Veterans’ Affairs Legislation Amendment Act (No. 2) 1992

No. 228 of 1992

TABLE OF PROVISIONS

PART 1—PRELIMINARY

TABLE OF PROVISIONS—continued

TABLE OF PROVISIONS—continued

TABLE OF PROVISIONS—continued

TABLE OF PROVISIONS—continued

SCHEDULE 1

AMENDMENTS OF THE VETERANS’ ENTITLEMENTS ACT 1986 RELATING TO REMOTE AREA ALLOWANCE

SCHEDULE 2

CONSEQUENTIAL, MINOR AND TECHNICAL AMENDMENTS

Veterans’ Affairs Legislation Amendment Act (No. 2) 1992

No. 228 of 1992

An Act to amend the law relating to veterans’ affairs, and for related purposes

[Assented to 24 December 1992]

The Parliament of Australia enacts:

PART 1—PRELIMINARY

Short title

1. This Act may be cited as the Veterans’ Affairs Legislation Amendment Act (No. 2) 1992.

Commencement

2. (1) The following provisions commence on the day on which this Act receives the Royal Assent:

(a)     Part 1;

(b)     Division 1 of Part 3;

(c)     Divisions 1, 11, 12, 13 and 14 of Part 4;

(d)     Part 1 of Schedule 2;

(e)      Part 5.

(2)     Part 2 of Schedule 2 is taken to have commenced on 1 July 1991.

(3)     Part 3 of Schedule 2 is taken to have commenced on 1 July 1991, immediately after the commencement of the Veterans’ Entitlements Amendment Act 1991.

(4)     The following provisions commence, or are taken to have commenced, on 1 January 1993:

(a)     Part 2;

(b)     Division 2 of Part 3;

(c)     Division 2 of Part 4;

(d)     Sections 84, 98, 99, 101, 102, 103 and 104;

(e)     Schedule 1.

(5)     Part 4 of Schedule 2 commences, or is taken to have commenced, on 1 January 1993, immediately after the commencement of the Social Security (Family Payment) Amendment Act 1992.

(6)     Division 3 of Part 3 and Division 3 of Part 4 commence on 4 February 1993.

(7) Division 10 of Part 4 (except sections 84, 98, 99, 101, 102, 103 and 104) and Division 15 of Part 4 commence on 20 March 1993.

(8)     Divisions 4, 5, 6 and 7 of Part 4 commence on 1 April 1993.

(9)     Division 8 of Part 4 commences on 1 July 1993.

(10) Division 9 of Part 4 commences on 20 September 1993.

Application

3. (1) The amendments made by Division 3 of Part 3 apply to instalments of pension under the Seamen’s War Pensions and Allowances Act 1940 that fall due on or after 4 February 1993.

(2)     The amendments made by Division 3 of Part 4 apply to instalments of pension under the Veterans’ Entitlements Act 1986 that fall due on or after 4 February 1993.

(3)     The amendments made by Division 5 of Part 4 apply to instalments of pension under Part III of the Veterans’ Entitlements Act 1986 that fall due on or after 1 April 1993.

(4)     The amendment made in Part 1 of Schedule 2 omitting subsection 135(6) of the Principal Act and substituting subsections 135(6) and (7) applies not only to an application that is made to the Veterans’ Review Board on or after the day on which this Act receives the Royal Assent but also to an application if the hearing of the application:

PART 2—AMENDMENTS OF THE DEFENCE SERVICE HOMES ACT 1918

Principal Act

4. In this Part, “Principal Act” means the Defence Service Homes Act 19181.

Criteria for issue of certificate of entitlement: advances other than widow or widower advances and advances for essential repairs

5. Section 18 of the Principal Act is amended:

“(a) to enlarge, modify or repair:

(e) by omitting paragraphs (3)(c) and (d);

PART 3—AMENDMENTS OF THE SEAMEN’S WAR PENSIONS AND ALLOWANCES ACT 1940

Division 1—Preliminary

Principal Act

6. In this Part, “Principal Act” means the Seamen’s War Pensions and Allowances Act 19402.

Division 2—Dependants of former POWs

Pensions to dependants of certain deceased Australian mariners

7. Section 17A of the Principal Act is amended:

(a) by inserting after subsection (1) the following subsections:

“(1A) If:

(a)     an Australian mariner has died or dies; and

the dependants of the mariner are, subject to this Act, entitled to receive the pensions that would have been payable to them if the mariner’s death had been a direct result of having sustained a war injury.

