198P   Objects of this Division

             (1)  The main object of this Division is to increase certain amounts that affect the rate at which payments of the following kinds are made under this Act to certain persons, on account of the Carbon Pollution Reduction Scheme’s estimated cost of living increase:

                     (a)  disability pensions (as defined in subsection 5Q(1));

                     (b)  service pensions;

                     (c)  pensions payable to war widow/war widower-pensioners.

             (2)  Another object of this Division is to adjust indexation of those amounts after they are increased, to reflect the inclusion in the increases of elements brought forward from the Carbon Pollution Reduction Scheme’s estimated cost of living increase.

198Q  What this Subdivision applies to

                   This Subdivision applies to each amount (the base amount ) provided for in an item of the table.

Note:          Amounts provided for in the table are amounts as affected from time to time by sections 198 and 198D (as affected by Subdivision C, if relevant).

198R   Increase of 1% on 1 July 2011

                   This Act has effect as if, on 1 July 2011, each base amount were replaced by an amount worked out by:

                     (a)  calculating the amount (the provisional replacement amount ) that is 1% greater than the base amount; and

                     (b)  if the provisional replacement amount is not a multiple of $0.10, rounding up or down to the nearest multiple of $0.10 (rounding up if the provisional replacement amount is a multiple of $0.05).

Note:          The 1% increase includes the Carbon Pollution Reduction Scheme’s estimated cost of living increase of 0.4% for the 2011-2012 financial year, which has been brought forward. The changes to the indexation factors on or after 20 March 2012 under section 198T or 198U take account of this brought forward increase.

198S  Increase of 1.8% on 1 July 2012

                   This Act has effect as if, on 1 July 2012, each base amount were replaced by an amount worked out by:

                     (a)  calculating the amount (the provisional replacement amount ) that is 1.8% greater than the base amount; and

                     (b)  if the provisional replacement amount is not a multiple of $0.10, rounding up or down to the nearest multiple of $0.10 (rounding up if the provisional replacement amount is a multiple of $0.05).

Note:          The 1.8% increase includes the Carbon Pollution Reduction Scheme’s estimated cost of living increase of 0.8% for the 2012-2013 financial year, which has also been brought forward. The changes to the indexation factors on or after 20 March 2013 under section 198V or 198W take account of this 2nd brought forward increase.

198T   Special rules for indexation of certain rates of disability pension on or after 20 March 2012

             (1)  An indexation factor that:

                     (a)  is worked out under section 59D for indexation on a day that is on or after 20 March 2012; and

                     (b)  is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4);

is, for the purposes of the indexation of such an amount on that day, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1:       An indexation factor worked out under section 59D is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4). This is because:

(a)    section 198 provides for indexation of such an amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the indexation factor worked out under section 59D.

Note 2:       The indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4) on that day depends on a pension MBR factor that is worked out on the basis of the indexation factor worked out under section 59D and reduced under this section.

Note 3:       Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the indexation factor.

Example:    Assume that the indexation factor worked out under section 59D on 20 March 2012 is 1.003. The brought forward CPI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2012.

                   Further assume that on 20 September 2012 the indexation factor worked out under section 59D is 1.010. The brought forward CPI indexation amount in relation to 20 September 2012 is 0.001. That indexation factor is reduced to 1.009 on 20 September 2012.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

             (2)  A living cost indexation factor that:

                     (a)  is worked out under section 59EAB for indexation on a day that is on or after 20 March 2012; and

                     (b)  is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4);

is, for the purposes of the indexation of such an amount on that day, to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note 1:       A living cost indexation factor worked out under section 59EAB is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4). This is because:

(a)    section 198 provides for indexation of such an amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the living cost indexation factor worked out under section 59EAB.

Note 2:       The indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4) on that day depends on a pension MBR factor that is worked out on the basis of the living cost indexation factor worked out under section 59EAB and reduced under this section.

Note 3:       Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the living cost indexation factor.

Example:    Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2012 is 1.003. The brought forward PBLCI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That living cost indexation factor is reduced to 1 on 20 March 2012.

