Division 3Residence factor

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Turn the raw legal text into a practical explanation grounded in Social Security (International Agreements) Act 1999.

An Act to give effect to international social security agreements, and for related purposes ## Part 1—Preliminary #### 1 Short title This Act may be cited as the Social Security (International Agreements) Act 1999. #### 2 Commencement This Act commences on 20 March 2000. #### 3 Interpretation Unless a contrary intention appears, an expression that is used in the Social Security Act 1991 has the same meaning, when used in this Act, as in the Social Security Act 1991. #### 4 Social security law This Act forms part of the social security law. #### 4A Norfolk Island This Act extends to Norfolk Island. ## Part 2—International social security agreements #### 5 Scheduled international social security agreements (1) For the purposes of a provision of the social security law, an agreement is a scheduled international social security agreement if: (a) the agreement is between Australia and another country; and (b) the agreement relates to reciprocity in social security or superannuation matters; and (c) the text of the agreement is set out in a Schedule to this Act. (2) The reference in subsection (1) to a scheduled international social security agreement includes a reference to such an agreement as amended, or otherwise affected in its operation, by a further agreement or further agreements between Australia and the other country concerned. #### 6 Overriding of social security law by scheduled international social security agreements (1) The provisions of a scheduled international social security agreement have effect despite anything in the social security law. (2) Subsection (1) applies to a provision of an agreement only in so far as the provision is in force and affects the operation of the social security law. (3) If: (a) immediately before he or she reaches pension age, a person is receiving a social security payment (other than age pension) solely because of the operation of a scheduled international social security agreement; and (b) on reaching pension age, the person becomes qualified for age pension because of the operation of paragraph 43(1)(c) of the Social Security Act 1991; the age pension is taken to be payable to the person under the agreement referred to in paragraph (a). #### 7 Amendment of Schedules by regulations (1) The regulations may make provision amending a Schedule to this Act so as to set out in the Schedule the text of an agreement (the amending agreement) that amends, or otherwise affects the operation of, another agreement set out in the Schedule. (2) Regulations making provision by virtue of subsection (1) must not come into operation on a day earlier than the day on which the amending agreement comes into force for Australia. #### 8 Addition of new scheduled international social security agreements (1) The regulations may add to this Act a Schedule setting out the terms of an agreement between Australia and another country if the agreement relates to reciprocity in social security or superannuation matters. (2) Regulations made by virtue of subsection (1) must not come into operation on a day earlier than the day on which the agreement concerned comes into operation for Australia. #### 9 Repeal of Schedule The regulations may repeal a Schedule to this Act. #### 10 Parenting payment claimed under agreement (1) If: (a) a scheduled international social security agreement authorises a person who is outside Australia to lodge a claim for parenting payment; and (b) the person, while outside Australia, lodges a claim for parenting payment; and (c) the person is not a member of a couple; and (d) the person would qualify for parenting payment if the following provisions had not been enacted: (i) paragraph 500(1)(b) or (c) of the Social Security Act 1991; (ii) subparagraph 500(1)(d)(ii) of that Act; (iii) subsection 5(21), (23) or (24) of that Act; then: (e) in determining whether the person is qualified for parenting payment, assume that the provisions referred to in paragraph (d) had not been enacted; and (f) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement. (2) If: (a) a person who is in Australia lodges a claim for parenting payment; and (b) the person is not a member of a couple; and (c) the person would qualify for parenting payment under a scheduled international social security agreement if subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; then: (d) in determining whether the person is qualified for parenting payment, assume that subparagraph 500(1)(d)(ii) of the Social Security Act 1991 had not been enacted; and (e) if parenting payment is payable to the person, it is taken to be payable to the person under the scheduled international social security agreement. #### 11 Portability of international agreement pension or allowance A social security payment payable under a scheduled international social security agreement is not payable to a person for a period when the person is outside Australia unless the agreement provides that the pension or allowance is payable outside Australia. #### 12 Rate of pension or allowance payable under agreement where rate to be determined under law of Australia (1) If: (a) a social security payment is payable to a person under a scheduled international social security agreement; and (b) the person is outside Australia; and (c) the agreement provides for the rate of the social security payment to be determined according to the law of Australia; the rate of the social security payment is the person’s international agreement portability rate worked out in accordance with Part 3. (2) A reference in the agreement to a person’s period of residence in Australia is to be taken to be a reference to the period of the person’s Australian working life residence for the purposes of this Act. ## Part 3—Calculation of international agreement portability rates ### Division 1—Overall rate calculation process #### 13 Overall calculation process (1) A person’s international agreement portability rate is worked out as follows: (a) the period of the person’s Australian working life residence