Commonwealth Numbered Acts

SOCIAL SECURITY LEGISLATION AMENDMENT ACT (No. 2) 1992 No. 229, 1992 - SECT 116

116. After section 1125 of the Principal Act the following section is
inserted: Disposal of assets in pre-pension years - members of couples

"1125A.(1) Subject to subsections (2), (3), (4) and (5), if:

   (a)  a person has disposed of an asset; and

   (b)  the person is a member of a couple when the person or the person's
        partner claims a pension, benefit or payment of a kind referred to in
        subsection 11(10A); and

   (c)  the person disposed of the asset:

        (i)    during a pre-pension year of the person; or

        (ii)   if the person has not claimed a pension, benefit or payment of
               a kind referred to in subsection 11(10A) but the person's
               partner has claimed such a pension, benefit or payment - during
               a pre-pension year of the person's partner; and

   (d)  the amount of that disposition, 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 pre-pension year,
        exceeds the disposal limit; then, for the purposes of determining
        whether a pension, benefit or payment is payable to the person:

   (e)  there is to be included in the value of the person's assets for the
        period of 5 years that starts on the day on which the disposition took
        place:

        (i)    50% of the amount by which the sum of the amount of the
               first-mentioned disposition and of the amounts (if any) of
               other dispositions of assets previously made by the person or
               the person's partner during that pre-pension year exceeds the
               disposal limit; or

        (ii)   50% of the amount of the first-mentioned disposition; whichever
               is the lesser amount; and

   (f)  there is to be included in the value of the assets of the person's
        partner for the period of 5 years that starts on the day on which the
        disposition took place:

        (i)    50% of the amount by which the sum of the amount of the
               first-mentioned disposition and of the amounts (if any) of
               other dispositions of assets previously made by the person or
               the person's partner during that pre-pension year exceeds the
               disposal limit; or

        (ii)   50% of the amount of the first-mentioned disposition; whichever
               is the lesser amount. Note 1: for 'disposes of assets' see
               section 1123. Note 2: for 'amount of disposition' see section
               1124. Note 3: for the effect of a transaction that constitutes
               both a disposal of an asset and a disposal of ordinary income
               see section 1110. Note 4: if a pension, benefit or family
               payment is payable to the person, section 1126 operates to
               determine the rate of payment and section 1125A ceases to apply
               to the person.

"(2) If:

   (a)  a person disposes of an asset before 1 March 1991; and

   (b)  an amount (the 'relevant amount') is included in the value of the
        person's or the person's partner's assets under subsection (1) because
        of the disposition; 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 'disposes of assets' see section 1123.
        Note 2: for 'amount of disposition' see section 1124.

"(3) If:

   (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 an asset 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) If:

   (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 of a disposition of an asset by the
        person; and

   (b)  the person dies; an amount is not to be included in the value of the
        assets of the person's partner because of that disposition.

"(5) If:

   (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 of a disposition of an asset by the
        person; and

   (b)  the partner dies; any amount that would, if the partner had not died,
        be included in the value of the partner's assets because of the
        disposition is to be included in the value of the person's assets.

"(6) In this section:
'disposal limit' means:

   (a)  in relation to assets disposed of on or after 1 March 1986 and before
        1 March 1991 - $4,000; and

   (b)  in relation to assets disposed of on or after 1 March 1991 -
        $10,000.".