Veterans' Entitlements Act 1986

Part I—Preliminary

1 Short title

This Act may be cited as the Veterans’ Entitlements Act 1986.

2 Commencement

This Act shall come into operation on a date to be fixed by Proclamation.

3 Repeal

(1) The Acts specified in Parts I, II, III, IV and V of Schedule 1 are repealed. (2) The Acts specified in column 1 of Part VI of Schedule 1 are amended as set out in columns 2 and 3 of that Schedule.

4 Extension of Act to external Territories

This Act extends to the external Territories.

4A Application of the Criminal Code

Chapter 2 of the Criminal Code applies to all offences against this Act.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

4B Secretary may arrange for use of computer programs to make decisions

(1) The Secretary may arrange for the use, under the Secretary’s control, of computer programs for any purposes for which the Commission may, or must, under this Act or a legislative instrument made for the purposes of this Act: (a) make a decision; or (b) exercise any power or comply with any obligation; or (c) do anything else related to making a decision or exercising a power or complying with an obligation. (1A) Subsection (1) does not apply to the following: (a) a decision that the death of a veteran was not war‑caused; (b) a decision that an injury suffered by a veteran is not a war‑caused injury; (c) a decision that a disease contracted by a veteran is not a war‑caused disease; (d) a decision that the death of a member of the Forces (within the meaning of Part IV), or a member of a Peacekeeping Force (within the meaning of that Part), was not defence‑caused; (e) a decision that an injury suffered by a member of the Forces (within the meaning of Part IV), or a member of a Peacekeeping Force (within the meaning of that Part), is not a defence‑caused injury; (f) a decision that a disease contracted by a member of the Forces (within the meaning of Part IV), or a member of a Peacekeeping Force (within the meaning of that Part), is not a defence‑caused disease. (2) For the purposes of this Act or the legislative instrument, the Commission is taken to have: (a) made a decision; or (b) exercised a power or complied with an obligation; or (c) done something else related to the making of a decision or the exercise of a power or the compliance with an obligation; that was made, exercised, complied with or done by the operation of a computer program under an arrangement made under subsection (1). Substituted decisions (3) The Commission may, under a provision of this Act or of the legislative instrument, make a decision in substitution for a decision the Commission is taken to have made under paragraph (2)(a) if the Commission is satisfied that the decision made by the operation of the computer program is incorrect.

Note: For review of a decision made in substitution, see Parts IX and X.

(4) Subsection (3) does not limit any other provision of this Act that provide for the review or reconsideration of a decision.

5 Definitions—simplified outline

Sections 5A to 11B contain definitions of terms that are used in this Act.

Subsection 5Q(1) contains an entry for each expression that is defined for the purposes of this Act. That subsection is like a Dictionary.

The entry is either an actual definition of the expression or a signpost definition that identifies the provision that defines the expression.

Many other sections in this Part contain the actual definitions relating to a particular topic. For example, sections 6 to 6F deal with operational service and section 5H contains income test definitions.

5A Repatriation Commission definitions

In this Act, unless the contrary intention appears:

acting commissioner means a person who is acting as a commissioner because of an appointment under section 191.

Acting Deputy President means a commissioner or acting commissioner who is acting as Deputy President because of an appointment under section 192.

Acting President means a commissioner or acting commissioner who is acting as President because of an appointment under section 192 or 193.

Commission means the Repatriation Commission continued in existence by section 179.

commissioner means a person holding an office of commissioner because of an appointment under section 182.

Deputy President means the Deputy President of the Commission.

President means the President of the Commission.

5AB Repatriation Medical Authority and Specialist Medical Review Council definitions

(1) In this Act, unless the contrary intention appears:

Chairperson means the Chairperson of the Repatriation Medical Authority.

Convener means the Convener of the Review Council.

councillor means the Convener or any other person holding office as a member of the Review Council.

member means the Chairperson or any other person holding office as a member of the Repatriation Medical Authority.

registered medical practitioner means a person registered or licensed as a medical practitioner under a law of a State or Territory but does not include a person so registered or licensed:

(a) whose registration, or licence to practice, as a medical practitioner in any State or Territory has been suspended, or cancelled, following an inquiry relating to his or her conduct; and
(b) who has not, after that suspension or cancellation, again been authorised to register or practise as a medical practitioner in that State or Territory.

Review Council means the Specialist Medical Review Council established by section 196V.

sound medical‑scientific evidence, in relation to a particular kind of injury, disease or death, has the meaning given by subsection (2).

(2) Information about a particular kind of injury, disease or death is taken to be sound medical‑scientific evidence if: (a) the information: (i) is consistent with material relating to medical science that has been published in a medical or scientific publication and has been, in the opinion of the Repatriation Medical Authority, subjected to a peer review process; or (ii) in accordance with generally accepted medical practice, would serve as the basis for the diagnosis and management of a medical condition; and (b) in the case of information about how that kind of injury, disease or death may be caused—meets the applicable criteria for assessing causation currently applied in the field of epidemiology.

5B War and operational area related definitions

(1) In this Act, unless the contrary intention appears:

allotted for duty in an operational area has the meaning given by subsection (2).

operational area means an area described in column 1 of Schedule 2 during the period specified in column 2 of Schedule 2 opposite to the description of the area in column 1.

period of hostilities means:

(a) World War 1 from its commencement on 4 August 1914 to 11 November 1918 (both included); or
(b) World War 2 from its commencement on 3 September 1939 to 29 October 1945 (both included); or
(c) the period of hostilities in respect of Korea from 27 June 1950 to 19 April 1956 (both included); or
(d) the period of hostilities in respect of Malaya from 29 June 1950 to 31 August 1957 (both included); or
(e) the period of hostilities in respect of war‑like operations in operational areas from 31 July 1962 to 11 January 1973 (both included).

war to which this Act applies means World War 1 or World War 2.

World War 1 means:

(a) the war that commenced on 4 August 1914; and
(b) any other war in which the Crown became engaged after 4 August 1914 and before 11 November 1918.

World War 2 means:

(a) the war that commenced on 3 September 1939; and
(b) any other war in which the Crown became engaged after 3 September 1939 and before 3 September 1945.

Allotted for duty (2) A reference in this Act to a person, or a unit of the Defence Force, that was allotted for duty in an operational area is a reference: (a) in the case of duty that was carried out in an operational area described in item 1, 2, 3, 4, 5, 6, 7 or 8 of Schedule 2 (in column 1)—to a person, or unit of the Defence Force, that is allotted for duty in the area (whether retrospectively or otherwise) by written instrument issued by the Defence Force for use by the Commission in determining a person’s eligibility for entitlements under this Act; or (b) in the case of duty that was carried out in an operational area described in item 3A, 3B, 9, 10, 11, 12, 13, 14 or 15 of Schedule 2 (in column 1)—to a person, or unit of the Defence Force, that is allotted for duty in the area (whether retrospectively or otherwise) by written instrument signed by the Vice Chief of the Defence Force for use by the Commission in determining a person’s eligibility for entitlements under this Act; or (c) to a person, or unit of the Defence Force, that is, by written instrument signed by the Defence Minister, taken to have been allotted for duty in an operational area described in item 4 or 8 in Schedule 2 (in column 1). End of World War 1 and 2 (3) For the purposes of this Act: (a) World War 1 is taken to have ended on 1 September 1921; and (b) World War 2 is taken to have ended on 28 April 1952.

Note 1: 1 September 1921 is the date fixed by Proclamation under the Termination of the Present War (Definition) Act 1919.

Note 2: 28 April 1952 is the date on which the Treaty of Peace with Japan came into force.

5C Eligibility related definitions

(1) In this Act, unless the contrary intention appears:

allied country means any country (not being Australia or a Commonwealth country):

(a) that was, at the relevant time, at war with the enemy; or
(b) the forces of which were, at the relevant time, engaged in an operational area against forces against which the forces of the Commonwealth were engaged in that area;

and includes: (c) a state, province or other territory that is one of 2 or more territories that together form, or formed at the relevant time, a discrete part of such a country; and (d) a place that is, or was at the relevant time, a territory, dependency or colony (however described) of such a country.

allied mariner means a person who:

(a) was during the period of World War 2 from its commencement to and including 29 October 1945:
(i) a master, officer or seaman employed under agreement, or an apprentice employed under indenture, in sea‑going service on a ship that was engaged in trading; or
(ii) a master, officer, seaman or apprentice employed in a lighthouse tender or pilot ship; or
(iii) employed as a pilot; or
(iv) a master, officer, seaman or apprentice employed in sea‑going service on a ship (being a hospital ship, troop transport, supply ship, tug, cable ship, salvage ship, dredge, fishing vessel or fisheries investigation vessel) that was operated by, or on behalf of, a foreign country; and
(b) was at any time during the course of that employment during the period referred to in paragraph (a) on a ship that was:
(i) operating from a port in Australia or from a port in a Commonwealth country or an allied country; or
(ii) engaged in trading with Australia or with a Commonwealth country or an allied country; or
(iii) engaged in providing assistance or support to the Defence Force, or to the forces, or any part of the forces, of a Commonwealth country or an allied country; or
(iv) engaged in providing assistance or support to Australia or to a Commonwealth country or an allied country;

but does not include: (c) an Australian mariner; or (d) a person who has, at any time, been employed by a foreign country that was, at that time, at war with Australia; or (e) a person who has, at any time, been employed: (i) on a ship that operated to, or was operating from, a port in a country that was, at that time, at war with Australia; or (ii) on a ship that was engaged in trading with a country that was, at that time, at war with Australia; or (iii) on a ship that was engaged in providing assistance or support to the enemy or to a country that was, at that time, at war with Australia.

allied veteran means a person:

(a) who has been appointed or enlisted as a member of the defence force established by an allied country; and
(b) who has rendered continuous full‑time service as such a member during a period of hostilities;

but does not include a person who has served at any time: (c) in the forces of a country that was, at that time, at war with Australia, or in forces engaged in supporting or assisting the forces of such a country; or (d) in forces that were, at that time, engaged in war‑like operations against the Naval, Military or Air Forces of Australia.

Note: See also subsection 5R(2).

Australian mariner means a person who was, during the period of World War 2 from its commencement to and including 29 October 1945:

(a) a master, officer or seaman employed under agreement, or an apprentice employed under indenture, in sea‑going service on a ship registered in Australia that was engaged in trading between a port in a State or Territory and any other port; or
(b) a master, officer or seaman employed under agreement, or an apprentice employed under indenture, in sea‑going service on a ship registered outside Australia who was, or whose dependants were, resident in Australia for at least 12 months immediately before he or she entered into the agreement or indenture; or
(c) a master, officer, seaman or apprentice employed on a lighthouse tender, or pilot ship of the Commonwealth or of a State; or
(d) a pilot employed or licensed by Australia or a State or by an authority constituted by or under a law of the Commonwealth or of a State; or
(e) a master, officer, seaman or apprentice employed in sea‑going service on a ship owned in Australia and operating from an Australian port, being a hospital ship, troop transport, supply ship, tug, cable ship, salvage ship, dredge, fishing vessel or fisheries investigation vessel; or
(f) a member or employee of the Commonwealth Salvage Board engaged in sea‑going service under the direction of that Board; or
(g) a master, officer, seaman or apprentice employed in sea‑going service on a ship registered in New Zealand who the Commission is satisfied was engaged in Australia and is not entitled to compensation under a law of a Commonwealth country providing for the payment of pensions and other payments to seamen who suffered death or disablement as a result of World War 2.

Commonwealth country means a country (other than Australia) that is, or was at the relevant time, a part of the Dominions of the Crown, and includes:

(a) a state, province or other territory that is one of 2 or more territories that together form, or formed at the relevant time, a discrete part of such a country; and
(b) a place that is, or was at the relevant time, a territory, dependency or colony (however described) of a part of such a country.

Commonwealth veteran means a person who rendered continuous full‑time service as a member of:

(a) the naval, military or air forces; or
(b) the nursing or auxiliary services of the naval, military or air forces; or
(c) the women’s branch of the naval, military or air forces;

of a Commonwealth country during a period of hostilities.

continuous full‑time service means:

(a) in relation to a member of the Defence Force:
(i) service in the Naval Forces of the Commonwealth of the kind known as continuous full‑time naval service; or
(ii) service in the Military Forces of the Commonwealth of the kind known as continuous full‑time military service; or
(iii) service in the Air Force of the Commonwealth of the kind known as continuous full‑time air force service; or
(b) in relation to a member of the naval, military or air forces of a Commonwealth country or an allied country—service in those forces of a kind similar to a kind of service referred to in subparagraph (a)(i), (ii) or (iii).

Note: See also subsection 5R(1).

Defence Force has the same meaning as in the Defence Act 1903.

defence force established by a Commonwealth country means:

(a) the naval, military or air forces of the country; or
(b) the nursing and auxiliary services of the naval, military or air forces of the country; or
(c) the women’s branch of the naval, military or air forces of the country.

defence force established by an allied country means:

(a) the regular naval, military or air forces; and
(b) the nursing or auxiliary services of the regular naval, military or air forces; and
(c) the women’s branch of the regular naval, military or air forces;

raised by an allied country and operated by the country with regular military‑like lines of command, that is to say, raised and operated in such a manner that the members of those forces and services: (d) were formally appointed to, or enlisted in, those forces or services; and (e) were required to wear uniforms or insignia distinguishing them as members of those forces or services; and (f) were required to carry arms openly; and (g) were subject to the rules and conventions of warfare.