                   Further assume that on 20 September 2012 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2012 is 0.001. That living cost indexation factor is reduced to 1.009 on 20 September 2012.

                   The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

             (3)  In this section:

brought forward CPI indexation amount , in relation to a day, means:

                     (a)  if the brought forward PBLCI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.004 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

                     (a)  if the brought forward CPI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.004 less any reduction made under subsection (2) for a previous day.

             (4)  This section affects the rate of a payment under this Act for a person if, and only if, section 198R affected that rate for the person.

198U   Special rules for indexation of increased rate of disability pension on or after 20 March 2012

             (1)  A factor worked out under subsection 198(5) or 198D(5) for indexation of an amount provided for by an item of the table in subsection 27(1) on a day that is on or after 20 March 2012 is, for the purposes of that indexation, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note:          Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the factor.

Example:    Assume that the factor worked out under subsection 198(5) on 20 March 2012 is 1.003. The brought forward CPI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That factor is reduced to 1 on 20 March 2012.

                   Further assume that on 20 September 2012 the factor worked out under subsection 198(5) is 1.010. The brought forward CPI indexation amount in relation to 20 September 2012 is 0.001. That factor is reduced to 1.009 on 20 September 2012.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the factor.

             (2)  In this section:

brought forward CPI indexation amount , in relation to a day, means 0.004 less any reduction made under subsection (1) for a previous day.

             (3)  This section affects the rate of a payment under this Act for a person if, and only if, section 198R affected that rate for the person.

198V   Special rules for indexation of certain rates of disability pension on or after 20 March 2013

             (1)  An indexation factor that:

                     (a)  is worked out under section 59D for indexation on a day that is on or after 20 March 2013; and

                     (b)  is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4);

is, for the purposes of the indexation of such an amount on that day, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1:       An indexation factor worked out under section 59D is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4). This is because:

(a)    section 198 provides for indexation of such an amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the indexation factor worked out under section 59D.

Note 2:       The indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4) on that day depends on a pension MBR factor that is worked out on the basis of the indexation factor worked out under section 59D and reduced under this section.

Note 3:       Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the indexation factor.

Example:    Assume that the indexation factor worked out under section 59D on 20 March 2013 is 1.005. The brought forward CPI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2013.

                   Further assume that on 20 September 2013 the indexation factor is 1.010. The brought forward CPI indexation amount in relation to 20 September 2013 is 0.003. That indexation factor is reduced to 1.007 on 20 September 2013.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

             (2)  A living cost indexation factor that:

                     (a)  is worked out under section 59EAB for indexation on a day that is on or after 20 March 2013; and

                     (b)  is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4);

is, for the purposes of the indexation of such an amount on that day, to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note 1:       A living cost indexation factor worked out under section 59EAB is (indirectly) relevant to the indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4). This is because:

(a)    section 198 provides for indexation of such an amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the living cost indexation factor worked out under section 59EAB.

Note 2:       The indexation of an amount provided for by subsection 22(3) or (4) or 23(4) or 24(4) on that day depends on a pension MBR factor that is worked out on the basis of the living cost indexation factor worked out under section 59EAB and reduced under this section.

Note 3:       Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the living cost indexation factor.

Example:    Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2013 is 1.005. The brought forward PBLCI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That living cost indexation factor is reduced to 1 on 20 March 2013.

                   Further assume that on 20 September 2013 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2013 is 0.003. That living cost indexation factor is reduced to 1.007 on 20 September 2013.

                   The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

             (3)  In this section:

brought forward CPI indexation amount , in relation to a day, means:

                     (a)  if the brought forward PBLCI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.008 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

                     (a)  if the brought forward CPI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.008 less any reduction made under subsection (2) for a previous day.

             (4)  This section affects the rate of a payment under this Act for a person if, and only if, section 198S affected that rate for the person.

198W   Special rules for indexation of increased rate of disability pension on or after 20 March 2013

             (1)  A factor worked out under subsection 198(5) or 198D(5) for indexation of an amount provided for by an item of the table in subsection 27(1) on a day that is on or after 20 March 2013 is, for the purposes of that indexation, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note:          Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the factor.

