Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 5 December 2002
Page: 7316

Senator MURRAY (5:11 PM) —by leave—I move amendments (1), (R3) and (4) on sheet 2670 revised together:

(1) Schedule 1, item 1, page 4 (after line 10), after the definition of date of settlement, insert:

life expectancy has the same meaning as life expectation factor has in section 27H of the Income Tax Assessment Act 1936.

(R3) Schedule 1, item 1, page 7 (line 9), omit subsection (1)(b), substitute:

(b) for the life of the injured person; or

(c) in the event of the death of the injured person for the period of the *life expectancy of the injured person;

whichever period is chosen by the injured person and specified in the *annuity instrument.

(4) Schedule 1, item 1, page 8 (lines 3 to 15), omit subsections (1) and (2), substitute:

(1) This section applies where a person:

(a) has purchased an *annuity instrument for a period of at least 10 years; or

(b) has purchased an *annuity instrument for a period of life expectancy.

(2) The *annuity instrument may specify a period (the guarantee period) of:

(a) up to 10 years; or

(b) life expectancy; or

after the date of settlement, during which, if the *injured person dies, the payments (the remaining payments) for the remainder of the guarantee period that would have been paid to the injured person are to be paid instead to:

(c) the injured person's estate; or

(d) a reversionary beneficiary.

Note: For tax exemptions in this situation, see sections 54-65 and 54-70.

I was interested in the minister's remarks about the quality of the drafting. I am certain she did not mean it in that manner, but I thought it impugned slightly by inference the quality of what was an offer from the opposition and the Democrats. I know she did not mean that, but in her response to my question she did make the quite proper remark that, as the bill goes through both houses, there is an evolutionary process and it is quite proper for the government to introduce further amendments to its own bill if they are justified. Therefore, in the spirit of evolution I shall move my three amendments and I hope that the government takes them on that basis.

These amendments try to deal with the issue of life expectancy. The first amendment is the addition of the definition of `life expectancy' to have the same meaning that `life expectation factor' has in section 27H of the Income Tax Assessment Act 1936. This is to provide for the ability for life expectancy in the subsequent amendments to have meaning. References are to the Income Tax Assessment Act, which contains the actuarial tables to which this applies. The third and fourth amendments provide an option for annuity payments to carry on for a guaranteed period of 10 years or for the remaining period of a victim's estimated life expectancy if the victim happens to pass away before this time. The bill as it stands only provides for a maximum of 10 years continuation of payment after death from the time that the annuity was entered into. These amendments are designed to allow the option for a named beneficiary to receive the annuity for the remainder of the period that was used in the victim's calculated life expectancy. We see this as a fairness issue and an issue trying to take account of real experiences in this somewhat sad and tragic field.

There are a few points to mention. Firstly, the lump sum may have been substituted for lifetime periodic payments and calculated as such; therefore, the amount paid would always have been calculated with this in mind. Secondly, were it otherwise than for the beneficiaries to receive the remainder of the payments, the annuity issuer would be faced with a greater windfall with every annuity that ceases prematurely. Thirdly, it is quite probable that the victim's beneficiaries are family members and dependants who might be partly or wholly reliant on the income that flows from the victim's annuity. So we do see this as a fairness issue and as providing a little more option for those who are put into this unfortunate state by serious injury.