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

Schedule 10 Transitional arrangements

Part 1 Main amendment

Social Security Act 1991

1  At the end of Schedule 1A

Add:

144   Saving and transitional provisions for section 93H

Saving provision

             (1)  Section 93H, as in force before 20 September 2009, continues to apply to set a person’s annual pension rate for the purposes of Division 6 of Part 2.2A if the start day for the age pension was before 20 September 2009.

Indexation of subsection 93H(4) amounts on 20 September 2009

             (2)  Part 3.16, as amended by Part 3 of Schedule 1 to the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 , applies to the indexation on 20 September 2009, and later indexation days, of the amounts in subsection 93H(4).

145   Saving provision for income test taper rate for disability support pensioners under 21 without dependent children

             (1)  Point 1066A-F9, as in force before 20 September 2009, continues to apply to working out a person’s rate of disability support pension under Pension Rate Calculator D in section 1066A if:

                     (a)  the person was receiving disability support pension immediately before that day at a rate worked out under that Calculator; and

                     (b)  the rate was worked out taking account of an ordinary income excess under point 1066A-F10 that was more than nil.

Note:          This clause is relevant only if Pension Rate Calculator D in section 1066A continues to apply to working out the person’s rate of disability support pension.

             (2)  Subclause (1) ceases to apply, and does not apply ever again, in relation to the person if:

                     (a)  the person’s rate of disability support pension under Pension Rate Calculator D in section 1066A for a day on or after 20 September 2009 is worked out taking account of an ordinary income excess under point 1066A-F10 that is nil or less; or

                     (b)  Pension Rate Calculator D in section 1066A ceases to apply for working out the person’s rate of disability support pension for a day on or after 20 September 2009; or

                     (c)  the person ceases to receive disability support pension on or after 20 September 2009.

146   Transitional provision for rates of certain social security pensions on and after 20 September 2009

Application

             (1)  This clause applies if:

                     (a)  on 19 September 2009 a person was receiving one of the following social security pensions:

                              (i)  age pension;

                             (ii)  disability support pension;

                            (iii)  wife pension;

                            (iv)  carer payment;

                             (v)  bereavement allowance;

                            (vi)   widow B pension;

                           (vii)   special needs pension; and

                     (b)  the person continues (without a break) to receive one of those social security pensions (whether or not of the same sort as the one the person received on that day).

Purpose

             (2)  This clause has effect for the purposes of working out the rate of one of those social security pensions for the person for a day (the relevant day ) after 19 September 2009 under point 1064-A1, 1065-A1 or 1066-A1, or under section 796 so far as one or more of those points are relevant because of that section.

Provisional annual payment rate

             (3)  The person’s provisional annual payment rate is taken to be the amount worked out under subclause (4) if the total of:

                     (a)  1 / 364 of that amount; and

                     (b)  the amount (if any) of DFISA that would be payable to the person on the relevant day assuming that:

                              (i)  the person’s provisional annual payment rate were the amount worked out under subclause (4); and

                             (ii)  the amendments made by Schedules 6 and 7 to the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 had not been made;

is greater than the total of:

                     (c)  1 / 364 of the person’s provisional annual payment rate apart from this clause; and

                     (d)  the amount (if any) of DFISA that would be payable to the person on the relevant day apart from this clause.

Note:          The provisional annual payment rate is an amount worked out under the method statement in whichever of points 1064-A1 and 1066-A1 is relevant. Point 1064-A1 may be relevant of its own force or because of point 1065-A1 or section 796.

             (4)  The amount is the one that would be the provisional annual payment rate under the relevant point if:

                     (a)  the maximum payment rate for the person were the total of:

                              (i)  the amount worked out under whichever of subclauses 147(1), (2), (3) and (4) is relevant to the person; and

                             (ii)  the amount (if any) per year calculated for the person under paragraph 1070A(b) (for rent assistance);

                            reduced, if subclause 147(1) or (2) is relevant to the person and an election by the person under subsection 1061VA(1) is in force, by the minimum pension supplement amount; and

                     (b)  the amendments made by Schedules 6 and 7 to the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 had not been made.

Note 1:       The maximum payment rate is an amount used in points 1064-A1 and 1066-A1.

Note 2:       Subclause 147(1) deals with a person in Australia who is not a member of a couple or is a member of an illness separated couple or respite care couple, or is partnered (partner in gaol).

Note 3:       Subclause 147(2) deals with a person in Australia who is a member of a couple (but not a member of an illness separated couple or respite care couple, and not partnered (partner in gaol)).

Note 4:       Subclause 147(3) deals with a person who has been outside Australia for more than 13 weeks and is not a member of a couple or is a member of an illness separated couple or respite care couple, or is partnered (partner in gaol).

Note 5:       Subclause 147(4) deals with a person who has been outside Australia for more than 13 weeks and is a member of a couple (but not a member of an illness separated couple or respite care couple, and not partnered (partner in gaol)).

Note 6:       The amount described in subparagraph (4)(a)(i) is indexed under sections 1191 to 1194 (CPI indexation) on and after 20 March 2010.

