’s rent assistance free area (see point 44-C12 below).
Step 3.	Work out whether the person’s disability pension income exceeds the person’s rent assistance free area.
Step 4.	If the person’s rent assistance free area exceeds the person’s disability pension income, the person’s rate of rent assistance worked out under Table C is not affected.
Step 5.	If the person’s rent assistance free area does not exceed the person’s disability pension income, take the person’s rent assistance free area away from the person’s disability pension income: the result is the person’s disability income excess.
Step 6.	. Halve the person’s disability pension income excess: the result is the rent assistance reduction amount.
Step 7.	Take the person’s rent assistance reduction amount away from the rate of rent assistance worked out under Table C-1: the result is the person’s rate of rent assistance.

Members of couples receiving disability pension

44-C11. If a person is a member of couple and the person’s partner also receives disability pension, add the couple’s disability pensions (on a yearly basis) and divide by 2 to work out the amount of the disability pension income of each of them for the purposes of this Module.

How to calculate a person’s rent assistance free area

44-C12. A person’s rent assistance free area is worked out using Table C-2. Work out which family situation in Table C-2 applies to the person. The rent assistance free area is the corresponding amount in column 3. If the person has a partner who has a dependent child or children, an additional amount in column 5 is added to the basic rent assistance free area for each dependent child of the person’s partner.

TABLE C-2 RENT ASSISTANCE FREE AREA
column 1	column 2	column 3	column 4	column 5	column 6
item	category of person	basic free area per year	basic free area per fortnight	additional free area per year	additional free area per fortnight
1.	Not member of a couple	$1,820	$70	—	—
2.	Partnered (partner getting neither pension nor benefit)	$1,820	$70	—	—
3.	Partnered (partner getting benefit)	$1,820	$70	—	—
4.	Partnered (partner getting pension)	$1,820	$70	$312	$12

Note 2: items 2, 3 and 4 of Table C-2 apply to members of illness separated or respite care couples.

Note 3: the free area is indexed annually in line with CPI increases.

Additional free area for children in some cases

44-C13. If:

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

(b) the person’s partner is receiving an age service pension or invalidity service pension; and

(c) the partner’s service pension rate includes a dependent child add-on for a child or dependent child add-ons for children;

the person’s ordinary income free area is to be increased by $312 for the child or for each of the children.

No additional free area for certain prescribed student children

44-C14. No additional free area is to be added for a dependent child who:

(a) has turned 18; and

(b) is a prescribed student child;

unless the person whose rate is being calculated, or the person’s partner, receives child disability allowance under the Social Security Act for the child.

Reduction of additional free area for dependent children

44-C15. The additional free area for a dependent child of a person to whom item 1, 2 or 3 of Table C-1 applies is reduced by the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 44-C17 do not result in a reduction.

44-C16. The additional free area for a dependent child of a person to whom item 4 of Table C-1 applies is reduced by 50% of the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 44-C17 do not result in a reduction.

44-C17. No reduction is to be made under point 44-C7 or 44-C8 for a payment:

(a) under this Act; or

(b) of maintenance income; or

(d) under the AUSTUDY scheme; or

(e) under the Assistance for Isolated Children Scheme; or

(f) that is similar in nature to family allowance and that prevents a family allowance from being paid under section 837 of the Social Security Act.

MODULE D—ORDINARY INCOME TEST

Effect of income on maximum payment rate

44-D1. This is how to work out the effect of a person’s ordinary income on the person’s maximum payment rate:

Method statement
Step 1.	Work out the amount of the person’s ordinary income in a yearly basis.
	Note: for the treatment of the ordinary income of members of a couple see point 44-D2.
Step 2.	Work out the person’s ordinary free area (see points 44-D4 to 44-D11 below).
	Note: a person’s ordinary income free area is the maximum amount of ordinary income the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the person’s ordinary income exceeds the person’s ordinary income free area.
Step 4.	If the person’s ordinary income does not exceed the person’s ordinary income free area, the person’s ordinary income excess is nil.
Step 5.	If the person’s ordinary income exceeds the person’s ordinary income free area, the person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.
Step 6.	Use the person’s ordinary income excess to work out the person’s reduction for ordinary income using points 44-D10 and 44-D11 below.

Note 1: see point 44-A1 (Steps 5 to 10) for the significance of the person’s reduction for ordinary income.

Note 2: the application of the ordinary income test is affected by provisions concerning:

• investment income (sections 46-46u);

• disposal of income (sections 48-48e);

• earnings credit (section 49).

Ordinary incomes of members of couples

44-D2. 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 Module.

Ordinary income free area

44-D3. A person’s ordinary income free area is the amount of ordinary income the person can have without any deduction being made from the person’s maximum payment rate.

How to calculate a person’s ordinary income free area

44-D4. Subject to point 44-D5, a person’s ordinary income free area is $1,820.

Additional free area for children in some cases 44-D5. If:

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

(b) the person’s partner is receiving an age service pension or invalidity service pension; and

the person’s ordinary income free area is to be increased by $312 for the child or for each of the children.

No additional free area for certain prescribed student children

44-D6. No additional free area is to be added for a dependent child who:

(a) has turned 18; and

(b) is a prescribed student child;

unless the person whose rate is being calculated, or the person’s partner, receives child disability allowance under the Social Security Act for the child.

Reduction of additional free area for dependent children

44-D7. The additional free area for a dependent child of a person is reduced by the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 42-D8 do not result in a reduction.

44-D8. No reduction is to be made under point 44-D7 for a payment:

(a) under this Act; or

(b) of maintenance income; or

(d) under the AUSTUDY scheme; or

(e) under the Assistance for Isolated Children Scheme; or

(f) that is similar in nature to family allowance and that prevents a family allowance from being paid under section 837 of the Social Security Act.

Pension reduction for ordinary income in excess of ordinary income free area

44-D9. A person’s reduction for ordinary income is worked out using Table D. Work out which family situation applies to the person. The reduction for ordinary income is the amount per year worked out using the corresponding calculation in column 3.

TABLE D REDUCTION FOR ORDINARY INCOME
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not member of a couple	ordinary income excess
		2
2.	Partnered (partner getting neither pension nor benefit)	ordinary income excess
	Partnered (partner getting neither pension nor benefit)	2
3.	Partnered (partner getting benefit)	ordinary income excess
		2
4.	Partnered (partner getting pension)	ordinary income excess
		2
5.	Partnered (partner getting pension) partner has additional amounts for dependent children	remaining excess
		2

Note 2: for ‘additional amounts for dependent children’ see subsection 5q (1).

Note 3: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 4: for ‘ordinary income excess’ see point 44-D10 below.

Note 5: for background information on the special treatment given to people covered by item 5 of Table D see points 42-A3 and 42-A4 (in section 42).

Ordinary income excess

44-D10. A person’s ordinary income excess is the person’s ordinary income less the person’s ordinary income free area.

Working out remaining excess

44-D11. For the purposes of Table D, where a member of a couple (in this point called the ‘DC partner’) has additional amounts for dependent children:

(a) the additional amounts for dependent children total (the ‘DC total’) is the sum of the amounts the DC partner has by way of additional amounts for dependent children; and

(b) if the DC partner’s ordinary income excess (see point 42-E12) is less than or equal to the DC total, the remaining excess is nil; and

(c) if the DC partner’s ordinary income excess (see point 42-E12) is greater than the DC total, the remaining excess is the DC partner’s ordinary income excess less the DC total.

MODULE E—MAINTENANCE INCOME TEST

Effect of maintenance income on maximum payment rate

44-E1. This is how to work out the effect of a person’s maintenance income on the person’s maximum payment rate:

Method statement
Step 1.	Work out the amount of the person’s maintenance income on a yearly basis.
	Note 1: for the treatment of the maintenance income of members of a couple see points 44-E2 and 44-E3.
	Note 2: ‘special maintenance income’ (see subsection 5k (1)) can in some circumstances be disregarded under points 44-E4 to 44-E8.
Step 2.	Work out the person’s maintenance income free area (see points 44-E6 and 44-E7 below).
	Note: a person’s maintenance income free area is the maximum amount of maintenance income the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the person’s maintenance income exceeds the person’s maintenance income free area.
Step 4.	If the person’s maintenance income does not exceed the person’s maintenance income free area, the person’s maintenance income excess is nil.
Step 5.	If the person’s maintenance income exceeds the person’s maintenance income free area, the person’s maintenance income excess is the person’s maintenance income less the person’s maintenance income free area.
Step 6.	Use the person’s maintenance income excess to work out the person’s reduction for maintenance income using points 44-E9 and 44-E10 below.

Note 1: see point 44-A1 (Steps 5 to 10) for the significance of the person’s reduction for maintenance income.

Note 2: the application of the maintenance income test is affected by provisions concerning:

• apportionment of capitalised maintenance income (section 51);

• in-kind housing maintenance—value of substitute for family home (section 51a).

Maintenance incomes of members of couples

44-E2. If the person is a member of a couple, add the couples maintenance incomes (on a yearly basis) and divide by 2 to work out the amount of the person’s maintenance income for the purposes of this Module.

44-E3. Point 44-E2 does not apply to a person if the person’s partner:

(a) is not receiving:

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

(ii) a social security benefit; and

(b) does not have maintenance income.

Note: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Special maintenance income

44-E4. If a person has special maintenance income in excess of the ceiling applicable to the person, the excess is disregarded for the purposes of this Module.

Note: see section 5k for ‘special maintenance income’.

44-E5. The ceiling applicable to a person under this Module is the amount equal to the person’s maintenance income free area plus:

How to calculate a person’s maintenance income free area

44-E6. A person’s maintenance income free area is worked out using Table E-1. Work out which family situation in Table E-1 applies to the person. The maintenance income free area is the corresponding amount in column 3. If the person or the person’s partner has a maintained child or children, an additional amount in column 5 is added to the basic maintenance income free area for each maintained child after the first.

TABLE E-1 MAINTENANCE INCOME FREE AREA
column 1	column 2	column 3	column 4	column 5	column 6
item	person’s family situation	basic free area per year	basic free area per fortnight	additional free area per year	additional free area per fortnight
1.	Not member of a couple	$780.00	$30.00	$260.00	$10.00
2.	Partnered (partner getting neither pension nor benefit)	$780.00	$30.00	$260.00	$10.00
3.	Partnered (partner getting pension or benefit)—both the person and the partner are receiving maintenance income	$780.00	$30.00	$130.00	$5.00
4.	Partnered (partner getting pension or benefit)— either the person or the partner (but not both) are receiving maintenance income	$390.00	$15.00	$130.00	$5.00

Note: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’ and ‘partnered (partner getting pension or benefit)’ see section 5e.

44-E7. In determining whether or not item 3 or 4 of Table E-1 applies to a person point 44-E2 is to be disregarded. This has the effect of taking into account only maintenance income that the person actually receives rather than any income that the person is to be taken to receive because of maintenance income received by the person’s partner.

Pension reduction for maintenance income in excess of maintenance income free area

44-E8. A person’s reduction for maintenance income is worked out using Table E-2. Work out which family situation applies to the person. The reduction for maintenance income is the amount per year worked out using the corresponding calculation in column 3.

TABLE E-2 REDUCTION FOR MAINTENANCE INCOME
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not member of a couple	maintenance income excess
		2
2.	Partnered (partner getting neither pension nor benefit)	maintenance income excess
	Partnered (partner getting neither pension nor benefit)	2
3.	Partnered (partner getting pension or benefit)	maintenance income excess
	Partnered (partner getting pension or benefit)	2
4.	Partnered (partner getting pension) partner has additional amounts for dependent children	remaining excess
		2

Note 2: for ‘additional amounts for dependent children’ see subsection 5q (1).

Note 3: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 4: for ‘maintenance income excess’ see point 44-E9 below.

Note 5: for background information on the special treatment given to people covered by item 4 of Table E-2 see points 42-A3 and 42-A4 (in section 42).

Maintenance income excess

44-E9. A person’s maintenance income excess is the person’s maintenance income less the person’s maintenance income free area.

Working out remaining excess

44-E10. For the purposes of Table E-2, where a member of a couple (in this point called the ‘DC partner’) has additional amounts for dependent children:

(a) the additional amounts for dependent children total (the ‘DC total’) is the sum of the amounts the DC partner has by way of additional amounts for dependent children; and

(b) if the DC partner’s ordinary income excess (see point 42-E11) plus the DC partner’s maintenance income excess (see point 42-F12) are less than or equal to the DC total, the remaining excess is nil; and

(i) the DC partner’s ordinary income excess (see point 42-E11) plus the DC partner’s maintenance income excess (see point 42-F12) is greater than the DC total; and

(ii) the DC partner’s ordinary income excess is greater than or equal to the DC total;

the remaining excess is the DC partner’s maintenance income excess; and

(d) if:

(i) the DC partner’s ordinary income excess (see point 42-E11) plus the DC partner’s maintenance income excess (see point 42-F12) is greater than the DC total; and

(ii) the DC partner’s ordinary income excess is less than the DC total;

the remaining excess is the DC partner’s maintenance income excess less the DC excess.

MODULE F—ASSETS TEST

Effect of assets on maximum payment rate

44-F1. This is how to work out the effect of a person’s assets on the person’s maximum payment rate:

Method statement
Step 1.	Work out the value of the person’s assets.
	Note 1: for the treatment of the assets of members of a couple see point 44-F2.
	Note 2: for the assets that are to be disregarded in valuing a person’s assets see section 52.
	Note 3: for the valuation of an asset that is subject to a charge or encumbrance see section 52c.
Step 2.	Work out the person’s assets value limit (see point 44-F3 below).
	Note: a person’s assets value limit is the maximum value of assets the person can have without affecting the person’s pension rate.
Step 3.	Work out whether the value of the person’s assets exceeds the person’s assets value limit.
Step 4.	If the value of the person’s assets does not exceed the person’s assets value limit, the person’s assets excess is nil.
Step 5.	If the value of the person’s assets exceeds the person’s assets value limit, the person’s assets excess is the value of the person’s assets less the person’s assets value limit.
Step 6.	Use the person’s assets excess to work out the person’s reduction for assets using points 44-F4 to 44-F7.

Note 1: see point 44-A1 (Steps 9 and 10) for the significance of the person’s reduction for assets.

Note 2: the application of the assets test is affected by provisions concerning:

• disposal of assets (sections 52e and 52j);

• retirement villages (sections 52k-52x);

• financial hardship (sections 52y and 52z);

• the pensions loans scheme (sections 52za-52zm).

Value of assets of members of couples

44-F2. For the purposes of this Module:

(a) the value of the assets of a member of a couple is to be taken to be 50% of the sum of:

(i) the value of the person’s assets; and

(ii) the value of the person’s partner’s assets; and

(b) the value of the assets of a particular kind of a member of a couple is to be taken to be 50% of the sum of:

(i) the value of the person’s assets of that kind; and

(ii) the value of the person’s partner’s assets of that kind.

Assets value limit

44-F3. A person’s assets value limit is worked out using Table F-1. Work out the person’s family situation and property ownership situation. The assets value limit is the corresponding amount in column 3.

