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SOCIAL SECURITY AND VETERANS' AFFAIRS LEGISLATION AMENDMENT ACT 1995 No. 1, 1996 - SCHEDULE 1
SCHEDULE 1 Section 3
AMENDMENTS OF THE SOCIAL SECURITY ACT 1991 RELATING TO
EXTENDED DEEMING
PART 1-AMENDMENTS COMMENCING ON ROYAL ASSENT 1. Paragraph 1074A(1)(a): Omit
the paragraph, substitute:
"(a) an accruing return investment that was made or acquired before 1 January
1988; or". 2. Sections 1075, 1076, 1077, 1079: Repeal the sections. 3.
Schedule 1A: Add at the end: Provisions regarding the treatment of returns
from the realisation of certain investments
"81A.(1) If:
(a) before the commencement of this clause, a person realised an
investment; and
(b) section 1075 of this Act, as in force immediately before the
commencement of this clause, applied to the person as a result of the
realisation of the investment; and
(c) the period of 12 months commencing on the day on which the investment
was realised had not expired when this clause commenced; sections 1075
and 1076 of this Act, as in force immediately before the commencement
of this clause, are taken to continue to apply to the person in
relation to the realisation of the investment until:
(d) the end of the period referred to in paragraph (c); or
(e) the end of 30 June 1996; whichever is the earlier.
"(2) If:
(a) before the commencement of this clause, a person realised an
investment; and
(b) section 1077 of this Act, as in force immediately before the
commencement of this clause, applied to the person as a result of the
realisation of the investment; and
(c) the period of 12 months commencing on the day on which the investment
was realised had not expired when this clause commenced; sections 1077
and 1079 of this Act, as in force immediately before the commencement
of this clause, are taken to continue to apply to the person in
relation to the realisation of the investment until:
(d) the end of the period referred to in paragraph (c); or
(e) the end of 30 June 1996; whichever is the earlier.".
PART 2-AMENDMENTS COMMENCING ON 1 JULY 1996 4. Section 3 (Index): Omit the
following entries:
"accruing return investment 9(1)
"annual rate of return 9(3)
"eligible investment 9(1)
"investment product 9(1)
"investment product 9(1), (2)
"market-linked investment 9(1)
"SSAT rate of return decision 22
"statutory rate of return 9(1)".
5. Section 3 (Index): Insert the following entries in the Index in their
appropriate alphabetical positions, determined on a letter-by-letter basis:
"deprived asset 9(4)
"financial asset 9(1)
"financial investment 9(1)
"loan 9(2), (3)
"money that attracts interest 1080
"pensioner couple 9(1)
"unlisted public security 9(1)".
6. Subsection 8(1) (definition of available money): Omit paragraph (c),
substitute:
"(c) is not the subject of a loan made by the person;". 7. Subsection 8(1)
(definition of income): Omit Notes 1, 2 and 3, substitute:
"Note 1: See also sections 1074 and 1075 (business income),
sections 1076-1084 (deemed income from financial assets) and sections
1095-1099 (income from retirement funds and annuities).". 8. Subsection 8(1)
(definition of income) (Note 4): Omit "4", substitute "2". 9. Subsection 8(1)
(definition of income) (Note 5): Omit "5", substitute "3". 10. Subsection 8(1)
(definition of ordinary income): Omit Note 3, substitute:
"Note 3: For provisions affecting the amount of a person's ordinary income see
sections 1072 and 1073 (ordinary income concept), sections 1074 and 1075
(business income), sections 1076-1084 (deemed income from financial assets)
and sections 1095-1099 (income from retirement funds and annuities).". 11.
Subsection 9(1) (definition of friendly society): Omit all words after
paragraph (b). 12. Subsection 9(1) (definition of return): Omit "investment
(including an investment in the nature of superannuation)", substitute
"investment in the nature of superannuation". 13. Subsection 9(1) (definitions
of accruing return investment, annual rate of return, eligible investment,
investment product, market-linked investment, statutory rate of return): Omit
the definitions. 14. Subsection 9(1): Insert:
"financial asset means:
(a) a financial investment; or
(b) a deprived asset. Note: For deprived asset see subsection 9(4).
financial investment means:
(a) available money; or
(b) deposit money; or
(c) a managed investment; or
(d) a listed security; or
(e) a loan that has not been repaid in full; or
(f) an unlisted public security; or
(g) gold, silver or platinum bullion. pensioner couple means a couple, one
or both of the members of which are receiving a social security
pension, a service pension or a rehabilitation allowance. unlisted
public security means:
(a) a share in a public company; or
(b) another security; that is not listed on a stock exchange.". 15.
