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Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009

Schedule 3 Indexation using combined couple benchmark

   

Social Security Act 1991

1  Point 1064-B1 (note 2)

Repeal the note, substitute:

Note 2:       The maximum basic rates are adjusted 6 monthly: see sections 1191 to 1198A.

2  Point 1065-B1 (note 2)

Repeal the note, substitute:

Note 2:       The maximum basic rates are adjusted 6 monthly: see sections 1191 to 1198A.

3  Point 1066-B1 (note)

Repeal the note, substitute:

Note:          The maximum basic rate is adjusted 6 monthly: see section 1198A.

4  Section 1190 (table item 1, column 2)

After “social security pension”, insert “payable to a person who is partnered or for pension PP (single)”.

5  Section 1190 (table item 1, column 4)

Omit:

[Pension Rate Calculator A—point 1064-B1—Table B—column 3—all amounts]

[Pension Rate Calculator B—point 1065-B1—Table B—column 3—all amounts]

[Pension Rate Calculator C—point 1066-B1—the annual rate]

substitute:

[Pension Rate Calculator A—point 1064-B1—Table B—item 2—column 3]

[Pension Rate Calculator B—point 1065-B1—Table B—item 2—column 3]

6  Section 1190 (after table item 1)

Insert:

 

1AAA.

Maximum basic rates for a social security pension that are to be worked out by reference to the maximum basic rates for a social security pension payable to a person who is partnered

single pension rate MBR

[Pension Rate Calculator A—point 1064-B1—Table B—items 1, 3, 4 and 5—column 3]

[Pension Rate Calculator B—point 1065-B1—Table B—items 1, 3, 4 and 5—column 3]

[Pension Rate Calculator C—point 1066-B1—the annual rate]

7  Paragraph 1195(1)(a)

Repeal the paragraph, substitute:

                     (a)  a category A amount is the annual rate specified in point 1068A-B1; and

8  Subsection 1195(2)

Repeal the subsection, substitute:

             (2)  If:

                     (a)  a category A amount is to be indexed under this Division on an indexation day; and

                     (b)  25% of the annualised MTAWE figure for whichever of the following quarters is applicable:

                              (i)  if the indexation day is a 20 March—the most recent December quarter;

                             (ii)  if the indexation day is a 20 September—the most recent June quarter;

                            exceeds the indexed amount for the category A amount;

then:

                     (c)  the indexed amount for the category A amount is to be increased by an amount equal to the excess; and

                     (d)  if the indexed amount for the category A amount (as increased under paragraph (c)) is not a multiple of $2.60, the indexed amount (as increased under paragraph (c)) is to be further increased by rounding up to the next highest multiple of $2.60.

          (2A)  If:

                     (a)  a category B amount is to be indexed under this Division on an indexation day; and

                     (b)  50% of the combined couple benchmark for that indexation day exceeds the indexed amount for the category B amount;

then:

                     (c)  the indexed amount for the category B amount is to be increased by an amount equal to the excess; and

                     (d)  if the indexed amount for the category B amount (as increased under paragraph (c)) is not a multiple of $2.60, the indexed amount (as increased under paragraph (c)) is to be further increased by rounding up to the next highest multiple of $2.60.

          (2B)  For the purposes of this section, the combined couple benchmark , for an indexation day, is 41.76% of the annualised MTAWE figure for whichever of the following quarters is applicable:

                     (a)  if the indexation day is a 20 March—the most recent December quarter;

                     (b)  if the indexation day is a 20 September—the most recent June quarter.

9  Before section 1198B

Insert:

1198A   Adjustment of single pension rate MBR amounts

             (1)  This Act has effect as if, on 20 March (an indexation day ) and 20 September (an indexation day ) each year, the adjusted single pension amount were substituted for each single pension rate MBR amount (see item 1AAA of the table in section 1190).

             (2)  For the purposes of this section, the adjusted single pension amount is worked out as follows:

Method statement

Step 1.   Work out the amount substituted for the amount specified in column 3 of item 2 of Table B in point 1064-B1 on that indexation day under section 1192.

Step 2.   Multiply the amount worked out at step 1 by 2.

Step 3.   Work out 66.33% of the amount worked out at step 2.

Step 4.   Round the amount worked out at step 3 to the nearest multiple of $2.60 (rounding up if necessary): the result is the adjusted single pension amount .