TABLE F-1 ASSETS VALUE LIMIT
column 1	column 2	column 3 assets value limit
		column 3a	column 3b
item	person’s family situation	either person or partner property owner	neither person nor partner property owner
1.	Not member of a couple	$103,500	$177,500
2.	Partnered (partner getting neither pension nor benefit)	$73,750	$110,750
3.	Partnered (partner getting pension or benefit)	$73,750	$110,750

Note 1: for ‘member of a couple’, ‘partnered (partner getting neither pension nor benefit)’ and ‘partnered (partner getting pension or benefit)’ see section 5e.

Note 2: for ‘property owner’ see section 5l.

Note 3: the assets value limits are indexed annually in line with CPI increases.

Pension reduction for assets in excess of assets value limit

44-F4. A person’s reduction for assets is worked out using Table F-2. Work out which family situation applies to the person. The reduction for assets is the amount per year worked out using the corresponding calculation in column 3.

TABLE F-2 REDUCTION FOR ASSETS
column 1	column 2	column 3
item	person’s family situation	reduction
1.	Not member of a couple	[assets excess] × 26
		250
2.	Partnered (partner getting neither pension nor benefit)	[assets excess] × 26
	Partnered (partner getting neither pension nor benefit)	250
3.	Partnered (partner getting benefit)	[assets excess] × 26
		250
4.	Partnered (partner getting pension)	[assets excess] × 26
		250
5.	Partnered (partner getting pension) partner has additional amounts for dependent children	[remaining excess] × 26
		250

Note 2: for ‘additional amounts for dependent children’ see subsection 5q (1).

Note 3: ‘social security pension’ includes a sheltered employment or rehabilitation allowance.

Note 4: for ‘assets excess’ see point 44-F5 below.

Note 5: for background information on the special treatment given to people covered by item 4 of Table E-2 see points 42-A3 and 42-A4 (in section 42).

Assets excess

44-F5. A person’s assets excess is the value of the person’s assets less the person’s assets value limit.

Working out remaining excess

44-F6. For the purposes of Table F-2, where a member of a pensioner couple (in this point called the ‘DC partner’) has additional amounts for dependent children:

(a) the additional amounts for dependent children total (the ‘DC total’) is the sum of the amounts that the DC partner has by way of additional amounts for dependent children; and

(b) the assets equivalent of the DC total (the ‘DC assets total’) is:

; and

(c) if the DC partner’s assets excess (see point 42-G5) is less than or equal to the DC assets total, the remaining excess is nil; and

(d) if the DC partner’s assets excess (see point 42-G5) is greater than the DC assets total, the remaining excess is the assets excess less the DC assets total.

44-F7. In calculating a person’s assets excess under point 44-F5 disregard any part of the excess that is not a multiple of $250.

MODULE G—REMOTE AREA ALLOWANCE

Remote area allowance

44-G1. An amount by way of remote area allowance is to be added to a person’s rate of pension if:

(a) the person’s usual place of residence is situated in the remote area; and

(b) the person is physically present in the remote area.

Note: for ‘remote area’ and ‘physically present in the remote area’ see section 5q.

Rate of remote area allowance

44-G2. The rate of remote area allowance payable to a person is worked out using Table G. Work out which family situation in the Table applies to the person. The rate of remote area allowance is the corresponding amount in column 3.

TABLE G REMOTE AREA ALLOWANCE
column 1	column 2	column 3	column 4
item	person’s family situation	allowance per year	allowance per fortnight
1.	Not member of a couple	$364.00	$14.00
2.	Partnered—partner receiving remote area allowance	$312.00	$12.00
3.	Partnered—partner not receiving remote area allowance	$364.00	$14.00

Note: for ‘member of a couple’ and ‘partnered’ see section 5e.

“Subdivision F—Service Pension Rate Calculator for ‘Frozen Rate’ Widows

Rate of age, invalidity and carer service pensions (war widow)

“45. If:

(a) a woman is a war widow because she is receiving a pension under:

(i) Part II or IV at a rate determined under or by reference to subsection 30 (1); or

(ii) the Seamen’s War Pensions and Allowances Act 1940 at a rate determined under or by reference to subsection 18 (2) of that Act; and

(b) she is also receiving:

(i) age service pension; or

(ii) invalidity service pension; or

(iii) carer service pension;

the rate of the service pension payable to her is to be calculated in accordance with the Rate Calculator at the end of this section.

Note: for ‘war widow’ see subsection 5e (1).

“SERVICE PENSION RATE CALCULATOR FOR ‘FROZEN RATE’ WIDOWS

MODULE A—OVERALL RATE CALCULATION PROCESS

Method of calculating rate

45-A1. The rate of pension is an annual rate (fortnightly amounts are provided for information only):

Method statement
Step 1.	Work out what the widow’s rate would be under the relevant Rate Calculator at the end of section 41, 42 or 43 if that Rate Calculator applied to her: the result is called the provisional rate.
Step 2.	Work out what the widow’s ceiling rate is using Module B below.
Step 3.	Compare the widow’s provisional rate and the ceiling rate: the rate of pension for the widow is:
	(a) the provisional rate if it is lower than the ceiling rate; or
	(b) the ceiling rate if it is lower than or equal to the provisional rate.

MODULE B—CEILING RATE

45-B1. The ceiling rate for a widow is $3,122.60 unless point 45-B2 applies to the widow.

45-B2. If the widow was receiving her service pension immediately before 1 November 1986 at a rate (in this point called the ‘pre-November 1986 rate’) equal to or more than $3,122.60, her ceiling rate is the pre-November 1986 rate.

“Division 8—Ordinary income test—investment income

“Subdivision A—Introduction

Structure of Division

“46. (1) This Division sets out the way that certain types of investment income are taken into account in applying the ordinary income test: if a person has any of the types of income referred to in

column 2 of the following Table, the rules relating to that type of income are found in the corresponding sections referred to in column 3.

TABLE STRUCTURE OF DIVISION
column 1	column 2	column 3
item	investment	section(s)
1.	Accruing return investments made before 1 January 1988	46b-46c
2.	Accruing return investments made after 1 January 1988	46d
3.	Market-linked investments made before 9 September 1988	46j-46k.
4.	Market-linked investments made after 9 September 1988	46l
5.	Compulsorily preserved superannuation	46s
6.	Immediate annuities	46t
7.	Superannuation pensions	46u

Note: for definitions of the terms used in the Table see section 5j.

“(2) If the person’s income is not covered by any of the other Subdivisions, it may be covered by section 46a below.

Certain capital amounts not covered by other Subdivisions taken to be received over 12 months

“46a. (1) Where a person becomes entitled, whether before or after the commencement of this section, to receive an amount of income that:

(a) is of a capital nature; and

(b) is not income from remunerative work undertaken by the person; and

(d) is not a return from a market-linked investment made on or after 9 September 1988;

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

“(2) A reference in subsection (1) to a person becoming entitled to receive an amount includes a reference to the person becoming entitled to receive an amount under an arrangement of the kind referred to in the definition of ‘accruing return investment’ in subsection 5j (1) to the extent to which section 46c or 46d does not apply to that entitlement.

“Subdivision B—Accruing return investments

Investments made before 1 January 1988 with friendly societies or where no immediate return

“46b. (1) If:

(a) a person has made, at any time before 1 January 1988, an accruing return investment; and

(b) the investment is:

(i) an investment with a friendly society; or

(ii) an investment of a kind where a return is not available:

(a) until the end of a period of at least 12 months after the investment was made; or

(b) until realisation of the investment; and

the person is, for the purposes of this Act, to be taken to receive one fifty-second of that amount as income of the person during each week in the assumed receipt period.

“(2) A reference in subsection (1) to a person becoming entitled to receive an amount includes a reference to the person becoming entitled to receive an amount under an arrangement referred to in the definition of ‘accruing return investment’ in section 5h to the extent that section 46c or 46d does not apply to that entitlement.

“(3) In this section:

‘assumed receipt period’ means the period of 12 months commencing on the day on which the person becomes entitled to receive an amount by way of a return from an accruing return investment referred to in subparagraphs (1) (b) (i) and (ii).

Investments made before 1 January 1988 not with friendly societies or where return is not deferred

“46c. If:

(a) a person has made, at any time before 1 January 1988, an accruing return investment; and

(b) the investment is not:

(i) an investment with a friendly society; or

(ii) an investment of a kind where a return is not available:

(a) until the end of a period of at least 12 months after the investment was made; or

(b) until realisation of the investment;

the person is to be taken, for the purposes of this Act, to receive the current annual rate of return on that investment as ordinary income of the person from the day on which that investment was made.

Investments made after 1 January 1988

“46d. If a person makes, on or after 1 January 1988, an accruing return investment, the person is, for the purposes of this Act, to be taken to receive the current annual rate of return on that investment as ordinary income of the person from the day on which that investment was made.

Actual return not to be treated as income

“46e. If:

(a) a person is to be taken, because of this Subdivision, to have received income from an investment in respect of a period; and

(b) the person actually receives a return from the investment in respect of that period;

the return actually received is to be taken, for the purposes of this Act, not to be ordinary income of the person.

Rate of return where it can only be approximated

“46f. If the rate of return on an accruing return investment is not a fixed rate or a quantifiable rate, for the purposes of this Subdivision, the current annual rate of return on that investment is a reasonable approximation of the rate of return.

Reduction of rate of return for investment costs

“46g. (1) Where, under another provision of this Subdivision, a person is to be taken to receive a rate of return on an investment as income, the amount that the person is taken to receive is, during each week in the assumed receipt period, to be reduced by one fifty-second of the total amount of the person’s reasonable investment costs.

“(2) For the purposes of subsection (1), the person’s reasonable investment costs for the investment are the reasonable costs that any person making an identical investment would be required to pay as a condition of being permitted to make that investment.

“(3) Subsection (1) does not apply in respect of investment costs incurred in respect of investments made before 9 September 1988.

“(4) For the purposes of this section, ‘assumed receipt period’ means the period of 12 months after the day from which the person is to be taken to receive a rate of return on the investment as income under another provision of this Subdivision.

Conversion of investment to accruing return investment

“46h. (1) If an investment that was not an accruing return investment (in this subsection called the ‘original investment’) is converted into an accruing return investment then, for the purposes of this Subdivision:

(a) the accruing return investment is to be taken to have been made on the day the original investment was so converted; and

(b) the original investment is to be taken to have been realised on that day.

“(2) Subsection (1) applies to an investment whether or not the investment was able to be converted into an accruing return investment because of a provision of the agreement relating to the making of the original investment.

“Subdivision C—Market-linked investments

Investments made before 9 September 1988

“46j. If a person becomes entitled to receive an amount by way of a return from a market-linked investment made before 9 September 1988, the person is, for the purposes of this Act, to be taken to receive one fifty-second of that amount as ordinary income of the person during each week in the period of 12 months commencing on the day on which the person becomes entitled to receive that amount.

Special provisions about certain investments made before 9 September 1988

“46k. (1) If:

(a) before 9 September 1988, a person has made a market-linked investment; and

(b) under an agreement made before 9 September 1988, dividends payable to the person in respect of that investment are not paid to the person directly but are invested in the person’s name in market-linked investments included in the same investment product;

any market-linked investment arising from the investment of a dividend pursuant to that agreement on or after 9 September 1988 is to be taken, for the purposes of this Subdivision, to have been made before 9 September 1988.

“(2) Subsections (3) and (4) apply if, at any time after 9 September 1988:

(a) a person held, or holds, 2 or more market-linked investments included in the same investment product; and

(b) at least one of the investments was made before 9 September 1988 and at least one of the investments was made on or after that day; and

“(3) If the amount received in respect of the disposal is or was greater than or equal to:

(a) the value or amount, at the time of the disposal, of the investment made before 9 September 1988; or

(b) the sum of the values or amounts, at the time of the disposal, of the investments made before 9 September 1988;

as the case requires, the person is to be taken, for the purposes of this Subdivision, to have disposed of the whole of that investment or those investments.

“(4) If the amount received in respect of the disposal (in this subsection called the ‘disposal amount’) is or was less than:

(a) the value or amount, at the time of the disposal, of the investment made before 9 September 1988; or

(b) the sum of the values or amounts, at the time of the disposal, of the investments made before 9 September 1988;

as the case requires, the person is to be taken, for the purposes of this Subdivision, to have disposed of so much of that investment or those investments as is equal to the disposal amount.

Investments made after 9 September 1988

“46l. If, on or after 9 September 1988, a person makes a market-linked investment, the person is, for the purposes of this Act, to be taken to receive the product rate of return on that investment as ordinary income of the person from:

(a) the day on which that investment was made; or

(b) the commencement of this section;

whichever is later.

Note: for ‘product rate of return’ see section 46n below.

Actual return not be be treated as income

“46m. If:

(a) a person is to be taken, because of this Subdivision, to have received ordinary income from an investment in respect of a period; and

(b) the person actually receives a return from the investment in respect of that period;

the return actually received is to be taken, for the purposes of this Act, not to be ordinary income of the person.

Product rate of return

“46n. The product rate of return on a market-linked investment is:

(a) except where paragraph (b) applies—the statutory rate of return for that investment; or

(b) if a determination by the Secretary to the Department of Social Security under subsection 1088 (1) of the Social Security Act is in force in relation to that investment—the percentage per year specified in that determination.

Determination of entitlement of person holding a market-linked investment

“46p. (1) If a determination of entitlement is made in relation to a person who has a market-linked investment that was made on or after 9 September 1988, the Commission must:

(a) make that determination having regard to the current product rate of return for that market-linked investment; and

(b) re-assess the rate at which pension or allowance under this Part should have been payable to the person in respect of any period:

(i) that occurs after the immediately preceding determination of the person’s entitlement; and

(ii) during which the product rate of return for that market-linked investment was less than the product rate of return that was used for the purposes of that immediately preceding determination of entitlement.

Note: for ‘determination of entitlement’ see section 5q: a determination of entitlement includes a determination of rate.

“(2) If, under paragraph (1) (b), the Commission re-assesses the rate at which pension or allowance under this Part should have been payable to a person in respect of a period, there is payable to the person the amount worked out using the formula:

where:

‘correct amount’ means the amount of pension or allowance that should have been payable to the person for the period;

‘amount paid’ means the amount of pension or allowance that was paid to the person for the period.

Reduction of rate of return for investment costs

“46q. (1) Where, under another provision of this Subdivision, a person is to be taken to receive a rate of return on an investment as income, the amount that the person is taken to receive is, during each week in the assumed receipt period, to be reduced by one fifty-second of the total amount of the person’s reasonable investment costs.

“(3) Subsection (1) does not apply in respect of investment costs incurred in respect of investments made before 9 September 1988.

Conversion of investments to market-linked investments

“46r. (1) If an investment that was not a market-linked investment (in this subsection called the ‘original investment’) is converted into a market-linked investment then, for the purposes of this Subdivision:

(a) the market-linked investment is to be taken to have been made on the day the original investment was so converted; and

(b) the original investment is to be taken to have been realised on that day.

“(2) Subsection (1) applies to an investment whether or not the investment was able to be converted into a market-linked investment because of a provision of the. agreement relating to the making of the original investment.