Note 1: For extended meaning of this term in relation to a government‑in‑exile, see subsection (3).

Note 2: For an extended meaning of this term in relation to an allied veteran see subsection 5R(2).

eligible civilian means a person:

(a) who was killed, or detained by the enemy, during World War 2; and
(b) who was, at the time the person was killed or first detained:
(i) a British subject; and
(ii) a resident, but not an indigenous inhabitant, of the Territory of Papua or the Territory of New Guinea; and
(c) who was not, at that time:
(i) rendering service as a member of the Defence Force; or
(ii) employed by the Commonwealth on a special mission outside Australia.

enemy means:

(a) in relation to World War 1 or World War 2—the naval, military or air forces, or any part of the naval, military or air forces, of a State at war with the Crown during that war; and
(b) in relation to service in, or a period of hostilities in respect of, an operational area—the naval, military or air forces against which the Naval, Military or Air Forces of the Commonwealth were engaged in that operational area; and
(c) persons assisting any of those forces.

fishing vessel means a ship employed in connection with the occupation of sea fishing for profit.

former refugee means a person who was a refugee but does not include a person who ceased to be a refugee because his or her entry permit or visa (as the case may be) was cancelled.

government‑in‑exile, in relation to an allied country, includes a person, or group of persons, claiming to represent, or administer, the country or a part of the country or the people of the country.

member of a unit of the Defence Force means:

(a) a member of the Defence Force; or
(b) another person who is:
(i) a member of the unit; or
(ii) attached to the unit; or
(iii) appointed for continuous full‑time service with the unit.

Note: See also subsection 5R(1).

member of the Defence Force includes a person appointed for continuous full‑time service with a unit of the Defence Force.

Note: See also subsection (2).

member of the Interim Forces means a person who:

(a) enlisted or re‑engaged in, or was appointed or re‑appointed to, the Defence Force for continuous full‑time service for a term of not more than 2 years; or
(b) was appointed for continuous full‑time service with a unit of the Defence Force for a term of not more than 2 years;

on or after 1 July 1947 and before 1 July 1949.

non‑warlike service means service in the Defence Force of a kind determined in writing by the Defence Minister to be non‑warlike service.

operational service has the meaning given by sections 6 to 6F.

qualifying service has the meaning given in section 7A.

refugee has the meaning given by subsection (4).

special mission means a mission that, in the opinion of the Commission, was of special assistance to the Commonwealth in the prosecution of a war to which this Act applies.

unit of the Defence Force means a body, contingent or detachment of the Defence Force.

veteran means:

(a) a person (including a deceased person):
(i) who is, because of section 7, taken to have rendered eligible war service; or
(ii) in respect of whom a pension is, or pensions are, payable under subsection 13(6); and
(b) in Parts III and VIIC also includes a person who is:
(i) a Commonwealth veteran; or
(ii) an allied veteran; or
(iv) an allied mariner.

Note: Commonwealth veteran, allied veteran and allied mariner are defined in this subsection.

warlike service means service in the Defence Force of a kind determined in writing by the Defence Minister to be warlike service.

Army Medical Corps Nursing Service (2) For the purposes of this Act, a member of the Army Medical Corps Nursing Service who: (a) rendered service during World War 1, either within or outside Australia; and (b) rendered the service as such a member in accordance with an acceptance or appointment by the Director‑General of Medical Services for service outside Australia; is taken to have been serving as a member of the Defence Force while rendering that service. Defence force of government‑in‑exile (3) In relation to any period during which there was a government‑in‑exile in relation to an allied country, defence force established by an allied country includes: (a) the regular naval, military or air forces; and (b) the nursing or auxiliary services of the regular naval, military or air forces; and (c) the women’s branch of the regular naval, military or air forces; raised by that government‑in‑exile and operated by it with regular military‑like lines of command, that is to say, raised and operated in such a manner that the members of those forces and services: (d) were formally appointed to, or enlisted in, those forces or services; and (e) were required to wear uniforms or insignia distinguishing them as members of those forces or services; and (f) were required to carry arms openly; and (g) were subject to the rules and conventions of warfare.

Note: For an extended meaning of the defence force of a government‑in‑exile in relation to an allied veteran see subsection 5R(2).

Refugee (4) For the purposes of Part III, a person is a refugee if the person: (a) is taken, under the Migration Reform (Transitional Provisions) Regulations, to be the holder of a transitional (permanent) visa because the person was, immediately before 1 September 1994, the holder of: (i) a visa or entry permit that fell within Division 1.3—Group 1.3 (Permanent resident (refugee and humanitarian) (offshore)) in Part 1 of Schedule 1 to the Migration (1993) Regulations as then in force; or (ii) a visa or entry permit that fell within Division 1.5—Group 1.5 (Permanent resident (refugee and humanitarian) (on‑shore)) in Part 1 of Schedule 1 to the Migration (1993) Regulations as then in force; or (b) was, immediately before 1 February 1993, the holder of a visa or entry permit of a class prescribed under the Migration Regulations as then in force that corresponds to a visa or entry permit referred to in subparagraph (a)(i) or (ii); or (c) is the holder of: (i) a permanent protection visa; or (ii) a permanent visa of a class referred to in Schedule 2A; or (iii) a permanent visa of a class referred to in a declaration of the Minister under subsection (5) that is in force. Declaration of class of visas (5) If: (a) after the commencement of this subsection, a class of permanent visas (other than a class referred to in Schedule 2A) is prescribed by regulations made for the purposes of section 31 of the Migration Act 1958; and (b) the Minister is of the view that a person holding a visa of that class should be regarded as a refugee for the purposes of Part III; the Minister may, by legislative instrument, declare that class of visas to be a class of visas for the purposes of subparagraph (4)(c)(iii).

5D Injury/disease definitions

(1) In this Act, unless the contrary intention appears:

blinded in an eye has the meaning given by subsection (3).

disease means:

(a) any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development); or
(b) the recurrence of such an ailment, disorder, defect or morbid condition;

but does not include: (c) the aggravation of such an ailment, disorder, defect or morbid condition; or (d) a temporary departure from: (i) the normal physiological state; or (ii) the accepted ranges of physiological or biochemical measures; that results from normal physiological stress (for example, the effect of exercise on blood pressure) or the temporary effect of extraneous agents (for example, alcohol on blood cholesterol levels).

incapacity from a defence‑caused injury or incapacity from a defence‑caused disease has the meaning given by subsection (2).

incapacity from a war‑caused injury or incapacity from a war‑caused disease has the meaning given by subsection (2).

injury means any physical or mental injury (including the recurrence of a physical or mental injury) but does not include:

(a) a disease; or
(b) the aggravation of a physical or mental injury.

War‑caused injury; war‑caused disease; defence‑caused injury; defence‑caused disease (2) In this Act, unless the contrary intention appears: (a) a reference to the incapacity of a veteran from a war‑caused injury or a war‑caused disease; or (b) a reference to the incapacity of a person who is a member of the Forces, or a member of a Peacekeeping Force (as defined by subsection 68(1)), from a defence‑caused injury or a defence‑caused disease; is a reference to the effects of that injury or disease and not a reference to the injury or disease itself.

Note: For war‑caused injury and war‑caused disease see section 9.

Blinded in an eye (3) For the purposes of this Act, a person is taken to have been blinded in an eye if: (a) the person has lost the eye; or (b) in the opinion of the Commission, the eyesight of the person in that eye is so defective that the person has no useful sight in that eye.

5E Family relationships definitions—couples

(1) In this Act, unless the contrary intention appears:

couple has the meaning given by subsections (2), (3) and (4).

member of a couple has the meaning given by subsections (2), (3), (4) and (4A).

non‑illness separated spouse means a person:

(a) who is legally married to another person but living separately and apart from that other person on a permanent basis; and
(b) whose separation has not resulted in a determination under subsection 5R(5).

partner, in relation to a person who is a member of a couple, means the other member of the couple.

partnered has the meaning given by subsection (5).

partnered (partner getting benefit) has the meaning given by subsection (5).

partnered (partner getting neither pension nor benefit) has the meaning given by subsection (5).

partnered (partner getting pension) has the meaning given by subsection (5).

partnered (partner getting pension or benefit) has the meaning given by subsection (5).

prohibited relationship has the meaning given by subsections (6) and (7).

war widow means a woman:

(a) who was the partner of, was legally married to, or was the wholly dependent partner of:
(i) a veteran; or
(ii) a person who was a member of the Forces for the purposes of Part II or IV of this Act; or
(iii) a person who was a member (within the meaning of the MRCA);
immediately before the death of the veteran or person; and
(b) who:
(i) is receiving a pension payable under Part II or IV of this Act at a rate determined under or by reference to subsection 30(1); or
(ii) is receiving the weekly amount mentioned in paragraph 234(1)(b) of the MRCA (including a reduced weekly amount because of a choice under section 236 of the MRCA) or has received a lump sum mentioned in subsection 236(5) of the MRCA; or
(iii) is receiving a pension that is payable under the law of a foreign country, and that is, in the opinion of the Commission, similar in character to a pension referred to in subparagraph (i).

war widower means a man:

(a) who was the partner of, was legally married to, or was the wholly dependent partner of:
(i) a veteran; or
(ii) a person who was a member of the Forces for the purposes of Part II or IV of this Act; or
(iii) a person who was a member (within the meaning of the MRCA);
immediately before the death of the veteran or person; and
(b) who:
(i) is receiving a pension payable under Part II or IV of this Act at a rate determined under or by reference to subsection 30(1); or
(ii) is receiving the weekly amount mentioned in paragraph 234(1)(b) of the MRCA (including a reduced weekly amount because of a choice under section 236 of the MRCA) or has received a lump sum mentioned in subsection 236(5) of the MRCA; or
(iii) is receiving a pension that is payable under the law of a foreign country, and that is, in the opinion of the Commission, similar in character to a pension referred to in subparagraph (i).

wholly dependent partner has the meaning given by the MRCA.

widow means:

(a) a woman who was the partner of a person immediately before the person died; or
(b) a woman who was legally married to a person, but living separately and apart from the person on a permanent basis, immediately before the person died.

widower means:

(a) a man who was a partner of a person immediately before the person died; or
(b) a man who was legally married to a person, but living separately and apart from the person on a permanent basis, immediately before the person died.

Member of a couple—general (2) A person is a member of a couple for the purposes of this Act if: (a) the person is legally married to another person and is not living separately and apart from the other person on a permanent basis; or (aa) both of the following conditions are met: (i) a relationship between the person and another person (whether of the same sex or a different sex) is registered under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; (ii) the person is not living separately and apart from the other person on a permanent basis; or (b) all of the following conditions are met: (i) the person is living with another person, whether of the same sex or a different sex (in this paragraph called the partner); (ii) the person is not legally married to the partner; (iii) the person and the partner are, in the Commission’s opinion (formed as mentioned in section 11A), in a de facto relationship; (iv) the person and the partner are not within a prohibited relationship.

Note 1: For living with a person see subsection (3).

Note 3: Subsection 5R(5) (determination in relation to an illness separated couple) is a qualification to the definition of a member of a couple.

Note 4: Subsection 5R(6) (determination in relation to a respite care couple) is a qualification to the definition of a member of a couple.

(3) For the purposes of subparagraph (2)(b)(i), a person is to be treated as living with another person during: (a) any temporary absence of one of those persons; (b) an absence of one of those persons resulting from illness or infirmity; if the Commission is of the opinion that they would, but for the absence, have been living together during that period. Member of a couple—special excluding determination (4) A person is not a member of a couple if a determination under subsection 5R(3) is in force in relation to the person.

Note: Subsection 5R(3) allows the Commission to treat a person who is a member of a couple as not being a member of a couple in special circumstances.

(4A) The partner of a person who: (a) is receiving a youth allowance under the Social Security Act; and (b) is not independent within the meaning of Part 3.5 of that Act; is not a member of a couple for the purposes of: (c) the provisions of this Act referred to in the table at the end of this subsection; and (d) any provision of this Act that applies for the purposes of a provision mentioned in paragraph (c).

Note: Paragraph (d) has the effect of treating a person as not being a member of a couple in provisions that apply for the purposes of the income test, assets test or compensation recovery provisions, including section 5H (Income test definitions), sections 5L and 5LA (Assets test definitions), section 5NB (Compensation recovery definitions) and Divisions 1 to 11 of Part IIIB (General provisions relating to the income and assets tests).