Example:    Assume that the factor worked out under subsection 198(5) on 20 March 2013 is 1.005. The brought forward CPI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That factor is reduced to 1 on 20 March 2013.

                   Further assume that on 20 September 2013 the factor worked out under subsection 198(5) is 1.010. The brought forward CPI indexation amount in relation to 20 September 2013 is 0.003. That factor is reduced to 1.007 on 20 September 2013.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the factor.

             (2)  In this section:

brought forward CPI indexation amount , in relation to a day, means 0.008 less any reduction made under subsection (1) for a previous day.

             (3)  This section affects the rate of a payment under this Act for a person if, and only if, section 198S affected that rate for the person.

198X   Application of this Subdivision

             (1)  This Subdivision applies to a person if, on or after 1 July 2011:

                     (a)  the person is receiving service pension; and

                     (b)  the person is not a war widow/war widower-pensioner; and

                     (c)  the person’s pension supplement amount is more than the person’s pension supplement basic amount.

             (2)  This Subdivision applies for purposes connected with the person’s service pension on and after 1 July 2011 while he or she is not a war widow/war widower-pensioner.

Note:          This Subdivision does not affect (directly or indirectly) on or after 1 July 2011:

(a)    the rate of service pension of a war widow/war widower-pensioner; or

(b)    the rate of anyone’s income support supplement; or

(c)    the minimum pension supplement amount of a person who is a war widow/war widower-pensioner.

198Y   Increase of 1% on 1 July 2011

             (1)  This Act has effect as if, on 1 July 2011, the PS rate (within the meaning of section 59A) used to work out the person’s pension supplement amount on and after that day were replaced by the PS rate needed for the person’s pension supplement amount to be equal to the amount worked out by:

                     (a)  adding the person’s CPRS amount to what, apart from this section, would be the person’s pension supplement amount on that day; and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

             (2)  This Act has effect as if, on 1 July 2011, the PS minimum rate (within the meaning of section 59A) used to work out the person’s minimum pension supplement amount on and after that day were replaced by the PS minimum rate needed for the person’s minimum pension supplement amount to be equal to the amount worked out by:

                     (a)  adding the person’s CPRS amount to what, apart from this section, would be the person’s minimum pension supplement amount on that day; and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

             (3)  In this section:

CPRS amount , for a person, means the sum of the following amounts:

                     (a)  1% of the person’s maximum basic rate worked out under point SCH6-B1 of Schedule 6;

                     (b)  1% of the person’s pension supplement basic amount.

Note:          The 1% increase includes the Carbon Pollution Reduction Scheme’s estimated cost of living increase of 0.4% for the 2011-2012 financial year, which has been brought forward. Subsection 198Z(2), and the change to the indexation factor, and living cost indexation factor, on or after 20 March 2012 under section 198Z, take account of this brought forward increase.

198Z   Special rules for indexation of some amounts on or after 20 March 2012

             (1)  An indexation factor worked out under section 59D for each indexation day on or after 20 March 2012 for each of the following:

                     (a)  the person’s maximum basic rate worked out under point SCH6-B1 of Schedule 6;

                     (b)  the person’s PS minimum rate (within the meaning of section 59A);

is to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1:       The person’s PS minimum rate is that rate as increased under subsection 198Y(2).

Note 2:       Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the factor.

Example:    Assume that the indexation factor worked out under section 59D on 20 March 2012 is 1.003. The brought forward CPI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2012.

                   Further assume that on 20 September 2012 the indexation factor is 1.010. The brought forward CPI indexation amount in relation to 20 September 2012 is 0.001. That indexation factor is reduced to 1.009 on 20 September 2012.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

             (2)  If the indexation factor worked out under section 59D for an indexation day is reduced under subsection (1), this Act has effect as if, on that day, the PS rate (within the meaning of section 59A) used to work out the person’s pension supplement amount on and after that day were replaced by the PS rate needed for the person’s pension supplement amount to be equal to the amount worked out as follows:

Note 1:       The amount in step 1 is the amount worked out from the PS minimum rate (within the meaning of section 59A) as adjusted under subsection (1).

