Social Security and Veterans’ Affairs Legislation Amendment Act 1988

No. 135 of 1988

An Act to amend the law relating to social security and veterans’ entitlements, and for related purposes

[Assented to 22 December 1988]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

PART I—PRELIMINARY

Short title

1. This Act may be cited as the Social Security and Veterans’ Affairs Legislation Amendment Act 1988.

Commencement: Day of Royal Assent

Commencement

2. Each provision of this Act commences, or shall be taken to have commenced, as the case requires, on the day shown by the note in italics at the foot of that provision.

Commencement: Day of Royal Assent

Application

3. (1) The amendments made by sections 5, 6, 7 and 8 apply to payments under the Social Security Act 1947 that fall due on or after 1 December 1988.

Commencement: 1 December 1988

(2) The amendments made by sections 9, 10, 11 and 12 apply to payments under the Social Security Act 1947 that fall due on or after 12 June 1989.

Commencement: 12 June 1989

(3) The amendments made by subsections 13 (1), 14 (1), 15 (1), 16 (1) and 17 (1) apply to payments under the Social Security Act 1947 that fall due on or after 13 June 1989.

Commencement: 13 June 1989

(4) The amendment made by subsection 16 (2) applies to payments under the Social Security Act 1947 that fall due on or after 13 December 1989.

Commencement: 13 December 1989

(5) The amendments made by subsections 13 (2), 14 (2), 15 (2), 16 (3) and 17 (2) apply to payments under the Social Security Act 1947 that fall due on or after 13 June 1990.

Commencement: 13 June 1990

(6) The amendments made by sections 22, 23 and 24 apply to payments under the Veterans’ Entitlements Act 1986 that fall due on or after 1 December 1988.

Commencement: 1 December 1988

(7) The amendments made by sections 25, 26, 27 and 28 and subsection 29 (1) apply to payments under the Veterans’ Entitlements Act 1986 that fall due on or after 12 June 1989.

Commencement: 12 June 1989

(8) The amendment made by subsection 29 (2) applies to payments under the Veterans’ Entitlements Act 1986 that fall due on or after 14 June 1990.

Commencement: 14 June 1990

PART II—AMENDMENTS OF SOCIAL SECURITY ACT 1947

Division 1—Principal Act

Principal Act

4. In this Part, “Principal Act” means the Social Security Act 19471 Commencement: Day of Royal Assent

Division 2—Amendments relating to investment income

Insertion of heading

5. Before section 1 of the Principal Act the following heading is inserted:

“Division 1—Preliminary”.

Commencement: 1 December 1988

Interpretation

6. Section 3 of the Principal Act is amended:

(a) by inserting in the definition of “income” in subsection (1) “and any income that the person is taken to receive because of section 12c or 12d” after “gift or allowance” (first occurring);

(b) by inserting after paragraph (a) of the definition of “income” in subsection (1) the following paragraph:

“(aa) any return actually received by the person from an investment in respect of a period during which the person has, because of section 12c or 12d, been taken to receive income from that investment;”.

Commencement: 1 December 1988

Repeal of section 3a

7. Section 3a of the Principal Act is repealed.

Commencement: 1 December 1988

8. After section 12a of the Principal Act the following Division is inserted in Part I:

“Division 2—Investment Income

Interpretation etc.

“12b. (1) In this Division, unless the contrary intention appears:

‘accruing return investment’ means an arrangement by a person that consists of or includes an investment of money, being an investment:

(a) that produces:

(i) a fixed rate or quantifiable rate of return, whether or not that rate varies from time to time; or

(ii) a rate of return that may be reasonably approximated; and

(b) the value of which from time to time is unlikely to decrease as a result of market changes;

‘approved deposit fund’ means a fund that is an approved deposit fund for the purposes of Subdivision AA of Division 2 of Part III of the Assessment Act;

‘Assessment Act’ means the Income Tax Assessment Act 1936;

‘deferred annuity’ means an annuity that is a deferred annuity for the purposes of Subdivision AA of Division 2 of Part III of the Assessment Act;

‘determination of entitlement’, in relation to a person, means a determination:

(a) whether the person is qualified to receive a pension, benefit or allowance under this Act; or

(b) of the rate at which a pension, benefit or allowance under this Act is payable to the person;

‘eligible investment’ means an investment that satisfies all of the following conditions:

(a) money or property invested is paid or transferred by the investor directly or indirectly to a body corporate or into a trust fund;

(b) the assets that represent money or property invested (in this definition called the ‘investment assets’) are held otherwise than in the names of investors;

(c) the investor does not, either alone or jointly with a relative or relatives of the investor, have effective control over the management of the investment assets;

(d) the investor has a legally enforceable right to share in any distribution of the income or profits derived from the investment assets;

‘friendly society’ means:

(a) a society registered as a friendly society under a law in force in a State or Territory; or

(b) a society that had, before 13 December 1987, been approved for the purpose of the definition of ‘friendly society’ in subsection 115 (1);

and, for the purpose of the definition of ‘market-linked investment’ in this subsection, includes a society that has been approved for the purpose of the definition of ‘friendly society’ in subsection 115 (1) on or after 13 December 1987;

‘fund manager’, in relation to an investment product, means the person or body specified, in relation to that investment product, in a notice under subsection (2);

‘investment product’ means a class of market-linked investments specified in a notice under subsection (2);

‘market-linked investment’ means:

(a) an investment in:

(i) an approved deposit fund;

(ii) a deferred annuity;

(iii) a public unit trust; or

(iv) an insurance bond;

(b) an investment with a friendly society; or

not being:

(d) an accruing return investment; or

(e) an investment consisting of the acquisition of real property, stock or shares;

‘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 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 Assessment Act;

‘return’, in relation to an investment, means any increase, whether of a capital or income nature and whether or not distributed, in the value or amount of the investment;

‘statutory rate of return’ means 11% per annum or such lower percentage per annum as is specified in a notice in force under subsection 12e (1).

“(2) The Secretary, by notice in writing published in the Gazette:

(a) may specify a class of market-linked investments that constitute an investment product; and

(b) shall, in relation to each investment product so identified, specify a person or body for the purposes of the definition of ‘fund manager’ in subsection (1).

“(3) Where the value or amount at a particular time of a market-linked investment included in an investment product is equal to or less than the value or amount of that market-linked investment 12 months previously, the annual rate of return at that first-mentioned time for market-linked investments included in that investment product shall be taken for the purposes of a determination under this Act to be 0%.

“(4) A reference in this Division to the Secretary refusing, on application under subsection 12f (2), to make a determination under subsection 12f (1) does not include a reference to the Secretary refusing, pursuant to subsection 12f (11), to consider such an application.