<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><thead><tr><td colspan="3" style="width:343.6pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Affected provisions</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:140.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Provisions of this Act</span></p></td><td style="width:156.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Subject matter</span></p></td></tr></thead><tbody><tr><td style="width:24.65pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>1</span></p></td><td style="width:140.65pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>Part</span><span> </span><span>IIIC</span></p></td><td style="width:156.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span>Compensation recovery</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:140.65pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Module E of the Rate Calculator in Part</span><span> </span><span>2 of Schedule</span><span> </span><span>6</span></p></td><td style="width:156.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Ordinary/adjusted income test</span></p></td></tr><tr><td style="width:24.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>3</span></p></td><td style="width:140.65pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Module F of the Rate Calculator in Part</span><span> </span><span>2 of Schedule</span><span> </span><span>6</span></p></td><td style="width:156.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Assets test</span></p></td></tr></tbody></table>

Standard family situation categories (5) For the purposes of this Act: (a) a person is partnered if the person is a member of a couple; and (b) a person is partnered (partner getting neither pension nor benefit) if the person is a member of a couple and the person’s partner: (i) is not receiving a service pension; and (ia) is not receiving income support supplement; and (ib) is not receiving a veteran payment; and (ii) is not receiving a social security pension; and (iii) is not receiving a social security benefit; and (c) a person is partnered (partner getting pension or benefit) if the person is a member of a couple and the person’s partner is receiving: (i) a service pension; or (ia) income support supplement; or (ib) a veteran payment; or (ii) a social security pension; or (iii) a social security benefit; and (d) a person is partnered (partner getting pension) if the person is a member of a couple and the person’s partner is receiving: (i) a service pension; or (ia) income support supplement; or (ib) a veteran payment; or (ii) a social security pension; and (e) a person is partnered (partner getting benefit) if the person is a member of a couple and the person’s partner is receiving a social security benefit. Prohibited relationship (6) For the purposes of this Act, a person and his or her partner are within a prohibited relationship if the person is: (a) an ancestor or a descendant of the partner; or (b) a brother, sister, half‑brother or half‑sister of the partner. (7) For the purposes of subsection (6), a child who is, or has ever been, an adopted child of a person is taken to be the natural child of that person and the person is taken to be the natural parent of the child.

5F Family relationships definitions—children

(1) In this Act, unless the contrary intention appears:

Aboriginal study assistance scheme means:

(a) the ABSTUDY Scheme; or
(b) the Aboriginal Overseas Study Assistance Scheme; or
(c) a scheme prescribed for the purposes of this definition.

adopted child means a child adopted under the law of any place, whether in Australia or not, relating to the adoption of children.

child means:

(a) a person who has not turned 16; or
(b) a person who:
(i) has turned 16 but has not turned 25; and
(ii) is receiving full‑time education at a school, college or university;

but does not include such a person if the person is receiving: (c) a disability support pension; or (e) a carer payment; or (f) a pension PP (single); or (h) a widowed person allowance; or (j) a social security benefit (except youth allowance paid because the person is at least 16 but less than 25 and is receiving full‑time education at a school, college or university); under the Social Security Act.

dependent child has the same meaning as in the Social Security Act.

family tax benefit has the meaning given by subsection 3(1) of the Family Assistance Act.

FTB child has the meaning given by Subdivision A of Division 1 of Part 3 of the Family Assistance Act.

maximum Part A rate of family tax benefit is the maximum rate worked out in step 1 of the method statement in clause 3 of Schedule 1 to the Family Assistance Act.

parent has a meaning affected by section 10A.

regular care child has the meaning given by subsection 3(1) of the Family Assistance Act.

step‑child: without limiting who is a step‑child of a person for the purposes of this Act, someone who is a child of a partner of the person is the step‑child of the person, if he or she would be the person’s step‑child except that the person is not legally married to the partner.

step‑parent: without limiting who is a step‑parent of a person for the purposes of this Act, someone who is a partner of a parent of the person is the step‑parent of the person, if he or she would be the person’s step‑parent except that he or she is not legally married to the person’s parent.

When a person becomes a dependent child (2) A person becomes a dependent child at the time when the person would become a dependent child for the purposes of the Social Security Act if that Act applied in respect of the person.

5G Australian residence definitions

(1) In this Act, unless the contrary intention appears:

Australian resident has the meaning given by subsection (1AA).

holder, in relation to a visa, has the same meaning as in the Migration Act 1958.

permanent visa, special category visa and special purpose visa have the same meanings as in the Migration Act 1958.

(1AA) An Australian resident is a person who: (a) resides in Australia; and (b) is one of the following: (i) an Australian citizen; (ii) the holder of a permanent visa; (iii) the holder of a special category visa who is likely to remain permanently in Australia; (iv) the holder of a special purpose visa who is likely to remain permanently in Australia.

Note 1: For holder, permanent visa and special purpose visa see subsection (1).

Note 2: Australian citizen is defined in the Australian Citizenship Act 2007.

(1A) In deciding for the purposes of this Act whether or not a person resides in Australia, regard must be had to: (a) the nature of the accommodation used by the person in Australia; and (b) the nature and extent of the family relationships the person has in Australia; and (c) the nature and extent of the person’s employment, business or financial ties with Australia; and (ca) the nature and extent of the person’s assets located in Australia; and (cb) the frequency and duration of the person’s travel outside Australia; and (d) any other matter relevant to determining whether the person intends to remain permanently in Australia. (1AB) For the purposes of paragraph (1A)(b), family relationships are taken to include (without limitation): (a) relationships between partners; and (b) relationships of child and parent that arise if someone is the parent of a person under section 10A; and (c) any other relationship that would be a family relationship if a relationship mentioned in paragraph (a) or (b) is taken to be a family relationship. Papua New Guinea residents (2) For the purposes of this Act (other than Part VIIC), a person (other than an indigenous inhabitant of the Territory of Papua or the Territory of New Guinea) resident in Papua New Guinea immediately before it became an independent sovereign State, is taken to be an Australian resident so long as the person continues to reside in Papua New Guinea. (3) If: (a) a person who is receiving a service pension, income support supplement or a veteran payment is taken to be an Australian resident under subsection (2); and (b) the person’s partner was resident in Papua New Guinea after it became an independent sovereign State; the partner is, for the purposes of Parts III, IIIA, IIIAA and IIIB, also taken to be an Australian resident. (4) If: (a) a person who is receiving a service pension, income support supplement or a veteran payment is taken to be an Australian resident under subsection (2); and (b) the person’s non‑illness separated spouse was resident in Papua New Guinea after it became an independent sovereign State; the non‑illness separated spouse is, for the purposes of Parts III, IIIA, IIIAA and IIIB, also taken to be an Australian resident.

5GA Pension supplement rate definitions

(1) In this Act, the combined couple rate of pension supplement is $2,199.60.

Note 1: This rate is indexed 6 monthly in line with CPI increases (see sections 59B to 59E).

Note 2: This rate is an annual rate.

(2) In this Act, the combined couple rate of minimum pension supplement is $1,185.60.

Note 1: This rate is indexed 6 monthly in line with CPI increases (see sections 59B to 59E).

Note 2: This rate is an annual rate.

(3) In this Act, a person’s minimum pension supplement amount is the amount worked out by: (a) applying the applicable percentage in the following table to the combined couple rate of minimum pension supplement; and (b) if: (i) the person is not partnered; and (ii) the amount resulting from paragraph (a) is not a multiple of $2.60; rounding the amount up or down to the nearest multiple of $2.60 (rounding up if the amount is not a multiple of $2.60 but is a multiple of $1.30).

Note: A person’s minimum pension supplement amount is an annual rate.

(4) In this Act, a person’s pension supplement basic amount depends on which family situation in the following table applies to the person. The person’s pension supplement basic amount is the corresponding amount set out in the table.

Note 1: Each amount in the table will be indexed 6 monthly in line with CPI increases (see sections 59B to 59E).

Note 2: A person’s pension supplement basic amount is an annual rate.

(5) In this Act, the daily rate of tax‑exempt pension supplement, for a person who is receiving a service pension, income support supplement or a veteran payment is the amount a day worked out using the table.

<table cellspacing="0" cellpadding="0" style="width:294.05pt; margin-left:56.7pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:283.25pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="TableHeading"><span>Tax</span><span>‑</span><span>exempt pension supplement</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Item</span></p></td><td style="width:88.2pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Payment received</span></p></td><td style="width:148.55pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid; page-break-after:avoid"><span style="font-weight:bold">Amount a day of tax</span><span style="font-weight:bold">‑</span><span style="font-weight:bold">exempt pension supplement</span></p></td></tr></thead><tbody><tr><td style="width:24.9pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>1</span></p></td><td style="width:88.2pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid"><span>Service pension or veteran payment</span></p></td><td style="width:148.55pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext" style="page-break-inside:avoid"><span>The amount worked out by:</span></p><p class="Tablea" style="page-break-inside:avoid"><span>(a) subtracting the person’s pension supplement basic amount from the person’s pension supplement amount; and</span></p><p class="Tablea" style="page-break-inside:avoid"><span>(b) dividing the result of paragraph</span><span> </span><span>(a) by 364</span></p></td></tr><tr><td style="width:24.9pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>2</span></p></td><td style="width:88.2pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>Income support supplement</span></p></td><td style="width:148.55pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p class="Tabletext"><span>The person’s minimum pension supplement amount divided by 364</span></p></td></tr></tbody></table>

Note: The portion of the person’s service pension, income support supplement or veteran payment equal to the tax‑exempt pension supplement is exempt from income tax (see sections 52‑65 and 52‑70 of the Income Tax Assessment Act 1997).

(6) If a person is receiving a service pension at a rate that: (a) is worked out under subpoint SCH6‑A1(4) of Schedule 6 and is the revised rate; or (b) is worked out under subpoint SCH6‑A1(5) of Schedule 6; subsection (5) applies in relation to the person and the pension as if the person had a pension supplement amount equal to what would be the person’s pension supplement amount if the person were receiving the service pension at the rate worked out under subpoint SCH6‑A1(4) of Schedule 6 and equal to the provisional rate.

5H Income test definitions

(1) In this Act, unless the contrary intention appears:

adjusted income, in relation to a person for the purpose of assessment of the rate of income support supplement, means the sum of:

(a) the person’s ordinary income; and
(b) a payment to the person that is a payment in respect of incapacity or death resulting from employment in connection with a war or war‑like operations in which the Crown has been engaged, other than:
(i) a pension under Part II or IV (other than a pension that is payable under section 30 to a dependant of a deceased veteran); or
(ii) a pension payable because of subsection 4(6) or (8B) of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986 (other than a pension payable in respect of a child); and
(c) any instalment of pension payable to the person under subsection 30(1); and
(ca) if compensation under section 233 of the MRCA is payable to the person and the person has not made a choice under section 236 of the MRCA—any payment of the weekly amount mentioned in paragraph 234(1)(b) of the MRCA; and
(cb) if compensation under section 233 of the MRCA is payable to the person and the person has made a choice under section 236 of the MRCA—any weekly amount mentioned in paragraph 234(1)(b) of the MRCA that the person would have been paid if the person had not made that choice; and
(d) any instalment of pension that is payable to the person under the law of a foreign country and is, in the opinion of the Commission, similar in character to the pension referred to in paragraph (c).

approved exchange trading system has the meaning given by subsection (11).

available money, in relation to a person, means money that:

(a) is held by or on behalf of the person; and
(b) is not deposit money of the person; and
(c) is not the subject of a loan made by the person.

deposit money, in relation to a person, means the person’s money that is deposited in an account with a financial institution.

disposes of ordinary income has the meaning given by section 48.

domestic payment has the meaning given by subsection (3).

earned, derived or received has the meaning given by subsection (2).

exchange trading system has the meaning given by subsection (10).

exempt lump sum has the meaning given by subsections (12) and (12A).

home equity conversion agreement, in relation to a person, means an agreement under which the repayment of an amount paid to or on behalf of the person, or the person’s partner, is secured by a mortgage of the principal home of the person or the person’s partner.

Note 1: See also subsection (7).

Note 2: A home equity access scheme advance payment (within the meaning of Subdivision E of Division 11 of Part IIIB) is an example of a payment under a home equity conversion agreement.

income, in relation to a person, means:

(a) an income amount earned, derived or received by the person for the person’s own use or benefit; or
(b) a periodical payment by way of gift or allowance; or
(c) a periodical benefit by way of gift or allowance;

but does not include an amount that is excluded under subsection (4), (5) or (8).

Note 1: See also sections 46B and 46C (business income), Division 3 of Part IIIB (income from financial assets (including income streams (short term) and certain income streams (long term)) and Division 4 of Part IIIB (income from income streams not covered by Division 3 of Part IIIB).

Note 2: Where a person or a person’s partner has disposed of income, the person’s income may be taken to include the amount which has been disposed of—see sections 48–48E.

Note 3: Amounts of maintenance income are not excluded amounts.

income amount means:

(a) valuable consideration; or
(b) personal earnings; or
(c) moneys; or
(d) profits;

(whether of a capital nature or not).

instalment of parental leave pay means an instalment of parental leave pay under the Paid Parental Leave Act 2010.

ordinary income means income that is not maintenance income or an exempt lump sum.

Note 1: For maintenance income see section 5K. For exempt lump sum, see subsections (12) and (12A).

Note 2: The receipt of periodic compensation payments may result in reduction of the person’s rate of service pension, income support supplement or veteran payment under Part IIIC. If this happens, the payments are not treated as ordinary income (see section 59X).

Note 3: For provisions affecting the amount of a person’s ordinary income see sections 46 and 46A (ordinary income concept), sections 46B and 46C (business income), Division 3 of Part IIIB (income from financial assets (including income streams (short term) and certain income streams (long term)) and Division 4 of Part IIIB (income from income streams not covered by Division 3 of Part IIIB).

