46AA   Income concession

             (1)  This section applies to a person if:

                     (a)  the person’s rate of service pension or income support supplement is calculated in accordance with the Rate Calculator; and

                     (b)  the person has reached qualifying age.

Note:          For qualifying age see section 5Q.

             (2)  If the person’s employment income for a pension period is greater than or equal to the income concession amount for that period, the amount of the person’s employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of that income concession amount.

Note:          For employment income see section 46AB.

             (3)  If a person’s employment income for a pension period is less than the income concession amount for that period, the amount of the person’s employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of the person’s employment income for that period.

Definition

             (4)  The income concession amount is $500.

Interpretation

             (5)  To avoid doubt, apply this section before applying Point SCH6-E3 of Schedule 6.

Example 1: David and Amy are members of a couple. David earns $50 of employment income in a pension period and Amy earns $500 of employment income in that period.

                   For David, $25 of the $50 is disregarded for the purposes of the ordinary/adjusted income test.

                   For Amy, $250 of the $500 is disregarded for the purposes of the ordinary/adjusted income test.

Example 2: Ian and Simone are members of a couple. Ian earns no employment income in a pension period and Simone earns $1,000 of employment income in that period.

                   For Simone, $250 is disregarded for the purposes of the ordinary/adjusted income test (which is 50% of the income concession amount).

             (6)  If:

                     (a)  apart from this subsection, an amount (the initial amount ) would be disregarded under subsection (2) or (3) in relation to a person and a pension period; and

                     (b)  an amount is worked out under subsection 115G(1) or (2) in relation to that person and that period, and that amount is greater than or equal to the initial amount;

then subsection (2) or (3) of this section, as the case may be, does not apply in relation to that person and that period.

46AB   Meaning of employment income

             (1)  For the purposes of section 46AA, employment income , in relation to a person, is ordinary income of the person:

                     (a)  that is earned, derived or received, or that is taken to have been earned, derived or received, by the person from remunerative work undertaken by the person as an employee in an employer/employee relationship; and

                     (b)  that includes, but is not limited to, salary, wages, commissions and employment-related fringe benefits that are so earned, derived or received or taken to have been so earned, derived or received;

but does not include:

                     (c)  a superannuation payment to the person; or

                     (d)  a payment of compensation, or a payment to the person under an insurance scheme, in relation to the person’s inability to earn, derive or receive income from that remunerative work; or

                     (e)  a leave payment to the person; or

                      (f)  a payment to the person by a former employer of the person in relation to the termination of the person’s employment; or

                     (g)  a comparable foreign pension.

             (2)  For the purposes of paragraph (1)(e), a leave payment:

                     (a)  includes a payment in respect of sick leave, annual leave, maternity leave or long service leave; and

                     (b)  may be made as a lump sum payment, a payment that is one of a series of regular payments or otherwise; and

                     (c)  is taken to be made to a person if it is made to another person:

                              (i)  at the direction of the person or of a court; or

                             (ii)  on behalf of the person; or

                            (iii)  for the benefit of the person; or

                            (iv)  if the person waives or assigns his or her right to the payment.

3  At the end of section 115G

Add:

             (4)  If:

                     (a)  an amount (the initial amount ) is worked out under subsection (1) or (2) in respect of a veteran and a pension period; and

                     (b)  an amount is disregarded under subsection 46AA(2) or (3) in relation to that veteran and that period, and that amount is greater than or equal to the initial amount;

then subsection (1) or (2) of this section, as the case may be, does not apply in relation to that veteran and that period.

4  Point SCH6-E2 of Schedule 6 (method statement, step 6, after paragraph (a) of note 2)

Insert:

                                       (aa)   the work bonus (section 46AA);

5  Application

The amendment made by item 2 applies in respect of a pension period that includes 20 September 2009 and later pension periods.