Accruing return investments

“12c. (1) Where a person has made, or makes, whether before, on or after 13 December 1987, an accruing return investment, being an investment to which subsections (2) and (3) do not apply, the person shall, for the

purposes of this Act, be taken to receive the current annual rate of return on that investment as income of the person from the day on which that investment was made.

“(2) Where a person makes, on or after 1 January 1988, an accruing return investment:

(a) with a friendly society; or

(b) of a kind where a return is not available until the end of a period of at least 12 months after that investment was made or until realisation of that investment;

the person shall, for the purposes of this Act, be taken to receive the current annual rate of return on that investment as income of the person from the day on which that investment was made.

“(3) Where a person has made, at any time before 1 January 1988, an accruing return investment:

(a) with a friendly society; or

(b) of a kind where a return is not available until the end of a period of at least 12 months after that investment was made or until realisation of that investment;

and the person becomes entitled to receive an amount by way of a return on that investment, the person shall, for the purposes of this Act, be taken to receive one fifty-second of that amount as income of the person during each week in the period of 12 months commencing on the day on which the person becomes entitled to receive that amount.

“(4) For the purposes of this section, the current annual rate of return on an investment of the kind referred to in subparagraph (a) (ii) of the definition of ‘accruing return investment’ in section 12b is a reasonable approximation of that rate of return.

“(5) A reference in subsection (3) to a person becoming entitled to receive an amount includes a reference to the person becoming entitled to receive an amount under an arrangement of the kind referred to in the definition of ‘accruing return investment’ in section 12b to the extent that subsection (1) or (2) does not apply to that entitlement.

Market-linked investments

“12d. (1) Where, on or after 9 September 1988, a person makes a market-linked investment, the person shall, for the purposes of this Act, be taken to receive the product rate of return on that investment as income of the person from:

(a) the day on which that investment was made; or

(b) the commencement of this section; whichever is later.

“(2) For the purposes of this Division, the product rate of return on a market-linked investment is:

(a) except where paragraph (b) applies—the statutory rate of return for that investment; or

(b) if a determination by the Secretary under subsection 12f (1) is in force in relation to that investment—the percentage per annum specified in that determination.

Statutory rate of return for market-linked investments

“12e. (1) The Minister may from time to time, by notice in writing, determine a rate of return for market-linked investments that is less than 11% but not less than 0% per annum.

“(2) A notice by the Minister under subsection (1) is a disallowable instrument for the purposes of section 46a of the Acts Interpretation Act 1901.

Secretary may determine rate of return for market-linked investments

“12f. (1) Where the Secretary is satisfied, either on application made under subsection (2) or otherwise, that the current annual rate of return on market-linked investments included in an investment product is less than the statutory rate of return on those market-linked investments, the Secretary shall determine the current annual rate of return on market-linked investments included in that investment product.

“(2) An application for a determination of the current annual rate of return on market-linked investments included in an investment product may be made in writing by:

(a) the fund manager in relation to the investment product; or

(b) a natural person who holds a market-linked investment included in the investment product.

“(3) Where the Secretary:

(a) is considering an application under subsection (2) in relation to an investment product; or

(b) otherwise than on application under subsection (2), proposes to make a determination under subsection (1) in relation to an investment product;

the Secretary shall notify the fund manager, in writing, accordingly.

“(4) In making a determination under subsection (1) of a current annual rate of return on market-linked investments included in that investment product, the Secretary shall have regard to all information that is available to the Secretary about the return (if any) on those market-linked investments during the immediately preceding period of 12 months.

“(5) A determination by the Secretary under subsection (1) comes into force, or shall be taken to have come into force:

(a) except where paragraph (b) applies—on the date of the determination; or

(b) where the determination is made on application under subsection (2)—on the day when the application was received by the Secretary.

“(6) The Secretary shall cause a determination made under subsection (1) to be notified in the Gazette, but a failure to do so does not invalidate the determination.

“(7) The Secretary may revoke a determination under subsection (1) of the current annual rate of return on market-linked investments included in an investment product if and only if the Secretary ceases to be satisfied that the current annual rate of return on those investments is lower than the statutory rate of return on those investments.

“(8) Where the Secretary:

(a) makes or revokes a determination under subsection (1) in relation to an investment product; or

(b) on application under subsection (2), refuses to make a determination under subsection (1) in relation to an investment product;

the Secretary shall give notice in writing accordingly to the fund manager in relation to that investment product.

“(9) A determination by the Secretary under subsection (1) in relation to an investment product remains in force until:

(a) the Minister determines a new rate of return under section 12e that is lower than the rate of return provided for by the Secretary’s determination;

(b) a new determination by the Secretary under subsection (1) in relation to that investment product comes into force; or

“(10) Subsection (11) applies in relation to an investment product where:

(a) on application under subsection (2), the Secretary has made or refused to make a determination under subsection (1) in relation to the investment product; or

(b) in any other case, the Secretary has made a determination under subsection (1) in relation to the investment product.

“(11) Where this subsection applies in relation to an investment product, the Secretary is not required to consider any application made in relation to that investment product that is made:

(a) within the period of 3 months after the making of the application referred to in paragraph (10) (a), or of the determination referred to in paragraph (10) (b), as the case requires; or

(b) if, within that period of 3 months, the Minister determines a new rate of return as mentioned in paragraph (9) (a) in relation to that

investment product—within the period of 3 months after the date of the Minister’s determination.

Special provisions about certain investments made before 9 September 1988

“12g. (1) Where:

(a) before 9 September 1988, a person has made a market-linked investment; and

(b) under an agreement made before 9 September 1988, dividends payable to the person in respect of that investment are not paid to the person directly but are invested in the person’s name in market-linked investments included in the same investment product;

any market-linked investment arising from the investment of a dividend pursuant to that agreement on or after 9 September 1988 shall, for the purposes of this Division, be taken to have been made before 9 September 1988.

“(2) Subsections (3) and (4) apply where, at any time after 9 September 1988:

(a) a person held, or holds, 2 or more market-linked investments included in the same investment product;

(b) at least one of the investments was made before 9 September 1988 and at least one of the investments was made on or after that day; and

“(3) If the amount received in respect of the disposal is or was greater than or equal to:

(a) the value or amount, at the time of the disposal, of the investment made before 9 September 1988; or

(b) the sum of the values or amounts, at the time of the disposal, of the investments made before 9 September 1988;

as the case requires, the person shall, for the purposes of this Division, be taken to have disposed of the whole of that investment or those investments.