Earned, derived or received (2) A reference in this Act to an income amount earned, derived or received is a reference to: (a) an income amount earned, derived or received by any means; and (b) an income amount earned, derived or received from any source (whether within or outside Australia). Domestic payments (3) A payment received by a person is a domestic payment for the purposes of this Act if: (a) the person receives the payment on the disposal of an asset of the person; and (b) the asset was used, immediately before the disposal, by the person or the person’s partner wholly or substantially for private or domestic purposes; and (c) the asset was used by the person or the person’s partner wholly or substantially for those purposes for: (i) a period of 12 months before the disposal; or (ii) if the Commission considers it appropriate—a period of less than 12 months before the disposal. Excluded amounts—home equity conversion (not a member of a couple) (4) If a person is not a member of a couple, an amount paid to or on behalf of the person under a home equity conversion agreement is an excluded amount for the person to the extent that the total amount owed by the person from time to time under home equity conversion agreements does not exceed $40,000. Excluded amounts—home equity conversion (member of a couple) (5) If a person is a member of a couple, an amount paid to or on behalf of the person or the person’s partner under a home equity conversion agreement is an excluded amount for the person to the extent that the total amount owed by the person and the person’s partner under home equity conversion agreements from time to time does not exceed $40,000. Home equity conversion (amount owed) (6) For the purposes of this Act, the amount owed by a person under a home equity conversion agreement is the principal amount secured by the mortgage concerned and does not include: (a) any amount representing mortgage fees; or (b) any amount representing interest; or (c) any similar liability whose repayment is also secured by the mortgage. Home equity conversion (principal home) (7) For the purposes of the definition of home equity conversion agreement in subsection (1), an asset cannot be a person’s principal home unless the person or the person’s partner has a beneficial interest (but not necessarily the sole beneficial interest) in the asset. Excluded amounts—general (8) The following amounts are not income in relation to a person for the purposes of this Act: (a) a payment under Part III or Part IIIA; (aa) a veteran payment; (ab) a home equity access scheme advance payment (within the meaning of section 52ZBA); (b) a payment of an instalment of pension under Part II or IV; (ba) a payment of an instalment of a supplement under Part VIIA (veterans supplement); (c) a payment of an instalment of a pension (other than a pension payable in respect of a child) payable because of subsection 4(6) or (8B) of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986; (e) a payment (other than a payment referred to in paragraph (b) or (c)) that is a payment in respect of incapacity or death resulting from employment in connection with a war or war‑like operations in which the Crown has been engaged;

Note: However, a payment referred to in paragraph (b), (c) or (e) is counted in working out a person’s total income for the purposes of the hardship rules (see section 52Z).

(ea) any payment of compensation (other than a payment referred to in paragraph (e)) to the extent that the payment is taken into account:
(i) under Division 5A of Part II; or
(ii) under section 74;
to reduce a pension payable to the person under Part II or IV, as the case requires;

Note: However, a payment referred to in paragraph (ea) is counted in working out a person’s total income for the purposes of the hardship rules (see section 52Z).

(f) a payment by way of allowance (other than a loss of earnings allowance) under Part VI of this Act;

Note: However, a payment referred to in paragraph (f) is counted in working out a person’s total income for the purposes of the hardship rules (see section 52Z).

(faa) a payment, by a foreign country, of an allowance or annuity that is of a similar kind to decoration allowance payable under section 102 or to Victoria Cross allowance payable under section 103;

Note: However, a payment referred to in paragraph (faa) is counted in working out a person’s total income for the purposes of the hardship rules (see section 52Z).

(faaa) a payment under Part VIB (prisoner of war recognition supplement);

Note: However, a payment referred to in paragraph (faaa) is counted in working out a person’s total income for the purposes of the hardship rules (see section 52Z).

(fa) a payment known as a student start‑up scholarship payment, or a relocation scholarship payment, under the Veterans’ Children Education Scheme;
(gb) a payment under Part VIIAD (energy supplement);
(h) a payment under the Social Security Act;
(ha) a payment under the ABSTUDY Scheme;
(haa) the amount or value of a scholarship known as a Commonwealth Trade Learning Scholarship;
(hab) a payment of an approved scholarship (within the meaning of subsection 8(1) of the Social Security Act 1991) awarded on or after 1 September 1990;
(hac) the amount or value of a scholarship:
(i) provided for under Part 2‑2A of the Higher Education Support Act 2003 (Indigenous student assistance grants); and
(ii) specified under subsection 8(8AAA) of the Social Security Act 1991;
(hb) the amount or value of:
(i) a scholarship known as a Commonwealth Education Costs Scholarship; or
(ii) a scholarship known as a Commonwealth Accommodation Scholarship;
provided for under the Commonwealth Scholarships Guidelines made for the purposes of Part 2‑4 of the Higher Education Support Act 2003;
(hc) an amount covered by subsection (8A) (about reductions of amounts payable for enrolment or tuition in certain courses);
(hd) a payment covered by subsection (8B) (about payments that are made to an educational institution or the Commonwealth to reduce a person’s liability to the educational institution or Commonwealth and that are made by someone other than the person);
(he) a payment of a scholarship, to the extent that the payment is not income for the purposes of the Social Security Act 1991 because of paragraph 8(8)(zjd) of that Act;
(i) any return on a person’s investment in:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iiia) an ATO small superannuation account;
until the person:
(iv) reaches pension age; or
(v) commences to receive a pension or annuity out of the fund;

Note 1: For pension age see subsection (9) and sections 5QA and 5QB.

Note 2: For superannuation fund, approved deposit fund and ATO small superannuation account see subsection 5J(1).

(j) the value of emergency relief or like assistance;
(m) a payment under Part III of the former Disability Services Act 1986 or the value of any rehabilitation program (including any follow‑up program) provided under that Part;
(maa) the value of supports or services that are specified in an instrument under subsection 8(8AAAB) of the Social Security Act and are provided under an arrangement or grant under the Disability Services and Inclusion Act 2023;
(ma) a payment under the Business Services Wage Assessment Tool Payment Scheme Act 2015;
(mb) a payment under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018;
(mc) a payment under the scheme known as the Territories Stolen Generations Redress Scheme;
(n) a payment of domiciliary nursing care benefit under Part VB of the National Health Act 1953 as in force immediately before 1 July 1999;
(na) a payment of subsidy made to a registered provider under Division 4 of Part 2 of Chapter 4 of the Aged Care Act 2024 in respect of care delivered to the person;
(nb) an accommodation bond balance (within the meaning of the Aged Care Act 2024) refunded to the person under that Act;
(nba) a payment under section 186 of the Aged Care Act 2024;
(nc) while a person is accruing a liability to pay an accommodation charge—any rent from the person’s principal home that the person, or the person’s partner, earns, derives or receives from another person;

Note 1: Accommodation charge has the same meaning as in the Aged Care Act 2024: see subsection 5L(1).

Note 2: For rent, see subsection 5N(2).

Note 3: Under subsections 5LA(8) and (9), the principal home of a person in a care situation may be a place other than the place where the person receives care.

Note 4: The operation of this paragraph is limited by subsection (11A).

(nd) while a person is liable to pay all or some of an accommodation bond by periodic payments—any rent from the person’s principal home that the person, or the person’s partner, earns, derives or receives from another person;

Note 1: For rent, see subsection 5N(2).

Note 2: Under subsections 5LA(8) and (9), the principal home of a person in a care situation may be a place other than the place where the person receives care.

Note 3: The operation of this paragraph is limited by subsection (11A).

(ne) a refundable deposit balance refunded to the person under the Aged Care Act 2024;
(nf) while a person is liable to pay a daily accommodation payment or a daily accommodation contribution—any rent from the person’s principal home that the person, or the person’s partner, earns, derives or receives from another person;

Note 1: For rent, see subsection 5N(2).

Note 2: Under subsections 5LA(8) and (9), the principal home of a person in a care situation may be a place other than the place where the person receives care.

Note 3: The operation of this paragraph is limited by subsection (11A).

(o) a payment under a Commonwealth law, one of whose objects is that of assisting people to purchase or build their own homes;
(oa) a payment by a State or Territory for the purpose of assisting people to purchase or build their own homes;
(p) a payment made to the person for or in respect of a child of the person;
(paa) a payment of family assistance, or of one‑off payment to families, economic security strategy payment to families, back to school bonus, single income family bonus, clean energy advance, ETR payment, first 2020 economic support payment, second 2020 economic support payment, additional economic support payment 2020 or additional economic support payment 2021, under the Family Assistance Act;
(pab) a payment under the scheme determined under Schedule 3 to the Family Assistance Legislation Amendment (More Help for Families—One‑off Payments) Act 2004;
(paba) an NDIS amount;
(pabb) any return on a person’s NDIS amounts;
(pabc) a payment of a bursary under the program established by the Commonwealth and known as the Young Carer Bursary Programme;
(pac) disability expenses maintenance;
(pa) if:
(i) the person owes money under a mortgage or other arrangement; and
(ii) the person has insurance which requires the insurer to make payments to the creditor when the person is unemployed or ill or in other specified circumstances; and
(iii) payments are made to the creditor under the insurance;
a payment so made;
(q) insurance or compensation payments made because of the loss of, or damage to, buildings, plant or personal effects;

Note: These payments are to be disregarded in calculating the value of a person’s assets (see paragraph 52(1)(o)).

(r) money from an investment that is:
(i) an investment of payments of the kind referred to in paragraph (q); and
(ii) an investment for:
(A) a period of not more than 12 months after the person receives the payments; or
(B) if the Commission thinks it appropriate—of 12 months or more after the person receives those payments;
(s) an amount paid, under a law of, or applying in, a country or part of a country, by way of compensation for a victim of National Socialist persecution;
(u) if the person pays, or is liable to pay, rent—a payment by way of rent subsidy made by the Commonwealth, by a State or Territory or by an authority of the Commonwealth or of a State or Territory to or on behalf of the person who pays or who is liable to pay rent;
(v) a payment received by a trainee in full‑time training under a program included in the programs known as Labour Market Programs, to the extent that the payment includes one or more of the following amounts:
(i) an amount calculated by reference to a rate of jobseeker payment or youth allowance under the Social Security Act;
(ii) an amount known as the training component;
(iii) an amount by way of a living away from home allowance;
(w) in the case of a person who:
(i) is receiving a service pension, income support supplement, a veteran payment, a social security pension or a social security benefit; and
(ii) is in part‑time training, or engaged in part‑time work experience, under a program included in the programs known as Labour Market Programs;
a payment received by the person under that program in respect of the person’s expenses associated with his or her participation in the training or work experience;
(x) a payment received by the person under a self‑employment program;
(xaa) a payment made by the Commonwealth known as the Apprenticeship Wage Top‑Up to the person;
(xab) a payment to the person made by the Commonwealth under the program known as Skills for Sustainability for Australian Apprentices;
(xac) a payment to the person made by the Commonwealth under the program known as Tools for Your Trade (within the program known as the Australian Apprenticeships Incentives Program);
(xad) a payment made by the Commonwealth, under the program established by the Commonwealth and known as “Youth Jobs PaTH”, to an individual placed in an internship under that program;
(xa) a payment made by the Mark Fitzpatrick Trust or the New South Wales Medically‑Acquired HIV Trust to a person by way of assistance with expenses incurred in relation to a person who has medically acquired HIV infection;
(xb) a payment by the Thalidomide Australia Fixed Trust:
(i) made to, or applied for the benefit of, a beneficiary of the Trust; or
(ii) made to a person in respect of a beneficiary of the Trust;
(xc) a payment under the program established by the Commonwealth and known as the Support for Australia’s Thalidomide Survivors program;
(y) a benefit under a law of the Commonwealth that relates to the provision of:
(i) pharmaceutical, sickness or hospital benefits; or
(ii) medical or dental services;
(ya) a payment towards the cost of personal care support services for the person that is made under a scheme approved under section 35A of the Social Security Act;
(z) a payment that:
(i) is made by an organisation that is registered under a law referred to in paragraph (y); and
(ii) is made in respect of expenses incurred by a person for:
(A) hospital treatment; or
(B) medical treatment; or
(C) dental treatment;
(za) in the case of a member of:
(i) the Naval Reserve; or
(ii) the Army Reserve; or
(iii) the Air Force Reserve;
the pay and allowances paid to the person as such a member (other than pay and allowances in respect of continuous full‑time service);
(zb) a payment that is a bereavement payment under section 98A;
(zd) a periodical payment by way of gift or allowance, or a periodical benefit by way of gift or allowance, from a parent, child, brother or sister of the person;
(ze) the value of board or lodging received by the person;
(zea) an amount received under the scheme known as the Western Australian Cost of Living Rebate Scheme;
(zeb) the value of a benefit obtained by using a card known as the Western Australian Country Age Pension Fuel Card;
(zec) a payment, known as the Cost of Living Concession, made by the Government of South Australia;
(zf) a domestic payment;
(zh) a payment received by the person for serving, or being summoned to serve, on a jury;
(zi) a payment received by the person for expenses incurred by the person as a witness, other than an expert witness, before a court, tribunal or commission;
(zj) a return on an exempt funeral investment;

Note: For exempt funeral investment see section 5PC.

(zk) an amount paid by a buyer under a sale leaseback agreement;
(zl) if a person is a member of an approved exchange trading system—an amount credited to the person’s account for the purposes of the scheme in respect of any goods or services provided by the person to another member;

Note: For approved exchange trading system see subsections (10) and (11).

(zm) an advance payment of pension under Part IVA;
(zn) an amount worked out under section 115G;
(zo) a payment under section 47, 56, 81, 205, 214, 217, 226, 239 or 266 of the MRCA to reimburse costs incurred in respect of the provision of goods or services (other than a payment to the person who provided the goods or service);
(zp) a payment (either as a weekly amount or a lump sum) under section 68, 71, 75 or 80 of the MRCA (permanent impairment);
(zq) a payment of a Special Rate Disability Pension under Part 6 of Chapter 4 of the MRCA;
(zr) if subsection 204(5) of the MRCA applies to a person—an amount per fortnight, worked out under section 5I of this Act, that would, apart from this paragraph, be income of the person;

Note: Subsection 204(5) of the MRCA reduces a Special Rate Disability Pension by reference to amounts of Commonwealth superannuation that the person has received or is receiving.

