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Social Security and Veterans' Entitlements Legislation Amendment (Disposal of Assets—Integrity of Means Testing) Bill 2002
Schedule 2 Veterans’ Entitlements Act 1986

   

1  Section 5 (Index of definitions)

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

 

greater amount

5QAA

greatest amount

5QAA

higher amount

5QAA

highest amount

5QAA

least amount

5QAA

lesser amount

5QAA

lower amount

5QAA

lowest amount

5QAA

2  Paragraph 5J(2B)(b)

Omit “section 52FA, 52G, 52GA or 52H”, substitute “Subdivision BA or BB of Division 11 of Part IIIB”.

3  After subsection 5L(9)

Insert:

No pension year to extend beyond 30 June 2002

          (9A)  No period after 30 June 2002 is, or is a part of, a pension year of a person. If, apart from this subsection, a period beginning before 1 July 2002 and ending on or after that date would be a pension year of a person, the part of that period that ends immediately before that date is taken to be a pension year of the person.

4  After subsection 5L(10A)

Insert:

No pre-pension year to extend beyond 30 June 2002

         (10B)  No period after 30 June 2002 is, or is a part of, a pre-pension year of a person. If, apart from this subsection, a period beginning before 1 July 2002 and ending on or after that date would be a pre-pension year of a person, the part of that period that ends immediately before that date is taken to be a pre-pension year of the person.

5  After section 5Q

Insert:

5QAA   Equal amounts

             (1)  Where:

                     (a)  a provision of this Act refers to:

                              (i)  the greater or greatest, or the higher or highest; or

                             (ii)  the lesser or least, or the lower or lowest;

                            of 2 or more amounts; and

                     (b)  the amounts are equal;

the provision is taken to refer to one only of the amounts.

             (2)  Where:

                     (a)  a provision of this Act refers to the greatest or highest of 3 or more amounts; and

                     (b)  2 or more (but not all) of the amounts are equal and exceed the other amount or other amounts;

the provision is taken to refer to one only of those equal amounts.

             (3)  Where:

                     (a)  a provision of this Act refers to the least or lowest of 3 or more amounts; and

                     (b)  2 or more (but not all) of the amounts are equal and are less than the other amount or other amounts;

the provision is taken to refer to one only of those equal amounts.

6  Section 45TA (at the end of the definition of disposal preclusion period )

Add “or 45UTA”.

7  Subsection 45TN(1) (note)

Omit “section 45UT”, substitute “sections 45UT and 45UTA”.

8  Subsection 45UM(5)

Omit “Subdivision B of Division 11 of Part IIIB (disposals of assets)”, substitute “Subdivision BA or BB of Division 11 of Part IIIB (dispositions of assets)”.

9  Before subsection 45UT(1)

Insert:

          (1A)  This section applies only to dispositions of assets that took place before 1 July 2002.

Note:       The heading to section 45UT is replaced by the heading “ Disposal preclusion period—dispositions before 1 July 2002 ”.

10  At the end of section 45UT

Add:

             (5)  No period after 30 June 2002 is, or is a part of, a designated year of a person. If, apart from this subsection, a period beginning before 1 July 2002 and ending on or after that date would be a designated year of a person, the part of that period that ends immediately before that date is taken to be a designated year of the person.

11  After section 45UT

Insert:

45UTA   Disposal preclusion period—dispositions on or after 1 July 2002

                   A person is subject to a disposal preclusion period throughout any period for which an amount is included in the value of the person’s assets under Subdivision BB of Division 11 of Part IIIB.

12  Paragraph 48D(1)(a)

After “1984”, insert “and before 1 July 2002”.

Note:       The heading to section 48D is altered by inserting “ entered into before 1 July 2002 ” after “ transactions ”.

13  Subsection 52(1)

After “52H,”, insert “52JA, 52JB, 52JC, 52JD,”.

14  Subsection 52C(1)

Omit “and 52H”, substitute “, 52H, 52JA, 52JB, 52JC and 52JD”.

15  Subdivision B of Division 11 of Part IIIB (heading)

Repeal the heading, substitute:

Subdivision B Dispositions of assets (general provisions)

16  After section 52F

Insert:

Subdivision BA Dispositions of assets before 1 July 2002

52FAA   Application

                   This Subdivision applies only to dispositions of assets that took place before 1 July 2002.

17  Subsection 52G(1)

After “1986”, insert “and before 1 July 2002”.

Note:       The heading to section 52G is altered by inserting “ in pension years ” after “ assets ”.