Paragraph 9(1C)(e): Omit the paragraph, substitute:
"(e) a loan;". 16. Subsection 9(1C) (Note 3): Omit the Note, substitute:
"Note 3: For provisions relating to when a loan is taken to be made see
subsection (2).". 17. Subsections 9(3) and (4): Omit the subsections,
substitute:
"(2) The following rules apply for the purposes of this Act:
(a) the acquisition by a person of debentures, bonds or other securities
is treated as the making of a loan by the person;
(b) a person is not treated as having made a loan merely because:
(i) the person has an account with a financial institution; or
(ii) the person has paid an entry contribution. Note: For entry
contribution see section 1147.
"(3) Subsection (2) does not limit the meaning of the word loan in this Act.
"(4) For the purposes of this Act, an asset is a deprived asset if:
(a) a person has disposed of the asset; and
(b) the value of the asset is included in the value of the person's assets
by section 1124A, 1125, 1125A or 1126.". 18. Paragraph 9(10)(b): Omit
the paragraph. 19. Section 22 (definition of SSAT rate of return
decision): Omit the definition. 20. Section 1064 (Pension Rate
Calculator A-point 1064-E1-Note 2): Omit ". investment income
(sections 1073 to 1099);", substitute:
". the general concept of ordinary income (sections 1072 and
1073);
". business income (sections 1074 and 1075);
". deemed income from financial assets (sections 1076 to 1084);
". income from retirement funds and annuities (sections 1095 to
1099);". 21. Section 1066 (Pension Rate Calculator C-point 1066-E1-Note 2):
Omit ". investment income (sections 1073 to 1099);", substitute:
". the general concept of ordinary income (sections 1072 and
1073);
". business income (sections 1074 and 1075);
". deemed income from financial assets (sections 1076 to 1084);
". income from retirement funds and annuities (sections 1095 to
1099);". 22. Section 1066A (Pension Rate Calculator D-point 1066A-F1-Note 2):
Omit ". investment income (sections 1073 to 1099);", substitute:
". the general concept of ordinary income (sections 1072 and
1073);
". business income (sections 1074 and 1075);
". deemed income from financial assets (sections 1076 to 1084);
". income from retirement funds and annuities (sections 1095 to
1099);". 23. Section 1067 (Benefit Rate Calculator A-point 1067-H1-Note 3):
Omit ". investment income (sections 1073 to 1099);", substitute:
". the general concept of ordinary income (sections 1072 and
1073);
". business income (sections 1074 and 1075);
". deemed income from financial assets (sections 1076 to 1084);
". income from retirement funds and annuities (sections 1095 to
1099);". 24. Section 1067E (Sickness Allowance Rate Calculator-point
1067E-G1-Note 2): Omit ". investment income (sections 1073 to 1099);",
substitute:
". the general concept of ordinary income (sections 1072 and
1073);
". business income (sections 1074 and 1075);
". deemed income from financial assets (sections 1076 to 1084);
". income from retirement funds and annuities (sections 1095 to
1099);". 25. Section 1068 (Benefit Rate Calculator B-point 1068-G1-Note 3):
Omit ". investment income (sections 1073 to 1099);", substitute:
". the general concept of ordinary income (sections 1072 and
1073);
". business income (sections 1074 and 1075);
". deemed income from financial assets (sections 1076 to 1084);
". income from retirement funds and annuities (sections 1095 to
1099);". 26. Section 1068A (Parenting Allowance Rate Calculator-point
1068A-D1-Note 3): Omit ". investment income (sections 1073 to 1099);",
substitute:
". the general concept of ordinary income (sections 1072 and
1073);
". business income (sections 1074 and 1075);
". deemed income from financial assets (sections 1076 to 1084);
". income from retirement funds and annuities (sections 1095 to
1099);". 27. Section 1071 (Seniors Health Card Ordinary Income Test
Calculator-point 1071-1-Note): Omit the Note, substitute:
"Note: The application of the ordinary income test is affected by the
following provisions:
". sections 1072 and 1073 (the general concept of ordinary
income);
". sections 1074 and 1075 (business income);
". sections 1076-1084 (deemed income from financial assets);
". sections 1095-1099 (income from retirement funds and