“(4) If the amount received in respect of the disposal (in this subsection called the ‘disposal amount’) is or was less than:

(a) the value or amount, at the time of the disposal, of the investment made before 9 September 1988; or

(b) the sum of the values or amounts, at the time of the disposal, of the investments made before 9 September 1988;

as the case requires, the person shall, for the purposes of this Division, be taken to have disposed of so much of that investment or those investments as is equal to the disposal amount.

Conversion of certain investments

“12h. (1) Where an investment that was not an accruing return investment (in this subsection called the ‘original investment’) is converted into an accruing return investment, whether or not it was able to be so converted because of a provision of the agreement relating to the making of the original investment, then, for the purposes of this Division:

(a) the accruing return investment shall be taken to have been made on the day the original investment was so converted; and

(b) the original investment shall be taken to have been realised on that day.

“(2) Where an investment that was not a market-linked investment (in this subsection called the ‘original investment’) is converted into a market-linked investment, whether or not it was able to be so converted because of a provision of the agreement relating to the making of the original investment, then, for the purposes of this Division:

(a) the market-linked investment shall be taken to have been made on the day the original investment was so converted; and

(b) the original investment shall be taken to have been realised on that day.

Determinations of entitlement of persons holding market-linked investments

“12j. (1) When a determination of entitlement is made in relation to a person who has a market-linked investment that was made on or after 9 September 1988, the Secretary shall:

(a) make that determination having regard to the current product rate of return for that market-linked investment; and

(b) re-assess the rate at which pension, benefit or allowance under this Act should have been payable to the person in respect of any period since the immediately preceding determination of the person’s entitlement during which the product rate of return for that market-linked investment was less than the product rate of return that was used for the purposes of that immediately preceding determination of entitlement.

“(2) Where, under paragraph (1) (b), the Secretary re-assesses the rate at which pension, benefit or allowance under this Act should have been payable to a person in respect of a period, there is payable to the person the amount worked out using the formula:

where:

A1 is the amount of pension, benefit or allowance that should have been payable to the person in respect of the period;

A2 is the amount of that pension, benefit or allowance that was paid to the person in respect of the period.

Treatment of costs of investments

“12k. (1) Where, under another provision of this Division, a person is to be taken to receive a rate of return on an investment as income, the amount that the person is taken to receive shall, during each week in the period of 12 months after the day from which the person is to be taken to receive a rate of return on the investment as income, be reduced by one fifty-second of the total amount of the investment costs.

“(2) Subsection (1) does not apply in respect of investment costs incurred in respect of investments made before 9 September 1988.

“(3) In this section:

‘investment costs’, in relation to an investment made by a person, means such reasonable costs as would be required to be paid by any person making an identical investment as a condition of being permitted to make that investment.

Certain capital amounts taken to be received over 12 months

“12l. (1) Where a person becomes entitled, whether before or after the commencement of this section, to receive an amount of income, being an amount of a capital nature but not being:

(a) income from remunerative work undertaken by the person;

(b) a return from an accruing return investment; or

the person shall, for the purposes of this Act, be taken to receive one fifty-second of that amount as income of the person during each week in the period of 12 months commencing on the day on which the person becomes entitled to receive that amount.

“(2) A reference in subsection (1) to a person becoming entitled to receive an amount includes a reference to the person becoming entitled to receive an amount under an arrangement of the kind referred to in the definition of ‘accruing return investment’ in section 12b to the extent that subsection 12c (1) or (2) does not apply to that entitlement.

Operation of Part XIX

“12m. (1) For the purposes of Part XIX, the fund manager in relation to an investment product shall be taken to be a person affected by a rate of return decision in relation to the investment product.

“(2) Sections 173, 174 and 175 do not apply in relation to a rate of return decision.

“(3) Where an application is made to the Social Security Appeals Tribunal under section 177 for review of a rate of return decision, being an application by a person other than the fund manager in relation to the

investment product concerned, the National Convener shall give written notice to the fund manager of the making of that application.

“(4) In spite of anything in this Act, a person is not entitled to apply to the Social Security Appeals Tribunal for review of a rate of return decision more than 3 months after the decision came into force.

“(5) A person who applies to the Social Security Appeals Tribunal for review of a rate of return decision when an application has already been made to that Tribunal for review of that decision but before the review has been determined shall be taken to have applied to the National Convener under section 181 to be made a party to the review.

“(6) Section 183 does not apply in relation to a decision by the Social Security Appeals Tribunal where the decision under review was a rate of return decision.

“(7) A decision by the Social Security Appeals Tribunal affirming a rate of review decision comes into operation immediately on the giving of the decision by the Tribunal.

“(8) A decision by the Social Security Appeals Tribunal varying a rate of review decision, or setting aside a rate of review decision and making a new decision, comes into force on such day, and remains in force for such period, as is specified by the Tribunal, but the Tribunal is not empowered to specify a day or a period such that the decision as varied, or the new decision, would be taken to have effect at any time after the rate of return resulting from the decision under review had been replaced by a new rate of return, whether because of a later rate of return decision or otherwise.

“(9) Section 187 does not apply in relation to an application to the Social Security Appeals Tribunal for review of a rate of return decision.

“(10) The Social Security Appeals Tribunal is not empowered to review a rate of return decision except on application that is made within the time limit imposed by subsection (4) and expressed to be an application for review of the rate of return decision.

“(11) A reference in this section to an application having been made to the Social Security Appeals Tribunal does not include a reference to an application that has been withdrawn.

“(12) A decision constituted by a refusal, on application under subsection 12f (2), to make a determination under subsection 12f (1) shall for the purposes of this section be taken to have come into force on the day when the fund manager concerned is notified of that refusal.

“(13) In this section:

‘rate of return decision’, in relation to an investment product, means a decision under this Division constituted by:

(a) a refusal, on application under subsection 12f (2), to make a determination under subsection 12f (1) of a rate of return on market-linked investments included in the investment product;

(b) a determination under subsection 12f (1) of a rate of return on market-linked investments included in the investment product; or

(c) the revocation under subsection 12f (7) of a determination of a rate of return on market-linked investments included in the investment product.

Operation of Administrative Appeals Tribunal Act

“12n. (1) For the purposes of the AAT Act, the fund manager in relation to an investment product shall be taken to be a person affected by an SSAT rate of return decision in relation to the investment product.

“(2) Where an application is made to the Tribunal under section 205 for review of an SSAT rate of return decision, being an application by a person other than the fund manager in relation to the investment product concerned, the Registrar of the Tribunal shall give written notice to the fund manager of the making of the application.

“(3) A person who applies to the Tribunal for review of an SSAT rate of return decision when an application has already been made to the Tribunal for review of that decision but before proceedings for the review of the decision have been determined shall be taken to have applied to the Tribunal under subsection 30 (1a) of the AAT Act to be made a party to the proceeding for the review of the decision.