in Australia (the residence period) is worked out according to Division 2; (b) the person’s residence factor is worked out according to Division 3; (c) the person’s notional agreement pension rate is worked out by calculating the rate that would be the person’s social security payment rate if this section did not apply to the person but taking into account section 14; (d) if the person’s notional agreement pension rate is nil, the international agreement portability rate is also nil; (e) if the person’s notional agreement pension rate is not nil, add the additional child amount or amounts (that are applicable in accordance with section 14A) to the person’s notional agreement pension rate. This new amount is the person’s total notional rate; (f) multiply the person’s total notional rate by the person’s residence factor: the result is the person’s international agreement portability rate. (2) If a person’s international agreement portability rate as calculated under subsection (1) would exceed the rate (the notional rate) that would be the person’s notional agreement pension rate under that subsection if the person had a residence factor of 1, the person’s international agreement portability rate is the rate that equals the notional rate. #### 14 Amounts to be treated as income (1) If a scheduled international social security agreement provides that certain amounts are to be treated as income of a person—those amounts are to be treated as income of the person for the purposes of this Part. (2) If a scheduled international social security agreement provides that certain amounts are to be treated as not being income of a person—those amounts are to be treated as not being income of the person for the purposes of this Part. #### 14A Additional child amounts For the purpose of the step in the calculation of a person’s international agreement portability rate that is described in paragraph 13(1)(e), the additional child amounts that may be applicable are set out in the following table. They are annual amounts. The amount in item 3 is only applicable if an amount in item 1 or 2 is to be paid to a person without a partner. ```html <table cellspacing="0" cellpadding="0" style="margin-left:0.05pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:344.8pt; border-top:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">Additional child amounts</td></tr><tr><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">Item</td><td style="width:237.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">Family situation</td><td style="width:61.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">Additional child amount</td></tr></thead><tbody><tr style="height:15pt"><td style="width:24.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">1</td><td style="width:237.35pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">For each dependent child under 13 years of age</td><td style="width:61.35pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">$1,957.80</td></tr><tr style="height:15pt"><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">2</td><td style="width:237.35pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">For each dependent child who has reached 13, but is under 16, years of age</td><td style="width:61.35pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">$2,732.60</td></tr><tr style="height:15pt"><td style="width:24.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">3</td><td style="width:237.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">For a person without a partner</td><td style="width:61.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top">$962.00</td></tr></tbody></table> ``` > Note: Additional child amounts are indexed annually in line with CPI increases (see sections 1190 and 1191 of the Social Security Act 1991). ### Division 2—Australian working life residence #### 15 Working life For the purposes of this Division, a person’s working life is the period beginning when the person turns 16 and ending when the person reaches pension age. #### 16 Australian working life residence generally Subject to sections 17 and 21, a person’s period of Australian working life residence at a particular time is the number of months in the period, or the aggregate of the periods, during the person’s working life during which the person has, up to that time, been an Australian resident. #### 17 Calculation of period of residence (1) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months, the period is to be increased by one month. (2) If a person’s period of Australian working life residence would, apart from this subsection, be a number of whole months and a day or days, the period is to be increased so that it is equal to the number of months plus one month. #### 21 Australian working life residence: recipient of pension PP (single) If: (a) a person is receiving a pension PP (single); and (b) the person became qualified for the pension because the person’s former partner died; and (c) the partner’s period of Australian working life residence (immediately before the partner’s death) is longer than the period that would now be the person’s period of Australian working life residence under section 17; the person’s period of Australian working life residence is to be equal to the partner’s period of Australian working life residence (immediately before the partner’s death). ### Division 3—Residence factor #### 23 Residence factor: Australian working life residence of 35 years or more If a person’s period of Australian working life residence is 420 months (35 years) or more, the person’s residence factor is 1. #### 24 Residence factor: Australian working life residence of less than 35 years If a person’s period of Australian working life residence is less than 420 months (35 years), the person’s residence factor is the fraction represented by: ![Start formula start fraction Person's period of Australian working life residence over 420 end fraction end formula](image.002.png) ## Part 4—Regulations #### 25 Regulations The Governor‑General may make regulations prescribing matters: (a) required or permitted by this Act to be prescribed; or (b) necessary or convenient for carrying out or giving effect to this Act.