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Aged Care Amendment (Omnibus) Bill 1999
Schedule 2 Social Security Act 1991

   

1  Section 3 (index)

Insert the following entries in their appropriate alphabetical positions, determined on a letter-by-letter basis:

accommodation charge

11(1)

charge exempt resident

11(1)

2  Subsection 8(1) (note 1 to the definition of income )

Omit “and sections 1095-1099D (income from income streams)”, substitute “, sections 1095 to 1099D (income from income streams), section 1099F (exempt bond amount does not count as income) and section 1099K (refunded amount does not count as income)”.

3  At the end of subsection 8(8)

Add:

                 ; (zn)  while a person is accruing a liability to pay an accommodation charge—any rent from the person’s principal home that the person, or the person’s partner, earns, derives or receives from another person.

Note 1:    For rent , see subsection 13(2).

Note 2:    Under subsections 11(6A) and (7), the principal home of a person in a care situation may be a place other than the place where the person receives care.

4  Subsection 11(1)

Insert:

accommodation charge has the same meaning as in the Aged Care Act 1997 .

5  Subsection 11(1)

Insert:

charge exempt resident has the same meaning as in the Aged Care Act 1997 .

6  Subsection 11(1) (definition of principal home )

Omit “subsections (5), (6) and (7)”, substitute “subsections (5) to (7)”.

7  After subsection 11(6)

Insert:

          (6A)  A residence of a person is taken to be the person’s principal home during:

                     (a)  if the Secretary is satisfied that the residence was previously the person’s principal home but that the person left it for the purpose of going into a care situation—any period during which:

                              (i)  the person is accruing a liability to pay an accommodation charge (or would be accruing such a liability, assuming that no sanctions under Part 4.4 of the Aged Care Act 1997 were currently being imposed on the provider of the care concerned); and

                             (ii)  the person, or the person’s partner, is earning, deriving or receiving rent for the residence from another person; and

Note 1:    For rent , see subsection 13(2).

Note 2:    A person can be liable to pay an accommodation charge only if certain conditions are met: see Division 57A of the Aged Care Act 1997 .

                     (b)  any period during which the residence is, because of paragraph (a), the principal home of the person’s partner.

Note:          This subsection is not meant to imply that a person may have more than one principal home at the same time.

8  Subsection 13(1) (note to the definition of ineligible homeowner )

Omit “subsections 11(5), (6) and (7)”, substitute “subsections 11(5) to (7)”.

9  Subparagraph 13(2)(a)(iii)

Omit “subsection 11(7)”, substitute “subsection 11(6A) or (7)”.

10  Subsection 13(2) (note)

Omit “subsections 11(5), (6) and (7)”, substitute “subsections 11(5) to (7)”.

11  Subsection 13(3A) (note)

Omit “subsection 11(7)”, substitute “subsection 11(6A) or (7)”.

12  Subsection 13(3B) (note)

Omit “subsection 11(7)”, substitute “subsection 11(6A) or (7)”.

13  After Division 1C of Part 3.10

Insert:

Division 1D Aged care accommodation bonds: certain transactions before 6 November 1997

1099E   Scope of Division

             (1)  This Division applies to a person if:

                     (a)  at any time from the beginning of 1 October 1997 until the end of 5 November 1997, the person became liable to pay an accommodation bond for entry to a residential care service; and

                     (b)  either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44-8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry; and

                     (c)  the person later made an agreement (a refund agreement ) with the provider of the service that the person’s liability to pay an accommodation bond for the entry was to be replaced with a liability to pay an accommodation charge for the entry, and that any payment of any of the bond was to be refunded to the person.

Note:          For accommodation bond , accommodation charge and charge exempt resident , see subsection 11(1).

             (2)  This Division also applies to a person if the Secretary is satisfied that:

                     (a)  on or before 5 November 1997, the person sold his or her principal home for the sole or principal purpose of raising money to pay an accommodation bond for entry to a residential care service; and

                     (b)  either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44-8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry.

Note:          For accommodation bond , accommodation charge and charge exempt resident , see subsection 11(1).

             (3)  This Division also applies to the partner of a person covered by subsection (1) or (2) (even if the person so covered is now deceased).

             (4)  For the purposes of subsection (2), the time at which a person sells his or her home is the time when he or she comes under a legal obligation to transfer the home to the buyer.

1099F   Exempt bond amount does not count as income

                   The person’s exempt bond amount (see section 1099H) does not count as income of the person for the purposes of this Act.

Note:          Income is otherwise defined in section 8.

1099G   Person’s ordinary income reduced using financial asset rules

             (1)  For the purposes of this section, assume that the person’s exempt bond amount (see section 1099H) were a financial asset of the person.

             (2)  The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (Deemed income from financial assets).

             (3)  In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold ( deeming threshold is a term used in Division 1B).

