12Reduction in benefits

12 Reduction in benefits

12 Reduction in benefits

(1) For the Act, section 14AA(2)(b), the following method of calculating a reduction is prescribed—

where—

R is the amount of the reduction.

M is the amount of the benefit being reduced.

A is the portion of the benefit attributable to employer contributions, which is calculated in accordance with section 13.

B is the value of the benefit, calculated as—

(a) for a gratuity benefit, a preserved benefit or a lump sum benefit for which an election has been made or is deemed to have been made under the Act, section 14J that must be paid to or in relation to the member or former member of the police force—the amount of that benefit, or

(b) for an allowance that must be paid to or in relation to the member or former member—the amount calculated by STC as the capitalised value of the benefits payable to or in relation to the member or former member.

Q is the sum of the number of terms determined in accordance with section 14 to reflect the number of times the rate of tax, being the tax referred to in the Act, section 14AA(1), has changed.

(2) No benefit reduction applies where the value of A is less than 0.