“(4) The Tribunal is not empowered to review a rate of return decision except on application that is expressed to be an application for review of an SSAT rate of return decision.

“(5) A reference in this section to an application having been made to the Tribunal does not include a reference to an application that has been dismissed under section 42a of the AAT Act.

“(6) In this section:

‘AAT Act’ means the Administrative Appeals Tribunal Act 1975;

‘rate of return decision’ has the same meaning as it has in section 12m;

‘SSAT rate of return decision’ means a decision of the Social Security Appeals Tribunal referred to in section 205, being a decision that is, or is made in substitution for, a rate of return decision;

‘Tribunal’ means the Administrative Appeals Tribunal.”.

Commencement: 1 December 1988

Division 3—Amendments relating to rent assistance and retirement villages

Interpretation

9. Section 3 of the Principal Act is amended:

(a) by omitting from subsection (1) the definition of “rent” and substituting the following definition:

“ ‘rent’, in relation to a person, means amounts payable every 3 months, or more frequently, by the person as a condition of occupancy of premises, or a part of premises, occupied by the person as the person’s principal home, and includes:

(a) amounts payable by the person for services provided in a retirement village that is the person’s principal home;

(b) where the person is residing in a nursing home that is the person’s principal home—amounts payable by the person for accommodation in the nursing home;

(d) amounts payable by the person for the use of a site for:

(i) a caravan or other vehicle; or

(ii) a structure;

occupied by the person as the person’s principal home; or

(e) amounts payable by the person for the right to moor a vessel that is occupied by the person as the person’s principal home;”;

(b) by inserting in subsection (1) the following definitions:

“ ‘board’, when used in the expression ‘board and lodging’, means the provision of meals on a regular basis in connection with the provision of lodging;

‘ineligible property owner’ means a person who has a right or interest to which subparagraph 4 (1) (a) (i) or (ii) applies, or would apply if the value of the person’s property for the purposes of this Act were calculated in accordance with section 4, other than a person:

(a) in relation to whom subsection 4 (2) applies or would apply;

(b) who is residing in a nursing home, other than a person who is residing in a retirement village;

(c) who pays amounts for the use of a site for a caravan or other vehicle, or a structure, that is the person’s principal home; or

(d) who pays amounts for the right to moor a vessel that is the person’s principal home;

‘retirement village’ means residential premises the accommodation in which is primarily intended for persons who are at least 55 years old, being premises consisting of:

(a) one or more of the following kinds of accommodation:

(i) self-care units;

(ii) serviced units;

(iii) hostel units; and

(b) communal facilities for use by the occupants of the units referred to in paragraph (a);

and includes residential premises that, in the Secretary’s opinion, have similar functions to those first-mentioned residential premises;”;

“(19) Where:

(a) a person pays or is liable to pay amounts for board and lodging; and

(b) the part of each such amount that is paid or payable in respect of lodging is not ascertainable;

the amount of rent paid or payable by the person shall, for the purposes of this Act, be taken to be two-thirds of the amounts paid or payable as mentioned in paragraph (a).

“(20) Where:

(a) a person who is residing in a nursing home pays or is liable to pay amounts for accommodation and other services in the nursing home; and

(b) the part of each such amount that is paid or payable in respect of accommodation is not ascertainable;

the amount of rent paid or payable by the person shall, for the purposes of this Act, be taken to be two-thirds of the amounts paid or payable as mentioned in paragraph (a).

“(21) Unless the contrary intention appears, a reference in this Act to a person residing in a nursing home is a reference to a person who is:

(a) residing in a benevolent home or in premises at which accommodation is provided exclusively or principally for persons who have a mental disability;

(b) residing in premises that are:

(i) an approved nursing home for the purposes of the National Health Act 1953 or the Nursing Homes Assistance Act 1974;

(ii) an approved home for the purposes of the Aged or Disabled Persons Homes Act 1954; or

(iii) an approved hostel for the purposes of the Aged or Disabled Persons Hostels Act 1972;

(d) residing in premises made available for the accommodation of the person by an approved organisation providing hostel care services or personal care services to the person for the purposes of Part III of the Aged or Disabled Persons Homes Act 1954.”.

Commencement: 12 June 1989

Calculation of value of property

10. Section 4 of the Principal Act is amended by adding at the end the following subsection:

“(12) This section has effect subject to section 4b.”.

Commencement: 12 June 1989

11. After section 4a of the Principal Act the following section is inserted:

Special provisions relating to residents of retirement villages

“4b. (1) Where:

(a) an unmarried person’s principal home is in a retirement village; and

(b) the person’s entry contribution was more than the extra allowable amount;

the person shall be taken, for the purposes of this Act, to have a right or interest in his or her principal home to which subparagraph 4 (1) (a) (i) applies.

“(2) Where:

(a) an unmarried person’s principal home is in a retirement village; and

(b) the person’s entry contribution was equal to or less than the extra allowable amount;

then, for the purposes of this Act, whether or not the person actually has any right or interest in relation to the person’s principal home and whatever the value of any such right or interest:

(d) the person’s property shall be taken to include property the value of which is equal to the amount of the person’s entry contribution; and

(e) paragraph 4 (1) (a) and section 6 do not apply to the property that the person is, because of paragraph (d) of this subsection, taken to have.

“(3) Where:

(a) a married person’s principal home is in a retirement village;

(b) the person shares that principal home with his or her spouse; and

the person shall be taken, for the purposes of this Act, to have a right or interest in his or her principal home to which subparagraph 4 (1) (a) (ii) applies.

“(4) Where:

(a) a married person’s principal home is in a retirement village;

(b) the person shares that principal home with his or her spouse; and

then, for the purposes of this Act, whether or not the person actually has any right or interest in relation to the persons’s principal home and whatever the value of any such right or interest:

(d) the person shall be taken not to have a right or interest in relation to the person’s principal home;

(e) the person’s property shall be taken to include property the value of which is equal to the amount of the person’s entry contribution; and

(f) paragraph 4 (1) (a) and section 6 do not apply to the property that the person is, because of paragraph (e) of this subsection, taken to have.

“(5) Where:

(a) a married person’s principal home is in a retirement village;

(b) a direction under subsection 33 (2) is in force in respect of the person or the person’s spouse;

(d) the person’s entry contribution, and the entry contribution of the person’s spouse, were each more than the extra allowable amount concerned;

then, for the purposes of this Act:

(e) the person shall be taken to have a right or interest in his or her principal home to which subparagraph 4 (1) (a) (ii) applies;

(f) any right or interest of the person in the principal home of the person’s spouse shall be disregarded in calculating the actual value of the person’s property for the purposes of this Act; and

(g) any right or interest of the person’s spouse in his or her principal home, or in the person’s principal home, shall be disregarded in

calculating the actual value of the property of the person’s spouse for the purposes of this Act.