annuities).". 28. Division 1AA of Part 3.10: Repeal the Division, substitute:
"Division 1-Ordinary income concept General meaning of ordinary income
"1072. A reference in this Act to a person's ordinary income for a period is a
reference to the person's gross ordinary income from all sources for the
period calculated without any reduction, other than a reduction under Division
1A. Note 1: For ordinary income see subsection 8(1). See also point 1068A-D4
(Parenting Allowance Rate Calculator). Note 2: For other provisions affecting
the amount of a person's ordinary income see sections 1074 and 1075 (business
income), sections 1076 to 1084 (deemed income from financial assets) and
sections 1095 to 1099 (income from retirement funds and annuities). Certain
amounts taken to be received over 12 months
"1073. If a person receives, whether before or after the commencement of this
section, an amount of income that:
(a) is not income within the meaning of Division 1B or 1C of this Part;
and
(b) is not:
(i) income in the form of periodic payments; or
(ii) ordinary income from remunerative work undertaken by the
person; the person is, for the purposes of this Act, taken to
receive one fifty-second of that amount as ordinary income of
the person during each week in the 12 months commencing on the
day on which the person becomes entitled to receive that
amount.
"Division 1A-Business income Ordinary income from a business-treatment of
trading stock
"1074.(1) If:
(a) a person carries on a business; and
(b) the value of all the trading stock on hand at the end of a tax year is
greater than the value of all the trading stock on hand at the
beginning of that tax year; the person's ordinary income for that tax
year in the form of profits from the business is to include the amount
of the difference in values.
"(2) If:
(a) a person carries on a business; and
(b) the value of all the trading stock on hand at the end of a tax year is
less than the value of all the trading stock on hand at the beginning
of that tax year; the person's ordinary income for that tax year in
the form of profits from the business is to be reduced by the amount
of the difference in values. Permissible reductions of business income
"1075.(1) Subject to subsection (2), if a person carries on a business, the
person's ordinary income from the business is to be reduced by:
(a) losses and outgoings that relate to the business and are allowable
deductions for the purposes of section 51 of the Income Tax
Assessment Act ; and
(b) depreciation that relates to the business and is an allowable
deduction for the purposes of subsection 54(1) of that Act; and
(c) amounts that relate to the business and are allowable deductions under
subsection 82AAC(1) of that Act.
"(2) If, under Division 1B, a person is taken to receive ordinary income on a
financial investment, that ordinary income is not to be reduced by the amount
of any expenses incurred by the person because of that investment.
"Note: For financial investment see subsection 9(1).". 29. Heading to Division
1 of Part 3.10: Omit the heading, substitute:
"Division 1B-Deemed income from financial assets". 30. Subdivisions A, AA and
B of Division 1 of Part 3.10: Repeal the Subdivisions, substitute: Deemed
income from financial assets-persons other than members of couples
"1076.(1) This section applies to a person who is not a member of a couple.
"(2) A person who has financial assets is taken, for the purposes of this Act,
to receive ordinary income on those assets in accordance with this section.
"(3) This is how to work out the ordinary income the person is taken to
receive: Method statement Step 1. If any part of the person's deposit
concession money attracts interest, multiply the amount of each such part by
the rate of interest and add together the amounts so worked out. Note: For
deposit concession money see section 1079. Step 2. Subtract the total amount
of the person's deposit concession money from the person's deeming threshold
or, if the total value of the person's financial assets is less than that
threshold, from that total value. Note: For deeming threshold see subsection
1081(1). Step 3. Multiply the remainder (if any) worked out at Step 2 by the
below threshold rate. Note: For below threshold rate see subsection 1082(1).