“Subdivision D—Compulsorily preserved superannuation

Superannuation benefits received before pension age

“46s. (1) If:

(a) a person becomes entitled to receive an amount that was, until the person became so entitled, a compulsorily preserved superannuation benefit; and

(b) the person has not reached pension age;

the person is, for the purposes of this Act, to be taken to receive one fifty-second of the assessable growth component of that amount as ordinary income of the person during each week in the period of 12 months starting on the day when the person becomes entitled to receive that amount.

“(2) Subsection (1) does not apply in relation to any amount received by a person by way of a superannuation pension or a payment under an immediate annuity.

“Subdivision E—Immediate annuities and superannuation pensions

Immediate annuities

“46t. For the purpose of working out the annual rate of ordinary income of a person from an immediate annuity, the person is to be taken to receive from that annuity each year an amount worked out by reducing the amount payable each year by the deductible amount in relation to the annuity.

Superannuation pensions

“46u. For the purpose of working out the annual rate of ordinary income of a person from a superannuation pension, the person is to be taken to receive from that pension each year an amount worked out by reducing the amount payable each year by the deductible amount in relation to the superannuation pension.

“Division 9—Ordinary income test—conversion of foreign currency amounts

Application of Division

“47. (1) The Commission may determine in writing that this Division applies in relation to a foreign currency.

“(2) This Division applies in relation to a foreign currency in relation to which a determination under subsection (1) is in force.

“(3) This Division applies for the purposes of sections 41, 42, 43, 44 and 45 (Rate Calculators).

Conversion of foreign currency amounts

“47a. The value in Australian currency of a payment received by a person in foreign currency is to be worked out using:

(a) if section 47c applies—the re-assessed exchange rate; or

(b) in any other case—the base exchange rate (see section 47b).

Base exchange rate

“47b. The base exchange rate for a foreign currency for a foreign exchange period is the average (calculated to 4 decimal places) of the actual market exchange rates available on each working day of the first month of the year to start during the immediately preceding foreign exchange period.

Re-assessed exchange rate

“47c. (1) If for 10 consecutive working days:

(a) starting after a month of the year in relation to which section 47b operates; and

(b) ending before the next month of the year in relation to which section 47b operates;

the actual market exchange rate available differs, by at least 10%, from:

(d) if a re-assessed exchange rate has already been worked out under this subsection for the purposes of the next foreign exchange period—the last re-assessed exchange rate so worked out;

the re-assessed exchange rate for a foreign currency is the average (calculated to 4 decimal places) of the actual market exchange rates available on those consecutive working days.

“(2) Subsection (1) does not apply to a working day if the actual market exchange rate available on that day has been used to work out a re-assessed exchange rate in a previous application of that subsection.

Applicability of re-assessed exchange rate

“47d. (1) The Commission must determine in writing the day on which a re-assessed exchange rate becomes applicable.

“(2) The day determined under subsection (1) is to be no later than 6 weeks after the tenth consecutive working day covered by subsection 47c (1).

“(3) A re-assessed exchange rate:

(a) becomes applicable on the day determined under subsection (1), unless a new re-assessed exchange rate has already become applicable; and

(b) remains applicable until:

(i) a new re-assessed exchange rate becomes applicable; or

(ii) the commencement of the next exchange period the base exchange rate for which has been worked out by reference to working days later than those by reference to which the re-assessed exchange rate was worked out.

Rounding off exchange rates

“47e. If an exchange rate worked out under this Division would, if it were calculated to 5 decimal places, end in a number greater than 4, the rate worked out is to be taken to be the rate calculated to 4 decimal places and increased by 0.0001.

“Division 10—Ordinary income test—disposal of ordinary income

Disposal of ordinary income

“48. For the purposes of this Act, a person disposes of ordinary income of the person if the person engages in a course of conduct that diminishes, directly or indirectly, the rate of the person’s ordinary income and either:

(a) the person receives no consideration in money or money’s worth for the diminution; or

(b) the person receives inadequate consideration in money or money’s worth for the diminution; or

(c) the Commission is satisfied that the purpose, or the dominant purpose, of the person in engaging in that course of conduct was:

(i) to obtain or enable the person’s partner to obtain a service pension or a social security pension or benefit; or

(ii) to obtain or enable the person’s partner to obtain a service pension or a social security pension or benefit at a higher rate than that which would otherwise have been payable; or

(iii) to ensure that the person or the person’s partner would be eligible for fringe benefits for the purposes of this Act or the Social Security Act.

Note 1: for ‘amount of disposition’ see section 48a.

Note 2: for the effect of a transaction that constitutes both a disposal of an asset and a disposal of ordinary income see section 48d.

Amount of disposition

“48a. If a person disposes of ordinary income, the amount of the disposition is the amount that, in the Commission’s opinion, is:

(a) if the person receives no consideration for the diminution in the rate of the person’s ordinary income—the annual rate of the diminution of the person’s ordinary income; or

(b) if the person receives consideration for the diminution in the rate of the person’s ordinary income—the annual rate of the diminution less the part (if any) of the consideration that the Commission determines, in writing, to be fair and reasonable in all the circumstances of the case.

Disposal of ordinary income—not a member of a couple

“48b. If a person who is not a member of a couple has, on or after 1 June 1984 disposed of ordinary income of the person, the amount of that disposition is to be included in the person’s ordinary income for the purposes of this Act.

Note 1: for ‘disposes of income’ see section 48.

Note 2: for ‘amount of disposition’ see section 48a.

Note 3: for ‘ordinary income’ see subsection 5h (1): ‘ordinary income’ includes investment income but does not include maintenance income.

Disposal of ordinary income—members of couples

“48c. (1) Subject to subsections (2), (3) and (4), if a person who is a member of a couple has, on or after 1 June 1984, disposed of ordinary income of the person:

(a) 50% of the amount of the disposition is to be included in the person’s ordinary income; and

(b) 50% of the amount of the disposition is to be included in the person’s partner’s ordinary income.

Note 1: for ‘disposes of income’ see section 48.

Note 2: for ‘amount of disposition’ see section 48a.

Note 3: for transactions that constitute both a disposal of ordinary income and a disposal of an asset see section 48d.

“(2) If:

(a) amounts are included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and

(b) the person and the person’s partner cease to be members of the same couple;

any amount that was included in the ordinary income of the person’s former partner because of the disposition is to be included in the person’s ordinary income.

“(3) If:

(b) the person dies;

no amount is to be included in the ordinary income of the person’s partner because of the disposition.

“(4) If:

(a) an amount is included under subsection (1) in the ordinary income of a person who is a member of a couple and in the person’s partner’s ordinary income because the person has disposed of ordinary income; and

(b) the person’s partner dies;

any amount that would, if the person’s partner had not died, be included in the ordinary income of the person’s partner because of the disposition is to be included in the person’s ordinary income.

Note: for ‘ordinary income’ see subsection 5h (1): ‘ordinary income’ includes-investment income but does not include maintenance income.

Treatment of transactions that constitute both a disposal of ordinary income and a disposal of assets

“48d. (1) This section applies if:

(a) a person disposes, on or after 1 June 1984, of an asset of the person; and

(b) the course of conduct that constituted the disposition of the asset also constituted a disposition of ordinary income; and

“(2) If:

(a) this section applies; and

(b) no amount is included in the value of the person’s assets under section 52g or 52h because of the disposition of the asset;

no amount is, for the purposes of sections 48b and 48c, to be included in the person’s ordinary income because of the disposition of ordinary income.

“(3) If:

(a) this section applies; and

(b) the amount that is included in the value of the person’s assets under section 52g or 52h because of the disposition of the asset is:

(i) if section 52h applies—less than 50% of the amount of the disposition of the asset; or

(ii) if section 52g applies—less than the amount of the disposition;

the amount to be included in the person’s ordinary income because of the disposition of ordinary income is to be worked out disregarding so much of the amount of the disposition of ordinary income as the Commission determines, in writing, is attributable to the part of the amount of the disposition of the asset that is not included in the value of the person’s assets under section 52g or 52h.

Note: the operation of this subsection is affected by subsections 52g (2) and 52h (2) which provide for an annual 10% reduction in the value of the asset disposed of.

Dispositions more than 5 years old to be disregarded

“48e. This Division does not apply to a disposition of ordinary income that took place:

(a) more than 5 years before the time when:

(i) the person who disposed of the ordinary income; or

(ii) if the person who disposed of the ordinary income was, at the time of disposition, a member of a couple—the person’s partner;

became eligible to receive a service pension; or

(b) less than 5 years before the time referred to in paragraph (a) and before the time when the Commission is satisfied that the person who disposed of the ordinary income could reasonably have expected that the person or the person’s partner would become eligible to receive a service pension.

“‘Division 11—Ordinary income test—earnings credit

Earnings credit account balance may be set off against ordinary income from remunerative work

“49. If:

(a) a person is receiving a service pension (other than a carer service pension); and

(b) the person earns an amount of money for remunerative work done by the person during an earnings credit accounting period; and

(d) immediately before the beginning of that period, the person’s earnings credit account balance is greater than nil; and

(e) the person’s pension rate is not reduced by reference to the value of the person’s assets;

then, in applying the ordinary income test to the person, disregard:

(f) if the person’s earnings credit account balance equals or exceeds the amount earned—the whole of the amount; or

(g) if the person’s earnings credit account balance is less than the amount earned—the part of the amount that does not exceed the earnings credit balance.

Earnings credit account

“49a. If a person is receiving a service pension (other than a carer service pension), the person has an earnings credit account.

Earnings credit account balance

“49b. The person’s earnings credit account balance is worked out using the Earnings Credit Account Balance Calculator at the end of this section.

“EARNINGS CREDIT ACCOUNT BALANCE CALCULATOR

MODULE A—OVERALL ACCOUNT BALANCE CALCULATION

Account balance calculation

49B-A1. This is how to work out the balance of the person’s earnings credit account:

Method statement
Step 1.	Work out the person’s opening balance using MODULE B below.
Step 2.	If the person has an earnings credit, add the amount of the earnings credit to the account: see MODULE C below.
Step 3.	If the person draws on the account, deduct from the account the amount drawn: see MODULE D below.

Balance not to exceed $1,000

49B-A2. The balance of the account is not to exceed $1,000.

Balance not to be in debit

49B-A3. The balance of the account is not to fall below nil.

EC accounting periods

49B-A4. The earnings credit accounting periods are:

(a) the fortnight that commences on the first payday after 1 July 1991; and

(b) the fortnights that follow that fortnight.

MODULE B—OPENING BALANCE

General rule

49B-B1. If:

(a) the person commences to receive the pension on or after 1 July 1991; and

(b) the person was not receiving a service pension or a social security pension (other than a carer pension) immediately before commencing to receive the pension;

the opening balance of the person’s earnings credit account is nil.

Carry-over of earnings credit accumulated before 1 July 1991

49B-B2. If the person has continued to receive the pension from immediately before 1 July 1991, the opening balance of the person’s earnings credit account is the amount of the person’s earnings credit 5 immediately before 1 July 1991 under section 49b.

Note: the reference in point 49B-B2 to section 49b is a reference to section 49b as in force immediately before 1 July 1991.

Transferees from service pensions or social security pensions

49B-B3. If:

(a) the person commences to receive the pension on or after 1 July 1991; and

(b) immediately before commencing to receive the pension, the person was receiving a service pension or a social security pension (other than a carer pension) and had an earnings credit account balance under this Act or section 1115 of the Social Security Act;

the opening balance of the person’s earnings credit account is the amount of that account balance.

MODULE C—EARNINGS CREDIT

When earnings credit arises

49B-C1. The person has an earnings credit for an EC accounting period if during that period the person’s ordinary income on a yearly basis is less than the person’s ordinary income free area.

Note 1: for ‘EC (earnings credit) accounting period’ see point 49B-A4 above.

Note 2: for ‘ordinary income free area’ see Module E of the Service Pension Rate Calculator at the end of section 41 or 42 and Module F of the Service Pension Rate Calculator at the end of section 44.

Amount of earnings credit

49B-C2. The amount of an earnings credit for an EC accounting period is:

MODULE D—DRAWING ON ACCOUNT

Drawing on account

49B-D1. The person draws on the account if:

(a) during an EC accounting period:

(i) the person earns an amount of money for remunerative work done by the person during that period; and

(ii) the person’s annual rate of ordinary income exceeds the person’s ordinary income free area; and

(iii) the person’s pension rate is not reduced by reference to the value of the person’s assets; and

(b) immediately before the beginning of the EC accounting period, the person’s earnings credit account balance was greater than nil.

Amount to be deducted

49B-D2. The amount to be deducted is the amount earned.

“Division 12—New Enterprise Incentive Scheme

General effect of Division

“50. This Division adjusts the service pension rate of a person who is receiving, or whose partner is receiving, payments under the scheme known as the New Enterprise Incentive Scheme (NEIS).

Note: payments under the NEIS do not count as ordinary income for the purposes of the ordinary income test: see paragraph 5h (8) (x).

Reduction in rate of payments under this Part if recipient or partner also receiving payments under NEIS

“50a. (1) If:

(a) an instalment of service pension is payable to a person during a pension period; and

(b) NEIS is payable to the person during that pension period;

the rate of the payment referred to in paragraph (a) is to be reduced under this Division.

“(2) If:

(a) an instalment of age or invalidity service pension is payable to a person during a pension period; and

(b) NEIS is payable to the person during that pension period; and

(i) wife service pension in respect of the person; or

(ii) carer service pension in respect of the person;

is payable to the person’s partner during a pension period; the rate of the partner’s payment is also to be reduced under this Division.

Rate reduction under this Division

“50b. (1) Subject to subsection (2), if a person’s rate of payment under this Part is to be reduced under this Division because of a NEIS payment, the amount of rate reduction is to be equal to the amount of the NEIS payment.

“(2) If:

(a) a person’s rate of payment under this Part is to be reduced under this Division because of a NEIS payment; and

(b) the person’s partner’s rate of payment under this Part is also to be reduced under this Division (see subsection 50a (2)) because of the NEIS payment;

the amount of rate reduction for both the person and the person’s partner is to be equal to 50% of the amount of the NEIS payment.

“(3) A person’s rate of payment under this Part is not to be reduced below nil under subsection (1) or (2).

“Division 13—General provisions relating to the maintenance income test

Apportionment of capitalised maintenance income

“51. (1) The object of this section is to spread capitalised maintenance income so that it is taken into account over the whole of the period in respect of which it is received.

“(2) If a person receives capitalised maintenance income, the maintenance income of the person that is attributable to the capitalised maintenance income during any period (in this subsection called the ‘relevant period’) in the capitalisation period is the amount calculated in accordance with the formula:

Capitalisation period—court order or registered or approved maintenance agreement

“(3) If:

(a) the capitalised maintenance income is received under or as a result of:

(i) the order of a court; or

(ii) a maintenance agreement registered in, or approved by, a court under the Family Law Act 1975 or the law of a State or Territory; and

(b) the order or agreement specified the period in relation to which the capitalised maintenance income was to be provided; and

(c) the length of the period could be ascertained with reasonable certainty when the order was made or the agreement was so registered or approved;

the capitalisation period is, subject to subsection (6), the period specified in the order or agreement.

Capitalisation period—maintained child under 18

“(4) If:

(a) the capitalised maintenance income relates to the maintenance of a maintained child of the person; and

(b) the child has not turned 18 on the day on which the income is received; and

the capitalisation period is, subject to subsection (6), the period that starts on the day on which the income is received and ends on the day immediately before the day on which the child turns 18.