“(6) Where:

(a) a married person’s principal home is in a retirement village;

(b) a direction under subsection 33 (2) is in force in respect of the person or the person’s spouse;

(d) the person’s entry contribution, and the entry contribution of the person’s spouse, were each equal to or less than the extra allowable amount concerned;

then, for the purposes of this Act, whether or not the person actually has any right or interest in relation to the person’s principal home and whatever the value of any such right or interest;

(e) the person shall be taken not to have a right or interest in relation to the person’s principal home;

(f) the person’s property shall be taken to include property the value of which is equal to the amount of the person’s entry contribution; and

(g) paragraph 4 (1) (a) and section 6 do not apply to the property that the person is, because of paragraph (f) of this subsection, taken to have.

“(7) Where:

(a) a married person’s principal home is in a retirement village;

(b) a direction under subsection 33 (2) is in force in respect of the person or the person’s spouse;

(d) the person’s entry contribution was more than the extra allowable amount and the entry contribution of the person’s spouse was equal to or less than the extra allowable amount;

the following provisions apply for the purposes of the application of this Act to the person and to the person’s spouse:

(e) the person shall be taken to have a right or interest in his or her principal home to which subparagraph 4 (1) (a) (ii) applies;

(f) for the purposes of this Act, whether or not the person’s spouse actually has any right or interest in relation to the spouse’s principal home and whatever the value of any such right or interest:

(i) both the person, and the person’s spouse, shall be taken not to have a right or interest in relation to the spouse’s principal home;

(ii) the property of the person’s spouse shall be taken to include property the value of which is equal to the amount of the spouse’s entry contribution; and

(iii) paragraph 4 (1) (a) and section 6 do not apply to the property that the person’s spouse is, because of subparagraph (ii) of this paragraph, taken to have;

(g) any right or interest of the person’s spouse in the person’s principal home shall be disregarded in calculating the actual value of the property of the person’s spouse for the purposes of this Act;

(h) for the purpose of determining under section 8 whether a pension reduction amount is applicable to the person, or the person’s spouse, that section shall have effect as if the amount specified in each of paragraphs 8 (1) (c) and (d) were the amount worked out using the formula:

where:

C is the amount specified in paragraph 8 (1) (c);

D is the amount specified in paragraph 8 (1) (d).

“(8) Where:

(a) a married person’s principal home is in a retirement village;

(b) a direction under subsection 33 (2) is in force in respect of the person or the person’s spouse;

(d) the right or interest of the person’s spouse in his or her principal home is to be disregarded because of subparagraph 4 (1) (a) (ii); and

(e) the person’s entry contribution was more than the extra allowable amount;

then:

(f) for the purposes of this Act, the person shall be taken to have a right or interest in his or her principal home to which subparagraph 4 (1) (a) (ii) applies;

(g) any right or interest of the person in the principal home of the person’s spouse referred to in paragraph (d) shall be disregarded in calculating the actual value of the person’s property for the purposes of this Act; and

(h) any right or interest of the person’s spouse in the person’s principal home shall also be disregarded in calculating the actual value of the property of the person’s spouse for the purposes of this Act.

“(9) Where:

(a) a married person’s principal home is in a retirement village;

(b) a direction under subsection 33 (2) is in force in respect of the person or the person’s spouse;

(d) the right or interest of the person’s spouse in his or her principal home is to be disregarded because of subparagraph 4 (1) (a) (ii); and

(e) the person’s entry contribution was equal to or less than the extra allowable amount;

the following provisions apply for the purposes of the application of this Act to the person and to the person’s spouse:

(f) for the purposes of this Act, whether or not the person actually has any right or interest in relation to the person’s principal home and whatever the value of any such right or interest:

(i) both the person, and the person’s spouse, shall be taken not to have a right or interest in relation to the person’s principal home;

(ii) the person’s property shall be taken to include property the value of which is equal to the amount of the person’s entry contribution; and

(iii) paragraph 4 (1) (a) and section 6 do not apply to the property that the person is, because of subparagraph (ii) of this paragraph, taken to have;

(h) for the purposes of determining under section 8 whether a pension reduction amount is applicable to the person, or the person’s spouse, that section shall have effect as if the amount specified in each of paragraphs 8 (1) (c) and (d) were the amount worked out using the formula:

where:

C is the amount specified in paragraph 8 (1) (c);

D is the amount specified in paragraph 8 (1) (d).

“(10) Where:

(a) a married person’s principal home is in a retirement village;

(b) a direction under subsection 33 (2) is in force in respect of the person or the person’s spouse;

(d) the person’s spouse does not have a right or interest in his or her principal home that is to be disregarded because of subparagraph 4 (1) (a) (ii); and

(e) the person’s entry contribution was more than the extra allowable amount;

the following provisions apply for the purposes of the application of this Act to the person and to the person’s spouse:

(f) for the purposes of this Act, the person shall be taken to have a right or interest in his or her principal home to which subparagraph 4 (1) (a) (ii) applies;

where:

C is the amount specified in paragraph 8 (1) (c);

D is the amount specified in paragraph 8 (1) (d).

“(11) Where:

(a) a married person’s principal home is in a retirement village;

(b) a direction under subsection 33 (2) is in force in respect of the person or the person’s spouse;

(d) the person’s spouse does not have a right or interest in his or her principal home that is to be disregarded because of subparagraph 4 (1) (a) (ii); and

(e) the person’s entry contribution was equal to or less than the extra allowable amount;

then, whether or not the person or the person’s spouse actually has any right or interest in relation to the person’s principal home and whatever the value of any such right or interest, the following provisions apply for the purposes of the application of this Act to the person and to the person’s spouse:

(f) both the person, and the person’s spouse, shall be taken not to have a right or interest in relation to the person’s principal home;

(g) the person’s property shall be taken to include property the value of which is equal to the amount of the person’s entry contribution; and

(h) paragraph 4 (1) (a) and section 6 do not apply to the property that the person is, because of paragraph (g) of this subsection, taken to have.

“(12) In this section, a reference to the actual value of a married person’s property is a reference to the value of the property that is actually property of the person rather than the person’s spouse, that is, the value of the person’s property that would be used to determine the value of the person’s property, or of the property of the person’s spouse, under paragraph 3 (5) (a).

