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

Schedule 7 Work bonus

   

Social Security Act 1991

1  Point 1064-E1 (note 2)

After:

·          the general concept of ordinary income (sections 1072 and 1073);

insert:

·          the work bonus (section 1073AA);

2  Point 1066-E1 (note 2)

After:

·          the general concept of ordinary income (sections 1072 and 1073);

insert:

·          the work bonus (section 1073AA);

3  Section 1072 (note 2)

After “see”, insert “section 1073AA (work bonus),”.

4  After Division 1 of Part 3.10

Insert:

Division 1AAA Work bonus

1073AA   Work bonus

             (1)  This section applies to a person if:

                     (a)  the person’s rate of social security pension is calculated in accordance with Pension Rate Calculator A at the end of section 1064 or Pension Rate Calculator C at the end of section 1066; and

                     (b)  the person has reached pension age.

Note:          For pension age see subsections 23(5A), (5B), (5C) and (5D).

             (2)  If the person’s employment income for an instalment period is greater than or equal to the income concession amount for that period, the amount of the person’s employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of that income concession amount.

             (3)  If a person’s employment income for an instalment period is less than the income concession amount for that period, the amount of the person’s employment income to be disregarded for that period for the purposes of Module E of that Rate Calculator is 50% of the person’s employment income for that period.

Definition

             (4)  The income concession amount is:

                     (a)  for an instalment period of 14 days—$500; and

                     (b)  for an instalment period of less than 14 days—the amount worked out using the following formula:

Interpretation

             (5)  For the purposes of this section, a person’s employment income for an instalment period includes an amount that is taken to have been earned, derived or received over that period because of subsection 1073A(1).

             (6)  To avoid doubt, apply this section before applying point 1064-E2 or point 1066-E2 (whichever is relevant).

Example 1: David and Amy are members of a couple. David earns $50 of employment income in an instalment period of 14 days and Amy earns $500 of employment income in that period.

                   For David, $25 of the $50 is disregarded for the purposes of the ordinary income test.

                   For Amy, $250 of the $500 is disregarded for the purposes of the ordinary income test.

Example 2: Ian and Simone are members of a couple. Ian earns no employment income in an instalment period of 14 days and Simone earns $1,000 of employment income in that period.

                   For Simone, $250 is disregarded for the purposes of the ordinary income test (which is 50% of the income concession amount).

5  Application

The amendment made by item 4 applies in respect of an instalment period that includes 20 September 2009 and later instalment periods.