Note 2:       The amount in step 2 is the amount worked out from the PS minimum rate as increased under subsection 198Y(2), and as indexed under section 59C, but without the adjustment under subsection (1) of this section.

Note 3:       For step 4, the amount that would, apart from this subsection, be the person’s pension supplement amount is the amount worked out from the PS rate (within the meaning of section 59A) as increased under subsection 198Y(1) and as indexed under section 59C.

             (3)  A living cost indexation factor, worked out under section 59EAB for each indexation day on or after 20 March 2012 for the person’s maximum basic rate worked out under point SCH6-B1 of Schedule 6, is to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note:          Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the factor.

Example:    Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2012 is 1.003. The brought forward PBLCI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2012.

                   Further assume that on 20 September 2012 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2012 is 0.001. That indexation factor is reduced to 1.009 on 20 September 2012.

                   The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

             (4)  In this section:

brought forward CPI indexation amount , in relation to a day, means:

                     (a)  if the brought forward PBLCI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.004 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

                     (a)  if the brought forward CPI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.004 less any reduction made under subsection (3) for a previous day.

198ZA   Application of this Subdivision

             (1)  This Subdivision applies to a person if, on or after 1 July 2012:

                     (a)  the person is receiving service pension; and

                     (b)  the person is not a war widow/war widower-pensioner; and

                     (c)  the person’s pension supplement amount is more than the person’s pension supplement basic amount.

             (2)  This Subdivision applies for purposes connected with the person’s service pension on and after 1 July 2012 while he or she is not a war widow/war widower-pensioner.

Note:          This Subdivision does not affect (directly or indirectly) on or after 1 July 2012:

(a)    the rate of service pension of a war widow/war widower-pensioner; or

(b)    the rate of anyone’s income support supplement; or

(c)    the minimum pension supplement amount of a person who is a war widow/war widower-pensioner.

198ZB   Increase of 1.8% on 1 July 2012

             (1)  This Act has effect as if, on 1 July 2012, the PS rate (within the meaning of section 59A) used to work out the person’s pension supplement amount on and after that day were replaced by the PS rate needed for the person’s pension supplement amount to be equal to the amount worked out by:

                     (a)  adding the person’s CPRS amount to what, apart from this section, would be the person’s pension supplement amount on that day; and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

             (2)  This Act has effect as if, on 1 July 2012, the PS minimum rate (within the meaning of section 59A) used to work out the person’s minimum pension supplement amount on and after that day were replaced by the PS minimum rate needed for the person’s minimum pension supplement amount to be equal to the amount worked out by:

                     (a)  adding the person’s CPRS amount to what, apart from this section, would be the person’s minimum pension supplement amount on that day; and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

             (3)  In this section:

CPRS amount , for a person, means the sum of the following amounts:

                     (a)  1.8% of the person’s maximum basic rate worked out under point SCH6-B1 of Schedule 6;

                     (b)  1.8% of the person’s pension supplement basic amount.

Note:          The 1.8% increase includes the Carbon Pollution Reduction Scheme’s estimated cost of living increase of 0.8% for the 2012-2013 financial year, which has also been brought forward. Subsection 198ZC(2), and the changes to the indexation factor and living cost indexation factor on or after 20 March 2013 under section 198ZC, take account of this 2nd brought forward increase.

198ZC   Special rules for indexation of some amounts on or after 20 March 2013

             (1)  An indexation factor worked out under section 59D for each indexation day on or after 20 March 2013 for each of the following:

                     (a)  the person’s maximum basic rate worked out under point SCH6-B1 of Schedule 6;

                     (b)  the person’s PS minimum rate (within the meaning of section 59A);

is to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1:       The person’s PS minimum rate is that rate as increased under subsection 198ZB(2).

Note 2:       Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the factor.

Example:    Assume that the indexation factor worked out under section 59D on 20 March 2013 is 1.005. The brought forward CPI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2013.