18  Subsection 52H(1)

After “1986”, insert “and before 1 July 2002”.

Note:       The heading to section 52H is altered by inserting “ in pension years ” after “ assets ”.

19  Before Subdivision C of Division 11 of Part IIIB

Insert:

Subdivision BB Dispositions of assets on or after 1 July 2002

52JA   Disposition of assets in tax year—individuals

Dispositions to which section applies

             (1)  This section applies to a disposition (the relevant disposition ) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposition.

Increase in value of assets

             (2)  If the amount of the relevant disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person during the tax year in which the relevant disposition took place, exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person’s assets for the period of 5 years starting on the day on which the relevant disposition took place:

                     (a)  the amount of the relevant disposition;

                     (b)  the amount by which the sum of the amount of the relevant disposition and the amounts (if any) of other dispositions of assets previously made by the person during the tax year in which the relevant disposition took place, exceeds $10,000.

Previous joint dispositions

             (3)  If, during the tax year in which the relevant disposition took place but before the time of the relevant disposition, the person was a member of a couple who jointly disposed of an asset, a reference in subsection (2) to the amounts (if any) of other dispositions of assets previously made by the person during that tax year includes a reference to one-half of the amount of the joint disposition.

52JB   Dispositions of assets in 5 year period—individuals

Disposition to which section applies

             (1)  This section also applies to a disposition (the relevant disposition ) on or after 1 July 2002 of an asset by a person who is not a member of a couple at the time of the relevant disposition.

Increase in value of assets

             (2)  If:

                     (a)  the sum of the amount of the relevant disposition and the amounts of any previous dispositions of assets made during the rolling period by the person;

less

                     (b)  the sum of any amounts included in the value of the person’s assets during the rolling period under section 52JA, 52JC or 52JD or any previous application or applications of this section;

exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the person’s assets for the period of 5 years starting on the day on which the relevant disposition took place:

                     (c)  an amount equal to the excess;

                     (d)  the amount of the relevant disposition.

Previous joint dispositions

             (3)  If, during the rolling period but before the time of the relevant disposition, the person was a member of a couple who jointly disposed of an asset, the reference in paragraph (2)(a) to the amounts of any previous dispositions during the rolling period of assets by the person includes a reference to one-half of the amount of the joint disposition.

Rolling period

             (4)  For the purposes of this section, the rolling period is the period comprising the tax year in which the relevant disposition took place and such (if any) of the 4 previous tax years as occurred after 30 June 2002.

52JC   Disposition of assets in tax year—members of couples

Dispositions to which section applies

             (1)  If there is a disposition (the relevant disposition ) on or after 1 July 2002 of an asset by:

                     (a)  a person who, at the time of the relevant disposition, is a member of a couple; or

                     (b)  the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph;

subsection (2) has effect.

Increase in value of assets

             (2)  Subject to this section, if the amount of the relevant disposition, or the sum of that amount and the amounts (if any) of other dispositions of assets previously made by the person, the person’s partner, or the person and the person’s partner, during the tax year in which the relevant disposition took place (whether before or after they became members of the couple), exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposition took place:

                     (a)  one-half of the amount of the relevant disposition;

                     (b)  one-half of the amount by which the sum of the amount of the relevant disposition, and the amounts (if any) of other dispositions of assets previously made by the person, the partner, or the person and the partner, during the tax year in which the relevant disposition took place, exceeds $10,000.

Effect of ceasing to be member of couple

             (3)  If, after the disposition referred to in paragraph (1)(a), the person and the person’s partner cease to be members of the same couple:

                     (a)  no amount is to be included after the cessation in the value of the assets of the former partner because of that disposition; and

                     (b)  any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person.

Effect of death of person

             (4)  If, after the disposition referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person’s partner because of that disposition.

Effect of death of partner

             (5)  If, after the disposition referred to in paragraph (1)(a), the person’s partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposition is to be included in the value of the assets of the person.

52JD   Disposition of assets in 5 year period—members of couples

Dispositions to which section applies

             (1)  If there is a disposition (the relevant disposition ) on or after 1 July 2002 of an asset by:

                     (a)  a person who, at the time of the relevant disposition, is a member of a couple; or

                     (b)  the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph;

subsection (2) has effect.

Increase in value of assets

             (2)  Subject to this section, if:

                     (a)  the sum of the amount of the relevant disposition and the amounts of any previous dispositions of assets made during the rolling period by the person, the person’s partner or the person and the person’s partner;

less

                     (b)  the sum of any amounts included in the value of the assets of the person or of the partner during the rolling period under section 52JA, 52JB or 52JC or any previous application or applications of this section;

exceeds $30,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposition took place:

                     (c)  an amount equal to one-half of the excess;

                     (d)  one-half of the amount of the relevant disposition.