Limit on future application of subclause (3)

             (5)  Subclause (3) does not apply again for working out the rate of a social security pension of the person for a day after the relevant day if the amount worked out under subclause (4) for the relevant day is less than or equal to the person’s provisional annual payment rate for the relevant day apart from this clause.

Relationship with DFISA provisions

             (6)  This clause does not affect the operation of Part VIIAB (Defence Force Income Support Allowance and related payments) of the Veterans’ Entitlements Act 1986 for the purposes of working out amounts of payments under that Part after working out the provisional annual payment rate for a social security pension taking account of this clause.

147   Amounts for subparagraph 146(4)(a)(i)

Single Australian resident in Australia

             (1)  For the purposes of subparagraph 146(4)(a)(i), work out the amount as follows, if, on the relevant day:

                     (a)  the person’s family situation is any of the following:

                              (i)  not a member of a couple;

                             (ii)  member of an illness separated couple;

                            (iii)  member of a respite care couple;

                            (iv)  partnered (partner in gaol); and

                     (b)  the person is residing in Australia; and

                     (c)  the person either:

                              (i)  is in Australia; or

                             (ii)  is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks.

Method statement

Step 1.   Work out what each of the following amounts (described using the abbreviation used in Part 3.16 for the amount) would be on 20 September 2009, taking account of indexation (if any) under that Part on that day, if the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 had not been enacted:

               (a)     the amount that would be the pension MBR for a person who is not a member of a couple assuming that section 1195 did not apply on 20 September 2009;

              (b)     pension supplement for a person who is not (and was not on 1 July 2000) a member of a couple;

               (c)     pension PA “single” rate;

              (d)     TA (Internet) “single” rate;

               (e)     UA “single” rate.

Step 2.   Identify the greater of the amount described in paragraph (e) of step 1 and $525.20 (or either of them if they are the same).

Step 3.   Add up all the amounts worked out under step 1 and the amount identified under step 2.

Step 4.   If the result of step 3 is not a multiple of $2.60, round that result up to the next multiple of $2.60.

Note 1:       For member of a couple , illness separated couple , respite care couple and partnered (partner in gaol) see section 4.

Note 2:       Subsection 7(3) is relevant to determining whether a person is residing in Australia.

Note 3:       Section 1190 explains the abbreviations used in Part 3.16.

Partnered Australian resident in Australia

             (2)  For the purposes of subparagraph 146(4)(a)(i), work out the amount as follows, if, on the relevant day:

                     (a)  the person is a member of a couple, but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol); and

                     (b)  the person is residing in Australia; and

                     (c)  the person either:

                              (i)  is in Australia; or

                             (ii)  is temporarily absent from Australia and has been so for a continuous period not exceeding 13 weeks.

Method statement

Step 1.   Work out what each of the following amounts (described using the abbreviation used in Part 3.16 for the amount) would be on 20 September 2009, taking account of indexation (if any) under that Part on that day, if the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 had not been enacted:

               (a)     the amount that would be the pension MBR for a person who is a member of a couple (but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol)) assuming that section 1195 did not apply on 20 September 2009;

              (b)     pension supplement for a person who is (and was on 1 July 2000) a member of a couple (but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol));

               (c)     Pension PA “partnered” (item 2) rate;

              (d)     TA (Internet) “partnered” (item 5) rate;

               (e)     half the UA “single” rate.

Step 2.   Identify the greater of the amount described in paragraph (e) of step 1 and $262.60 (or either of them if they are the same).

Step 3.   Add up all the amounts worked out under step 1 and the amount identified under step 2.

Step 4.   If the result of step 3 is not a multiple of $2.60, round that result up to the next multiple of $2.60.

Note 1:       For member of a couple , partnered , illness separated couple , respite care couple and partnered (partner in gaol) see section 4.

Note 2:       Subsection 7(3) is relevant to determining whether a person is residing in Australia.

Note 3:       Section 1190 explains the abbreviations used in Part 3.16.

Single person not covered by subclause (1)

             (3)  For the purposes of subparagraph 146(4)(a)(i), work out the amount as follows, if, on the relevant day:

                     (a)  the person’s family situation is any of the following:

                              (i)  not a member of a couple;

                             (ii)  member of an illness separated couple;

                            (iii)  member of a respite care couple;

                            (iv)  partnered (partner in gaol); and

                     (b)  the person either:

                              (i)  is not residing in Australia; or

                             (ii)  is absent from Australia and has been so for a continuous period exceeding 13 weeks.

Method statement

Step 1.   Work out what each of the following amounts (described using the abbreviation used in Part 3.16 for the amount) would be on 20 September 2009, taking account of indexation under that Part on that day, if the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 had not been enacted:

               (a)     the amount that would be the pension MBR for a person who is not a member of a couple assuming that section 1195 did not apply on 20 September 2009;

              (b)     pension supplement for a person who is not (and was not on 1 July 2000) a member of a couple.

Step 2.   Add up the amounts worked out under step 1.

