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

Schedule 12 Advance payments

   

Social Security Act 1991

1  Subsection 23(1)

Insert:

advance payment qualifying amount , for a person, means:

                     (a)  if the person is receiving a social security pension worked out under Pension Rate Calculator A—the sum of the following amounts:

                              (i)  the person’s maximum basic rate;

                             (ii)  the amount (if any) by which the person’s pension supplement amount exceeds the person’s minimum pension supplement amount; or

                     (b)  otherwise—the result of paragraph (a) worked out as if the person were receiving a social security pension worked out under Pension Rate Calculator A.

2  Paragraph 1061A(1)(b)

Omit “made”, substitute “lodged”.

3  After subsection 1061A(2)

Insert:

Disqualification—age, disability support, wife and widow B pensions and carer payment

             (3)  A person is not qualified for an advance payment of an age pension, disability support pension, wife pension, carer payment or widow B pension if:

                     (a)  the maximum amount of advance payment to which the person would be entitled under Division 4 is less than 1 / 52 of the person’s advance payment qualifying amount; or

                     (b)  the amount of an advance payment of a social security entitlement that the person received in full (whether as a single lump sum or in instalments) more than 12 months ago has not been fully repaid; or

                     (c)  the person owes a debt to the Commonwealth (whether arising under this Act or not) that is recoverable under Part 5.2 by means of deductions from the person’s social security payment.

The amount worked out under paragraph (a) must be rounded to the nearest cent (rounding 0.5 cents upwards).

Note 1:       Paragraph (a) does not prevent payment of an advance payment in instalments of less than the amount worked out under that paragraph.

Note 2:       For advance payment qualifying amount , see subsection 23(1).

4  Subsection 1061A(4)

After “advance payment” (first occurring), insert “of a social security entitlement not covered by subsection (3)”.

Note:       The heading to subsection 1061A(4) is replaced by the heading “ Disqualification—other social security entitlements ”.

5  At the end of subsection 1061A(4)

Add:

Note:          Paragraph (a) does not prevent payment of an advance payment in instalments of less than $250.

6  Subsection 1061E(2)

Omit “made”, substitute “lodged”.

7  Before section 1061ED

Insert:

1061ECA   Amount of advance payment—age, disability support, wife and widow B pensions and carer payment

Application

             (1)  The amount of an advance payment of any of the following social security pensions is worked out according to this section:

                     (a)  age pension;

                     (b)  disability support pension;

                     (c)  wife pension;

                     (d)  carer payment;

                     (e)  widow B pension.

Amount of advance

             (2)  The amount of the advance payment is the smaller of the following amounts:

                     (a)  the amount of advance payment sought;

                     (b)  the maximum amount of advance payment payable to the person as worked out as follows:

Method statement

Step 1.   Work out 3 / 52 of the person’s advance payment qualifying amount.

Step 2.   Work out the annual rate at which the social security pension was payable to the person on the last payday before the application for the advance payment was lodged, disregarding:

               (a)     any amount payable by way of remote area allowance; and

              (b)     so much of the person’s pension supplement amount (if any) as is equal to the person’s minimum pension supplement amount.

Step 3.   Work out the smaller of the result of step 1 and 7.5% of the result of step 2.

Step 4.   Subtract the following from the result of step 3:

               (a)     each advance payment (if any) of a social security entitlement paid to the person during any of the 13 fortnights immediately before the application for the current advance payment was lodged;

              (b)     each other advance payment (if any) of a social security entitlement paid to the person that has not been fully repaid.

Step 5.   The result of step 4 (rounded to the nearest cent (rounding 0.5 cents upwards)) is the maximum amount of advance payment payable to the person.

Note 1:       The amount of the advance payment will be more than the minimum qualifying amount for the person (see paragraph 1061A(3)(a)).

Note 2:       For advance payment qualifying amount , see subsection 23(1).

Note:       The heading to section 1061ED is replaced by the heading “ Amount of advance payment—pension PP (single) ”.

8  Subsection 1061ED(1)

Repeal the subsection, substitute:

Application

             (1)  The amount of an advance payment of pension PP (single) is worked out according to this section.

9  Subsection 1061ED(2)

Omit “Subject to section 1061EH, the”, substitute “The”.

10  At the end of subsection 1061ED(2)

Add:

Note:          The amount of the advance payment will be at least $250 (see paragraph 1061A(4)(a)).

11  Subsection 1061ED(3) (definition of annual payment rate )

Repeal the definition, substitute:

annual payment rate means:

                     (a)  if the person was receiving pension PP (single) on the last payday before the application for the advance payment was lodged—the rate at which the pension was payable under the Pension PP (Single) Rate Calculator to the person on that payday, disregarding any amount payable by way of remote area allowance; or

                     (b)  if the person was receiving benefit PP (partnered) on the last payday before the application for the advance payment was lodged—the rate at which pension PP (single) is payable to the person under the Pension PP (Single) Rate Calculator on the person’s first pension PP (single) payday after the application for the advance payment was lodged, disregarding any amount payable by way of remote area allowance.

12  Subsection 1061ED(4) (example)

Omit “age pension”, substitute “pension PP (single)”.

13  Subsection 1061EE(2)

Omit “Subject to section 1061EH, the”, substitute “The”.

14  At the end of subsection 1061EE(2)

Add:

Note:          The amount of the advance payment will be at least $250 (see paragraph 1061A(4)(a)).

15  Subsection 1061EE(6) (paragraphs (a) and (b) of the definition of fortnightly payment rate )

Omit “made”, substitute “lodged”.

16  Section 1061EH

Repeal the section.

17  Application

The amendments made by this Schedule apply in relation to applications for advance payment lodged on or after 1 July 2010.