(zs) a payment under the Motor Vehicle Compensation Scheme under section 212 of the MRCA;
(zt) a payment of MRCA supplement under section 221, 245 or 300 of the MRCA;
(zu) a payment of a lump sum mentioned in paragraph 234(1)(a) or subsection 236(5) of the MRCA or of the weekly amount mentioned in paragraph 234(1)(b) of the MRCA (including a reduced weekly amount because of a choice under section 236 of the MRCA) (wholly dependent partner payment);
(zv) a payment under section 242 or 255 of the MRCA (continuing permanent impairment and incapacity etc. payments);
(zw) a payment under section 251 or 253 of the MRCA (eligible young person payment);
(zx) a payment under the scheme set up under section 258 of the MRCA (education scheme for eligible young persons);
(zy) a payment under section 262 of the MRCA (compensation for other dependants);
(zz) a payment under Division 1A, 2 or 3 of Part 4 of Chapter 6, or subsection 328(4), of the MRCA (compensation for treatment etc.);
(zza) a payment under section 424 of the MRCA (special assistance);
(zzaaaa) a clean energy payment under the MRCA;
(zzah) a clean energy payment under Part IIIE;
(zzaj) a one‑off energy assistance payment under Part IIIF;
(zzak) a one‑off energy assistance payment under Part IIIG;
(zzal) a first 2020 economic support payment under Division 1 of Part IIIH;
(zzam) a second 2020 economic support payment under Division 2 of Part IIIH;
(zzan) an additional economic support payment 2020 under Division 1 of Part IIIJ;
(zzao) an additional economic support payment 2021 under Division 2 of Part IIIJ;
(zzap) a 2022 cost of living payment under Division 1 of Part IIIK;
(zzb) the value of the benefit provided under the initiative known as the Tools for Your Trade initiative;
(zzc) a cash flow boost (within the meaning of the Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020);
(zzd) a payment:
(i) paid in accordance with rules made under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020; and
(ii) stated, in those rules, not to be income in relation to the person for the purposes of this Act;
(zze) a payment under an instrument made under any of the following:
(i) section 115S of this Act;
(ii) section 268B of the MRCA;
(ii) section 41B of the Safety, Rehabilitation and Compensation (Defence‑related Claims) Act 1988;
(zzf) a payment made by the Commonwealth to an individual under a program that is established by the Commonwealth and is determined in an instrument under subsection 8(8AC) of the Social Security Act to be an employment program;
(zzg) a payment made by a State or Territory to an individual under a program that is established by the State or Territory and is determined in an instrument under subsection 8(8AC) of the Social Security Act to be an employment program.

Note: However, some of the amounts referred to in paragraphs (zp), (zq), (zr) and (zu) are counted for the purposes of the hardship rules (see subsection 52Z(3A)).

(8AA) Paragraph (8)(h) does not apply to a payment under an arrangement or grant referred to in section 1062A of the Social Security Act. This subsection does not prevent another paragraph of subsection (8) from applying to such a payment. (8A) This subsection covers the amount of a reduction (by discount, remission or waiver) of an amount that would otherwise be payable by a person: (a) to an educational institution for enrolment or tuition of the person by the institution in a course that: (i) is determined, under section 5D of the Student Assistance Act 1973, to be a secondary course or a tertiary course for the purposes of that Act; or (ii) is a Masters or Doctoral degree course accredited as a higher education course by the authority responsible for accrediting higher education courses in the State or Territory in which the course is conducted or by the institution, if it is permitted by a law of the Commonwealth, a State or a Territory to accredit higher education courses that it conducts; or (iii) is a course of vocational training; or (b) to the Commonwealth as a result of the person’s enrolment in, or undertaking of, such a course at an educational institution. (8B) This subsection covers a payment: (a) that is made to discharge, or to prevent from arising, to any extent: (i) a person’s actual or anticipated liability to an educational institution for enrolment or tuition of the person by the institution in a course described in paragraph (8A)(a); or (ii) a person’s actual or anticipated liability to the Commonwealth resulting from the person’s enrolment in, or undertaking of, such a course at an educational institution; and (b) that is made by someone other than the person; and (c) that is made to the institution or the Commonwealth; and (d) that is not made at the direction of the person. (9) For the purposes of the application of subsection (8) in relation to income support supplement, the reference in subparagraph (8)(i)(iv) to pension age is taken to be a reference to the qualifying age.

Note: For qualifying age see section 5Q.

(10) An exchange trading system is an arrangement between a number of people (members) under which each member may obtain goods or services from another member that is wholly or partly in kind rather than in cash. Each member has, for the purposes of the arrangement, an account: (a) to which is credited: (i) the amount representing the value of any goods or services provided by the member to another member; or (ii) if the goods or services were partly paid for in cash—the amount referred to in subparagraph (i) less the amount so paid in cash; and (b) to which is debited: (i) the amount representing the value of any goods or services supplied to the member by another member; or (ii) if the goods or services were partly paid for in cash—the amount referred to in subparagraph (i) less the amount so paid in cash. (11) An exchange trading system is an approved exchange trading system if the Commission is satisfied that: (a) it is a local community‑based system; and (b) its primary purpose is to help people maintain their labour skills and keep them in touch with the labour market; and (c) it is not a system run by a person or organisation for profit. (11A) Paragraphs (8)(nc), (nd) and (nf) do not apply in relation to a person if: (a) those paragraphs did not apply in relation to the person immediately before the commencement of the Aged Care Act 2024; or (b) a period of 28 consecutive days ends after that commencement in which the person: (i) was not provided with residential care or flexible care through a residential care service or a flexible care service; and (ii) did not access ongoing funded aged care services in an approved residential care home; other than because the person was on leave. (11C) An expression used in subsection (11A) and in the Aged Care Act 2024 or the Aged Care Act 1997 (as in force immediately before the commencement of the Aged Care Act 2024) has the same meaning in that subsection as in those Acts. (12) An amount received by a person is an exempt lump sum if: (a) it is not a periodic amount (within the meaning of subsection (13)); and (b) it is not income from remunerative work undertaken by the person; and (c) it is an amount, or one of a class of amounts, that the Commission determines to be an exempt lump sum. (12A) An amount received by a person is also an exempt lump sum if the amount is an exempt lump sum within the meaning of subsection 8(11) of the Social Security Act 1991. (13) An amount is a periodic amount if it is: (a) the amount of one payment in a series of related payments, even if the payments are irregular in time and amount; or (b) the amount of a payment making up for arrears in such a series.

5I Special Rate Disability Pension reduction amount

For the purposes of paragraphs 5H(8)(zr) and 52Z(3A)(i), the amount per fortnight is: Start formula special rate disability pension reduction amount times start fraction 10 over 6 end fraction end formula where:

Special Rate Disability Pension reduction amount means the amount by which the Special Rate Disability Pension (as reduced under subsection 204(3)) is reduced under subsection 204(6) of the MRCA (but not below zero).

5J Financial assets and income streams definitions

(1) In this Act, unless the contrary intention appears:

approved deposit fund has the same meaning as in the Income Tax Assessment Act 1997.

asset‑tested income stream (lifetime) has the meaning given by section 5JE.

asset‑tested income stream (long term) means an income stream that is an asset‑tested income stream (long term) under section 5JD or an income stream that:

(a) is not an asset‑test exempt income stream; and
(b) has, on its commencement day:
(i) a specified term of more than 5 years; or
(ii) if the person who has acquired the income stream has a life expectancy of 5 years or less—a specified term equal to or greater than the person’s life expectancy.

Note: Since the income stream must be for a specified term, an asset‑tested income stream (long term) cannot be an asset‑tested income stream (lifetime).

asset‑tested income stream (short term) means an income stream that is an asset‑tested income stream (short term) under section 5JD or an income stream that is none of the following:

(a) an asset‑test exempt income stream;
(b) an asset‑tested income stream (long term);
(c) an asset‑tested income stream (lifetime).

asset‑test exempt income stream has the meanings given by sections 5JA, 5JB, 5JBA and 5JBB.

ATO small superannuation account means an account kept in the name of an individual under the Small Superannuation Accounts Act 1995.

commencement day, in relation to an income stream, means the first day of the period to which the first payment under the income stream relates.

deductible amount, in relation to a defined benefit income stream for a year, means the sum of the amounts that are the tax free components (worked out under Subdivision 307‑C of the Income Tax Assessment Act 1997 or, if applicable, section 307‑125 of the Income Tax (Transitional Provisions) Act 1997) of the payments received from the defined benefit income stream during the year.

defined benefit income stream has the meaning given by subsection (1E).

deprived asset has the meaning given by subsection (2B).

designated NDIS amount means:

(a) an NDIS amount that is deposited in an account with a financial institution; and
(b) any return on the NDIS amount that a person earns, derives or receives.

family law affected income stream has the meaning given by section 5JC.

financial asset means:

(a) a financial investment; or
(b) a deprived asset.

Note: For deprived asset see subsection (2B).

financial investment means:

(a) available money; or
(b) deposit money; or
(c) a managed investment; or
(d) a listed security; or
(e) a loan that has not been repaid in full; or
(f) an unlisted public security; or
(g) gold, silver or platinum bullion; or
(h) an asset‑tested income stream (short term); or
(i) an asset‑tested income stream (long term) that is an account‑based pension within the meaning of the Superannuation Industry (Supervision) Regulations 1994; or
(j) an asset‑tested income stream (long term) that is an annuity (within the meaning of the Superannuation Industry (Supervision) Act 1993) provided under a contract that meets the requirements determined in an instrument under subsection (1G);

but does not include a designated NDIS amount.

Note: For loan see subsections (2) and (2A).

friendly society means:

(a) a body that is a friendly society for the purposes of the Life Insurance Act 1995; or
(b) a body that is registered or incorporated as a friendly society under a law of a State or Territory; or
(c) a body that is permitted, by a law of a State or Territory, to assume or use the expression friendly society; or
(d) a body that, immediately before the date that is the transfer date for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999, was registered or incorporated as a friendly society under a law of a State or Territory; or
(e) a body that had, before 13 December 1987, been approved for the purpose of the definition of friendly society in subsection 115(1) of the Social Security Act 1947.

governing rules, in relation to an income stream, means any trust instrument, other document or legislation, or combination of them, governing the establishment and operation of the income stream.

income stream means:

(a) an income stream arising under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; or
(b) an income stream arising under a public sector superannuation scheme (within the meaning of that Act); or
(c) an income stream arising under a retirement savings account; or
(d) an income stream provided as life insurance business by a life company registered under section 21 of the Life Insurance Act 1995; or
(f) an income stream designated in writing by the Commission for the purposes of this definition, having regard to the guidelines determined under subsection (1F); or
(fa) a family law affected income stream;

but does not include any of the following: (g) available money; (h) deposit money; (i) a managed investment; (j) a listed security; (k) a loan that has not been repaid in full; (l) an unlisted public security; (m) gold, silver or platinum bullion; (n) a payment of compensation to a person, or a payment to a person under an insurance scheme, in relation to: (i) the person’s inability to earn, derive or receive income from remunerative work; or (ii) the person’s total and permanent disability or incapacity.

investment:

(a) in relation to a superannuation fund or approved deposit fund—has the meaning given by subsection (6); or
(b) in relation to an ATO small superannuation account—has the meaning given by subsection (6A).

investor, in relation to an ATO small superannuation account, means the person in whose name the account is kept.

life expectancy has the same meaning as life expectation factor has in section 27H of the Income Tax Assessment Act.

listed security means:

(a) a share in a company; or
(b) another security;

listed on a stock exchange.

loan has a meaning affected by subsections (2) and (2A).

managed investment has the meaning given by subsections (1A), (1B) and (1C).

military invalidity pension income stream has the meaning given by subsection (1EA).

original family law affected income stream has the meaning given by section 5JC.

primary FLA income stream has the meaning given by section 5JC.

public unit trust means a unit trust that:

(a) except where paragraph (b) applies—was, in relation to the unit trust’s last year of income, a public unit trust for the purposes of Division 6B of Part III of the Income Tax Assessment Act; or
(b) where the first year of income of the unit trust has not yet finished—has, at some time since the trust was established, satisfied at least one of the paragraphs of subsection 102G(1) of the Income Tax Assessment Act.

purchase price, in relation to an income stream, means the sum of the payments made to purchase the income stream (including amounts paid by way of employer and employee contributions) less any commuted amounts.

relevant number, in relation to an income stream, means:

(a) if the income stream is payable for a fixed number of years—that number; or
(b) if the income stream is payable during the lifetime of a person and no longer—the number of years of the person’s life expectancy; or
(c) if the income stream:
(i) is jointly owned by a person and his or her partner and is payable for the lifetime of the person or the partner; or
(ii) is payable during the lifetime of a person and then for the lifetime of a reversionary beneficiary;
the number of years in the longer of the relevant life expectancies; or
(d) in any other case—the number that the Commission considers appropriate having regard to the number of years in the total period during which the income stream will be, or may reasonably be expected to be, payable.

residual capital value, in relation to an income stream, means the capital amount payable on the termination of the income stream.