Note 1:       For member of a couple , illness separated couple , respite care couple and partnered (partner in gaol) see section 4.

Note 2:       Subsection 7(3) is relevant to determining whether a person is residing in Australia.

Note 3:       Section 1190 explains the abbreviations used in Part 3.16.

Partnered person not covered by subclause (2)

             (4)  For the purposes of subparagraph 146(4)(a)(i), work out the amount as follows, if, on the relevant day:

                     (a)  the person is a member of a couple, but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol); and

                     (b)  the person either:

                              (i)  is not residing in Australia; or

                             (ii)  is absent from Australia and has been so for a continuous period exceeding 13 weeks.

Method statement

Step 1.   Work out what each of the following amounts (described using the abbreviation used in Part 3.16 for the amount) would be on 20 September 2009, taking account of indexation under that Part on that day, if the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Act 2009 had not been enacted:

               (a)     the amount that would be the pension MBR for a person who is a member of a couple (but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol)) assuming that section 1195 did not apply on 20 September 2009;

              (b)     pension supplement for a person who is (and was on 1 July 2000) a member of a couple (but not a member of an illness separated couple or respite care couple and not partnered (partner in gaol)).

Step 2.   Add up the amounts worked out under step 1.

Note 1:       For member of a couple , partnered , illness separated couple , respite care couple and partnered (partner in gaol) see section 4.

Note 2:       Subsection 7(3) is relevant to determining whether a person is residing in Australia.

Note 3:       Section 1190 explains the abbreviations used in Part 3.16.

148   Rate of social security payments to partners of persons affected by clause 146

             (1)  This clause applies if clause 146 applies to a person who is a member of a couple and that clause affects the rate at which a social security pension is payable to the person.

             (2)  In working out the amount of a social security payment payable to a partner of the person, assume that the social security pension payable to the person is payable at the rate at which it would be payable if clause 146 had not been enacted.

149   Payment and income tax consequences of receiving social security pension at rate affected by clause 146

Application

             (1)  This clause applies if clause 146 affects the rate at which a social security pension is payable to a person.

Purpose

             (2)  The purpose of this clause is to ensure that the person is treated appropriately in relation to the payment, and income taxation, of the pension by modifying the operation of the social security law (and thus affecting the related income tax law) in relation to the person and the pension.

Note:          This clause does not modify the operation of subsection 20A(4), which provides for working out the person’s minimum pension supplement amount.

Pension supplement amount

             (3)  The social security law applies in relation to the person’s pension as if the amount described in subparagraph 146(4)(a)(i), as affected by any indexation and any relevant reduction described in paragraph 146(4)(a), were an amount added under the pension supplement Module of the relevant Pension Rate Calculator (and therefore used to work out the rate of the pension).

Note 1:       One effect of subclause (3) is that the amount is the person’s pension supplement amount (as defined in subsection 23(1)).

Note 2:       If that amount exceeds the person’s pension supplement basic amount (as affected by subclause (4)), other effects of subclause (3) include the following:

(a)    the excess being tax-exempt pension supplement under subsection 20A(6) of this Act;

(b)    Part 2.25C (Quarterly pension supplement) of this Act applying, which may affect timing of payment of some of the pension under the Administration Act;

(c)    the possibility of the minimum amount of fortnightly instalments of the pension being affected under section 43 of the Administration Act;

(d)    telephone allowance not being payable because of section 1061R of this Act;

(e)    utilities allowance not being payable because of section 1061T of this Act.

Note 3:       Yet another effect of subclause (3) is that section 1210 will affect the operation of reductions of the maximum payment rate because of the income test and assets test.

Pension supplement basic amount

             (4)  The social security law applies in relation to the person’s pension as if:

                     (a)  each reference in the table in subsection 20A(5) to $507 were a reference to $14,814.80; and

                     (b)  the reference in the table in subsection 20A(5) to $423.80 were a reference to $12,373.40.

Note 1:       This affects the person’s pension supplement basic amount.

Note 2:       The provisions for indexing amounts in the table in subsection 20A(5) apply to the higher figures mentioned in this subclause.



 

Part 2 Related amendments

Division 1—Amendments commencing on 20 September 2009

Social Security Act 1991

2  At the end of point 1064-A1

Add:

Note 7:       Clause 146 of Schedule 1A may affect the provisional annual payment rate in step 11.

3  At the end of point 1066-A1

Add:

Note 6:       Clause 146 of Schedule 1A may affect the provisional annual payment rate in step 11.

Division 2—Amendments commencing on 21 September 2009

Social Security Act 1991

4  Section 1190 (at the end of the table)

Add:

 

 

Maximum transitional pension rates

 

 

66.

Maximum transitional pension rates

Maximum transitional pension rates

Subparagraph 146(4)(a)(i)

5  Subsection 1191(1) (at the end of the table)

Add:

 

 

Maximum transitional pension rates

 

 

 

 

38.

Maximum transitional pension rates

(a) 20 March

(b) 20 September

(a) December

(b) June

highest June or December quarter before reference quarter (but not earlier than June quarter 2008)

$2.60