“(13) In this section:

‘entry contribution’, in relation to a person whose principal home is in a retirement village, means:

(a) in the case of an unmarried person—the amount, or the sum of all the amounts, paid or agreed to be paid to obtain for the person a right to live in the retirement village;

(b) in the case of a married person who shares his or her principal home with his or her spouse—an amount equal to half of:

(i) the amount; or

(ii) the sum of all the amounts;

paid or agreed to be paid to obtain for the person and his or her spouse a right to live in the retirement village; or

(c) in the case of a married person in respect of whom, or in respect of whose spouse, a direction under subsection 33 (2) is in force—the amount, or the sum of all the amounts, paid or agreed to be paid to obtain for the person a right to live in the retirement village;

other than amounts that are rent within the meaning of this Act;

‘extra allowable amount’ means:

(a) in relation to a person who became entitled to take up residence in a retirement village before 12 June 1989:

(i) where the person is an unmarried person, or a married person in respect of whom, or in respect of whose spouse, a direction under subsection 33 (2) is in force—the amount that is the difference between the amount set out in paragraph 8 (1) (a) as in force immediately before that date and the amount worked out under paragraph 8 (1) (b) as so in force; or

(ii) in any other case—the amount that is the difference between the amounts set out in paragraphs 8 (1) (c) and (d) as in force immediately before that date; and

(b) in relation to a person who became entitled to take up residence in a retirement village on or after 12 June 1989:

(i) where the person is an unmarried person, or a married person in respect of whom, or in respect of whose spouse, a direction under subsection 33 (2) is in force—the amount that is the difference between the amount set out in paragraph 8 (1) (a) as in force when the person became so entitled and the amount worked out under paragraph 8 (1) (b) as so in force; or

(ii) in any other case—the amount that is the difference between the amounts set out in paragraphs 8 (1) (c) and (d) as in force when the person became so entitled.”.

Commencement: 12 June 1989

Pension reduction amounts

12. Section 8 of the Principal Act is amended by adding at the end the following subsection:

“(2) This section has effect subject to section 4b.”

Commencement: 12 June 1989

Rent assistance

13. (1) Section 36 of the Principal Act is amended:

(a) by inserting in subsection (1) “, other than an ineligible property owner,” after “person” (first occurring);

(b) by omitting paragraph (1) (a) and substituting the following paragraph:

“(a) the person pays, or is liable to pay, rent, other than Government rent, at a rate exceeding $1,040 per year;”;

(d) by omitting paragraph (3) (b) and substituting the following paragraph:

“(b) the maximum amount in relation to the person;”;

(e) by adding at the end the following subsection:

“(5) In this section:

‘maximum amount’, in relation to a person, means:

(a) if there is at least one relevant child in relation to the person—$1,040; and

(b) in any other case—$780;

‘relevant child’, in relation to a person, means a child in respect of whom:

(a) the maximum rate of pension applicable to the person, or the person’s spouse, is increased by a sum under subsection 33 (4); or

(b) the rate of service pension under Part III of the Veterans’ Entitlements Act 1986 applicable to the person’s spouse is increased by a sum under paragraph 47 (3) (a), (b) or (c) of that Act.”.

Commencement: 13 June 1989

(2) Section 36 of the Principal Act is amended by omitting paragraphs (a) and (b) of the definition of “maximum amount” in subsection (5) and substituting the following paragraphs:

“(a) if there are 3 or more relevant children in relation to the person—$1,560;

(b) if there are only one or 2 relevant children in relation to the person—$1,300; and

Commencement: 13 June 1990

Rent assistance

14. (1) Section 50 of the Principal Act is amended:

(a) by inserting in subsection (1) “, other than an ineligible property owner,” after “person” (first occurring);

(b) by omitting from paragraph (1) (a) “rent at a rate exceeding $780” and substituting “rent, other than Government rent, at a rate exceeding $1,040”;

“(a) the maximum amount in relation to the person;”;

(d) by omitting paragraph (2) (b) and substituting the following paragraph:

“(b) the amount worked out using the formula:

where:

ARP is the annual rent paid or payable by the person;

RT is the amount specified in paragraph (1) (a).”;

(e) by adding at the end the following subsection:

“(3) In this section:

‘maximum amount’, in relation to a person, means:

(a) if there is at least one dependent child of the person for whom there is, within the meaning of section 49, an applicable amount—$1,040; or

(b) in any other case—$780.”.

Commencement: 13 June 1989

(2) Section 50 of the Principal Act is amended by omitting paragraphs (a) and (b) of the definition of “maximum amount” in subsection (3) and substituting the following paragraphs:

“(a) if there are 3 or more dependent children of the person for whom there are, within the meaning of section 49, applicable amounts—$1,560;

(b) if there are only one or 2 dependent children of the person for whom there are, within the meaning of section 49, applicable amounts—$1,300; and

Commencement: 13 June 1990

Rate of allowance

15. (1) Section 74 of the Principal Act is amended:

(a) by omitting from paragraph (2) (a) “person;” and substituting “person, other than an ineligible property owner; and”;

(b) by omitting paragraph (2) (b);

(c) by omitting from paragraph (2) (c) “rent at a rate exceeding $15” and substituting “rent, other than Government rent, at a rate exceeding $20”;

(d) by omitting from subsection (2) “$15” (second occurring) and substituting “$20”;

(e) by omitting from subsection (2) “$15” (last occurring) and substituting “the amount specified in paragraph (c)”.

Commencement: 13 June 1989

(2) Section 74 of the Principal Act is amended:

(a) by omitting from subsection (2) “increased by $20 per week” and substituting “increased by the maximum amount per week in relation to the person”;

(b) by adding at the end the following subsection:

“(8) In this section:

‘maximum amount per week’, in relation to a person, means:

(a) if there are 3 or more relevant children in relation to the person—$30 per week; and

(b) if there are only one or 2 relevant children in relation to the person—$25 per week;

‘relevant child’, in relation to a person, means a child in respect of whom the person is qualified to receive an allowance.”.

Commencement: 13 June 1990

Rent assistance

16. (1) Section 120 of the Principal Act is amended:

(a) by omitting “$15” from paragraphs (a) and (b) of the definition of “entitlement period” in subsection (1) and substituting “the threshold amount”;

(b) by omitting “or” from paragraph (c) of the definition of “qualified person” in subsection (1);

(c) by inserting after paragraph (d) of the definition of “qualified person” in subsection (1) the following word and paragraph:

“or (e) is in detention.”;

(d) by inserting in subsection (1) the following definitions:

“ ‘detention’ means detention in a prison, gaol, lock-up or other place of lawful detention;

‘relevant child’, in relation to a person, means a child in respect of whom the rate of benefit applicable to the person is increased by a sum under subsection 118 (11);

‘threshold amount’ means $20.”;

(e) by omitting from paragraph (4) (c) “and” (last occurring);

(f) by inserting after paragraph (4) (d) the following word and paragraph:

“and (e) the person is not an ineligible property owner;”;

(g) by omitting from paragraph (5) (a) “rent paid, or payable, by the person exceeds $15” and substituting “rent, other than Government rent, paid or payable by the person exceeds the threshold amount”;

(h) by omitting paragraph (6) (b) and substituting the following paragraph:

“(b) in relation to whom there is a relevant child;”;

(j) by adding at the end of subsection (6) the following word and paragraph:

“and (d) who is not an ineligible property owner.”;

(k) by omitting from paragraph (7) (a) “rent paid or payable by the person exceeds $15” and substituting “rent, other than Government rent, paid or payable by the person exceeds the threshold amount”;

(m) by omitting from paragraph (7) (b) “$15” and substituting “$20”.