Note: An account‑based income stream does not have a residual capital value (see subsection (9) of this section).

retirement savings account has the meaning that it has in the Retirement Savings Accounts Act 1997.

return:

(a) in relation to an ATO small superannuation account—means so much of the balance of the account as is attributable to interest; or
(b) in relation to any other investment (including an investment in the nature of superannuation)—means any increase, whether of a capital or income nature and whether or not distributed, in the value or amount of the investment.

secondary FLA income stream has the meaning given by section 5JC.

superannuation benefit, in relation to a person, means:

(a) a benefit arising directly or indirectly from amounts contributed (whether by the person or by any other person) to a superannuation fund in respect of the person; or
(b) a payment under Part 7 of the Small Superannuation Accounts Act 1995, where the payment is in respect of an ATO small superannuation account kept in the name of the person.

superannuation contributions surcharge has the meaning that it has in the Superannuation Contributions Tax (Assessment and Collection) Act 1997.

superannuation fund means:

(a) a fund that is or has been a complying superannuation fund within the meaning of section 45 of the Superannuation Industry (Supervision) Act 1993 in relation to any tax year; or
(b) an Australian superannuation fund (within the meaning of the Income Tax Assessment Act 1997) that is not a complying superannuation fund mentioned in paragraph (a) in relation to any tax year; or
(c) a scheme for the payment of benefits upon retirement or death that is constituted by or under a law of the Commonwealth or of a State or Territory; or
(d) an RSA within the meaning of the Retirement Savings Accounts Act 1997; or
(e) any of the following funds (unless the fund is a foreign superannuation fund):
(i) a fund to which paragraph 23(jaa), or section 23FC, 121CC or 121DAB, of the Income Tax Assessment Act 1936 (as in force at any time before the commencement of section 1 of the Taxation Laws Amendment Act (No. 2) 1989) has applied in relation to any tax year;
(ii) a fund to which paragraph 23(ja), or section 23F or 23FB, of the Income Tax Assessment Act 1936 (as in force at any time before the commencement of paragraph (a) of the definition of superannuation fund in former subsection 27A(1) of the Income Tax Assessment Act 1936) has applied in relation to the tax year that started on 1 July 1985 or an earlier tax year;
(iii) a fund to which section 79 of the Income Tax Assessment Act 1936 (as in force at any time before 25 June 1984) has applied in relation to the tax year that started on 1 July 1983 or an earlier tax year.

Note: For foreign superannuation fund see subsection 5L(1).

unlisted public security means:

(a) a share in a public company; or
(b) another security;

that is not listed on a stock exchange. (1A) Subject to subsections (1B) and (1C), an investment is a managed investment for the purposes of this Act if: (a) the money or property invested is paid by the investor directly or indirectly to a body corporate or into a trust fund; and (b) the assets that represent the money or property invested (the invested assets) are not held in the names of investors; and (c) the investor does not have effective control over the management of the invested assets; and (d) the investor has a legally enforceable right to share in any distribution of income or profits derived from the invested assets. (1B) Without limiting the generality of subsection (1A) but subject to subsection (1C), the following are managed investments for the purposes of this Act: (a) an investment in a public unit trust; (b) an investment in an insurance bond; (c) an investment with a friendly society; (d) an investment in a superannuation fund; (e) an investment in an approved deposit fund; (g) an investment in an ATO small superannuation account; (h) an asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993.

Note 1: For paragraph (d), see paragraph (1C)(a) for superannuation investments held before pension age is reached.

Note 2: For paragraph (e), see paragraph (1C)(b) for investments in approved deposit funds held before pension age is reached.

Note 4: For paragraph (g), see paragraph (1C)(ca) for investments in ATO small superannuation accounts held before pension age is reached.

Note 5: For paragraph (h), see paragraph (1C)(j) for a person’s asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 if the person’s assessment day (within the meaning of section 52BAB) for the income stream has occurred.

(1C) The following are not managed investments for the purposes of this Act: (a) an investment in a superannuation fund if the investor has not yet turned pension age; (b) an investment in an approved deposit fund if the investor has not yet turned pension age; (ca) an investment in an ATO small superannuation account if the investor has not yet turned pension age; (d) deposit money; (e) a loan; (f) an asset‑test exempt income stream; (g) an asset‑tested income stream (long term); (h) an asset‑tested income stream (short term); (i) a person’s asset‑tested income stream (lifetime) that arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; (j) a person’s asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 if the person’s assessment day (within the meaning of section 52BAB) for the income stream has occurred.

Note 1: For pension age see subsection (1D) and sections 5QA and 5QB.

Note 2: For deposit money see subsection 5H(1).

Note 3: For provisions relating to when a loan is taken to be made see subsection (2).

(1D) For the purposes of the application of subsection (1C) in relation to income support supplement, the references in paragraphs (1C)(a), (b) and (c) to pension age are taken to be references to the qualifying age.

Note: For qualifying age see section 5Q.

(1E) An income stream is a defined benefit income stream if: (a) under the Superannuation Industry (Supervision) Regulations 1994, the income stream is taken to be a pension for the purposes of the Superannuation Industry (Supervision) Act 1993; and (b) except in the case of an income stream arising under a superannuation fund established before 20 September 1998—the income stream is provided under rules that meet the standards of subregulation 1.06(2) of the Superannuation Industry (Supervision) Regulations 1994; and (ba) in the case of an income stream arising under a superannuation fund established before 20 September 1998—the income stream is provided under rules that meet the standards determined, by legislative instrument, by the Minister; and (c) in any case—the income stream is attributable to a defined benefit interest within the meaning of the Superannuation Industry (Supervision) Regulations 1994 (for this purpose, disregard subparagraph 1.03AA(1)(b)(ii) of those regulations). (1EA) An income stream is a military invalidity pension income stream if: (a) the income stream is: (i) invalidity pay within the meaning of the Defence Force Retirement and Death Benefits Act 1973; or (ii) an invalidity pension under the superannuation scheme established under the Military Superannuation and Benefits Act 1991; or (iii) an income stream provided under a superannuation scheme and that is covered by an instrument under subsection (1FA); and (b) the income stream is not a defined benefit income stream. (1F) The Commission may determine, by legislative instrument, guidelines to be complied with when designating an income stream for the purposes of the definition of income stream in subsection (1). (1FA) For the purposes of subparagraph (1EA)(a)(iii), the Commission may, by legislative instrument, do any one or more of the following: (a) specify an income stream; (b) describe an income stream; (c) determine requirements relating to an income stream; regardless of whether the income stream relates to military service or invalidity. (1FB) Without limiting subsection 33(3A) of the Acts Interpretation Act 1901, an instrument under subsection (1FA) may make different provision in relation to: (a) different kinds of income streams; and (b) different kinds of circumstances.

Note: For specification by class, see subsection 13(3) of the Legislation Act 2003.

(1G) The Minister may, by legislative instrument, determine requirements for the purposes of paragraph (j) of the definition of financial investment in subsection (1). (2) The following rules apply for the purposes of this Act: (a) the acquisition by a person of debentures, bonds or other securities is treated as the making of a loan by the person; (b) a person is not treated as having made a loan merely because: (i) the person has an account with a financial institution; or (ii) the person has paid an entry contribution.

Note: For entry contribution see section 52M.

(2A) Subsection (2) does not limit the meaning of the word loan in this Act. (2B) For the purposes of this Act, an asset is a deprived asset if: (a) a person has disposed of the asset; and (b) the value of the asset is included in the value of the person’s assets by Subdivision BA or BB of Division 11 of Part IIIB.

Note: For circumstances in which a person is taken to dispose of assets see section 52E.

(2C) To avoid doubt, none of the following is a financial investment for the purposes of this Act: (a) an accommodation bond; (b) an accommodation bond balance; (c) a refundable deposit; (d) a refundable deposit balance.

Note: These expressions are defined in section 5L.

(6) For the purposes of this Act, a person has an investment in a superannuation fund or approved deposit fund if the person has benefits in the fund (whether the benefits are attributable to amounts paid by the person or someone else). (6A) For the purposes of this Act: (a) a person has an investment in an ATO small superannuation account if: (i) the account is kept in the name of the person; and (ii) the balance of the account exceeds nil; and (b) the amount or value of that investment equals the balance of the account. (9) To avoid doubt, for the purposes of this Act, an account‑based income stream does not have a residual capital value.

5JA Meaning of asset‑test exempt income stream—lifetime income streams

General requirements (1) An income stream provided to a person is an asset‑test exempt income stream for the purposes of this Act if: (aa) subject to subsection (1AA), the income stream’s commencement day happens before 20 September 2007; and (a) it is an income stream arising under a contract, or governing rules, that meet the requirements of subsection (2) and the Commission has not made a determination under subsection (4) in respect of the income stream; and (b) subject to subsections (1B), (1C) and (1D), the Commission is satisfied that in relation to an income stream, provided by a class of provider specified by the Commission for the purposes of this paragraph, there is in force a current actuarial certificate that states that the actuary is of the opinion that, for the financial year in which the certificate is given, there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules; and (c) the Commission is satisfied that the requirements of subsection (2) are being given effect to from the commencement day of the income stream.

Note: For paragraph (b), financial year means a period of 12 months commencing on 1 July: see the Acts Interpretation Act 1901.

Determination under subsection (5) (1A) An income stream provided to a person is an asset‑test exempt income stream for the purposes of this Act if the Commission has made a determination under subsection (5) in respect of the income stream. Defined benefit income streams (1AA) Paragraph (1)(aa) does not apply if the income stream is a defined benefit income stream. Guidelines relating to actuarial certificates (1B) The Commission may determine, by legislative instrument, guidelines to be complied with when determining whether an actuarial certificate is in force. Exception to paragraph (1)(b) (1C) If, on 30 June in a financial year, an actuarial certificate referred to in paragraph (1)(b) is in force in relation to an income stream, then paragraph (1)(b) does not apply in relation to the next financial year (the later year) for the period: (a) beginning on 1 July of the later year; and (b) ending at the earlier of the following: (i) the start of the first day in the later year on which any actuarial certificate is given to the Commission in relation to that income stream; (ii) the end of the period of 26 weeks beginning on 1 July of the later year. One certificate a financial year (1D) For the purposes of paragraph (1)(b), if an actuarial certificate is given to the Commission in a financial year in relation to an income stream, then any actuarial certificate given to the Commission later in that financial year in relation to that income stream has no effect. Requirements of contract/governing rules for provision of income stream (2) A contract, or the governing rules, for the provision of an income stream to a person meet the requirements of this subsection if the contract or governing rules specify: (a) that payments under the income stream are to be made at least annually throughout the life of the person and, if there is a reversionary beneficiary: (i) throughout the reversionary beneficiary’s life; or (ii) if the reversionary beneficiary is a child of the person or of a former reversionary beneficiary under the income stream—at least until he or she turns 16; or (iii) if the child referred to in subparagraph (ii) is a full‑time student who has turned 16—at least until the end of his or her full‑time studies or until he or she turns 25, whichever occurs sooner; and (b) the total amount of the payments that may be made under the income stream in the first year after the commencement day of the income stream (not taking commuted amounts into account); and (c) that the total amount of the payments that may be made under the income stream in any other year (not taking commuted amounts into account) may not fall below the total amount of the payments made under the income stream in the immediately preceding year (the previous total), and may not exceed the previous total: (i) if subparagraph (ii) does not apply—by more than 5% of the previous total; or (ii) if the index number for the second last quarter before the day on which the first of those payments is to be made (recent index number) exceeds the index number for the same quarter in the immediately preceding year (base index number) by more than 4% of the base index number—by more than such percentage of the previous total as is worked out under the formula: Start formula 100 times open bracket start fraction recent index number minus base index number over base index number end fraction close bracket plus 1 end formula (d) if the income stream is purchased by or for the primary beneficiary—that the first payment under the income stream relates to the period commencing on the day of that purchase; and (e) if the income stream is not purchased, but acquired, by or for the primary beneficiary—that the first payment under the income stream relates to the period commencing on the day of that acquisition; and (f) if the income stream is not a defined benefit income stream—that the amount paid as the purchase price for the income stream is wholly converted into income; and (g) that the income stream has no residual capital value; and (h) that the income stream cannot be commuted except: (i) if the income stream is a non‑commutation funded income stream and the commutation is made within 6 months after the commencement day of the income stream; or (ii) if the commutation is made to the benefit of a reversionary beneficiary or of the person’s estate, on the death of the person within the life expectancy period for the income stream; or (iii) if the payment resulting from the commutation is transferred directly to the purchase of another income stream that is an asset‑test exempt income stream; or (iv) to the extent necessary to cover any superannuation contributions surcharge relating to the income stream; or (iva) to the extent necessary to give effect to an entitlement of the person’s partner or former partner under a payment split under Part VIIIB or VIIIC of the Family Law Act 1975; or (ivb) to the extent necessary to give effect to an order under Part VIIIAA of the Family Law Act 1975; or (v) to the extent necessary to pay a hardship amount; and (i) that the income stream cannot be transferred to a person except: (i) on the death of the primary beneficiary, to a reversionary beneficiary; or (ii) on the death of a reversionary beneficiary, to another reversionary beneficiary; and (j) that neither the capital value of the income stream, nor the income from it, can be used as security for a borrowing; and (k) that, if the income stream reverts, it must not have a reversionary component greater than the benefit that was payable immediately before the reversion; and (l) that, if the income stream is commuted, the commuted amount must not be greater than the benefit that was payable immediately before the commutation.