Note: for ‘maintained child’ see subsection 5k (1).

Capitalisation period—partner under 65

“(5) If:

(a) the capitalised maintenance income relates to the maintenance of the person by the person’s partner or former partner; and

(b) the person has not turned 65 on the day on which the income is received; and

the capitalisation period is, subject to subsection (6), the period that starts on the day on which the income is received and ends on the day immediately before the day on which the person turns 65.

Capitalisation period—other cases

“(6) If:

(a) the Commission considers:

(i) in a case falling within subsection (3) where the period referred to in that subsection was specified in an order of a court that was made by consent or in a maintenance agreement—that the period is not appropriate in the circumstances of the case; or

(ii) in a case falling within subsection (4) or (5)—that the period referred to in that subsection is not appropriate in the circumstances of the case; or

(b) no capitalisation period is applicable in relation to the capitalised maintenance income under subsection (3), (4) or (5);

the capitalisation period is such period as the Commission considers appropriate in the circumstances of the case.

In-kind housing maintenance—value of substitute for family home

“51a. (1) If:

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

(b) a person has separated from the person’s partner or former partner; and

(c) immediately before the separation a residence (in this section called the ‘former family home’) was the principal home of both the person and the person’s partner or former partner; and

(d) the person is receiving in-kind housing maintenance in relation to the provision of a residence other than the former family home; and

(e) the value of the other residence exceeds the value, at the time the maintenance is received, of the former family home;

only so much of the maintenance as does not exceed the maintenance that would be assessed if it were based on the value of the former family home is to be treated as special maintenance income for the purposes of this Act.

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

(a) determine that a time specified in the determination is to be substituted for the time at which the in-kind housing maintenance is received; or

(b) determine that a specified part of in-kind housing maintenance is to be deducted from the amount that would otherwise be the amount of that maintenance.

Note: paragraph (a) is intended to cover situations where, for instance, there is not enough information about the current market rate of the former family home or where market values are fluctuating dramatically.

“(3) If a person has more than one former partner, a reference in subsection (1) to the person’s former partner is a reference to the person’s last former partner.

“Division 14—General provisions relating to the assets test

“Subdivision A—Value of person’s assets

Certain assets to be disregarded in calculating the value of a person’s assets

“52. (1) In calculating the value of a person’s assets for the purposes of this Act (other than sections 52g and 52h), disregard the following:

(a) if the person is not a member of a couple—the value of any right or interest of the person in the person’s principal home that is a right or interest that gives the person reasonable security of tenure in the home;

(b) if the person is a member of a couple—the value of any right or interest of the person in one residence that is the principal home of the person, of the person’s partner or of both of them that is a right or interest that gives the person or the person’s partner reasonable security of tenure in the home;

(c) the value of any life interest of the person (other than a life interest in the principal home of the person, of the person’s partner or of both of them or a life interest created by the person, by the person’s partner or by both of them);

(d) the value of any superannuation pension of the person;

(e) any amount that is:

(i) received by the person within the immediately preceding period of 90 days; and

(ii) is excluded from the definition of ‘income’ in subsection 5h (1) by subsection 5h (4) or (5);

(f) if the person has not reached pension age—the value of any compulsorily preserved superannuation benefit of the person;

(g) the value of any contingent, remainder or reversionary interest of the person (other than an interest created by the person, by the person’s partner or by both of them);

(h) the value of any assets (other than a contingent, remainder or reversionary interest) to which the person is entitled from the estate of a deceased person but which has not been, and is not able to be, received;

(i) the value of any medal or other decoration awarded (whether to the person or another person) for valour that is owned by the person otherwise than for the purposes of investment or a hobby;

(j) the value of:

(i) any cemetery plot acquired by the person for the burial of the person or the person’s partner; and

(ii) any funeral expenses paid in advance by the person in respect of the funeral of the person or the person’s partner;

(k) if:

(i) personal property of the person is designed for use by a disabled person; and

(ii) the person, the person’s partner or a child who is dependent on the person or the person’s partner is disabled;

the value of the property;

(l) if:

(i) personal property of the person is modified so that it can be used by a disabled person; and

(ii) the person, the person’s partner or a child who is dependent on the person or the person’s partner is disabled;

the part of the value of the property that is attributable to the modifications;

(m) if the person is provided with a motor vehicle under the scheme administered by the Commonwealth known as the Vehicle Assistance Scheme—the value of that motor vehicle;

(n) if the person has sold a residence that was the principal home of the person on terms and has purchased, also on terms, another residence that is the principal home of the person—so much of the balance due to the person in respect of the sale as will be applied by the person in respect of the purchase of the other residence.

“(2) Where:

(a) a person sells the person’s principal home; and

(b) the person is likely, within 12 months, to apply the whole or part of the proceeds of the sale in acquiring another residence that is to be the person’s principal home;

so much of the proceeds of the sale as the person is likely to apply in acquiring the other residence is to be disregarded during that period for the purposes of this Part (other than Subdivision B of this Division).

“(3) For the purposes of this section, where:

(a) the value of any assets of a person or, if the person is a member of a couple, of the person and the person’s partner, that consists of the contents of a principal home and of other personal effects that are used primarily within the principal home does not exceed $10,000; and

(b) the assets are used primarily for private or domestic purposes; the value of the assets is to be taken to be $10,000 unless the person satisfies the Commission that the value of the assets is less than $10,000.

“(4) This section has effect subject to sections 52k to 52x (retirement villages).

Value of annuities

Value of certain annuities to be disregarded

“52a. (1) Subject to subsection (2), in calculating the value of a person’s assets for the purposes of this Act (other than sections 52g and 52h), disregard the value of any annuity of the person.

“(2) Subsection (1) does not apply to:

(a) a disposable or deferrable annuity; or

(b) an immediate annuity purchased on or after 15 August 1989; or

Disposable or deferrable annuity

“(3) For the purposes of subsection (2), an annuity is a disposable or deferrable annuity if:

(a) either:

(i) the annuity is able to be disposed of; or

(ii) a substantial part of the income under the annuity is deferred; or

(iii) a substantial part of the income under the annuity may be deferred; and

(b) the Commission determines in writing that the annuity should not be disregarded under paragraph 52 (1) (e).

Value of certain post 15 August 1989 annuities

“(4) The value of:

(a) an immediate annuity purchased on or after 15 August 1989; or

(b) an annuity that became presently payable on or after 15 August 1989;

is worked out using the Annuity Value Calculator at the end of this section.

“ANNUITY VALUE CALCULATOR

Overall value calculation

52A-1. This is how to work out the value of the annuity:

Method statement
Step 1.	Work out the residual capital value of the annuity.
Step 2.	Work out the balance of the purchase price of the annuity using point 52A-2.
Step 3.	Work out the adjustment factor using point 52A-3.
Step 4.	Multiply the balance obtained under Step 2 by the adjustment factor obtained in Step 3: the result is called the adjusted balance.
Step 5.	Add the adjusted balance to the residual capital value: the result is called the adjusted value of the annuity.
Step 6.	The value of the annuity is the higher of the adjusted value and the residual capital value.

Note: for ‘residual capital value’ see subsection 5j (1).

Balance of purchase price

52A-2. The balance of the purchase price of the annuity is:

purchase price—residual capital value

Note: for ‘purchase price’ and ‘residual capital value’ see subsection 5j (1).

Adjustment factor

52A-3. The adjustment factor is:

where:

‘relevant number’ is the relevant number for the annuity;

‘years elapsed’ is the number of full years that have elapsed since the annuity became presently payable.

Note: for ‘relevant number’ see subsection 5j (1).

Value of annuity—change of relevant number

“52b. (1) If:

(a) a determination of entitlement is made in relation to a person; and

(b) the determination is made having regard to a relevant number for an annuity; and

(c) the number was determined as mentioned in paragraph (c) of the definition of ‘relevant number’ in section 27h of the Income Tax Assessment Act; and

(d) the person appeals against the determination of the relevant number; and

(e) on appeal, a lower number is substituted for the original relevant number;

the Commission must make a new determination of entitlement in relation to the person.

“(2) In making a new determination under subsection (1), the Commission must have regard to the lower relevant number for the annuity concerned.

“(3) If the Commission makes a new determination of entitlement in relation to a person under subsection (1), there is payable to the person the amount worked out using the formula:

where:

‘new amount’ is the amount of pension that would have been payable to the person for the underpayment period at the new rate determined under subsection (1);

‘actual amount’ is the amount of pension that is paid to the person for the underpayment period;

‘underpayment period’ is the period that:

(a) starts either:

(i) if the appeal concerned is instituted within 3 months after the person is notified of the original determination of the relevant number—when that determination is made; or

(ii) in any other case—when the appeal is instituted; and

(b) ends when the new determination of entitlement takes effect.

Effect of charge or encumbrance on value of assets

“52c. (1) Where there is a charge or encumbrance over particular assets of the person, the value of the assets, for the purposes of calculating the value of the person’s assets for the purposes of this Act (other than sections 52g and 52h), is to be reduced by the value of that charge or encumbrance.

“(2) Subsection (1) does not apply to a charge or encumbrance that is an excluded security.

“(3) Subsection (1) does not apply to a charge or encumbrance over assets that are to be disregarded under section 52.

“(4) Where:

(a) there is a charge or encumbrance over assets; and

(b) the charge does not arise under section 52zf; and

the amount to be deducted under subsection (1) is:

“(5) For the purpose of this section, a charge or encumbrance is an excluded security to the extent that:

(a) the charge or encumbrance is a collateral security; or

(b) the charge or encumbrance was given for the benefit of a person who is not a party, or the partner of a party, to the charge or encumbrance.

“(6) This section has effect subject to sections 52k to 52x (retirement villages).

Loans

“52d. If a person lends an amount after 22 May 1986, the value of the assets of the person for the purposes of this Act includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan.

“Subdivision B—Disposal of assets

Disposal of assets

“52e. For the purposes of this Act, a person disposes of assets of the person if the person engages in a course of conduct that diminishes, directly or indirectly, the value of the person’s assets and:

(a) the person receives no consideration in money or money’s worth for the diminution in the value of the person’s assets; or

(b) the person receives inadequate consideration in money or money’s worth for the diminution in the value of the person’s assets; or

(c) the Commission is satisfied that the purpose, or the dominant purpose, of the person in engaging in that course of conduct was:

(i) to obtain or enable the person’s partner to obtain a service pension or a social security pension or benefit; or

(ii) to obtain or enable the person’s partner to obtain a service pension or a social security pension or benefit at a higher rate than that which would otherwise have been payable; or

(iii) to ensure that the person or the person’s partner would be eligible for fringe benefits for the purposes of this Act or the Social Security Act.

Amount of disposition

“52f. Where a person disposes of assets, the amount of the disposition is:

(a) if the person receives no consideration for the diminution in the value of the assets—an amount equal to the amount of the diminution in the value of the assets; or

(b) if the person receives consideration for the diminution in the value of the assets—an amount equal to the amount of the diminution in the value of the assets less the amount of the consideration received by the person in respect of the diminution.

Disposal of assets—not a member of a couple

“52g. (1) Subject to subsection (2), where, on or after 1 June 1984:

(a) a person who is not a member of a couple has, during a pension year of the person, disposed of assets of the person; and

(b) the amount of that disposition of assets, or the sum of that amount and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds $2,000;

then, for the purposes of this Act, there is to be included in the value of the person’s assets:

(c) the amount by which the sum of the amount of the first-mentioned disposition of assets, and of the amounts (if any) of other dispositions of assets previously made by the person during that pension year, exceeds $2,000; or

(d) the amount of the first-mentioned disposition of assets; whichever is the lesser amount.

“(2) Where an amount (in this subsection called the ‘relevant amount’) is included in the value of a person’s assets under subsection (1) because of a disposition of assets, the amount that is to be included in that value under that subsection is to be reduced, on each anniversary of the day on which the disposition took place, by an amount equal to 10% of the relevant amount.

Note 1: for ‘dispose’ see section 48.

Note 2: for ‘amount of disposition’ see section 48a.

Note 3: for the effect of a transaction that constitutes both a disposal of an asset and a disposal of ordinary income see section 48d.

Disposal of assets—members of couples

“52h. (1) Subject to subsections (2), (3) and (4), where, on or after 1 June 1984:

(a) a person who is a member of a couple has disposed of assets of the person:

(i) during a pension year of the person; or

(ii) if the person is not receiving a service pension or a social security pension but the person’s partner is receiving such a pension—during a pension year of the person’s partner; and

(b) the amount of that disposition of assets, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during that pension year, exceeds $4,000;

then, for the purposes of this Act:

(i) 50% of the amount by which the sum of the amount of the first-mentioned disposition of the assets and of the amounts (if any) of other dispositions of assets previously made by the person or the person’s partner during the pension year exceeds $4,000; or

(ii) 50% of the amount of the first-mentioned disposition of assets;

whichever is the lesser amount; and

(d) there is to be included in the value of the assets of the person’s partner:

(ii) 50% of the amount of the first-mentioned disposition of assets;

whichever is the lesser amount.

Note 1: for ‘dispose’ see section 48.

Note 2: for ‘amount of disposition’ see section 48a.

Note 3: for the effect of a transaction that constitutes both a disposal of an asset and a disposal of ordinary income see section 48d.

“(3) Where:

(a) amounts are included under subsection (1) in the value of a person’s assets who is a member of a couple and in the assets of the person’s partner because of a disposition of assets by the person; and

(b) the person and the person’s partner cease to be members of the same couple;

any amount that was included in the value of the person’s former partner’s assets because of that disposition is to be included in the value of the person’s assets.

“(4) Where:

(a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and the value of the assets of the person’s partner because the person has disposed of an asset; and

(b) the person dies;

no amount is to be included in the value of the assets of the person’s partner because of that disposition.

“(5) Where:

(a) an amount is included under subsection (1) in the value of the assets of a person who is a member of a couple and in the value of the assets of the person’s partner because the person has disposed of an asset; and

(b) the person’s partner dies;

any amount that would, if the person’s partner had not died, be included in the value of the assets of the person’s partner because of the disposition is to be included in the value of the person’s assets.

Dispositions more than 5 years old to be disregarded

“52j. This Subdivision does not apply to a disposition of assets that took place:

(a) more than 5 years before the time when:

(i) the person who disposed of those assets; or

(ii) if that person was, at the time when that disposition took place, a member of a couple—that person’s partner;

became eligible to receive a service pension; or

(b) less than 5 years before the time referred to in paragraph (a) and before the time when the Commission is satisfied that the person who disposed of those assets could reasonably have expected that the person or the person’s partner would become eligible to receive a service pension.

“Subdivision C—Special provisions relating to retirement village residents

Retirement village resident

“52k. For the purposes of this Subdivision, a person is a retirement village resident if the person’s principal home is in a retirement village.