Step 4. If the total value of the person's financial assets exceeds the
person's deeming threshold, subtract the person's deeming threshold from the
total value of those assets. Step 5. Multiply the remainder (if any) worked
out at Step 4 by the above threshold rate. Note: For above threshold rate see
subsection 1082(2). Step 6. The total of the amounts worked out at Steps 1, 3
and 5 represents the ordinary income the person is taken to receive per year
on the financial assets. EXAMPLE OF HOW DEEMED INCOME OF A PERSON WHO IS NOT A
MEMBER OF A COUPLE IS WORKED OUT (using rates in force on 1 July 1996) Facts:
Elaine, a single pensioner, has $36,500 worth of financial assets. $1,500 is
in a cheque account not earning any interest. $25,000 is earning 6% in
interest and $10,000 is earning 8% in interest. The below threshold rate is
5%. The above threshold rate is 7%. Application:
Step 1. Elaine's deposit concession money amounts to $1,500 (see
section 1079) which earns no interest. Under this Step, $1,500 is multiplied
by 0%, giving a nil amount.
Step 2. Elaine's deeming threshold is $30,000 (see subsection
1081(1)). Her deposit concession money totals $1,500. The difference is
$28,500.
Step 3. The amount of $28,500 is multiplied by the below
threshold rate (5%):
$28,500 x 5 = $1,425.
100
Step 4. Elaine's deeming threshold of $30,000 is subtracted from
the total value of her financial assets ($36,500). The remainder is $6,500.
Step 5. The amount of $6,500 is multiplied by the above
threshold rate (7%):
$6,500 x 7 = $455.
100
Step 6. The amounts worked out at Steps 1, 3 and 5 are added
together:
$
Step 1 0
Step 3 1,425
Step 5 455
1,880 The ordinary income Elaine is deemed to receive per year from her
financial assets is $1,880.
"(4) The person is taken, for the purposes of this Act, to receive one
fifty-second of the amount calculated under subsection (3) as ordinary income
of the person during each week. Deemed income from financial assets-members of
pensioner couples
"1077.(1) This section applies to the members of a pensioner couple.
"(2) If one or both of the members of a couple have financial assets, the
members of the couple are taken, for the purposes of this Act, to receive
together ordinary income on those assets in accordance with this section.
"(3) This is how to work out the ordinary income the couple is taken to
receive: Method statement Step 1. If any part of the couple's deposit
concession money attracts interest, multiply the amount of each such part by
the rate of interest and add together the amounts so worked out. Note: For
deposit concession money see section 1079. Step 2. Subtract the total amount
of the couple's deposit concession money from the couple's deeming threshold
or, if the total value of the couple's financial assets is less than that
threshold, from that total value. Note: For deeming threshold see subsection
1081(2). Step 3. Multiply the remainder (if any) worked out at Step 2 by the
below threshold rate. Note: For below threshold rate see subsection 1082(1).
Step 4. If the total value of the couple's financial assets exceeds the
couple's deeming threshold, subtract the couple's deeming threshold from the
total value of those assets. Step 5. Multiply the remainder (if any) worked
out at Step 4 by the above threshold rate. Note: For above threshold rate see
subsection 1082(2). Step 6. The total of the amounts worked out at Steps 1, 3
and 5 represents the ordinary income the members of the couple are taken to
receive per year on the financial assets. EXAMPLE OF HOW DEEMED INCOME OF A
PENSIONER COUPLE IS WORKED OUT (using rates in force on 1 July 1996) Facts:
Maree and Peter, a pensioner couple, have $68,500 worth of financial assets.
They have $3,500 in a savings account earning interest at 2.8% and deposits of
$25,000 and $40,000 earning 5% p.a. and 8% p.a. in interest respectively. The
below threshold rate is 5%. The above threshold rate is 7%. Application:
Step 1. The couple's deposit concession money amounts to $3,500
(see section 1079) earning interest at 2.8%. The interest amounts to $98.
Step 2. The couple's deeming threshold is $50,000 (see
subsection 1081(2)). Their deposit concession money amounts to $3,500. The
remainder is $46,500.
Step 3. The amount of $46,500 is multiplied by the below
threshold rate (5%):
$46,500 x 5 = $2,325.
100
Step 4. The couple's deeming threshold of $50,000 is subtracted
from the total value of their financial assets ($68,500). The remainder is
$18,500.
Step 5. The amount of $18,500 is multiplied by the above
threshold rate (7%):
$18,500 x 7 = $1,295.