                   Further assume that on 20 September 2013 the indexation factor is 1.010. The brought forward CPI indexation amount in relation to 20 September 2013 is 0.003. That indexation factor is reduced to 1.007 on 20 September 2013.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

             (2)  If the indexation factor worked out under section 59D for an indexation day is reduced under subsection (1), this Act has effect as if, on that day, the PS rate (within the meaning of section 59A) used to work out the person’s pension supplement amount on and after that day were replaced by the PS rate needed for the person’s pension supplement amount to be equal to the amount worked out as follows:

Note 1:       The amount in step 1 is the amount worked out from the PS minimum rate as adjusted under subsection (1).

Note 2:       The amount in step 2 is the amount worked out from the PS minimum rate as increased under subsection 198ZB(2), and as indexed under section 59C, but without the adjustment under subsection (1) of this section.

Note 3:       For step 4, the amount that would, apart from this subsection, be the person’s pension supplement amount is the amount worked out from the PS rate as increased under subsection 198ZB(1) and as indexed under section 59C.

             (3)  A living cost indexation factor, worked out under section 59EAB for each indexation day on or after 20 March 2013 for the person’s maximum basic rate worked out under point SCH6-B1 of Schedule 6, is to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note:          Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the factor.

Example:    Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2013 is 1.005. The brought forward PBLCI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2013.

                   Further assume that on 20 September 2013 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2013 is 0.003. That indexation factor is reduced to 1.007 on 20 September 2013.

                   The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

             (4)  In this section:

brought forward CPI indexation amount , in relation to a day, means:

                     (a)  if the brought forward PBLCI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.008 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

                     (a)  if the brought forward CPI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.008 less any reduction made under subsection (3) for a previous day.

198ZD   Increase of 1% on 1 July 2011

                   This Act has effect as if, on 1 July 2011:

                     (a)  the amount specified in paragraph 30(1)(b) were increased by 1% of the sum of:

                              (i)  the amount worked out under paragraph 30(1)(a) on that day; and

                             (ii)  the amount specified in paragraph 30(1)(b) on that day apart from this section; and

                            (iii)  the amount specified in paragraph 30(1)(c) on that day; and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $0.10, rounding the amount up or down to the nearest multiple of $0.10 (rounding up if the amount is a multiple of $0.05).

Note:          The 1% increase includes the Carbon Pollution Reduction Scheme’s estimated cost of living increase of 0.4% for the 2011-2012 financial year, which has been brought forward. The changes to the indexation factors on or after 20 March 2012 under section 198ZE take account of this brought forward increase.

198ZE   Adjustment of indexation on and after 20 March 2012

             (1)  An indexation factor that:

                     (a)  is worked out under section 59D for indexation on a day that is on or after 20 March 2012; and

                     (b)  is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1:       An indexation factor worked out under section 59D is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a)    section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the indexation factor worked out under section 59D.

Note 2:       The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the indexation factor worked out under section 59D and reduced under this section.

Note 3:       Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the indexation factor.

Example:    Assume that the indexation factor worked out under section 59D on 20 March 2012 is 1.003. The brought forward CPI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2012.

                   Further assume that on 20 September 2012 the indexation factor worked out under section 59D is 1.010. The brought forward CPI indexation amount in relation to 20 September 2012 is 0.001. That indexation factor is reduced to 1.009 on 20 September 2012.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

             (2)  A living cost indexation factor that:

                     (a)  is worked out under section 59EAB for indexation on a day that is on or after 20 March 2012; and

                     (b)  is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note 1:       A factor worked out under section 59EAB is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a)    section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the factor worked out under section 59EAB.

Note 2:       The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the factor worked out under section 59EAB and reduced under this section.

Note 3:       Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the factor.

Example:    Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2012 is 1.003. The brought forward PBLCI indexation amount in relation to 20 March 2012 is 0.004 (as there has been no previous reduction). That living cost indexation factor is reduced to 1 on 20 March 2012.

