44Automatic conversion of small pensions to lump sums

44 Automatic conversion of small pensions to lump sums

(1) This section applies if, on a day (the conversion day), the annual rate of a single pension payable to or for one or more persons under this Act is less than: (a) $5,000 a year; or (b) if a greater rate is prescribed by the rules—that greater rate. (2) The pension ceases to be payable on the conversion day (and is not payable on any later day), despite any other provision of this Act. (3) Instead, a single lump sum is payable to or for the person or persons. (4) The amount of the lump sum is worked out using the formula: Start formula 16.5 times Annual rate of the pension on the conversion day, subject to subsection (5), if relevant end formula (5) If: (a) the pension is invalid’s spouse pension or pension payable under section 34 (because the surviving spouse of a covered ADF member who dies chose to receive the benefit for the member’s death as a pension); and (b) the annual rate of the pension on the conversion day is affected by the spouse pension child supplement percentage; work out the lump sum using the formula in subsection (4) as if the annual rate of the pension on the conversion day were not increased by that percentage.