Commencement: 13 June 1989

(2) Section 120 of the Principal Act is amended by omitting from paragraph (5) (b) “$10” and substituting “$15”.

Commencement: 13 December 1989

(3) Section 120 of the Principal Act is amended:

(a) by inserting in subsection (1) the following definition:

“ ‘maximum amount’, in relation to a person, means:

(a) if there are 3 or more relevant children in relation to the person—$30; and

(b) if there are only one or 2 relevant children in relation to the person—$25;”;

(b) by omitting from paragraph (5) (b) “$15” and substituting “$20”;

Commencement: 13 June 1990

Incentive allowance

17. (1) Section 143 of the Principal Act is amended:

(a) by omitting “rate of $15 per week.” and substituting “relevant rate in relation to the person.”;

(b) by adding at the end the following subsection:

“(2) In this section:

‘relevant child’, in relation to a person to whom sheltered employment allowance has been granted, means a child in respect of whom a sum under subsection 33 (4) is being taken into account in determining the amount of instalments of sheltered employment allowance that are payable to the person;

‘relevant rate’, in relation to a person to whom sheltered employment allowance has been granted, means:

(a) if there is at least one relevant child in relation to the person—$20 per week; and

(b) in any other case—$15 per week.”.

Commencement: 13 June 1989

(2) Section 143 of the Principal Act is amended by omitting paragraphs (a) and (b) of the definition of “relevant rate” in subsection (2) and substituting the following paragraphs:

“(a) if there are 3 or more relevant children in relation to the person—$30 per week;

(b) if there are only one or 2 relevant children in relation to the person—$25 per week; and

Commencement: 13 June 1990

Savings in relation to rent assistance in respect of payments for board and lodging

18. (1) Where, immediately before 12 June 1989, a person was in receipt of rent assistance under or because of the Social Security Act 1947 in respect of payments for board and lodging, then, subject to this section, from that date, the person shall be taken to be entitled to receive amounts by way of rent assistance under that Act that are not less than the amounts that the person would have received by way of rent assistance (having regard to any reductions in the amounts being paid from time to time by the person for board and lodging but disregarding any increases in those amounts) if none of the prescribed amendments had been made.

(2) Where:

(a) immediately before 12 June 1989, a person was in receipt of rent assistance under or because of the Veterans’ Entitlements Act 1986 in respect of payments for board and lodging;

(b) after that date, the person became entitled to be paid a relevant pension, benefit or allowance under the Social Security Act 1947; and

(c) subsection 30 (1) had not ceased to apply to that person until the person became entitled as mentioned in paragraph (b);

then, subject to this section, from the day when the person became entitled as mentioned in paragraph (b), the person shall be taken to be entitled to receive amounts by way of rent assistance under the Social Security Act 1947 that are not less than the amounts (if any) that the person would have received by way of rent assistance (having regard to any reductions in the amounts being paid from time to time by the person for board and lodging but disregarding any increases in those amounts) if none of the prescribed amendments had been made.

(3) Subsection (1) or (2) ceases to apply to a person:

(a) when the person ceases to be entitled to any relevant pension, benefit or allowance under the Social Security Act 1947;

(b) when the person ceases to be a boarder; or

(c) when the amount of rent assistance that the person would be entitled to receive because of that subsection is less than or equal to the amount of rent assistance that the person is entitled to receive under the provisions of the Social Security Act 1947 as in force after 12 June 1989;

and neither subsection (1) nor subsection (2) again applies to a person after it has ceased to apply to the person because of this subsection.

(4) In this section, references to payments for board and lodging include references to payments for accommodation and other services provided to a person who is residing in a nursing home.

(5) In this section:

“boarder” means a person who ordinarily lives on premises where the person is provided with board and lodging;

“prescribed amendments” means:

(a) any amendments of section 36 of the Social Security Act 1947 made on or after 12 June 1989, except the ones made by paragraphs 13 (1) (b) and (c) of this Act;

(b) any amendments of section 50 of the Social Security Act 1947 made on or after 12 June 1989, except the ones made by paragraphs 14 (1) (b) and (d) of this Act;

(c) any amendments of subsection 74 (2) of the Social Security Act 1947 made on or after 12 June 1989, except the ones made by paragraphs 15 (1) (c) and (e) of this Act; and

(d) any amendments of section 120 of the Social Security Act 1947 made on or after 12 June 1989, except the ones made by paragraphs 16 (1) (a), (d), (g) and (k) of this Act;

“relevant pension, benefit or allowance” means a pension, benefit or allowance under the Social Security Act 1947 that may include, or be increased by, an amount by way of rent assistance;

“rent assistance” means an increase in the amount, maximum amount or rate of a pension, benefit or allowance under the Social Security Act 1947, being an increase under or because of any of the following provisions of that Act:

(a) section 36;

(b) section 50;

(d) subsections 120 (5) and (7).

Commencement: 12 June 1989

Savings in relation to rent assistance for residents of retirement villages

19. (1) Where, immediately before 3 November 1988, a person was in receipt of rent assistance under or because of the Social Security Act 1947 in respect of payments for services provided in a retirement village, then, subject to this section, from 12 June 1989 the person shall be taken to be entitled to receive amounts by way of rent assistance under that Act that are not less than the amounts that the person would have received by way of rent assistance if none of the prescribed amendments had been made.

(2) Where:

(a) immediately after 12 June 1989 a person was in receipt of rent assistance because of the operation of subsection 31 (1);

(b) after 12 June 1989 the person became entitled to be paid a relevant pension, benefit or allowance under the Social Security Act 1947; and

(c) subsection 31 (1) had not ceased to apply to that person until the person became entitled as mentioned in paragraph (b);

then, subject to this section, from the day when the person became entitled as mentioned in paragraph (b), the person shall be taken to be entitled to receive amounts by way of rent assistance under the Social Security Act 1947 that are not less than the amounts (if any) that the person would have received by way of rent assistance if none of the prescribed amendments had been made.