                   Further assume that on 20 September 2012 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2012 is 0.001. That living cost indexation factor is reduced to 1.009 on 20 September 2012.

                   The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

             (3)  In this section:

brought forward CPI indexation amount , in relation to a day, means:

                     (a)  if the brought forward PBLCI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.004 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

                     (a)  if the brought forward CPI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.004 less any reduction made under subsection (2) for a previous day.

             (4)  This section affects the rate of a payment under this Act for a person if, and only if, section 198ZD affected that rate for the person.

198ZF   Increase of 1.8% on 1 July 2012

                   This Act has effect as if, on 1 July 2012:

                     (a)  the amount specified in paragraph 30(1)(b) were increased by 1.8% of the sum of:

                              (i)  the amount worked out under paragraph 30(1)(a) on that day; and

                             (ii)  the amount specified in paragraph 30(1)(b) on that day apart from this section; and

                            (iii)  the amount specified in paragraph 30(1)(c) on that day; and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $0.10, rounding the amount up or down to the nearest multiple of $0.10 (rounding up if the amount is a multiple of $0.05).

Note:          The 1.8% increase includes the Carbon Pollution Reduction Scheme’s estimated cost of living increase of 0.8% for the 2012-2013 financial year, which has also been brought forward. The changes to the indexation factors on or after 20 March 2013 under section 198ZG take account of this 2nd brought forward increase.

198ZG   Adjustment of indexation on and after 20 March 2013

             (1)  An indexation factor that:

                     (a)  is worked out under section 59D for indexation on a day that is on or after 20 March 2013; and

                     (b)  is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward CPI indexation amount, but not below 1.

Note 1:       An indexation factor worked out under section 59D is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a)    section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the indexation factor worked out under section 59D.

Note 2:       The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the indexation factor worked out under section 59D and reduced under this section.

Note 3:       Once the brought forward CPI indexation amount becomes 0, there will be no further reduction of the indexation factor.

Example:    Assume that the indexation factor worked out under section 59D on 20 March 2013 is 1.005. The brought forward CPI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 20 March 2013.

                   Further assume that on 20 September 2013 the indexation factor worked out under section 59D is 1.010. The brought forward CPI indexation amount in relation to 20 September 2013 is 0.003. That indexation factor is reduced to 1.007 on 20 September 2013.

                   The brought forward CPI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the indexation factor.

             (2)  A living cost indexation factor that:

                     (a)  is worked out under section 59EAB for indexation on a day that is on or after 20 March 2013; and

                     (b)  is (indirectly) relevant to the indexation of the amount specified in paragraph 30(1)(b);

is, for the purposes of the indexation of the amount on that day, to be reduced by the brought forward PBLCI indexation amount, but not below 1.

Note 1:       A living cost indexation factor worked out under section 59EAB is (indirectly) relevant to the indexation of an amount specified in paragraph 30(1)(b). This is because:

(a)    section 198 provides for indexation of the amount by reference to the pension MBR factor worked out under section 59LA; and

(b)    the pension MBR factor depends on the increase in the single pension rate MBR amount, which in turn depends (under section 59G) on indexation of the pension MBR amount under section 59C, which involves the living cost indexation factor worked out under section 59EAB.

Note 2:       The indexation of an amount specified in paragraph 30(1)(b) on that day depends on a pension MBR factor that is worked out on the basis of the living cost indexation factor worked out under section 59EAB and reduced under this section.

Note 3:       Once the brought forward PBLCI indexation amount becomes 0, there will be no further reduction of the living cost indexation factor.

Example:    Assume that the living cost indexation factor worked out under section 59EAB on 20 March 2013 is 1.005. The brought forward PBLCI indexation amount in relation to 20 March 2013 is 0.008 (as there has been no previous reduction). That living cost indexation factor is reduced to 1 on 20 March 2013.

                   Further assume that on 20 September 2013 the living cost indexation factor is 1.010. The brought forward PBLCI indexation amount in relation to 20 September 2013 is 0.003. That living cost indexation factor is reduced to 1.007 on 20 September 2013.

