Commonwealth Numbered Acts

SOCIAL SECURITY LEGISLATION AMENDMENT ACT 1993 No. 36, 1993 - SECT 44

44. After section 1075 of the Principal Act the following sections are
inserted in Subdivision B of Division 1 of Part 3.10: How investment losses
are taken into account in working out pension and benefit rates

"1076. (1) If:

   (a)  a person has an investment; and

   (b)  section 1075 applies to the investment; and

   (c)  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) Subsection (1) has effect subject to section 1082 (limits on offsetting
losses). Market-linked investments made or acquired before 9 September 1988

"1077. (1) Subject to subsection (4), if a person realises a market-linked
investment that was made or acquired before 9 September 1988 and receives an
amount by way of return, the person is taken to receive as ordinary income of
the person during each week in the 12 months commencing on the day on which
the person realises the investment the amount worked out using the formula:
assessable return
52 where:
'assessable return' is so much (if any) of the amount of the return as is
attributable to the person's assessable period. Note: For 'assessable period'
see subsection 9(1).

"(2) For the purposes of subsection (1), a person realises an investment if,
and only if:

   (a)  all or part of the amount of the investment is withdrawn; or

   (b)  where the investment is an eligible investment in a body corporate or
        trust fund-the person transfers all or part of the investment to
        another body corporate or trust fund; or

   (c)  all or part of the return on the investment is paid to another person;
        or

   (d)  the investment matures; or

   (e)  the investment is assigned by the person to another person; or

   (f)  the investment is disposed of by the person otherwise than in the way
        referred to in paragraph (e).

"(3) For the purposes of this section, if a person realises an investment in
circumstances where the return on the investment is paid to another person,
the return is taken to be received by the person realising the investment.

"(4) This section does not apply to the realisation of a person's
market-linked investment if:

   (a)  the investment is in a public unit trust; and

   (b)  the trust is a property trust; and

   (c)  the trust is not listed on a stock exchange; and

   (d)  the person made or acquired the investment before 9 September 1988;
        and

   (e)  the investment is realised on or after 24 July 1991 and before 23 July
        1992; and

   (f)  the investment is realised due to a restructuring of the trust.

"(5) For the purposes of paragraph (4)(f), a person's investment is realised
due to a restructuring if:

   (a)  in realising the investment the person exchanges the investment for an
        investment in another public unit trust that is a property trust; and

   (b)  the same manager manages both the investments referred to in paragraph
        (a). Special provisions about certain investments made before 9
        September 1988

"1078. (1) If:

   (a)  before 9 September 1988, a person made or acquired 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 taken, for the purposes of
        this Subdivision, to have been made, or acquired, by the person 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, or acquired, by the person
        before 9 September 1988 and at least one of the investments was made
        or acquired on or after that day; and

   (c)  the person disposed, or disposes, of any of those investments.

"(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, or acquired, by the person before 9 September 1988; or

   (b)  the sum of the values or amounts, at the time of the disposal, of the
        investments made, or acquired, by the person before 9 September 1988;
        as the case requires, the person is 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 (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. How investment losses are taken into
        account in working out pension and benefit rates

"1079. (1) If:

   (a)  a person has an investment; and

   (b)  section 1077 applies to the investment; and

   (c)  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) Subsection (1) has effect subject to section 1082 (limits on offsetting
losses). Early withdrawal from superannuation fund

"1080. 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 realised 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). How investment losses are taken into account
               in working out pension and benefit rates

"1081. (1) If:

   (a)  a person has an investment; and

   (b)  section 1080 applies to the investment; and

   (c)  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) Subsection (1) has effect subject to section 1082 (limits on offsetting
losses). Limit on reduction of ordinary income for losses

"1082. The sum of the reductions under sections 1076, 1079 and 1081 in
calculating a person's rate as at a particular day are not to exceed the sum
of the increases to be made under sections 1075, 1077 and 1080 in working out
the person's pension or benefit rate as at that day.".