(3) Subsection (1) or (2) ceases to apply to a person whose principal home was in a retirement village immediately before 3 November 1988:

(a) when the person ceases to be entitled to any relevant pension, benefit or allowance under the Social Security Act 1947; or

(b) when the person’s principal home ceases to be in that retirement village;

and neither subsection (1) nor subsection (2) again applies to a person after it has ceased to apply to the person because of this subsection.

(4) In this section:

“prescribed amendments” means the amendments of the Social Security Act 1947 made by paragraphs 9 (b) (to the extent that it inserts a definition of “ineligible property owner” in subsection 3 (1) of that Act), 13 (1) (a), 14 (1) (a), 15 (1) (a) and 16 (1) (f) of this Act;

“relevant pension, benefit or allowance” means a pension, benefit or allowance under the Social Security Act 1947 that may include, or be increased by, an amount by way of rent assistance;

(a) section 36;

(b) section 50;

(d) subsections 120 (5) and (7).

Commencement: 12 June 1989

Division 4—Insertion of new Schedule 3

Insertion of new Schedule 3

20. The Principal Act is amended by omitting Schedule 3 and substituting the Schedule set out in Schedule 1 to this Act.

Commencement: 1 March 1989

PART III—AMENDMENTS OF VETERANS’ ENTITLEMENTS ACT 1986

Division 1—Principal Act

Principal Act

21. In this Part, “Principal Act” means the Veterans’ Entitlements Act 19862.

Commencement: Day of Royal Assent

Division 2—Amendments relating to investment income

Interpretation

22. Section 35 of the Principal Act is amended:

(a) by inserting in the definition of “income” in subsection (1) “and any income that the person is taken to receive because of section 37c or 37d” after “gift or allowance” (first occurring);

(b) by inserting after paragraph (a) of the definition of “income” in subsection (1) the following paragraph:

“(aa) any return actually received by the person from an investment in respect of a period during which the person has, because of section 37c or 37d, been taken to receive income from that investment;”.

Commencement: 1 December 1988

Repeal of section 35a

23. Section 35a of the Principal Act is repealed.

Commencement: 1 December 1988

24. After section 37a of the Principal Act the following Division is inserted:

“Division 1a—Investment Income

Interpretation

“37b. In this Division, unless the contrary intention appears:

‘accruing return investment’ means an arrangement by a person that consists of or includes an investment of money, being an investment:

(a) that produces:

(i) a fixed rate or quantifiable rate of return, whether or not that rate varies from time to time; or

(ii) a rate of return that may be reasonably approximated; and

(b) the value of which from time to time is unlikely to decrease as a result of market changes;

‘approved deposit fund’ means a fund that is an approved deposit fund for the purposes of Subdivision AA of Division 2 of Part III of the Assessment Act;

‘Assessment Act’ means the Income Tax Assessment Act 1936;

‘deferred annuity’ means an annuity that is a deferred annuity for the purposes of Subdivision AA of Division 2 of Part III of the Assessment Act;

‘determination of entitlement’, in relation to a person, means a determination:

(a) whether the person is qualified to receive a pension or allowance under this Part; or

(b) of the rate at which a pension or allowance under this Part is payable to the person;

‘eligible investment’ means an investment that satisfies all of the following conditions:

(a) money or property invested is paid or transferred by the investor directly or indirectly to a body corporate or into a trust fund;

(b) the assets that represent money or property invested (in this definition called the ‘investment assets’) are held otherwise than in the names of investors;

(c) the investor does not, either alone or jointly with a relative or relatives of the investor, have effective control over the management of the investment assets;

(d) the investor has a legally enforceable right to share in any distribution of the income or profits derived from the investment assets;

‘friendly society’ means:

(a) a society registered as a friendly society under a law in force in a State or Territory; or

(b) a society 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;

‘investment product’ means a class of market-linked investments specified in a notice under subsection 12b (2) of the Social Security Act 1947;

‘market-linked investment’ means:

(a) an investment in:

(i) an approved deposit fund;

(ii) a deferred annuity;

(iii) a public unit trust; or

(iv) an insurance bond;

(b) an investment with a friendly society; or

not being:

(d) an accruing return investment; or

(e) an investment consisting of the acquisition of real property, stock or shares;

‘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 Assessment Act; or

‘return’, in relation to an investment, means any increase, whether of a capital or income nature and whether or not distributed, in the value or amount of the investment;

‘statutory rate of return’ means 11% per annum or such lower percentage per annum as is specified in a notice in force under subsection 12e (1) of the Social Security Act 1947.

Accruing return investments

“37c. (1) Where a person has made, or makes, whether before, on or after 13 December 1987, an accruing return investment, being an investment to which subsections (2) and (3) do not apply, the person shall, for the purposes of this Act, be taken to receive the current annual rate of return on that investment as income of the person from the day on which that investment was made.

“(2) Where a person makes, on or after 1 January 1988, an accruing return investment:

(a) with a friendly society; or

(b) of a kind where a return is not available until the end of a period of at least 12 months after that investment was made or until realisation of that investment;

the person shall, for the purposes of this Act, be taken to receive the current annual rate of return on that investment as income of the person from the day on which that investment was made.

“(3) Where a person has made, at any time before 1 January 1988, an accruing return investment:

(a) with a friendly society; or

(b) of a kind where a return is not available until the end of a period of at least 12 months after that investment was made or until realisation of that investment;

“(4) For the purposes of this section, the current annual rate of return on an investment of the kind referred to in subparagraph (a) (ii) of the definition of ‘accruing return investment’ in section 37b is a reasonable approximation of that rate of return.

“(5) A reference in subsection (3) to a person becoming entitled to receive an amount includes a reference to the person becoming entitled to

receive an amount under an arrangement of the kind referred to in the definition of ‘accruing return investment’ in section 37b to the extent that subsection (1) or (2) does not apply to that entitlement.

Market-linked investments

“37d. (1) Where, on or after 9 September 1988, a person makes a market-linked investment, the person shall, for the purposes of this Act, be taken to receive the product rate of return on that investment as income of the person from:

(a) the day on which that investment was made; or

(b) the commencement of this section;

whichever is later.

“(2) For the purposes of this Division, the product rate of return on a market-linked investment is:

(a) except where paragraph (b) applies—the statutory rate of return for that investment; or

(b) if a determination by the Secretary to the Department of Social Security under subsection 12f (1) of the Social Security Act 1947 is in force in relation to that investment—the percentage per annum specified in that determination.

Special provisions about certain investments made before 9 September 1988

“37e. (1) Where:

(a) before 9 September 1988, a person has made a market-linked investment; and

“(2) Subsections (3) and (4) apply where, at any time after 9 September 1988:

(a) a person held, or holds, 2 or more ‘market-linked investments included in the same investment product;