Basis for different treatment

“52l. This Subdivision’s operation on a retirement village resident depends on:

(a) whether the resident is:

(i) not a member of a couple; or

(ii) a member of an ordinary couple; or

(iii) a member of an illness separated couple; or

(iv) a member of an ordinary couple with different principal homes; and

(b) the resident’s entry contribution; and

Entry contribution

“52m. (1) A retirement village resident’s entry contribution is:

(a) if the resident is not a member of a couple—the total amount paid, or agreed to be paid, to obtain the resident’s current right to live in the retirement village; or

(b) if the resident is a member of a couple, shares the resident’s principal home with the resident’s partner and is not a member of an illness separated couple—an amount equal to 50% of the total amount paid, or agreed to be paid, for the resident’s, or the resident’s and the partner’s, current right to live in the retirement village; or

(c) if the resident is a member of an illness separated couple—the total amount paid, or agreed to be paid, for the resident’s current right to live in the retirement village; or

(d) if:

(i) the resident is a member of an ordinary couple with different principal homes; and

(ii) the principal home of the resident’s partner is not in a retirement village;

the total amount paid, or agreed to be paid, for the resident’s current right to live in the retirement village; or

(e) if:

(i) the resident is a member of an ordinary couple with different principal homes; and

(ii) the principal home of the resident’s partner is also in a retirement village;

an amount equal to 50% of the total amount paid, or agreed to be paid, for the resident’s and the partner’s respective current rights to live in the retirement village concerned; or

(f) if:

(i) the resident was a member of a couple at the time when the resident took up residence in the retirement village; and

(ii) the resident has ceased to be a member of a couple; the total amount paid, or agreed to be paid, for the resident’s current right to live in the retirement village.

“(2) An amount that is rent for the purposes of this Act is to be disregarded in applying subsection (1).

Extra allowable amount

Residence taken up before 12 June 1989

“52n. (1) If a retirement village resident became entitled to take up residence in the retirement village before 12 June 1989, the resident’s extra allowable amount is:

(a) if the resident is not a member of a couple—$64,000; or

(b) if the resident is a member of an illness separated couple— $64,000; or

Residence taken up on or after 12 June 1989

“(2) If a retirement village resident became entitled to take up residence in the retirement village on or after 12 June 1989, the resident’s extra allowable amount is:

(a) if the resident is not a member of a couple—the amount that, as at the time when the person becomes entitled to take up that residence, is the difference between the ‘single’ property owner AVL and the ‘single’ non-property owner AVL; or

(b) if the resident is a member of an illness separated couple—the amount that, as at the time when the person becomes entitled to take up that residence, is the difference between the ‘single’ AVL and the ‘single’ non-property owner AVL; or

(c) in any other case—the amount that, as at the time when the person becomes entitled to take up that residence, is the difference between the ‘partnered’ property owner AVL and the ‘partnered’ non-property owner AVL.

“(3) For the purposes of this section, a person becomes entitled to take up residence in a retirement village when the person becomes entitled to take up residence in a retirement village pursuant to the agreement under which the person’s current right to live in the retirement village arises.

Renegotiation of retirement village agreement

“52p. If a person who has a right to live in a retirement village under an agreement enters into a new agreement under which the person obtains a right to live in the retirement village, then, for the purposes of this Division, the total amount paid, or agreed to be paid, for the person’s current right to live in the retirement village is the sum of the following amounts:

(a) the total amount paid under the new agreement or that right;

(b) so much (if any) of:

(i) any amount paid under an earlier agreement to obtain a right for the person to live in the retirement village; and

(ii) any amount that was, or would have been, payable to the person upon the termination of an earlier agreement;

as ought, in the Commission’s opinion, to be attributed to the cost of the person’s current right to live in the retirement village.

People who are not members of a couple

“52q. (1) This section applies to a retirement village resident who is not a member of a couple.

Entry contribution more than extra allowable amount

“(2) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was more than the extra allowable amount;

the person is to be taken, for the purposes of this Act, to be a property owner.

Entry contribution equal to or below extra allowable amount

“(3) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was equal to or less than the extra allowable amount;

then, for the purposes of this Act:

(d) the person’s assets are to be taken to include an asset the value of which is equal to the amount of the person’s entry contribution; and

(e) subsection 52 (1) and section 52g do not apply to an asset that the person is, because of paragraph (d) of this subsection, to be taken to have.

“(4) Subsection (3) applies:

(a) whether or not the person actually has any right or interest in the person’s principal home; and

(b) whatever the value of any right or interest that the person does have in the person’s principal home.

Members of couples

“52r. (1) This section applies to a retirement village resident if:

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

(b) the resident shares the person’s principal home with the resident’s partner.

Entry contribution more than extra allowable amount

“(2) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was more than the extra allowable amount;

the person is to be taken, for the purposes of this Act, to be a property owner.

Entry contribution equal to or below extra allowable amount

“(3) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was equal to or less than the extra allowable amount;

then, for the purposes of this Act:

(d) the person’s assets are to be taken to include an asset the value of which is equal to the amount of the person’s entry contribution; and

(e) subsection 52 (1) and section 52h do not apply to an asset that the person is, because of paragraph (d) of this subsection, to be taken to have.

“(4) Subsection (3) applies:

(a) whether or not the person actually has any right or interest in the person’s principal home; and

(b) whatever the value of any right or interest that the person does have in the person’s principal home.

Members of illness separated couple (both in retirement village or villages)

“52s. (1) This section applies to a retirement village resident if:

(a) the resident is a member of an illness separated couple; and

(b) the principal home of the resident’s partner is also a retirement village.

Both entry contributions above extra allowable amount

“(2) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution, and the entry contribution of the person’s partner, were each more than the extra allowable amount concerned;

then, for the purposes of this Act:

(d) any right or interest of the person in the principal home of the person’s partner is to be disregarded in calculating the actual value of the person’s assets for the purposes of this Act; and

(e) any right or interest of the person’s partner in his or her principal home, or in the person’s principal home, is to be disregarded in calculating the actual value of the partner’s assets for the purposes of this Act.

Both entry contributions equal to or below extra allowable amount

“(3) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution, and the entry contribution of the person’s partner, were each equal to or less than the extra allowable amount concerned;

then, for the purposes of this Act:

(d) the person’s assets are to be taken to include an asset the value of which is equal to the amount of the person’s entry contribution; and

(e) subsection 52 (1) and section 52h do not apply to the asset that the person is, because of paragraph (d) of this subsection, taken to have.

“(4) Subsection (3) applies:

(a) whether or not the person actually has any right or interest in the person’s principal home; and

(b) whatever the value of any right or interest that the person does have in the person’s principal home.

Person’s entry contribution above extra allowable amount/partner’s entry contribution equal to or below extra allowable amount

“(5) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was more than the extra allowable amount; and

the following provisions apply for the purposes of the application of this Act to the person and to the person’s partner:

(d) the person is to be taken to be a property owner;

(e) for the purposes of this Act:

(i) both the person, and the person’s partner, are to be taken not to have a right or interest in relation to the partner’s principal home; and

(ii) the assets of the person’s partner are to be taken to include an asset whose value is equal to the amount of the partner’s entry contribution; and

(iii) sections 52 and section 52h do not apply to the asset that the person’s partner is, because of subparagraph (ii) of this paragraph, to be taken to have;

(f) any right or interest of the person’s partner in the person’s principal home is to be disregarded in calculating the actual value of the partner’s assets for the purposes of this Act;

(g) the assets value limit for the person and the person’s partner is to be taken to be $92,250.

Note: the amount in paragraph (g) is adjusted annually.

“(6) Subsection (5) applies:

(a) whether or not the person’s partner actually has any right or interest in the partner’s principal home; and

(b) whatever the value of any right or interest that the partner does have in the partner’s principal home.

Members of illness separated couple (partner not in retirement village and partner property owner)

“52t. (1) This section applies to a retirement village resident if:

(a) the resident is a member of an illness separated couple; and

(b) the principal home of the resident’s partner is not in a retirement village; and

(c) the right or interest of the resident’s partner in the partner’s principal home is to be disregarded because of paragraph 52 (1) (b).

Entry contribution more than extra allowable amount

“(2) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was more than the extra allowable amount;

then:

(d) any right or interest of the person in the principal home of the person’s partner referred to in paragraph (1) (c) is to be disregarded in calculating the actual value of the person’s assets for the purposes of this Act; and

(e) any right or interest of the person’s partner in the person’s principal home is also to be disregarded in calculating the actual value of the assets of the person’s partner for the purposes of this Act.

Entry contribution equal to or below extra allowable amount

“(3) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was equal to or less than the extra allowable amount;

the following provisions apply for the purposes of the application of this Act to the person and to the person’s partner:

(i) both the person, and the person’s partner, are to be taken not to have a right or interest in relation to the person’s principal home; and

(ii) the person’s assets are to be taken to include an asset the value of which is equal to the amount of the person’s entry contribution; and

(iii) subsection 52 (1) and section 52h do not apply to the asset that the person is, because of subparagraph (ii) of this paragraph, to be taken to have;

(e) the assets value limit of the person and the person’s partner is to be taken to be $92,250.

Note: the amount in paragraph (e) is adjusted annually.

“(4) Subsection (3) applies:

(a) whether or not the person actually has any right or interest in the person’s principal home; and

(b) whatever the value of any right to interest that the person does have in the person’s principal home.

Members of illness separated couple (partner not in retirement village and partner not property owner)

“52u. (1) This section applies to a retirement village resident if:

(a) the resident is a member of an illness separated couple; and

(b) the principal home of the resident’s partner is not in a retirement village; and

(c) the resident’s partner does not have a right or interest in the partner’s principal home that is is to be disregarded because of paragraph 52 (1) (b).

Entry contribution more than extra allowable amount

“(2) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was more than the extra allowable amount;

the following provisions apply for the purposes of the application of this Act to the person and to the person’s partner:

(d) any right or interest of the person’s partner in the person’s principal home is to be disregarded in calculating the actual value of the partner’s assets for the purposes of this Act;

(e) the assets value limit of the person and the person’s partner is to be taken to be $92,250.

Note: the amount in paragraph (e) is adjusted annually.

“(3) Subsection (2) applies:

(a) whether or not the person actually has any right or interest in the person’s principal home; and

(b) whatever the value of any right or interest that the person does have in the person’s principal home.

Entry contribution equal to or below extra allowable amount

“(4) Where:

(a) this section applies to a retirement village resident; and

(b) the person’s entry contribution was equal to or less than the extra allowable amount;

then, the following provisions apply for the purposes of the application of this Act to the person and to the person’s partner:

(c) both the person, and the person’s partner, are to be taken not to have a right or interest in relation to the person’s principal home;

(d) the person’s assets are to be taken to include an asset the value of which is equal to the amount of the person’s entry contribution;

(e) subsection 52 (1) and sections 52g and 52h do not apply to the asset that the person is, because of paragraph (d) of this subsection, taken to have.

Members of ordinary couple with different principal homes (both in retirement villages)

“52v. (1) This section applies to a retirement village resident if:

(a) the resident is a member of an ordinary couple with different principal homes; and

(b) the principal home of the resident’s partner is also in a retirement village.

Both entry contributions above extra allowable amount

“(2) If:

(a) this section applies to a retirement village resident; and

(b) the resident’s entry contribution, and the partner’s entry contribution, were each more than the extra allowable amount concerned;

then, for the purposes of this Act:

(d) the value of the principal home of the resident is to be taken to be the total amount paid, or agreed to be paid, for the resident’s current right to reside in the retirement village concerned; and

(e) the value of the principal home of the partner is to be taken to be the total amount paid, or agreed to be paid, for the partner’s current right to reside in the retirement village concerned; and

(f) any right or interest of the resident in:

(i) the more valuable of the two principal homes; or

(ii) where the value of the two principal homes is the same— the principal home of the younger person;

in this subsection called the ‘more valuable principal home’ is to be disregarded in calculating the actual value of the resident’s assets; and

(g) any right or interest of the partner in the more valuable principal home is to be disregarded in calculating the actual value of the partner’s assets; and

(h) the assets of the person whose principal home is not the more valuable principal home are to be taken to include an asset the value of which is equivalent to the amount of that person’s entry contribution.

Both entry contributions equal to or below extra allowable amount

“(3) If:

(a) this section applies to a retirement village resident; and

(b) the resident’s entry contribution, and the partner’s entry contribution, were each less than or equal to the extra allowable amount concerned;

then, for the purposes of this Act:

(c) the resident and the partner are each to be taken not to have a right or interest in relation to the resident’s principal home or the partner’s principal home; and

(d) the resident’s assets are to be taken to include the total amount paid, or agreed to be paid, for the person’s current right to reside in the retirement village; and

(e) the partner’s assets are to be taken to include the total amount paid, or agreed to be paid, for the partner’s current right to reside in the retirement village concerned.

“(4) Subsection (2) applies:

(a) whether or not the resident actually has any right or interest in the resident’s principal home; and

(b) whatever the value of any right or interest that the resident does have in the resident’s principal home; and

(d) whatever the value of any right or interest that the partner does have in the partner’s principal home.

Members of ordinary couple with different principal homes (partner not in retirement village and partner property owner)

“52w. (1) This section applies to a retirement village resident if:

(a) the resident is a member of an ordinary couple with different principal homes; and

(b) the principal home of the resident’s partner is not in a retirement village; and

(c) the right or interest of the resident’s partner in the partner’s principal home would, but for this section, be disregarded because of paragraph 52 (1) (b).

“(2) If this section applies to a retirement village resident, then, for the purposes of this Act:

(a) the resident and the resident’s partner are each to be taken to have a right or interest in a principal home to which paragraph 52 (1) (b) applies; and

(b) the value of the resident’s principal home is to be taken to be the amount of the resident’s entry contribution; and

(i) the more valuable of the two principal homes; or

(ii) where the value of the two principal homes is the same—the principal home that is not in a retirement village;

(in this subsection called the ‘more valuable principal home’) is to be disregarded in calculating the actual value of the resident’s assets; and

(d) any right or interest of the partner in the more valuable principal home is to be disregarded in calculating the actual value of the partner’s assets; and

(e) the assets of the person whose principal home is not the more valuable principal home are to be taken to include an asset whose value is equivalent to the value of the less valuable principal home.

Members of ordinary couple with different principal homes (partner not in retirement village and partner not property owner)

“52x. (1) This section applies to a retirement village resident if:

(a) the resident is a member of an ordinary couple with different principal homes; and

(b) the principal home of the resident’s partner is not in a retirement village; and

(c) the partner does not have a right or interest in the partner’s principal home that is to be disregarded because of paragraph 52 (1) (b).

Entry contribution above extra allowable amount

“(2) If:

(a) this section applies to a retirement village resident; and

(b) the resident’s entry contribution was more than the amount that would be the extra allowable amount if the resident were not a member of a couple;

then, for the purposes of this Act, the resident and the partner are each to be taken to have a right or interest in a principal home to which paragraph 52 (1) (b) applies.

Entry contribution equal to or below extra allowable amount

“(3) If:

(a) this section applies to a retirement village resident; and

(b) the resident’s entry contribution was equal to or less than the amount that would be the extra allowable amount if the resident were not a member of a couple;

then, the following provisions apply for the purposes of the application of this Act to the resident and to the resident’s partner:

(c) both the resident, and the partner, are to be taken not to have a right or interest in relation to the resident’s principal home; and

(d) the resident’s assets are to be taken to include an asset whose value is equal to the amount of the resident’s entry contribution.

