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Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009 [No. 2]

Schedule 4 Assistance under the Military Rehabilitation and Compensation Act

   

Military Rehabilitation and Compensation Act 2004

1  Subsection 404(3)

Omit “The”, substitute “Subject to sections 404A to 404C, the”.

2  At the end of Part 1 of Chapter 11

Add:

404A   1% increase in indexation factor for permanent impairment compensation on 1 July 2011

                   For the indexation year commencing on 1 July 2011 and for the dollar amount mentioned in subsection 74(1), the indexation factor worked out under section 404 for that year is to be increased by 0.01.

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 change to the indexation factor for 1 July 2012 under section 404B takes account of this brought forward increase.

404B   1.4% increase in indexation factor for permanent impairment compensation on 1 July 2012

                   For the indexation year commencing on 1 July 2012 and for the dollar amount mentioned in subsection 74(1), the indexation factor worked out under section 404 for that year is to be increased by 0.014.

Note:          The 1.4% increase is equal to a 1.8% increase less the 0.4% brought forward increase under section 404A. The 1.4% 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. Section 404C deals with later reductions to the indexation factor because of this second brought forward increase.

404C   Reduction in indexation factor for permanent impairment compensation on and after 1 July 2013

             (1)  For the dollar amount mentioned in subsection 74(1), the indexation factor, worked out under section 404 for each indexation year that commences on or after 1 July 2013, is to be reduced by the brought forward indexation amount, but not below 1.

             (2)  In this section:

brought forward indexation amount , in relation to an indexation year, means 0.008 less any reduction made under this section for a previous indexation year.

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

Example:    Assume that the indexation factor worked out under section 404 on 1 July 2013 is 1.005. The brought forward indexation amount in relation to 1 July 2013 is 0.008 (as there has been no previous reduction). That indexation factor is reduced to 1 on 1 July 2013.

                   Further assume that on 1 July 2014 the indexation factor is 1.010. The brought forward indexation amount in relation to 1 July 2014 is 0.003. That indexation factor is reduced to 1.007 on 1 July 2014.

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