100
Step 6. The amounts worked out at Steps 1, 3 and 5 are added
together:
$
Step 1 98
Step 3 2,325
Step 5 1,295
3,718 The ordinary income Maree and Peter are deemed to receive per year from
their financial assets is $3,718. (Subsection (4) shows how this amount is
divided between Maree and Peter.)
"(4) Each member of the couple is taken, for the purposes of this Act, to
receive, as ordinary income during each week, an amount calculated according
to the formula:
Amount calculated under subsection (3) x 1
52 2
Deemed income from financial assets-members of non-pensioner couples
"1078.(1) This section applies to a person who is a member of a couple, other
than a pensioner couple.
"(2) A person who has financial assets is taken, for the purposes of this Act,
to receive ordinary income on those assets in accordance with this section.
"(3) This is how to work out the ordinary income the person is taken to
receive: Method statement Step 1. If any part of the person's deposit
concession money attracts interest, multiply the amount of each such part by
the rate of interest and add together the amounts so worked out. Note: For
deposit concession money see section 1079. Step 2. Subtract the total amount
of the person's deposit concession money from the person's deeming threshold
or, if the total value of the person's financial assets is less than that
threshold, from that total value. Note: For deeming threshold see subsection
1081(3). Step 3. Multiply the remainder (if any) worked out at Step 2 by the
below threshold rate. Note: For below threshold rate see subsection 1082(1).
Step 4. If the total value of the person's financial assets exceeds the
person's deeming threshold, subtract the person's deeming threshold from the
total value of those assets. Step 5. Multiply the remainder (if any) worked
out at Step 4 by the above threshold rate. Note: For above threshold rate see
subsection 1082(2). Step 6. The total of the amounts worked out at Steps 1, 3
and 5 represents the ordinary income the person is taken to receive per year
on the financial assets. EXAMPLE OF HOW DEEMED INCOME OF A MEMBER OF A
NON-PENSIONER COUPLE IS WORKED OUT (using rates in force on 1 July 1996)
Facts: Kerry, who is married and receiving newstart allowance, has $1,200
worth of financial assets. Her spouse, Robert, is not receiving a pension.
Kerry has a cheque account containing $200 on which no interest is paid. The
remaining $1,000 is held in a savings account on which interest is paid at 3%.
The below threshold rate is 5%. Application:
Step 1. Kerry's deposit concession money amounts to $1,200
(section 1079). Of that amount, $200 earns no interest. The remaining $1,000
earns interest at less than the below threshold rate. Amounts are worked out
as follows:
. $200 x 0% = $0
. $1,000 x 3% = $30.
Step 2. As Kerry has no financial assets other than deposit
concession money, the result of this Step is a zero remainder. Kerry's deeming
threshold is $25,000.
Step 3. Because of the outcome of Step 2, Steps 3 to 5 have no
application, and no income is assessed under those Steps.
Step 6. The only amount of income worked out is the amount of
$30 under Step 1. Therefore, the ordinary income Kerry is deemed to receive
per year from her financial assets is $30.
"(4) The person is taken, for the purposes of this Act, to receive one
fifty-second of the amount calculated under subsection (3) as ordinary income
of the person during each week. Deposit concession money
"1079.(1) This is how to work out which money constitutes, at a particular
time, the deposit concession money of a person who is not a member of a
couple: Method statement Step 1. Start with the amount of $2,000. Step 2. Set
off against this amount any available money of the person. Step 3. Set off
against the remainder any deposit money of the person that does not attract
interest. Step 4. Set off against the remainder any deposit money of the
person that attracts interest at a rate lower than the below threshold rate:
this money is to be set off in ascending order of interest rate. Note: For
below threshold rate see subsection 1082(1). Step 5. The total of the
available money or deposit money that can be set off under Steps 2 to 4 is the
deposit concession money of the person at that time. Note: Because of
subsection (5), the total worked out under this Step cannot exceed $2,000.
"(2) This is how to work out which money constitutes, at a particular time,
the deposit concession money of a pensioner couple: Method statement Step 1.