Note: For paragraph (h), hardship amount, life expectancy period and non‑commutation funded income stream are defined in subsection (7) and asset‑test exempt income stream is defined in section 5J.

(2A) A contract, or the governing rules, for the provision to a person of an income stream that meets all of the requirements of subsection (2), except the requirement of paragraph (2)(c), are taken to meet the requirements of subsection (2) if the contract or governing rules specify that any provision included in the contract or governing rules in accordance with paragraph (2)(c) does not apply in any year in which: (a) the person ceases to receive income under an income stream jointly and begins to receive income under a single income stream; and (b) the total amount received in the year under the single income stream is less than the total amount received by the person in the previous year but is not nil. Matters not required of income stream (3) For the purpose of determining whether an income stream meets the requirements of subsection (2), it is immaterial that: (a) if the primary beneficiary dies within the life expectancy period for the income stream, a surviving reversionary beneficiary may be paid an amount equal to the total of the payments that the primary beneficiary would (if he or she had not died) have received from the day of the death until the end of that period; and (b) if: (i) the primary beneficiary dies within the life expectancy period for the income stream; and (ii) there is no surviving reversionary beneficiary; an amount, not exceeding the difference between: (iii) the sum of the amounts that would have been so payable to the primary beneficiary in that period; and (iv) the sum of the amounts paid to the primary beneficiary; is payable to the primary beneficiary’s estate, and (c) if: (i) the primary beneficiary dies within the life expectancy period for the income stream; and (ii) there is a surviving reversionary beneficiary who also dies within that period; there is payable to the reversionary beneficiary’s estate an amount determined as described in paragraph (b) as if that paragraph applied to the reversionary beneficiary. Determination that income stream not asset‑test exempt (4) The Commission may determine that an income stream that meets the requirements of subsection (2) is not an asset‑test exempt income stream if the Commission is satisfied that the person who has purchased the income stream has commuted an asset‑test exempt income stream within 6 months after its commencement day on at least 3 occasions since the person first received a service pension, income support supplement, a veteran payment or a social security payment. Determination that income stream is asset‑test exempt (5) The Commission may determine, in writing, that an income stream is an asset‑test exempt income stream for the purposes of this Act. In making the determination, the Commission is to have regard to the guidelines (if any) determined under subsection (6). (5A) To avoid doubt, a determination under subsection (5) may be made in respect of an income stream regardless of the income stream’s commencement day. (5B) A determination under subsection (5) is not a legislative instrument. Guidelines to be complied with in making determination (6) The Commission may determine, by legislative instrument, guidelines to be complied with when making a determination under subsection (5). Definitions (7) In this section:

hardship amount, in relation to a person, means an amount determined by the Commission for the purposes of this definition if:

(a) the person applies in writing to the Commission to be allowed to commute the whole or part of an income stream because of extreme financial hardship; and
(b) the Commission is satisfied that:
(i) the person’s circumstances are exceptional and could not be reasonably foreseen at the time the person purchased the income stream; and
(ii) the person has insufficient liquid assets or other assets (excluding the person’s principal home) that could be realised to avoid the extreme financial hardship; and
(iii) that amount is required to meet unavoidable expenditure.

life expectancy period, for an income stream, means:

(a) in a case where:
(i) there was only one primary beneficiary on the commencement day; and
(ii) the primary beneficiary has decided not to round up his or her life expectancy for the purposes of this definition;
the period starting on the income stream’s commencement day, and equal to the shorter of:
(iii) the primary beneficiary’s life expectancy on the commencement day; and
(iv) 20 years; or
(b) in a case where:
(i) there was only one primary beneficiary on the commencement day; and
(ii) paragraph (a) does not apply;
the period starting on the income stream’s commencement day, and equal to the shorter of:
(iii) the primary beneficiary’s life expectancy (rounded up, if not consisting of a whole number of years, to the next whole number) on the commencement day; and
(iv) 20 years; or
(c) in a case where:
(i) there were 2 primary beneficiaries on the commencement day; and
(ii) those primary beneficiaries have decided not to round up their life expectancies for the purposes of this definition;
the period starting on the income stream’s commencement day, and equal to the shorter of:
(iii) the greater of the life expectancies, on the commencement day, of the primary beneficiaries; and
(iv) 20 years; or
(d) in a case where:
(i) there were 2 primary beneficiaries on the commencement day; and
(ii) paragraph (c) does not apply;
the period starting on the income stream’s commencement day, and equal to the shorter of:
(iii) the greater of the life expectancies (rounded up, if not consisting of a whole number of years, to the next whole number), on the commencement day, of the primary beneficiaries; and
(iv) 20 years.

liquid assets, in relation to a person, means the person’s cash and readily realisable assets, and includes:

(a) the person’s shares and debentures in a public company within the meaning of the Corporations Act 2001; and
(b) managed investments; and
(c) insurance policies that can be surrendered for money; and
(d) amounts deposited with, or lent to, a bank or other financial institution by the person (whether or not the amount can be withdrawn or repaid immediately); and
(e) amounts due, and able to be paid, to the person by, or on behalf of, a former employer of the person;

but does not include the sum of NDIS amounts paid to the person and any return on those amounts that the person earns, derives or receives, less the sum of amounts spent by the person in accordance with an NDIS plan under which the amounts were paid.

non‑commutation funded income stream means an income stream that has not been purchased by transferring directly to the purchase of the income stream a payment resulting from the commutation of another asset‑test exempt income stream.

unavoidable expenditure, in relation to a person, means one or more of the following:

(a) essential medical expenses of the person, or the person’s partner, to the extent that the expenses are not covered by health insurance or other contracts or arrangements;
(b) the cost of:
(i) replacing the person’s principal home; or
(ii) essential repairs to the person’s principal home;
to the extent that the cost of the replacement or repairs is not covered by an insurance policy;
(c) expenditure to buy replacement essential household goods because of the loss of those goods to the extent that the cost of replacement is not covered by an insurance policy.

5JB Meaning of asset‑test exempt income stream—life expectancy income streams

(1) An income stream provided to a person is also an asset‑test exempt income stream for the purposes of this Act if: (a) the following criteria are satisfied: (i) the income stream’s commencement day happens before 20 September 2007; (ii) subsection (1A) applies; or (b) subsection (1B) applies. No determination under subsection (3) (1A) This subsection applies if: (aa) the person to whom the income stream is being provided is: (i) the primary beneficiary; or (ii) the primary beneficiary’s reversionary partner (if any) on the day of the primary beneficiary’s death; and (a) the income stream is an income stream arising under a contract, or governing rules, that meet the requirements of subsection (2) and the Commission has not made a determination under subsection (3) in respect of the income stream; and (b) subject to subsections (1C), (1D) and (1E), the Commission is satisfied that, in relation to an income stream provided by a class of provider specified by the Commission for the purposes of this paragraph, there is in force a current actuarial certificate that states that the actuary is of the opinion that, for the financial year in which the certificate is given, there is a high probability that the provider of the income stream will be able to pay the income stream as required under the contract or governing rules; and (c) the Commission is satisfied that the requirements of subsection (2) have been given effect to from the commencement day of the income stream; and (d) in the case of an income stream acquired before 20 September 2004 that is provided to a primary beneficiary’s reversionary beneficiary—the remaining term (in years) of the income stream is equal to the life expectancy (in years) of the primary beneficiary’s reversionary beneficiary.

Note 1: For paragraph (aa), reversionary partner is defined in subsection (7).

Note 2: For paragraph (b), financial year means a period of 12 months commencing on 1 July: see the Acts Interpretation Act 1901.

Determination under subsection (4) (1B) This subsection applies if the Commission has made a determination under subsection (4) in respect of the income stream. Guidelines relating to actuarial certificates (1C) The Commission may determine, by legislative instrument, guidelines to be complied with when determining whether an actuarial certificate is in force. Exception to paragraph (1A)(b) (1D) If, on 30 June in a financial year, an actuarial certificate referred to in paragraph (1A)(b) is in force in relation to an income stream, then paragraph (1A)(b) does not apply in relation to the next financial year (the later year) for the period: (a) beginning on 1 July of the later year; and (b) ending at the earlier of the following: (i) the start of the first day in the later year on which any actuarial certificate is given to the Commission in relation to that income stream; (ii) the end of the period of 26 weeks beginning on 1 July of the later year. One certificate a financial year (1E) For the purposes of paragraph (1A)(b), if an actuarial certificate is given to the Commission in a financial year in relation to an income stream, then any actuarial certificate given to the Commission later in that financial year in relation to that income stream has no effect. Requirements of contract/governing rules for provision of income stream (2) A contract, or the governing rules, for the provision of an income stream to a person meets the requirements of this subsection if the contract or governing rules specify: (a) the income stream’s term, which must comply with subsection (2B), (2C) or (2E); and (aa) that payments under the income stream are to be made at least annually during the income stream’s term; and (b) the total amount of the payments that may be made under the income stream in the first year after the commencement day of the income stream (not taking commuted amounts into account); and (c) that the total amount of the payments that may be made under the income stream in any other year (not taking commuted amounts into account) may not fall below the total amount of the payments made under the income stream in the immediately preceding year (the previous total), and may not exceed the previous total: (i) if subparagraph (ii) does not apply—by more than 5% of the previous total; or (ii) if the index number for the second last quarter before the day on which the first of those payments is to be made (recent index number) exceeds the index number for the same quarter in the immediately preceding year (base index number) by more than 4% of the base index number—by more than such percentage of the previous total as is worked out under the formula: Start formula 100 times open bracket start fraction recent index number minus base index number over base index number end fraction close bracket plus 1 end formula (d) if the income stream is purchased by or for the primary beneficiary—that the first payment under the income stream relates to the period commencing on the day of that purchase; and (e) if the income stream is not purchased, but acquired, by or for the primary beneficiary—that the first payment under the income stream relates to the period commencing on the day of that acquisition; and (f) if the income stream is not a defined benefit income stream—that the amount paid as the purchase price for the income stream is wholly converted into income; and (g) that the income stream has no residual capital value; and (h) that the income stream cannot be commuted except: (i) if the income stream is a non‑commutation funded income stream and the commutation is made within 6 months after the commencement day of the income stream; or (ii) if the payment resulting from the commutation is transferred directly to the purchase of another income stream that is an asset‑test exempt income stream; or (iii) if the primary beneficiary’s reversionary partner (if any) on the day of the primary beneficiary’s death survives the primary beneficiary—on or after the partner’s death; or (iv) if subparagraph (iii) does not apply—on or after the primary beneficiary’s death; or (ivaa) to the extent necessary to cover any superannuation contributions surcharge relating to the income stream; or (iva) to the extent necessary to give effect to an entitlement of the person’s partner or former partner under a payment split under Part VIIIB of the Family Law Act 1975; or (ivb) to the extent necessary to give effect to an order under Part VIIIAA of the Family Law Act 1975; or (ivc) to the extent necessary in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; or (vi) to the extent necessary to pay a hardship amount; and (i) that the income stream cannot be transferred except on death; and (j) that neither the capital value of the income stream, nor the income from it, can be used as security for a borrowing; and (k) that, if the income stream reverts, it must not have a reversionary component greater than the benefit that was payable immediately before the reversion; and (l) that, if the income stream is commuted, the commuted amount must not be greater than the benefit that was payable immediately before the commutation.

Note: For paragraph (h), hardship amount, non‑commutation funded income stream and reversionary partner are defined in subsection (7) and asset‑test exempt income stream is defined in section 5J.

