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Wednesday, 29 June 1994
Page: 2249

Senator WOODLEY (11.17 a.m.) —I have sought advice and I believe that I can move an amendment to Senator Patterson's amendment.

  The TEMPORARY CHAIRMAN (Senator Herron)—Yes, that is correct.

Senator WOODLEY —I move:

1.Government amendment No. 12 (tax file numbers and allocated pensions and allocated annuities), page 5, omit proposed new subsection 9(8), contained in proposed new paragraph 42A(b), substitute the following subsection:

"(8)A pension or annuity is an allocated one if:

(a)the pension or annuity was purchased on or after 1 July 1992; and


       (i)the rate of payment of the pension or annuity; or

      (ii)the basis for variations in the rate of payment of the pension or annuity;

    is not fully defined in the relevant trust deed or contract.".

My amendment simply replaces the year 1994 with the year 1992. I do this so that the amendment moved in my name can be dealt with first, as was proposed on the original running sheet, and I do that because I believe it is the more logical way of dealing with the issue.

  As I said in my speech during the second reading stage, the Democrats believe that this change to the assets testing of allocated pensions should be put off until the income and assets tests review is completed. If the change does not go through, it is important that we ensure that there is no retrospective element to it.

  Since the release of the superannuation committee's options paper on allocated pensions I have been contacted by a number of people who purchased allocated pensions before the government announced that it would move to include these pensions in the assets test. Understandably, these people were concerned that arrangements they had made for their retirement incomes were about to be drastically affected by this change in government policy.

  We have always said that, where governments make changes which modify pension eligibility, those changes should not operate retrospectively; in other words, the changes should only apply to people coming within the provisions after the changes are announced. I stress that it should only be after the announcement.

  As I understand it, these changes were announced at the end of June 1992 in a major government statement on retirement incomes. Anyone who has purchased an allocated pension since that time was fully aware that there had been a change announced to the social security rules. I understand that financial advisers have been very responsible in this regard.

  As such, this amendment will exempt from the new arrangements those people who bought their allocated pensions prior to 1 July 1992. These changes were announced at the end of June 1992. Anyone who has purchased an allocated pension since that time would be fully aware that changes to the social security rules had been announced.