“(4) Subsection (3) applies:

(a) whether or not the resident actually has any right or interest in the resident’s principal home; and

(b) whatever the value of any right or interest that the resident does have in the resident’s principal home; and

(d) whatever the value of any right or interest that the partner does have in the resident’s principal home.

“Subdivision D—Financial hardship

Access to financial hardship rules

“52y. (1) Where:

(a) either:

(i) a service pension is not payable to a person because of the application of an assets test; or

(ii) a person’s service pension rate is determined by the application of an assets test; and

(b) either:

(i) sections 48b and 48c (disposal of income) and 52g and 52h (disposal of assets) do not apply to the person; or

(ii) the Commission determines in writing that the application of those sections to the person should, for the purposes of this section, be disregarded; and

(d) the person lodges at an office of the Department in Australia a written request that this section apply to the person; and

(e) the Commission is satisfied that the person would suffer severe financial hardship if this section did not apply to the person;

the Commission must determine in writing that this section applies to the person.

Note: for ‘unrealisable asset’ see subsections 5l (11) and (12).

“(2) If a request is lodged under paragraph (1) (d), the Secretary:

(a) must investigate the matters that the request relates to; and

(b) must, when the investigation is complete, submit to the Commission for its consideration:

(i) the request; and

(ii) the evidence that the person who made the request provided in support of the request; and

(iii) any documents that are relevant to the request and are under the Department’s control (including any evidence or documents relevant to the request that are obtained in the course of the investigation).

“(3) A determination under subsection (1) takes effect:

(a) on the day on which the request under paragraph (1) (d) was lodged; or

(b) if the Commission so determines in the special circumstances of the case—on a day not more than 6 months before the day referred to in paragraph (a).

Application of financial hardship rules

Value of unrealisable asset to be disregarded

“52z. (1) If section 52y applies to a person, the value of:

(a) any unrealisable asset of the person; and

(b) any unrealisable asset of the person’s partner;

is to be disregarded in working out the person’s service pension rate.

Deduction from service pension maximum payment rate

“(2) If section 52y applies to a person, there is to be deducted from the person’s service pension maximum payment rate an amount equal to the person’s adjusted annual rate of ordinary income.

Adjusted annual rate of ordinary income

“(3) A person’s adjusted annual rate of ordinary income is an amount per year equal to the sum of:

(a) the person’s annual rate of ordinary income (other than income from assets); and

(b) the person’s annual rate of ordinary income from assets that are not assets tested; and

(i) the person’s annual rate of ordinary income from unrealisable assets; or

(ii) the person’s notional annual rate of ordinary income from unrealisable assets;

whichever is the greater; and

(d) an amount per year equal to $26 for each $250 of the value of the person’s assets (other than disregarded assets).

Assets tested asset

“(4) For the purposes of subsection (3), an asset is not assets tested if the asset’s value is disregarded under subsection 52 (1).

Notional annual rate of ordinary income from unrealisable assets

“(5) A person’s notional annual rate of ordinary income from unrealisable assets is:

(a) the amount per year equal to 2.5% of the value of the person’s and the person’s partner’s unrealisable assets; or

(b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person’s and the person’s partner’s unrealisable assets;

whichever is the less.

“(6) Subsection (2) applies:

(a) subject to subsection (8); and

(b) not with standing sections 41, 42, 44 and 45 (Service Pension Rate Calculators).

“(7) Where:

(a) a person has disposed of assets and section 52g or 52h applies to the disposition; and

(b) the Commission has made a determination under subparagraph 52y (1) (b) (ii) in relation to the disposition;

this section applies to the person as if the person had not disposed of the assets.

“(8) Where the sum of the rate of pension that would, apart from this subsection, be payable to a person and the annual rate of income of the person exceeds the maximum payment rate, the rate so payable is to be reduced by the amount per year of the excess.

“Subdivision E—Pension loans scheme

Eligibility for participation in pension loans scheme

Person not member of a couple

“52za. (1) A person who is not a member of a couple is eligible to participate in the pension loans scheme if:

(a) the person is receiving or is eligible to receive a service pension; and

(b) the person is a veteran; and

(d) the person has turned:

(i) if a woman—55; or

(ii) if a man—60; and

(e) the person’s assets consist of, or include, PLS assets; and

(f) the value of the PLS assets is not less than 70% of the value of the person’s assets.

Note 1: for ‘assets reduced rate’ see relevant Service Pension Rate Calculator.

Note 2: for ‘assets’ and ‘PLS assets’ see subsection 5l (1).

Note 3: in calculating the value of the person’s assets, the value of the person’s exempt assets is disregarded—see subsections 5l (1) and 52 (1).

Person member of a couple

“(2) A person who is a member of a couple is eligible to participate in the pension loans scheme if:

(a) the person is receiving or is eligible to receive a service pension; and

(b) the person is a veteran or the partner of a veteran; and

(d) the person either:

(i) is a veteran and has turned:

(a) if a woman—55; or

(b) if a man—60; or

(ii) is the partner of a veteran referred to in (i); and

(e) the couple’s assets consist of, or include, PLS assets; and

(f) the value of the PLS assets is not less than 70% of the value of the couple’s assets.

Note 1: for ‘assets reduced rate’ see the Service Pension Rate Calculator that applies to the person.

Note 2: for ‘assets’ and ‘PLS assets’ see subsection 5l (1).

Note 3: in calculating the value of the person’s assets, the value of the person’s exempt assets is disregarded—see subsections 5l (1) and 52 (1).

Effect of participation in pension loans scheme—pension rate

“52zb. (1) If:

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

(b) the person makes a request to participate under section 52zd; and

(d) the Commission is satisfied that the amount of any debt that becomes payable by the person to the Commonwealth under this Division is readily recoverable;

then:

(e) if the person is not a member of a couple—the value of the person’s assets is to be disregarded when determining the rate of pension or allowance payable to the person; or

(f) if the person is a member of a couple—the value of the couple’s assets is to be disregarded when determining the rate of pension or allowance payable to the person.

Note: section 52ze applies if the person’s or couple’s assets are valued at less than $100,000.

“(2) The value of the assets is to be disregarded on and after the first pension payday after the request is lodged.

“(3) For the purposes of Division 15 (fringe benefits), the person’s rate is taken to be an assets reduced rate in spite of subsection (1).

Note: for ‘assets reduced rate’ see the Service Pension Rate Calculator that applies to the person.

Effect of participation in pension loans scheme—creation of debt

“52zc. (1) If the value of assets has been disregarded under section 52zb for the purposes of determining a person’s pension rate, the person owes a debt to the Commonwealth.

“(2) The maximum amount of the debt owed by the person under this section is the amount worked out by taking away $100,000 from the value of the person’s—or the couple’s—assets (including exempt assets).

Note 1: if the value of the person’s assets (including exempt assets) is less than $100,000, see section 52ze.

Note 2: ‘exempt assets’ are defined in subsection 5l (1) to mean assets described in subsection 52 (1).

“(3) This is how to work out the amount of the debt owed by the person from time to time:

Method statement
Step 1.	Work out the sum of the amount of pension received by the person from time to time under the pension loans scheme: the result is the income reduced amount.
Step 2.	Take away from the income reduced amount the sum of the amount of pension (if any) that would have been received by the person if the value of assets had not been disregarded under section 52zb: the result is the basic amount of debt.
Step 3.	Add to the basic amount of debt the amount of interest payable. The amount of interest payable is worked out under subsection (4): the result is the amount of debt including interest.
Step 4.	Add to the amount of debt including interest the amount of any registration costs payable by the person under subsection 52zl (4): subject to subsection (2), the result is the total amount of debt.
Step 5.	From the total amount of debt take away any amount of the debt already paid to the Commonwealth: the result is the current amount of debt owed by the person.

“(4) The amount of interest payable under subsection (3) is worked out on the basis of the rate fixed from time to time by the Minister for Social Security by notice published in the Gazette.

Need for a request to participate

“52zd. (1) A person who wants to participate in the pension loans scheme must make a request to participate in accordance with this section.

“(2) A request under subsection (1) must be signed:

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

(b) if the person is a member of a couple—by both members of the couple.

“(3) The request must be:

(a) in writing; and

(b) in a form approved by the Commission; and

Additional requirement where person’s assets valued at less than $100,000

Person not member of a couple

“52ze. (1) If:

(a) a person who is not a member of a couple wants to participate in the pension loans scheme; and

(b) the value of the person’s assets (including exempt assets) is less than $100,000;

the person’s request to participate in the scheme must include an election in writing that subsection 52zc (2) not apply to the person.

Note 1: subsection 52zc (2) provides that no debt arises if the value of the assets is less than $100,000.

Note 2: ‘exempt assets’ are defined in subsection 5l (1) to mean assets described in subsection 52 (1).

Person member of a couple

“(2) If:

(a) a person who is a member of a couple wants to participate in the pension loans scheme; and

(b) the value of the couple’s assets (including exempt assets) is less than $100,000;

the person’s request to participate in the scheme must include an election in writing that subsection 52zc (2) not apply to the person.

Note 1: subsection 52zc (2) provides that no debt arises if the value of the assets (including exempt assets) is less than $100,000.

Note 2: ‘exempt assets’ are defined in subsection 5l (1) to mean assets described in subsection 52 (1).

Election to be signed

“(3) An election under this section must be signed:

(a) if the request is made under subsection (1)—by the person; or

(b) if the request is made under subsection (2)—by both members of the couple.

Existence of debt results in charge over assets

Person not member of a couple

“52zf. (1) If a person who is not a member of a couple owes a debt to the Commonwealth under section 52zc, the person’s assets are subject to a charge in favour of the Commonwealth to secure the payment of the debt to the Commonwealth.

Person member of a couple

“(2) If:

(a) a person who is a member of a couple owes a debt to the Commonwealth under section 52zc; and

(b) the person’s partner has signed the person’s request under subsection 52zd (2);

the couple’s assets are subject to a charge in favour of the Commonwealth to secure the payment of a debt to the Commonwealth.

Debt not to be recovered until after death

“52zg. (1) The Commonwealth is not entitled to recover a debt under section 52zc from a person until after the person’s death.

“(2) In the following circumstances, the Commonwealth is not entitled to recover the debt until after the person’s death and after:

(a) if:

(i) the person was a member of a couple at the time of death; and

(ii) the person’s partner survives the person; and

(iii) an amount of bereavement payment is payable to the partner because of the person’s death;

the last pension payday on which an amount of bereavement payment is payable; or

(b) if:

(i) the person was a member of a couple at the time of death; and

(ii) the person’s partner survives the person; and

(iii) the person’s partner has the use of the assets or part of the assets that are subject to a charge; and

(iv) the partner has turned:

(a) if a woman—55; or

(b) if a man—60;

the death of the partner.

“(3) This section is subject to sections 52zh (enforcement of charge if assets change hands) and 52zk (automatic termination of participation in pension loans scheme).

“(4) If the Commission determines in writing that the debt is to be recovered before the events referred to in subsection (1) or (2), the debt may be so recovered in spite of those subsections.

Enforcement of charge

“52zh. (1) If:

(a) assets of a person are subject to a charge under section 52zf; and

(b) any of those assets cease to be assets of the person; and

the Commonwealth may recover from the person, out of those proceeds, the whole or part of the debt secured by the charge.

“(2) If:

(a) assets of a person are subject to a charge under section 52zf; and

(b) any of those assets are disposed of to another person (in this section called the ‘new owner’);

the Commonwealth may, subject to subsection (3), enforce the charge against those assets.

“(3) The Commonwealth may not enforce the charge against the assets if the new owner is a genuine purchaser for value without notice of the charge.

Person ceases to participate in pension loans scheme if value of assets falls below $100,000

“52zj. (1) If:

(a) a person owes a debt to the Commonwealth under section 52zc; and

(b) the person has not made an election under section 52ze; and

section 52zb (determination of pension rate under pension loans scheme) ceases to apply to the person unless the person lodges with the Department an election in writing that subsection 52zc (2) not apply to the person.

Note: the effect of subsection 52zc (2) is that no debt arises if the value of the assets is less than $100.000.

“(2) To be effective, the election must be lodged at an office of the Department in Australia within 10 weeks after the value of the assets falls below $100,000.

“(3) If section 52zb ceases to apply to the person because of this section, it ceases to apply on or after the first pension payday after the value of the assets falls below $100,000.

Automatic termination of participation in pension loans scheme

“52zk. If:

(a) a person, or a couple, has assets that are subject to a charge under section 52zf; and

(b) any of the following circumstances occurs:

(i) any of the PLS assets of the person, or the couple, cease to be assets of the person or the couple;

(ii) the person, or the couple, acquires assets that are neither PLS assets nor exempt assets;

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

(iv) if the person is a member of a couple—the person ceases to be a member of a couple; and

(c) as a result of any of those circumstances, the value of the person’s, or the couple’s, PLS assets is less than 70% of the person’s, or the couple’s assets;

the following sections cease to apply to the person unless the Commission, by written determination, decides otherwise:

(d) section 52zb (determination of pension rate under pension loans scheme);

(e) section 52zg (debt not to be recovered until after death).

Note: in calculating the value of assets under this section, the value of exempt assets is disregarded—see subsection 5l (1) and section 52.

Registration of charge

“52zl. (1) If assets are subject to a charge under section 52zf, the Commission may lodge a notice in writing of the charge with the appropriate officer of the State or Territory in which the assets are situated.

“(2) The appropriate officer may register the charge as if the Commission’s notice were a bill of sale or an instrument of charge or encumbrance duly executed under the laws in force in the State or Territory.

“(3) The Secretary may require the person whose assets are subject to the charge to execute an instrument relating to the registration of the charge.

“(4) If the Commonwealth incurs costs associated with:

(a) the registration of the charge; or

(b) the registration of the discharge of the charge;

those costs are payable by the person whose assets are subject to the charge.

Manner of enforcement of charge

“52zm. If a charge against assets is enforceable under this Subdivision, the Commission may enforce the charge against those assets or against part of those assets in any manner that the Commission determines in writing.

“Division 15—Fringe benefits

“Subdivision A—Introduction

Fringe benefits and treatment at Departmental expense for certain service pensioners

“53. (1) If a person who is receiving a service pension is eligible for fringe benefits in accordance with this Division, benefits and concessions of various kinds may be made available to the person by the Commonwealth, State and Territory governments and authorities and local authorities.

Note: if a person is eligible for fringe benefits in accordance with this Division, benefits and concessions under the National Health Act 1953 may be made available to the person.

“(2) If a person who is receiving a service pension:

(a) is eligible for fringe benefits in accordance with this Division; or

(b) satisfies other conditions laid down in section 53d; the person may be entitled to certain medical treatment at Departmental expense.

“(3) Section 85 provides further treatment entitlements for veterans.

“Subdivision B—Fringe benefits

Eligibility for fringe benefits

“53a. A person who is receiving a service pension is eligible for fringe benefits if:

(a) the person is permanently blind; or

(b) the person’s service pension rate is neither income reduced nor assets reduced; or

(c) the person’s service pension rate is income reduced and the person satisfies the fringe benefits ordinary income test; or

(d) the person’s service pension rate is assets reduced and the person satisfies the fringe benefits assets test.

Note 1: the Fringe Benefits Ordinary Income Test Calculator at the end of section 53b is to be used in working out whether a person satisfies the fringe benefits ordinary income test.

