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Families, Community Services and Indigenous Affairs Legislation Amendment (Further 2007 Budget Measures) Bill 2007

Schedule 4 Funeral investments

   

Social Security Act 1991

1  Paragraph 8(8)(ma) (note)

Omit “subsection 23(1)”, substitute “section 19E”.

2  After section 19D

Insert:

19E   Exempt funeral investments

             (1)  Work out whether a funeral investment that relates to a particular funeral is an exempt funeral investment by applying these rules:

                     (a)  the expenses for the funeral must not be prepaid; and

                     (b)  in relation to that funeral:

                              (i)  only one investment of not more than $10,000 can be an exempt funeral investment; or

                             (ii)  only two investments that combined are not more than $10,000 can be exempt funeral investments.

Note:          The amounts in paragraph (1)(b) are indexed each year on 1 July (see Division 2 of Part 3.16).

             (2)  Disregard any return on an investment in determining the amount of an investment for the purposes of this section.

             (3)  For the purposes of subsection (1), a funeral investment means an investment, being an investment that cannot be realised before maturity and the return on which is not payable before maturity, that:

                     (a)  matures on the death of whichever member of a couple dies first or dies last and is to be applied on maturity to the expenses of the funeral of that member of the couple; or

                     (b)  matures on the death of:

                              (i)  the investor; or

                             (ii)  if the investor is a member of a couple at the time the investment is made, the investor’s partner at that time;

                            and is to be applied on maturity to the expenses of the funeral of the person on whose death it matures.

3  Subsection 23(1) (definition of exempt funeral investment )

Repeal the definition, substitute:

exempt funeral investment has the meaning given by section 19E.

4  Subsection 23(1) (definition of type A funeral investment )

Repeal the definition.

5  Subsection 23(1) (definition of type B funeral investment )

Repeal the definition.

6  Subsection 1118(1) (note 4)

Omit “subsection 23(1)”, substitute “section 19E”.

7  Section 1190 (after table item 35)

Insert:

36.

exempt funeral investment threshold

exempt funeral investment threshold

[paragraph 19E(1)(b)]

8  Subsection 1191(1) (after table item 25)

Insert:

26.

exempt funeral investment threshold

1 July

December

most recent December quarter before reference quarter

$250.00

Veterans’ Entitlements Act 1986

9  After paragraph 5H(8)(zj)

Insert:

Note:       For exempt funeral investment see section 5PC.

10  After section 5PB

Insert:

5PC   Exempt funeral investments

             (1)  Work out whether a funeral investment that relates to a particular funeral is an exempt funeral investment by applying these rules:

                     (a)  the expenses for the funeral must not be prepaid; and

                     (b)  in relation to that funeral:

                              (i)  only one investment of not more than $10,000 can be an exempt funeral investment; or

                             (ii)  only two investments that combined are not more than $10,000 can be exempt funeral investments.

Note:          The amounts in paragraph (1)(b) are indexed each year on 1 July (see Division 18 of Part IIIB).

             (2)  Disregard any return on an investment in determining the amount of an investment for the purposes of this section.

             (3)  For the purposes of subsection (1), a funeral investment means an investment, being an investment that cannot be realised before maturity and the return on which is not payable before maturity, that:

                     (a)  matures on the death of whichever member of a couple dies first or dies last and is to be applied on maturity to the expenses of the funeral of that member of the couple; or

                     (b)  matures on the death of:

                              (i)  the investor; or

                             (ii)  if the investor is a member of a couple at the time the investment is made, the investor’s partner at that time;

                            and is to be applied on maturity to the expenses of the funeral of the person on whose death it matures.

11  Subsection 5Q(1) (definition of exempt funeral investment )

Repeal the definition, substitute:

exempt funeral investment has the meaning given by section 5PC.

12  Subsection 5Q(1) (definition of type A funeral investment )

Repeal the definition.

13  Subsection 5Q(1) (definition of type B funeral investment )

Repeal the definition.

14  After paragraph 52(1)(ja)

Insert:

Note:       For exempt funeral investment see section 5PC.

15  Section 59A (after table item 13A)

Insert:

13B.

Exempt funeral investment threshold

exempt funeral investment threshold

paragraph 5PC(1)(b)

16  Subsection 59B(1) (after table item 8A)

Insert:

8B.

Exempt funeral investment threshold

1 July

December

most recent December quarter before reference quarter

$250.00

17  Application provision

The amendments made by this Schedule apply on and after 1 January 2008 in relation to investments whether made before or after that day.