                   The brought forward PBLCI indexation amount in relation to later indexation days is now 0 so there is no further reduction of the living cost indexation factor.

             (3)  In this section:

brought forward CPI indexation amount , in relation to a day, means:

                     (a)  if the brought forward PBLCI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.008 less any reduction made under subsection (1) for a previous day.

brought forward PBLCI indexation amount , in relation to a day, means:

                     (a)  if the brought forward CPI indexation amount in relation to the day is 0—0; and

                     (b)  otherwise—0.008 less any reduction made under subsection (2) for a previous day.

             (4)  This section affects the rate of a payment under this Act for a person if, and only if, section 198ZF affected that rate for the person.

2  After clause 34 of Schedule 5

Insert:

34A   Increases in rates payable under clause 30 related to Carbon Pollution Reduction Scheme

Application

             (1)  This clause applies if:

                     (a)  clause 30 affects the rate at which service pension is payable to a person for a day on or after 1 July 2011; and

                     (b)  subclause 31(1) or (2) is relevant to the person; and

                     (c)  Subdivision D or E of Division 5 of Part XII applies to the person.

Purpose

             (2)  The purpose of this clause is to ensure appropriate increases in the rate of the person’s service pension (as affected by clause 30 and while the person is not a war widow/war widower-pensioner) on account of the Carbon Pollution Reduction Scheme’s estimated cost of living increase, by:

                     (a)  providing for increases in the amount described in subparagraph 30(4)(a)(i) of this Schedule; and

                     (b)  modifying the operation of Subdivisions D and E of Division 5 of Part XII (which apply because of clause 34).

Increase on 1 July 2011

             (3)  If Subdivision D of Division 5 of Part XII applies to the person, this Act has effect as if, on 1 July 2011, the amount described in subparagraph 30(4)(a)(i) of this Schedule (apart from this subclause) for the person were replaced by the amount worked out by:

                     (a)  adding the CPRS amount defined in subsection 198Y(3) for the person (worked out disregarding clause 34) to the amount described in subparagraph 30(4)(a)(i) of this Schedule on that day (apart from this subclause); and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

Increase on 1 July 2012

             (4)  If Subdivision E of Division 5 of Part XII applies to the person, this Act has effect as if, on 1 July 2012, the amount described in subparagraph 30(4)(a)(i) of this Schedule (apart from this subclause) for the person were replaced by the amount worked out by:

                     (a)  adding the CPRS amount defined in subsection 198ZB(3) for the person (worked out disregarding clause 34) to the amount described in subparagraph 30(4)(a)(i) of this Schedule on that day (apart from this subclause); and

                     (b)  if the amount resulting from paragraph (a) is not a multiple of $2.60, rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is a multiple of $1.30).

Modification of Division 5 of Part XII

             (5)  Subsections 198Z(1) and 198ZC(1), and the definition of brought forward CPI indexation amount (except paragraph (a) of that definition) in each of subsections 198Z(4) and 198ZC(4), apply in relation to the amount described in subparagraph 30(4)(a)(i) of this Schedule for the person in the same way as they apply in relation to the person’s PS minimum rate.

             (6)  Subsections 198Z(2) and 198ZC(2) apply as if each reference in those subsections to the PS rate were a reference to the amount described in subparagraph 30(4)(a)(i) of this Schedule for the person.

Note:          The reference in step 4 of the method statement in each of subsections 198Z(2) and 198ZC(2), as they apply because of this clause, to what would, apart from that subsection, be the person’s pension supplement amount is a reference to that amount worked out taking account of clause 34. Note 3 to each of those subsections is not relevant to the application of those subsections because of this clause.

             (7)  The following provisions do not affect the rate of the person’s service pension worked out under clause 30 or an amount worked out in relation to the person’s pension because of clause 34:

                     (a)  subsection 198Y(1);

                     (b)  paragraph 198Z(1)(a);

                     (c)  subsection 198Z(3);

                     (d)  subsection 198ZB(1);

                     (e)  paragraph 198ZC(1)(a);

                      (f)  subsection 198ZC(3).