Note 2: the Fringe Benefits Assets Test Calculator at the end of section 53c is to be used in working out whether a person satisfies the fringe benefits assets test.

Fringe benefits ordinary income test

“53b. The Fringe Benefits Ordinary Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the fringe benefits ordinary income test for the purposes of this Act.

‘FRINGE BENEFITS ORDINARY INCOME TEST CALCULATOR

Satisfying the fringe benefits ordinary income test

53B-1. A person satisfies the fringe benefits ordinary income test if the person’s annual rate of ordinary income does not exceed the fringe benefits ordinary income free area.

Note 1: for ‘annual rate of ordinary income’ see points 53B-2 and 53B-3 below.

Note 2: for ‘fringe benefits ordinary income free area’ see point 53B-4 below.

Financial hardship cases

53B-2. For the purposes of point 53B-1, a person’s ordinary income is to be taken to include an amount per year that is taken into account under subsection 52z (5).

Changes in income rate (13 week buffer)

53B-3. If on a particular day a person’s annual rate of ordinary income increases from a rate below or equal to the person’s fringe benefits ordinary income free area to a rate not more than 25% above

that free area, the person is to be taken to satisfy the fringe benefits ordinary income test until:

(a) the end of the period of 13 weeks starting on the first pension payday after that day; or

(b) the person’s annual rate of ordinary income exceeds 125% of that free area;

whichever happens first.

Ordinary income free area

53B-4. A person’s fringe benefits ordinary income free area is worked out using the Table. Work out which family situation in the Table applies to the person. The fringe benefits ordinary income free area is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each dependent child of the person.

TABLE FRINGE BENEFITS ORDINARY INCOME FREE AREA
column 1	column 2	column 3	column 4
item	person’s family situation	basic free area	additional free area
1.	not a member of a couple	$5,148	$312
2.	member of a couple	$4,420	$156

Note 1: for ‘dependent child’ see section 5f.

Note 2: the basic free area is indexed in line with CPI increases.

Fringe benefits assets test

“53c. The Fringe Benefits Assets Test Calculator at the end of this section is to be used in working out whether a person satisfies the fringe benefits assets test for the purposes of this Act.

“FRINGE BENEFITS ASSETS TEST CALCULATOR

Satisfying the fringe benefits assets test

53C-1. A person satisfies the fringe benefits assets test if the value of the person’s assets does not exceed the person’s fringe benefits assets value limit.

Note: for ‘fringe benefits assets value limit’ see point 53C-2 below.

Fringe benefits assets value limit

53C-2. A person’s fringe benefits assets value limit is worked out using the Table. Work out which family situation applies to the person. The fringe benefits assets value limit is the corresponding amount in column 3.

TABLE FRINGE BENEFITS ASSETS VALUE LIMIT
column 1	column 2	column 3
		assets value limit
item	person’s family situation	column 3a either person or partner property owner	column 3b neither person nor partner property owner
1.	not a member of a couple	$118,000	$192,000
2.	member of a couple	$84,500	$121,500

Note 1: for ‘property owner’ see subsection 5l (4).

Note 2: the column 3a amounts are indexed in line with CPI increases.

Note 3: the column 3b amounts are adjusted annually.

“Subdivision C—Treatment at Departmental expense

Eligibility for treatment at Departmental expense

“53d. (1) A veteran who is receiving an age or invalidity service pension is eligible to be provided with treatment under Part V for any injury suffered, or disease contracted, by the veteran if:

(a) the veteran is eligible for fringe benefits in accordance with Subdivision B; and

(b) the veteran is not a veteran (as defined by subsection 5c (1)) only because the veteran has rendered service as a member of the naval, military or air forces of a Commonwealth or allied country of a kind described in paragraph 6 (1) (f) or (g).

Note 1: a service pensioner who is receiving age or invalidity service pension may also be eligible to be provided with treatment under Part V if he or she, although not eligible for fringe benefits, is receiving a pension under Part II at 50% of the general rate or higher (see subsection 85 (7)).

Note 2: a wife service pensioner may be eligible to be provided with treatment under Part V if she is receiving a pension under Part II at 50% of the general rate or higher (see subsection 85 (7)).

“(2) Paragraph (1) (b) does not make a veteran ineligible to be provided with treatment under Part V if the veteran satisfies the Commission that the veteran was domiciled in Australia or an external Territory immediately before the veteran’s appointment or enlistment in the naval, military or air forces of a Commonwealth or allied country of a kind described in paragraph 6 (1) (f) or (g).

“(3) If a veteran’s service pension is suspended, the Commission may determine that the veteran is to be treated, for the purposes of this section, as if the veteran were continuing to receive the service pension during the whole or a specified part of the period of suspension.

“(4) A determination under subsection (3) must be in writing.

“(5) This section applies to an injury suffered, or a disease contracted, by a veteran whether before or after the commencement of this section.

“Division 16—Recipient obligations

Secretary may require notification of an event or change of circumstances

“54. (1) The Secretary may give a person:

(a) to whom a service pension is being paid; or

(b) whose claim or application for a service pension is under consideration by the Commission or the Administrative Appeals Tribunal; or

a notice that requires the person to inform the Department, or an officer specified in the notice, if:

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

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

“(2) A person referred to in paragraph (1) (a) includes a person to whom the whole or a part of a service pension is being paid for the purpose of being applied for the benefit of a pensioner.

“(3) An event or change of circumstances is not to be specified in a notice under subsection (1) unless the occurrence of that event or change of circumstances might affect:

(a) the payment to the person of the service pension; or

(b) the provision of fringe benefits under Division 15.

“(4) A notice under subsection (1):

(a) must be in writing; and

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

“(5) The period specified under paragraph (4) (c) 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.

“(6) A person must not 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: $1,000 or imprisonment for 6 months, or both.

“(7) A person must not, in purporting to comply with a notice under subsection (1), knowingly give information that is false or misleading in a material particular.

Penalty: $2,000 or imprisonment for 12 months, or both.

Secretary may require recipient to give particular information relevant to the payment of pension

“54a. (1) The Secretary may give a person:

(a) to whom a service pension is being paid; or

(b) whose claim or application for a service pension is under consideration by the Commission or the Administrative Appeals Tribunal; or

a notice that requires the person to give the Department, or an officer specified in the notice, a statement about a matter that might affect:

(d) the payment to the person of the service pension; or

(e) the provision of fringe benefits under Division 15.

“(2) A person referred to in paragraph (1) (a) includes a person to whom the whole or a part of a service pension is being paid for the purpose of being applied for the benefit of a pensioner.

“(3) A notice under subsection (1):

(a) must be in writing; and

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

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

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

“(6) A person must not 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: $1,000 or imprisonment for 6 months, or both.

“(7) A person must not, in purporting to comply with a notice under subsection (1), knowingly give information that is false or misleading in a material particular.

Penalty: $2,000 or imprisonment for 12 months, or both.

Document served with a section 54 notice

“54b. (1) A notice under subsection 54 (1) is taken to specify an event or change of circumstances if:

(a) the notice refers to a document that sets out the event or change of circumstances; and

(b) a copy of the document is given to the person with the notice.

“(2) If a notice specifies an event or change of circumstances by reference to a document under subsection (1), the notice may specify the period within which a person is to give the information to the Department or specified officer by reference to the period set out in the document for notification of the event or change of circumstances.

Interpretation

“54c. In this Division:

‘officer’ means a person performing duties, or exercising powers or functions, under or in relation to this Act;

‘person’ includes an unincorporated body.

“Division 17—Pensioners in certain institutions

“Subdivision A—Imprisonment

Service pension may be suspended or forfeited when pensioner in gaol

“55. (1) Subject to subsections (2) and (3), if a person who is receiving a service pension goes to gaol, the Commission may direct that a pension instalment or instalments that would otherwise be payable while the person is in gaol are to be forfeited or suspended.

Note 1: although the person is not receiving the pension while the instalments are suspended or forfeited, the person may be able to receive treatment at Departmental expense if a determination is in force under subsection 53d (3). 55 (1) or 85 (8).

Note 2: while the instalments are suspended or forfeited, the person is not entitled to fringe benefits because the person is not ‘receiving a service pension’ unless a determination is in force under subsection 53d (3), 55 (1) or 85 (8).

“(2) A direction under subsection (1) can only be given in relation to an instalment for a payday that occurs:

(a) after the first payday after the day on which the person goes to gaol; and

(b) before the last payday before the day on which the person is released from gaol.

Note: this subsection has the effect of putting short-term imprisonments (e.g. 14 days) outside the scope of this section.

“(3) Subsection (1) does not apply to so much of an instalment as has been redirected under a direction given under section 55a.

“(4) For the purposes of this section, a person is in gaol if the person is imprisoned in connection with the person’s conviction for an offence.

Note: this section is not intended to apply to a pensioner who is in custody pending trial or sentencing.

Instalments may be redirected to partner or child

“55a. (1) If:

(a) an instalment of a person’s service pension would, but for this section, be suspended or forfeited under section 55; and

(b) the person has a partner or a child;

the Commission may direct that the whole, or a specified part, of the instalment is to be paid to:

(d) the child; or

(e) someone else approved by the Commission.

“(2) A payment made under paragraph (1) (e) is to be applied for the benefit of the partner or the child.

“(3) If a payment is made under subsection (1) to the partner or a child of the person who is in gaol, the payment is to be taken, for all the purposes of this Act, to be a payment made to the person in gaol.

Note: this subsection has the effect that the person is receiving the service pension on a payday if the instalment for that payday has been wholly or partly redirected under this section: the person may, for instance, be eligible for fringe benefits or for treatment at Departmental expense. This person is not eligible for another income support payment.

“Subdivision B—Benevolent homes

Application of Subdivision

“55b. (1) This Subdivision applies to a person if:

(a) the person is receiving a service pension; and

(b) the person is an inmate of a benevolent home; and

“(2) While a person to whom this Subdivision applies is an inmate of the benevolent home, the person’s pension is to be dealt with under:

(a) section 55c if the person is a male service pensioner and:

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

(ii) the person’s pension rate includes a child add-on or child add-ons; or

(b) section 55d in any other case.

Note: for ‘child add-on’ see section 5q.

Inmate of benevolent home—male, partnered, with child add-on

“55c. (1) If:

(a) a person to whom this Subdivision applies is male and partnered; and

(b) the person’s pension rate includes a child add-on or child add-ons;

this is how the person’s pension is to be dealt with while the person is an inmate of the benevolent home:

(c) so much of the person’s service pension as does not exceed the dependent child add-on (or the sum of the dependent child add-ons) is to be paid to the person’s partner: the balance (if any) is called the child reduced balance;

(d) so much of the child reduced balance (if any) as does not exceed the pensioner contribution is to be paid to the person who controls the benevolent home: the balance (if any) is called the contribution reduced balance;

(e) the contribution reduced balance (if any) is to be paid to the pensioner.

Note: for ‘pensioner contribution’ see section 55e.

“(2) Amounts paid under paragraph (1) (d) are to be used for the maintenance of the person in the benevolent home.

Inmate of benevolent home—other cases

“55d. (1) If a person to whom this Subdivision applies is not a male, partnered pensioner whose pension rate includes a child add-on, this is how the person’s pension is to be dealt with while the person is an inmate of the benevolent home:

(a) so much of the person’s service pension as does not exceed the pensioner contribution is to be paid to the person who controls the benevolent home: the balance (if any) is called the contribution reduced balance;

(b) the contribution reduced balance (if any) is to be paid to the pensioner.

“(2) Amounts paid under paragraph (1) (a) are to be used for the maintenance of the person in the benevolent home.

Pensioner contribution

“55e. (1) For the purposes of this Subdivision, the pensioner contribution is, subject to subsection (2), 364 times the amount in force from time to time for the purposes of subparagraph 47 (2) (b) (iii) of the National Health Act 1953.

“(2) If the amount worked out under subsection (1) is not a multiple of $2.60, the pensioner contribution is the next lower amount that is a multiple of $2.60.

“Division 18—Variation and termination

Automatic termination—recipient complying with section 54 notification obligations

“56. (1) Where:

(a) a person who is receiving a service pension is given a notice under section 54; and

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

(d) the person informs the Department or specified officer 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:

(i) the person ceases to be eligible for the pension; or

(ii) the pension would, but for this section, cease to be payable to the person;

the pension continues to be payable to the person until the end of the notification period and then ceases to be payable to the person.

“(2) If the person ceases to be eligible for the pension under subsection (1), the pension is cancelled.

Note 1: if the person informs the Department within the notification period, of an event or change in circumstances that reduces the rate of the person’s pension, there is no automatic rate reduction and a determination under section 56d must be made in order to bring the rate reduction into effect.

Note 2: if a service pension ceases to be payable to a person under this section, the person’s eligibility for fringe benefits (including treatment at Departmental expense) also ceases.

Automatic termination—recipient not complying with section 54 notification obligations

“56a. (1) Where:

(a) a person who is receiving a service pension is given a notice under section 54; and

(d) the person does not inform the Department or specified officer 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:

(i) the person ceases to be eligible for the pension; or

(ii) the pension ceases to be payable to the person;

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

“(2) If the person ceases to be eligible for the pension under subsection (1), the pension is cancelled.

Note: if a service pension ceases to be payable to a person under this section, the person’s eligibility for fringe benefits (including treatment at Departmental expense) also ceases.

Automatic rate reduction—recipient not complying with section 54 notification obligations

“56b. Where:

(a) a person who is receiving a service pension is given a notice under section 54; and

(d) the person does not inform the Department or specified officer 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’s rate of pension is to be reduced;

the pension becomes payable to the person at the reduced rate immediately after the day on which the event or change in circumstances occurs.

Rate increase determination

“56c. (1) If the Commission is satisfied that the rate at which a service pension is being, or has been, paid is less than the rate provided for by this Act, the Commission may determine that the rate is to be increased to the rate specified in the determination.

Note: for the date of effect of a determination under this section see section 56g.

“(2) A determination under subsection (1) must be in writing.

Rate reduction determination

“56d. (1) If the Commission is satisfied that the rate at which service pension is being, or has been, paid is more than the rate provided for by this Act, the Commission may determine that the rate is to be reduced to the rate specified in the determination.

Note 1: a determination under this section is not necessary in a case where an automatic rate reduction is produced by section 56b.

Note 2: for the date of effect of a determination under this section, see section 56h.

“(2) A determination under subsection (1) must be in writing.

Cancellation and suspension determination

“56e. (1) If the Commission is satisfied that a service pension is being, or has been, paid to a person to whom it is not, or was not, payable under this Act, the Commission may determine that the pension is to be cancelled or suspended.

Note 1: a determination under this section is not necessary in a case where an automatic termination is produced by section 56 or 56a.

Note 2: for the date of effect of a determination under this section, see section 56h.

Note 3: when a person’s pension is suspended under section 56e, the provision of fringe benefits (see Division 15) to the person is generally suspended too. However, the Commission may decide that the person can continue to receive medical treatment under section 53d or Part V (see subsection 85 (8)).

Note 4: when a person’s pension is cancelled under section 56e, the person’s fringe benefits (including treatment at Departmental expense) are also cancelled.

“(2) A determination under subsection (1) must be in writing.