Start with the amount of $4,000. Step 2. Set off against this amount any
available money of the couple. Step 3. Set off against the remainder any
deposit money of the couple that does not attract interest. Step 4. Set off
against the remainder any deposit money of the couple that attracts interest
at a rate lower than the below threshold rate: this money is to be set off in
ascending order of interest rate. Note: For below threshold rate see
subsection 1082(1). Step 5. The total of the available money or deposit money
that can be set off under Steps 2 to 4 is the deposit concession money of the
couple at that time. Note: Because of subsection (5), the total worked out
under this Step cannot exceed $4,000. Note: For pensioner couple see
subsection 9(1).
"(3) This is how to work out which money constitutes, at a particular time,
the deposit concession money of a person who is a member of a couple other
than a pensioner couple: Method statement Step 1. Start with the amount of
$2,000. Step 2. Set off against this amount any available money of the person.
Step 3. Set off against the remainder any deposit money of the person that
does not attract interest. Step 4. Set off against the remainder any deposit
money of the person that attracts interest at a rate lower than the below
threshold rate: this money is to be set off in ascending order of interest
rate. Note: For below threshold rate see subsection 1082(1). Step 5. The total
of the available money or deposit money that can be set off under Steps 2 to 4
is the deposit concession money of the person at that time. Note: Because of
subsection (5), the total worked out under this Step cannot exceed $2,000.
"(4) For the purposes of this section:
(a) the available money of a pensioner couple is the total of the
available money of the members of the couple; and
(b) the deposit money of a pensioner couple that does not attract interest
is the total of the deposit money of the members of the couple that
does not attract interest; and
(c) the deposit money of a pensioner couple that attracts interest at a
particular rate is the total of the deposit money of the members of
the couple that attracts interest at that rate.
"(5) For the purposes of subsections (1), (2) and (3) if available money or
deposit money is to be set off against an amount, only so much of the money as
does not exceed the amount can be set off against the amount.
"(6) In this section: available money does not include money specified in a
determination under subsection 1084(1). Note: For available money see
subsection 8(1). deposit money does not include money specified in a
determination under subsection 1084(1). Note: For deposit money see subsection
8(1). Meaning of money that attracts interest
"1080. A reference in any of sections 1076 to 1079 to money that attracts
interest is a reference to money on which interest accrues, whenever the
interest is paid. Deeming threshold
"1081.(1) The deeming threshold for a person who is not a member of a couple
is $30,000.
"(2) The deeming threshold for a pensioner couple is $50,000.
"(3) The deeming threshold for a member of a couple, other than a pensioner
couple, is an amount equal to one-half of the amount fixed by subsection (2).
Note: The amounts fixed by subsections (1) and (2) are indexed every 1 July.
See sections 1190-1192. Below threshold rate, above threshold rate
"1082.(1) For the purposes of this Division, the below threshold rate is the
rate determined by the Minister to be the below threshold rate for the
purposes of this Division.
"(2) For the purposes of this Division, the above threshold rate is the rate
determined by the Minister to be the above threshold rate for the purposes of
this Division.
"(3) A rate determined under this section must be in the form of a specified
percentage.
"(4) A determination under this section:
(a) must be in writing; and
(b) is a disallowable instrument. Actual return on financial assets not
treated as ordinary income
"1083.(1) Subject to subsection (2), any return on a financial asset that a
person actually receives is taken, for the purposes of this Act, not to be
ordinary income of the person.
"(2) If, because of a determination under subsection 1084(1), a financial
investment is not to be regarded as a financial asset for the purposes of
section 1076, 1077 or 1078, subsection (1) does not apply to any return on the
investment that the person actually receives. Certain money and financial
investments not taken into account
"1084.(1) The Minister may determine that:
(a) specified financial investments; or
(b) a specified class of financial investments; are not to be regarded as
financial assets for the purposes of section 1076, 1077 or 1078.
"(2) Money that constitutes a financial investment to which a determination
under subsection (1) applies is not to be taken into account under section
1079.
"(3) A determination under subsection (1) must be in writing.