Compliance with subsection (2) if certain conditions are met (2A) A contract, or the governing rules, for the provision to a person of an income stream that meets all of the requirements of subsection (2), except the requirement of paragraph (2)(c), are taken to meet the requirements of subsection (2) if the contract or governing rules specify that any provision included in the contract or governing rules in accordance with paragraph (2)(c) does not apply in any year in which: (a) the person ceases to receive income under an income stream jointly and begins to receive income under a single income stream; and (b) the total amount received in the year under the single income stream is less than the total amount received by the person in the previous year but is not nil. Term of the income stream (2B) If, on an income stream’s commencement day, there is only one primary beneficiary, the income stream’s term complies with this subsection if it is a period of whole years that: (a) starts on the income stream’s commencement day; and (b) is at least as long as the primary beneficiary’s life expectancy (rounded up, if not consisting of a whole number of years, to the next whole number) on the commencement day; and (c) is at most as long as the greater of: (i) what would be the primary beneficiary’s life expectancy (rounded up, if not consisting of a whole number of years, to the next whole number) on the commencement day if the primary beneficiary were 5 years younger; and (ii) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the primary beneficiary reaches age 100 (assuming that the primary beneficiary lives until then). (2C) If, on an income stream’s commencement day, there is only one primary beneficiary, the income stream’s term complies with this subsection if it is a period of whole years that: (a) starts on the income stream’s commencement day; and (b) is at least as long as the greater of the life expectancies (rounded up, if not consisting of a whole number of years, to the next whole number), on the commencement day, of: (i) the primary beneficiary; and (ii) the primary beneficiary’s reversionary partner on that day; and (c) is at most as long as the period worked out under subsection (2D). (2D) For the purposes of paragraph (2C)(c), the period is the greater of: (a) the greater of what would be the life expectancies (rounded up, if not consisting of a whole number of years, to the next whole number), on the commencement day, of: (i) the primary beneficiary, if the primary beneficiary were 5 years younger; and (ii) the primary beneficiary’s reversionary partner on that day, if the partner were 5 years younger; and (b) the greater of: (i) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the primary beneficiary reaches age 100 (assuming that the primary beneficiary lives until then); and (ii) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the primary beneficiary’s reversionary partner on the commencement day reaches age 100 (assuming that the partner lives until then). (2E) If, on an income stream’s commencement day, there are 2 primary beneficiaries (the first primary beneficiary and the second primary beneficiary), the income stream’s term complies with this subsection if it is a period of whole years that: (a) starts on the income stream’s commencement day; and (b) is at least as long as the lesser of the life expectancies (rounded up, if not consisting of a whole number of years, to the next whole number), on the commencement day, of: (i) the first primary beneficiary; and (ii) the second primary beneficiary; and (c) is at most as long as the period worked out under subsection (2F). (2F) For the purposes of paragraph (2E)(c), the period is the greater of: (a) the greater of what would be the life expectancies (rounded up, if not consisting of a whole number of years, to the next whole number), on the commencement day, of: (i) the first primary beneficiary, if the first primary beneficiary were 5 years younger; and (ii) the second primary beneficiary, if the second primary beneficiary were 5 years younger; and (b) the greater of: (i) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the first primary beneficiary reaches age 100 (assuming that the first primary beneficiary lives until then); and (ii) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the second primary beneficiary reaches age 100 (assuming that the second primary beneficiary lives until then). Determination that income stream not asset‑test exempt (3) The Commission may determine that an income stream that meets the requirements of subsection (2) is not an asset‑test exempt income stream if the Commission is satisfied that the person who has purchased the income stream has commuted an asset‑test exempt income stream within 6 months after its commencement day on at least 3 occasions since the person first received a service pension, income support supplement, a veteran payment or a social security payment. Determination that income stream is asset‑test exempt (4) The Commission may determine, in writing, that an income stream is an asset‑test exempt income stream for the purposes of this Act. In making the determination, the Commission is to have regard to the guidelines (if any) determined under subsection (5). (4A) To avoid doubt, a determination under subsection (4) may be made in respect of an income stream regardless of the income stream’s commencement day. (4B) A determination under subsection (4) is not a legislative instrument. Guidelines to be complied with in making determination (5) The Commission may determine, by legislative instrument, guidelines to be complied with when making a determination under subsection (4). Interpretation (7) In this section:

hardship amount has the same meaning as in section 5JA (see subsection 5JA(7).

non‑commutation funded income stream means an income stream that has not been purchased by transferring directly to the purchase of the income stream a payment resulting from the commutation of another asset‑test exempt income stream.

reversionary partner, in relation to the primary beneficiary of an income stream and a particular day, means another person who, on that day:

(a) is a member of a couple with the primary beneficiary; and
(b) is the person to whom the income stream will revert on the primary beneficiary’s death.

Note: For paragraph (a), member of a couple is defined in section 5E.

5JBA Meaning of asset‑test exempt income stream—market‑linked income streams

General requirements (1) An income stream provided to a person is also an asset‑test exempt income stream for the purposes of this Act if: (a) all of the following criteria are satisfied: (i) the income stream’s commencement day happens during the period from 20 September 2004 to 19 September 2007 (both dates inclusive); (ii) the person to whom the income stream is being provided is the primary beneficiary or the primary beneficiary’s reversionary partner (if any) on the day of the primary beneficiary’s death; (iii) the income stream is an income stream arising under a contract, or governing rules, that meets the requirements of subsection (2); (iv) the Commission has not made a determination under subsection (10) in respect of the income stream; (v) the Commission is satisfied that the requirements of subsection (2) have been given effect to from the day the income stream commenced to be paid; or (b) the Commission has made a determination under subsection (11) in respect of the income stream.

Note: For paragraph (a), reversionary partner is defined in subsection (14).

Requirements of contract/governing rules for provision of income stream (2) A contract, or the governing rules, for the provision of an income stream to a person meets the requirements of this subsection if the contract or governing rules specify: (a) the income stream’s term, which must comply with subsection (3) or (4); and (b) obligations for the making of payments under the income stream that satisfy the requirements of subsections (5) to (9); and (c) if the income stream is purchased by or for the primary beneficiary—that the first payment under the income stream relates to the period commencing on the day of that purchase; and (d) if the income stream is not purchased, but acquired, by or for the primary beneficiary—that the first payment under the income stream relates to the period commencing on the day of that acquisition; and (e) that the income stream has no residual capital value; and (f) that the income stream cannot be commuted except: (i) if the income stream is a non‑commutation funded income stream and the commutation is made within 6 months after the commencement day of the income stream; or (ii) if the payment resulting from the commutation is transferred directly to the purchase of another income stream that is an asset‑test exempt income stream; or (iii) if the primary beneficiary’s reversionary partner (if any) on the day of the primary beneficiary’s death survives the primary beneficiary—on or after the partner’s death; or (iv) if subparagraph (iii) does not apply—on or after the primary beneficiary’s death; or (v) to the extent necessary to cover any superannuation contributions surcharge relating to the income stream; or (vi) to the extent necessary to give effect to an entitlement of the person’s partner or former partner under a payment split under Part VIIIB of the Family Law Act 1975; or (via) to the extent necessary in order to comply with section 136‑80 in Schedule 1 to the Taxation Administration Act 1953; or (vii) to the extent necessary to pay a hardship amount; and (g) that the income stream cannot be transferred except on death; and (h) that neither the capital value of the income stream, nor the income from it, can be used as security for a borrowing; and (i) that, if the income stream reverts, it must not have a reversionary component greater than the account balance immediately before the reversion; and (j) that, if the income stream is commuted, the commuted amount must not be greater than the account balance immediately before the commutation.

Note: For paragraph (f), hardship amount, non‑commutation funded income stream and reversionary partner are defined in subsection (14) and asset‑test exempt income stream is defined in section 5J.

Term of the income stream (3) An income stream’s term complies with this subsection if it is a period of whole years that: (a) starts on the income stream’s commencement day; and (b) is at least as long as the primary beneficiary’s life expectancy (rounded up, if not consisting of a whole number of years, to the next whole number) on the commencement day; and (c) is at most as long as the greater of: (i) what would be the primary beneficiary’s life expectancy (rounded up, if not consisting of a whole number of years, to the next whole number) on the commencement day if the primary beneficiary were 5 years younger; and (ii) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the primary beneficiary reaches age 100 (assuming that the primary beneficiary lives until then). (4) An income stream’s term complies with this subsection if it is a period of whole years that: (a) starts on the income stream’s commencement day; and (b) is at least as long as the greater of the life expectancies (rounded up, if not consisting of a whole number of years, to the next whole number), on the commencement day, of: (i) the primary beneficiary; and (ii) the primary beneficiary’s reversionary partner on that day; and (c) is at most as long as the period worked out under subsection (4A). (4A) For the purposes of paragraph (4)(c), the period is the greater of: (a) the greater of what would be the life expectancies (rounded up, if not consisting of a whole number of years, to the next whole number), on the commencement day, of: (i) the primary beneficiary, if the primary beneficiary were 5 years younger; and (ii) the primary beneficiary’s reversionary partner on that day, if the partner were 5 years younger; and (b) the greater of: (i) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the primary beneficiary reaches age 100 (assuming that the primary beneficiary lives until then); and (ii) the period (rounded up, if not consisting of a whole number of years, to the next whole number) starting on the commencement day and ending on the day on which the primary beneficiary’s reversionary partner on the commencement day reaches age 100 (assuming that the partner lives until then). Total amount payable in each financial year—general rule (5) For each financial year wholly or partly within the income stream’s term, the total amount of the payments to be made under the income stream must not be less than 90%, nor greater than 110%, of the amount worked out under the formula: Start formula start fraction account balance over PF end fraction end formula where:

account balance means:

(a) if the financial year includes the income stream’s commencement day—the opening account balance for the income stream; or
(b) otherwise—the account balance for the income stream at the start of the financial year.

PF means the payment factor for the income stream for the financial year, worked out under principles determined by the Commission under subsection (5A).

(5A) The Commission must, by legislative instrument, determine principles for the purposes of the definition of PF in subsection (5). Other rules about payments under the income stream (6) If the income stream’s commencement day is not a 1 July, a total amount worked out under subsection (5) for the financial year starting on the preceding 1 July must be reduced on a pro‑rata basis by reference to the number of days in the financial year that are on and after the commencement day. (7) If: (a) the income stream’s commencement day happens in June; and (b) no payment is made under the income stream for the financial year in which the commencement day happens; subsections (5) and (6) do not apply to the income stream for that financial year. (8) If the amount (the test amount) of a payment to be made under the income stream on a day in a financial year: (a) is worked out by reference to a total amount worked out under subsection (5) (and subsection (6), if applicable) for the financial year; and (b) exceeds the income stream’s account balance on that day; then: (c) the account balance (if any) must be paid instead of the test amount; and (d) that total amount described in paragraph (a) must be reduced by the amount of the excess. (9) If the income stream has a positive account balance at the end of its term, a payment equal to that account balance must be made within 28 days after the end of the term. Determination that income stream not asset‑test exempt (10) The Commission may determine that an income stream that meets the requirements of subsection (2) is not an asset‑test exempt income stream if the Commission is satisfied that: (a) the primary beneficiary has commuted an asset‑test exempt income stream on at least 3 occasions since the person first received a service pension, income support supplement, a veteran payment or a social security payment; and (b) on at least 3 of those occasions, the commutation happened within 6 months after the commencement day of the income stream concerned. Determination that income stream is asset‑test exempt (11) The Commission may determine, in writing, that an income stream is an asset‑test exempt income stream for the purposes of this Act. In making the determination, the Commission must have regard to the guidelines (if any) determined under subsection (12). (11A) To avoid doubt, a determination under subsection (11) may be made in respect of an income stream regardless of the income stream’s commencement day. (11B) A determination under subsection (11) is not a legislative instrument. Guidelines to be complied with in making determination (12) The Commission may determine, by legislative instrument, guidelines to be complied with when making a determination under subsection (11). Definitions (14) In this section:

hardship amount has the same meaning as in section 5JA (see subsection 5JA(7)).

non‑commutation funded income stream means an income stream that has not been purchased by transferring directly to the purchase of the income stream a payment resulting from the commutation of another asset‑test exempt income stream.

reversionary partner, in relation to the primary beneficiary of an income stream and a particular day, means another person who, on that day:

(a) is a member of a couple with the primary beneficiary; and
(b) is the person to whom the income stream will revert on the primary beneficiary’s death.

Note: For paragraph (a), member of a couple is defined in section 5E.

5JBB Meaning of asset‑test exempt income stream—military invalidity pension income stream

An income stream provided to a person is an asset‑test exempt income stream for the purposes of this Act if the income stream is a military invalidity pension income stream.

5JC Family law affected income streams

If: (a) an income stream is acquired or purchased (the original family law affected income stream) by a person (the member); and (b) the member’s partner or former partner (the non‑member) becomes entitled to be paid some or all of that income stream under: (i) a payment split under Part VIIIB of the Family Law Act 1975; or (ii) an order under Part VIIIAA of the Family Law Act 1975; then so much (if any) of the income stream paid to the non‑member as a series of ongoing payments (secondary FLA income stream) and the remainder (if any) of the income stream paid to the member as such a series of payments (primary FLA income stream) are each family law affected income streams.

5JD Asset‑tested status of secondary FLA income streams

If there is a primary FLA income stream (1) If a primary FLA income stream is, or would be if the income stream were assessed for the purposes of this Act: (a) an asset‑tested income stream (long term); or (b) an asset‑tested income stream (short term); or (c) an asset‑tested income stream (lifetime); then the secondary FLA income stream to which it is related is also to be treated as if it were assessed as an income stream of that kind. If there is no primary FLA income stream (2) If: (a) there is no primary FLA income stream in relation to a secondary FLA income stream; and (b) had there been a primary FLA income stream in relation to that secondary FLA income stream it would have been assessed for the purposes of this Act as an asset‑tested income stream (long term), an asset‑tested income stream (short term) or an asset‑tested income stream (lifetime); then the secondary FLA income stream is to be treated as if it were assessed as an income stream of that kind.

5JE Asset‑tested income stream (lifetime)

(1) Subject to subsection (2), an income stream is an asset‑tested income stream (lifetime) if: (a) the contract, or governing rules, for the provision of the income stream ensure that, once payments of the income stream start, the income stream is to continue for the remainder of the life of one or more individuals; and (b) the contract, or governing rules, for the provision of the income stream ensure that the amounts of those payments are determined by having regard to the age, life expectancy or other factors relevant to the mortality of those individuals; and (c) the income stream is not an asset‑test exempt income stream; and (d) the income stream is not a defined benefit income stream. (2) If: (a) paragraphs (1)(a) to (d) are satisfied in relation to an income stream; and (b) the income stream is of a kind determined in an instrument under subsection (3); the income stream is an asset‑tested income stream (lifetime) only to the extent determined in the instrument. (3) The Commission may make a legislative instrument for the purposes of subsection (2). (4) An income stream is an asset‑tested income stream (lifetime) if: (a) the income stream satisfies the conditions determined in an instrument under subsection (5); and (b) the income stream is not an asset‑test exempt income stream; and (c) the income stream is not a defined benefit income stream. (5) The Commission may, by legislative instrument, determine conditions for the purposes of paragraph (4)(a).

5K Maintenance income definitions

In this Act, the expressions disability expenses maintenance, maintenance and maintenance income have the same respective meanings as in the Family Assistance Act.