1099H   Meaning of exempt bond amount

             (1)  The following is how to work out a person’s exempt bond amount .

             (2)  If the person is covered by subsection 1099E(1) (but not subsection 1099E(2)), the person’s exempt bond amount is any amount of accommodation bond payment refunded to the person under the refund agreement mentioned in that subsection.

             (3)  If the person is covered by subsection 1099E(2) (but not subsection 1099E(1)), the person’s exempt bond amount is the gross proceeds of the sale mentioned in that subsection, less:

                     (a)  any costs incurred in the course of the sale; and

                     (b)  the amount of any debt the person or the person’s partner owed immediately before the sale, so far as the debt was secured by the home at that time.

             (4)  If the person is covered by both subsections 1099E(1) and (2), the person’s exempt bond amount is the greater of the 2 amounts worked out under subsections (2) and (3) of this section.

             (5)  If the person is covered by subsection 1099E(3), the person’s exempt bond amount is equal to the exempt bond amount of the person’s partner, as worked out under subsection (2), (3) or (4) of this section.

             (6)  But in all of the above cases, if the person currently has a partner (who is not deceased), the person’s exempt bond amount is half of what it would otherwise be.

Division 1E Refunds to charge exempt residents

1099J   Scope of Division

             (1)  This Division applies to an amount (the refunded amount ) that is refunded as mentioned in paragraph 56-1(kc) or 56-3(ic) of the Aged Care Act 1997 to a person because the person is or was a charge exempt resident.

Note:          For charge exempt resident , see subsection 11(1).

             (2)  This Division also applies to an amount (also called the refunded amount ) that is paid to a person under paragraph 44-8A(6)(b) of that Act because the person is or was a charge exempt resident.

Note:          For charge exempt resident , see subsection 11(1).

             (3)  To avoid doubt, this Division does not apply if the amount is paid to the person’s estate or to any other person.

1099K   Refunded amount does not count as income

                   The refunded amount does not count as income of the person for the purposes of this Act.

Note:          Income is otherwise defined in section 8.

1099L   Person’s ordinary income reduced using financial asset rules

             (1)  For the purposes of this section, assume that the refunded amount were a financial asset of the person.

             (2)  The person’s ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 1B (Deemed income from financial assets).

             (3)  In working out that reduction, assume that the total value of the person’s financial assets exceeded the person’s deeming threshold ( deeming threshold is a term used in Division 1B).

1099M  Application of Division

                   This Division applies in relation to a person who is a charge exempt resident at any time, whether before or after the commencement of the Division.

14  Subsection 1118(1) (note 2)

Omit “subsections 11(5), (6) and (7), substitute “subsections (5) to (7)”.

15  After section 1118AA

Insert:

1118AB   Value of person’s assets reduced: certain transactions to do with aged care accommodation bonds

             (1)  This section applies to a person if Division 1D of Part 3.10 applies to the person.

             (2)  For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person’s assets is reduced by the person’s exempt bond amount (as defined by section 1099H).

1118AC   Value of person’s assets reduced: refunds to charge exempt residents

             (1)  This section applies to a person if Division 1E of Part 3.10 applies to the person.

             (2)  For the purposes of this Act (other than subparagraph 501E(1)(d)(iv) and sections 1124A, 1125, 1125A and 1126), the total value of the person’s assets is reduced by the refunded amount (as defined by section 1099J).

16  Transitional—persons who became charge exempt residents before 1 July 1999

(1)       This item applies if a person first became a charge exempt resident before 1 July 1999.

(2)       If, at any time after becoming a charge exempt resident but before 1 July 1999, the person, or the person’s partner, was earning, deriving or receiving any rent from the person’s principal home from another person, any such rent earned, derived or received while the person is a charge exempt resident is not income for the purposes of the Social Security Act 1991 .

Note 1:    For rent , see subsection 13(2) of that Act.

Note 2:    Under subsections 11(6A) and (7) of that Act, and subitem (3) of this item, the principal home of a person in a care situation may be a place other than the place where the person receives care.

(3)       A residence of a person is taken to be the person’s principal home for the purposes of the Social Security Act 1991 during:

                     (a)  if:

                              (i)  the Secretary is satisfied that the residence was previously the person’s principal home but that the person left it for the purpose of going into a care situation or becoming an aged care resident; and

                             (ii)  at any time after leaving the residence but before 1 July 1999, the person, or the person’s partner, earned, derived or received rent for the residence from another person;

                            any period during which:

                            (iii)  the person is a charge exempt resident; and

                            (iv)  the person, or the person’s partner, is earning, deriving or receiving rent for the residence from another person; and

                     (b)  any period during which the residence is, because of paragraph (a), the principal home of the person’s partner.

Note 1:    For rent , see subsection 13(2) of that Act.

Note 2:    This subitem is not meant to imply that a person may have more than one principal home at the same time.