"(4) A determination under subsection (1) takes effect on the day on which it
is made or on such other day (whether earlier or later) as is specified in the
determination. Valuation and revaluation of certain financial investments
"108A. The total value of a person's listed securities and managed investments
(being listed securities and managed investments that fluctuate depending on
the market) (the relevant investments) is determined in accordance with the
following:
(a) an initial total valuation is to be given to the relevant investments
on 1 July 1996, or when a new claim is determined, by the method set
out in departmental guidelines; (b) that total valuation continues in
effect until the relevant investments are revalued by the method set
out in departmental guidelines, and that revaluation must occur:
(i) on 20 March in each calendar year after 1996; and
(ii) on 20 September in each calendar year after 1996; and
(iii) when the person requests a revaluation of one or more of the
person's listed securities and managed investments; and
(iv) following an event that affects the relevant investments and is
the subject of a recipient notification notice.". 31.
Subdivision D of Division 1 of Part 3.10: Repeal the
Subdivision, substitute:
"Division 1C-Income from retirement funds and annuities
"Subdivision A-Investments taken into account on realisation Treatment of
superannuation fund investments before pension age
"1095. If:
(a) a person has an investment in:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a deferred annuity; and
(b) the person has not reached pension age; and
(c) the person has not commenced to receive a pension or annuity from the
investment; the investment is treated as follows:
(d) the return on the investment is not treated as ordinary income (see
paragraph 8(8)(b)); Note: The investment is also disregarded for the
purposes of the assets test (see paragraph 1118(1)(f)).
(e) if the investment is realised, the return is spread across the
following 12 months (see section 1096). Early withdrawal from
superannuation fund
"1096. If:
(a) a person realises an investment in a superannuation fund, approved
deposit fund or deferred annuity before the person reaches pension
age; and
(b) the amount is not rolled over into:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a deferred annuity; or
(iv) an immediate annuity; the person is 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 commencing on the day on which the person realises
the investment. Note: For assessable growth component see
subsection 9(1). Adjustment of ordinary income for investment
losses
"1097.(1) If:
(a) a person realises an investment to which section 1096 applies; and
(b) the investment is realised at a loss; the person's ordinary income is
taken to be reduced during each week in the 12 months commencing on
the day on which the person realises the investment by the amount
worked out using the formula:
assessable loss
52 where: assessable loss is so much (if any) of the amount of the loss as is
attributable to the person's assessable period. Note: For assessable period
see subsection 9(1).
"(2) The reduction under subsection (1) in a person's rate as at a particular
day is not to exceed the increase to be made under section 1096 in working out
the person's rate as at that day.". 32. Heading to Subdivision E of Division 1
of Part 3.10: Omit "Subdivision E", substitute "Subdivision B". 33. Divisions
1A, 1B and 1C of Part 3.10: Repeal the Divisions. 34. Section 1190 (Table):
Add at the end the following heading and items:
"Deeming thresholds 63. Deeming threshold for a person who is not a member of
a couple
Deeming threshold individual
Subsection 1081(1) 64. Deeming threshold for a pensioner couple
Deeming threshold pensioner couple
Subsection 1081(2)". 35. Subsection 1191(1) (CPI Indexation Table): Add at the
end the following heading and items:"
Deeming thresholds 35. Deeming threshold individual
1 July
March
highest March quarter before
reference quarter (but not
earlier than March 1994 quarter)
$200.00 36. Deeming threshold pensioner couple
1 July March
highest March quarter before
reference quarter (but not
earlier than March 1994 quarter)
$200.00". 36. Section 1192: Add at the end:
"(7) The first indexation of amounts under items 35 and 36 of the CPI
Indexation Table in subsection 1191(1) is to take place on 1 July 1997.". 37.
Subsection 1283(4) (Note): Omit the Note. 38. Schedule 1A: Add at the end
(after proposed clause 87 added by item 81 of Schedule 6): Saving:
Determinations under repealed sections 1099E and 1099L
"88. A determination in force under section 1099E or 1099L immediately before
the commencement of this clause continues to have effect after that
commencement as if:
(a) section 1084 of this Act, as in force immediately after the
commencement of this clause, had been in force when the determination
was made; and
(b) the determination had been made under that section as so in force; and
(c) any reference in the determination to section 1099B, 1099J or 1099K
were a reference to sections 1076 to 1078 of this Act. Saving: Benefit
rates
"89. If a social security benefit (including parenting allowance) is payable
to a person for a fortnightly period that starts before 1 July 1996 and ends
after that day, the rate of the person's payment for that period is to be
worked out in accordance with this Act as in force immediately before 1 July
1996.".
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