Resumption of payment after suspension

“56f. If the Commission:

(a) suspends a person’s service pension under section 56f; and

(b) later becomes satisfied that the pension is payable to the person; the Commission may end the suspension, by determination in writing.

Note: for the date of effect of a determination under this section, see section 56g.

Date of effect of favourable determination

“56g. (1) The day on which a determination under section 56c or 56f (in this section called the ‘favourable determination’) takes effect is worked out in accordance with this section.

Notified change of circumstances

“(2) If:

(a) the favourable determination is made following a person having advised the Department of a change of circumstances; and

(b) the change is not a decrease in the rate of the person’s maintenance income;

the determination takes effect on the first pension payday after the day on which the advice was received or on the day on which the change occurred, whichever is the later.

Note: if the change of circumstances is a decrease in the rate of the person’s maintenance income, see subsection (3) of this section and also Division 13 (General provisions relating to the maintenance income test).

Other determinations

“(3) In any other case, the favourable determination takes effect on the day on which the determination was made or on such later day or earlier day as is specified in the determination.

Date of effect of adverse determination

General

“56h. (1) The day on which a determination under section 56d or 56e (in this section called 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), (5) and (6), the day specified under paragraph (2) (b) must be later than the day on which the determination is made.

Contravention of Act

“(4) If the adverse determination is made because a person has contravened a provision of this Act (other than subsection 54 (6) or 128 (4)) the day specified under paragraph (2) (b) may be earlier than the day on which the determination is made.

False statement or misrepresentation—suspension or cancellation

“(5) If:

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

(b) because of the false statement or misrepresentation, any amount of a service pension has been paid to a person which should not have been paid;

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

False statement or misrepresentation—rate reduction

“(6) If:

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

(b) because of the false statement or misrepresentation, the rate at which a service pension was paid to a person was more than it should have been;

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

Pension may be cancelled at pensioner’s request

“56j. (1) The Commission may cancel a person’s age service pension, invalidity service pension or wife service pension if the person requests the Commission to do so.

“(2) A request under subsection (1) must be in writing.

Note: if the Commission cancels a veteran’s age service pension or invalidity service pension and the veteran’s partner receives a wife service pension, the wife service pension will also be terminated (under section 56e). Similarly, if a person has been receiving carer service pension because of caring for the veteran, that carer service pension will also be terminated.

Pension may be cancelled or suspended if Secretary loses contact with pensioner

“56k. If the Commission is unable to make payments of age service pension, invalidity service pension or wife service pension to a service pensioner for a continuous period of 6 months, the Commission may cancel or suspend the service pension.

Note 1: an example where this section is intended to apply is where a person has closed his or her bank account and cannot be contacted to make new banking or other arrangements for payment of the person’s service pension.

Note 2: if the Commission cancels or suspends a veteran’s age service pension or invalidity service pension and the veteran’s partner receives a wife service pension, the wife service pension will also be terminated (under section 56f). Similarly, if a person has been receiving carer service pension because of caring for the veteran, that carer service pension will also be cancelled or suspended.

Commission may end suspension

“56l. (1) If the Commission suspends a service pension under section 56k, it may end the suspension at any time.

“(2) The Commission may determine that the end of the suspension takes effect:

(a) from the date the suspension occurred; or

(b) such later date as the Commission thinks proper.

“Division 19—Review of decisions

Claimants and service pensioners may seek review of certain decisions

“57. (1) A claimant who is dissatisfied with a decision of the Commission:

(a) in relation to a claim for a qualifying service determination under section 35b; or

(b) in relation to a claim for a service pension; or

“(2) A service pensioner who is dissatisfied with a decision of the Commission:

(a) cancelling or suspending a service pension; or

(b) terminating the suspension of a service pension; or

(d) refusing an application for an increase in the rate of a service pension; or

(e) in relation to a request under section 52y (financial hardship); may request the Commission to review the decision.

Application for review

“57a. (1) A request for review of a decision under section 57 must:

(a) be made within 3 months after the person seeking review was notified of the decision; and

(b) set out the grounds on which the request is made; and

“(2) If a request for review of a decision is made in accordance with subsection (1) the Commission must review the decision.

“(3) If the Commission has delegated its powers under this section to the person who made the decision under review, that person must not review the decision.

Commission’s powers where request for review

“57b. (1) If the Commission reviews a decision under this Division, the Commission must affirm the decision or set it aside.

“(2) If the Commission sets the decision aside it must, subject to subsection (3), substitute a new decision in accordance with this Act.

“(3) If the decision set aside is:

(a) a decision to cancel, suspend or reduce the rate of a service pension under section 56d or 56e; or

(b) a decision to increase the rate of a service pension under section 56c;

the Commission need not substitute another decision.

Note: for the Commission’s evidence-gathering powers see section 57f.

Date of effect of certain review decisions

“57c. (1) If the Commission sets aside a decision and substitutes for it a decision:

(a) granting a claim for service pension; or

(b) increasing the rate of a service pension;

the substituted decision takes effect from a date specified by the Commission.

“(2) The date specified by the Commission under subsection (1) must not be earlier than the date from which the Commission could have granted the claim, or increased the rate, when the original decision was made.

“(3) If the Commission sets aside a decision to suspend a service pension, the Commission may end the suspension from a date specified by the Commission, which may be a date earlier than the date of the Commission’s decision to set aside the suspension.

Commission must make written record of review decision and reasons

“57d. (1) When the Commission reviews a decision under this Division it must make a written record of its decision upon review.

“(2) The written record must include a statement that:

(a) sets out the Commission’s findings on material questions of fact; and

(b) refers to the evidence or other material on which those findings are based; and

Person who requested review to be notified of decision

“57e. (1) When the Commission affirms or sets aside a decision under this Division it must give the person who requested the review of the decision:

(a) a copy of the Commission’s decision; and

(b) subject to subsection (2), a copy of the statement about the decision referred to in subsection 57d (2); and

(c) if the person has a right to apply to the Administrative Appeals Tribunal for a review of the Commission’s decision—a statement giving the person particulars of that right.

“(2) If the statement referred to in paragraph (1) (b) contains any matter that, in the opinion of the Commission:

(a) is of a confidential nature; or

(b) might, if communicated to the person who requested review, be prejudicial to his or her physical or mental health or well-being;

the copy given to the person is not to contain that matter.

Powers of Commission to gather evidence

“57f. (1) The Commission or the Commission’s delegate may, in reviewing a decision under this Division:

(a) take evidence on oath or affirmation for the purposes of the review; and

(b) adjourn a hearing of the review from time to time.

“(2) The presiding member of the Commission or the Commission’s delegate may, for the purposes of the review:

(a) summon a person to appear at a hearing of the review to give evidence and to produce such documents (if any) as are referred to in the summons; and

(b) require a person appearing at a hearing of the review for the purpose of giving evidence either to take an oath or to make an affirmation; and

“(3) The person who applied for the review under this Division is a competent and compellable witness upon the hearing of the review.

“(4) The oath or affirmation to be taken or made by a person for the purposes of this section is an oath or affirmation that the evidence that the person will give will be true.

“(5) The Commission’s power under paragraph (1) (a) to take evidence on oath or affirmation:

(a) may be exercised on behalf of the Commission by:

(i) the presiding member or the Commission’s delegate; or

(ii) by another person (whether a member or not) authorised by the presiding member or the Commission’s delegate; and

(b) may be exercised within or outside Australia; and

“(6) Where a person is authorised under subparagraph (5) (a) (ii) to take evidence for the purposes of a review, the person has:

(a) all the powers of the Commission under subsection (1); and

(b) all the powers of the presiding member under subsection (2); for the purposes of taking that evidence.

“(7) In this section:

‘Commission’s delegate’ means a person to whom the Commission has delegated its powers under section 57a and who is conducting the review in question.

Withdrawal of request for review

“57g. (1) A person who requests a review under section 57 may withdraw the request at any time before it is determined by the Commission.

“(2) To withdraw the request, the person must give written notice of withdrawal to the Secretary and the notice must be lodged at an office of the Department in Australia.

“(3) Subject to section 57a, a person who withdraws a request for review may subsequently make another request for review of the same decision.

Note: section 57a provides that a person who wants to request a review of a decision must do so within 3 months after the person has received notice of the decision.

Commission may reimburse certain expenses

“57h. (1) When the Commission, upon review of a decision under this Division:

(a) grants a claim for a qualifying service determination or a service pension; or

(b) sets aside a decision to cancel or suspend a service pension;

the Commission may pay to the person who requested the review an amount in respect of expenses incurred by the person in providing for the production of certificates, reports or other documents from a medical practitioner, or from a hospital or similar institution in which he or she had received medical treatment.

“(2) Subsection (1) applies only in relation to certificates, reports or documents reasonably used for the purposes of the review.

“(3) The amount that may be paid under subsection (1) is to be calculated in accordance with the scale approved by the Commission for the purposes of subsection 19 (8).

“Division 20—Administration of pension payments

“Subdivision A—General administration of pension payments

Payment by instalments

“58. Subject to section 58l, a fortnightly instalment of service pension is payable to a person on each pension payday on which:

(a) the person is eligible for the pension; and

(b) the pension is payable to the person.

Calculation of amount of fortnightly instalment

“58a. (1) The amount of a fortnightly instalment of service pension is the amount worked out by dividing the amount of the annual rate of the pension by 26.

“(2) If the amount that is payable to a person on a pension payday is not a multiple of 10 cents, the amount is, subject to subsection (3), to be increased or decreased to the nearest multiple of 10 cents.

“(3) If the amount that is payable to a person on a pension payday is a multiple of 5 cents, the amount is to be increased by 5 cents.

“(4) If, apart from this subsection, the amount of a fortnightly instalment of service pension would be less than $1.00, the amount of the instalment is to be increased to $1.00.

Effect on instalments of back-dating claim

“58b. If:

(a) on a particular day (in this section called the ‘claim day’) a person makes a claim for a service pension in accordance with the form approved by the Commission; and

(b) the Commission approves payment of the pension to the person from and including a day that occurs before the claim day (because of section 36b, 37b, 38b or 39b);

any instalment of service pension that would, but for this section, be payable to the person before the claim day is payable to the person:

(d) the first pension payday after the claim day.

Note: sections 36b, 37b, 38b and 39b deal with certain informal or incorrect claims.

Manner of payment

“58c. A person’s service pension is, subject to sections 58d and 58l and sections 202 to 202b, to be paid:

(a) to that person; and

(b) in the manner determined by the Commission.

Agents

“58d. (1) The Commission may approve payment of a service pensioner’s service pension to another person if:

(a) the service pensioner requests the Commission, in writing, to pay the pension to that person; and

(b) the Commission is satisfied that that person has agreed to receive payment as agent of the service pensioner.

“(2) An approval under subsection (1):

(a) must be in writing; and

(b) must specify the person to whom the pension is to be paid; and

“(3) If a payment of pension is made to a person in accordance with an approval under subsection (1):

(a) the payment is, for all purposes, to be taken to be a payment of the pension to the service pensioner; and

(b) neither the Commonwealth nor the Commission is bound to oversee the application of the payment by the person; and

Pension payday falling on public holiday etc.

“58e. If an amount of service pension that would normally be paid on a particular day cannot reasonably be paid on that day (because, for example, it is a public holiday or a bank holiday), the amount may be paid on an earlier day.

Payment into bank account etc.

“58f. (1) The Commission may direct that the whole or a part of the amount of a person’s service pension is to be paid, at the intervals that the Commission specifies, to the credit of an account with a bank, credit union or building society.

“(2) The account must be an account nominated and maintained by the person to whom the service pension is payable.

“(3) The account may be an account that is maintained by a person to whom the service pension is payable jointly or in common with another person.

“(4) If the Commission gives a direction under subsection (1), the service pension is to be payable in accordance with the direction.

Service pension to be absolutely inalienable

“58g. Subject to sections 58h and 58j, service pension is absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy or otherwise.

Payments to Commissioner of Taxation at pensioner’s request

“58h. (1) The Commission may make deductions from instalments of service pension payable to a person if the recipient requests the Commission to make those deductions for payment to the Commissioner of Taxation.

“(2) If deductions are made under subsection (1), the amounts deducted are to be paid to the Commissioner of Taxation.

Payments to Commissioner of Taxation—section 218 Income Tax Assessment Act

“58j. The Commission must, in accordance with section 218 of the Income Tax Assessment Act, for the purposes of enabling the collection of tax that is, or may become, payable by a recipient of a service pension:

(a) make deductions from instalments of the pension payable to the recipient; and

(b) pay the amount deducted to the Commissioner of Taxation.

“Subdivision B—Payment of service pension outside Australia

Age, invalidity and wife service pensions generally portable

“58k. (1) A person’s right to commence, or to continue, to be paid:

(a) an age service pension; or

(b) an invalidity service pension; or

granted to the person is not affected by the fact that the person leaves Australia.

Note: although a service pensioner can leave Australia and continue to receive the pension, the following need to be noted:

(a) rent assistance is not payable to a person who is outside Australia;

(b) if the person is being looked after by a carer, carer service pension will not be paid while the carer is outside Australia (see subsection (2)).

“(2) A carer service pension is not payable to a person who is outside Australia.

“(3) Subsection (1) has effect subject to section 58m (claim based on short-term residence).

Payment of service pension outside Australia

“58l. If a service pension is payable to a person who is physically outside Australia, the pension may be paid:

(a) in the manner determined by the Commission; and

(b) in the instalments determined by the Commission.

No portability if claim based on short-term residence

“58m. (1) If:

(a) a person is an Australian resident; and

(b) the person ceases to be an Australian resident; and

(d) the person makes a claim for:

(i) an age service pension; or

(ii) an invalidity service pension; or

(iii) a wife service pension; and

(e) the claim is made within the period of 12 months after the person again became an Australian resident; and

(f) the person leaves Australia before the end of that period of 12 months; and

(g) there is no determination in respect of the person under subsection (2);

a service pension granted on the basis of that claim is not payable to the person while the person is outside Australia.

“(2) The Commission may determine that subsection (1) is not to apply to a person if the Commission considers that the person’s reasons for leaving Australia before the end of the 12 month period arose from circumstances that could not be reasonably foreseen when the person returned to Australia.

“(3) A determination under subsection (2) must be by instrument in writing.

“Transfer” to portable pension

“58n. If:

(a) a person who is outside Australia is receiving:

(i) an age service pension; or

(ii) an invalidity service pension; or

(iii) a wife service pension; or

(iv) a social security pension (other than a sheltered employment allowance or rehabilitation allowance); and

(b) the pension is cancelled or ceases to be payable automatically; and

(i) an age service pension; or

(ii) an invalidity service pension; or

(iii) a wife service pension;

the pension referred to in paragraph (c) may be granted to the person as if the person were an Australian resident and in Australia.”.

NOTE

1. No. 27, 1986, as amended. For previous amendments, see Nos. 106 and 130, 1986; Nos. 78, 88 and 130, 1987; Nos. 13, 35, 75, 99, 134 and 135, 1988; Nos. 59, 83, 84, 93, 163 and 164, 1989; Nos. 56, 84 and 119, 1990; and No. 2, 1991.

[Minister’s second reading speech made in—

House of Representatives on 11 April 1991

Senate on 28 May 1991]

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