Effect of ceasing to be member of couple

             (3)  If, after the disposition referred to in paragraph (1)(a), the person and the person’s partner cease to be members of the same couple:

                     (a)  no amount is to be included after the cessation in the value of the assets of the former partner because of that disposition; and

                     (b)  any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person.

Effect of death of person

             (4)  If, after the disposition referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person’s partner because of that disposition.

Effect of death of partner

             (5)  If, after the disposition referred to in paragraph (1)(a), the person’s partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposition is to be included in the value of the assets of the person.

Rolling period

             (6)  For the purposes of this section, the rolling period is the period comprising the tax year in which the relevant disposition took place and such (if any) of the 4 previous tax years as occurred after 30 June 2002.

20  Paragraph 52Q(3)(e)

Omit “section 52G”, substitute “sections 52G, 52JA and 52JB”.

21  Paragraph 52U(4)(e)

Omit “and 52H”, substitute “, 52H, 52JA, 52JB, 52JC and 52JD”.

22  Subparagraph 52Y(1)(b)(i)

Omit “and 52H”, substitute “, 52H, 52JA, 52JB, 52JC and 52JD”.

23  Paragraph 52Z(7)(a)

Omit “or 52H”, substitute “, 52H, 52JA, 52JB, 52JC or 52JD”.

24  Subsection 52ZZW(1)

Omit “Subdivision B of Division 11 and section 45UT”, substitute “Subdivisions BA and BB of Division 11 and sections 45UT and 45UTA”.

25  Subsection 52ZZX(1)

Omit “Subdivision B of Division 11 and section 45UT”, substitute “Subdivisions BA and BB of Division 11 and sections 45UT and 45UTA”.

26  Section 52ZZY

Omit “Subdivision B of Division 11 and section 45UT”, substitute “Subdivisions BA and BB of Division 11 and sections 45UT and 45UTA”.

27  Subparagraph 52ZZZ(1)(c)(i)

Omit “Subdivision B”, substitute “Subdivision BA or BB”.

28  Paragraph 52ZZZ(1)(e)

Repeal the paragraph, substitute:

                     (e)  in a case where the individual’s asset attribution percentage is 100%—Subdivisions BA and BB of Division 11 and sections 45UT and 45UTA have effect, in relation to the disposal of the asset referred to in paragraph (b), as if references in those Subdivisions and sections to the period of 5 years starting on the day on which the disposition took place were references to the period:

                              (i)  beginning on the day on which the disposition took place; and

                             (ii)  ending immediately before 1 January 2002; or

29  Paragraph 52ZZZ(1)(f)

Omit “Subdivision B of Division 11 and section 45UT”, substitute “Subdivisions BA and BB of Division 11 and sections 45UT and 45UTA”.

30  Subparagraph 52ZZZA(1)(c)(i)

Omit “Subdivision B”, substitute “Subdivision BA or BB”.

31  Paragraph 52ZZZA(1)(e)

Repeal the paragraph, substitute:

                     (e)  in a case where the spouse’s asset attribution percentage is 100%—Subdivisions BA and BB of Division 11 and sections 45UT and 45UTA have effect, in relation to the disposal of the asset referred to in paragraph (b), as if references in those Subdivisions and sections to the period of 5 years starting on the day on which the disposition took place were references to the period:

                              (i)  beginning on the day on which the disposition took place; and

                             (ii)  ending immediately before 1 January 2002; or

32  Paragraph 52ZZZA(1)(f)

Omit “Subdivision B of Division 11 and section 45UT”, substitute “Subdivisions BA and BB of Division 11 and sections 45UT and 45UTA”.

33  Paragraph 52ZZZG(1)(c)

Omit “Subdivision B”, substitute “Subdivision BA or BB”.

34  Paragraph 52ZZZG(1)(d)

Omit “Subdivision B”, substitute “Subdivision BA or BB”.

35  Clause 15 of Schedule 5

Omit “and 52H”, substitute “, 52H, 52JA, 52JB, 52JC and 52JD”.

36  Clause 17D of Schedule 5

Omit “and 52H”, substitute “, 52H, 52JA, 52JB, 52JC and 52JD”.

 

 

 

[ Minister’s second reading speech made in—

House of Representatives on 14 March 2002

Senate on 19 June 2002 ]

 

(74/02)