“(1B) The date of commencement of a pension payable under subsection (1A) is not to be earlier than 1 January 1993.”;

(b) by inserting in subsection (2) “or (1A)” after “subsection (1)”.

Certain dependants to be automatically paid pension

8. Section 25A of the Principal Act is amended by inserting after subsection (1) the following subsection:

“(1A) If:

(a)     an Australian mariner dies; and

(c)     subsection 17A(1A) applies to the mariner; and

(d)     at the time when the mariner dies the Secretary:

(i) is aware of the person’s existence; and

the pension payable to the dependant in respect of the death of the mariner is payable:

Note: for the dependant’s eligibility for pension see section 17A.”.

Division 3—Pension rate increases

Rates of pension on death or total incapacity

9. Section 18 of the Principal Act is amended by omitting from subsection (4A) “$262.00” and substituting “$394.50”.

Indexation of rate of pension

10. Section 18AA of the Principal Act is amended by adding at the end of the definition of “relevant period” in subsection (1) “(other than the period of 6 months commencing on 20 September 1992)”.

Schedule 1

11. Schedule 1 of the Principal Act is amended:

(a)     by omitting from Column 1 “204.20” and substituting “312.10”;

(b)    by omitting from Column 3 “143.50” and substituting “216.90”.

PART 4—AMENDMENTS OF THE VETERANS’ ENTITLEMENTS ACT 1986

Division 1—Preliminary

Principal Act

12. In this Part, “Principal Act” means the Veterans’ Entitlements Act 19863.

Division 2—Dependants of former POWs

Eligibility for pension

13. Section 13 of the Principal Act is amended:

(a) by inserting after subsection (2) the following subsections:

“(2A) If:

(a)   a veteran has died; and

(b)   the veteran’s death was not war-caused; and

the Commonwealth is, subject to this Act, liable to pay pensions by way of compensation to the dependants of the veteran in accordance with this Act.

“(2B) The date of commencement of a pension payable under subsection (2A) is not to be earlier than 1 January 1993.”;

Certain dependants to be automatically paid pension

14. Section 13A of the Principal Act is amended by inserting after subsection (1) the following subsection:

“(1A) If:

(a)     a veteran dies; and

(d)     at the time when the veteran dies, the Secretary:

(i) is aware of the person’s existence; and

the pension payable to the dependant in respect of the death of the veteran is payable:

Note: for the dependant’s eligibility for pension see subsection 13(2A).”.

Dependants eligible to be provided with treatment

15. Section 86 of the Principal Act is amended by inserting after paragraph (2)(b) the following word and paragraph:

Interpretation

16. Section 116 of the Principal Act is amended by adding at the end of paragraph (a) of the definition of “eligible child of a veteran” the following subparagraph:

Division 3—Pension rate increases

General rate of pension and extreme disablement adjustment

17. Section 22 of the Principal Act is amended by omitting from subsection (3) “$174.50” and substituting “$216.90”.

Intermediate rate of pension

18. Section 23 of the Principal Act is amended by omitting from subsection (4) “$262.00” and substituting “$394.50”.

Special rate of pension

19. Section 24 of the Principal Act is amended by omitting from subsection (4) “$380.60” and substituting “$571.70”.

Increased rates of pension in certain cases

20. Section 27 of the Principal Act is amended by omitting from column 2 of the Table in subsection (1) “237.10” (wherever occurring) and substituting “354.80”.

Rates at which pensions are payable to dependants

21. Section 30 of the Principal Act is amended by omitting from paragraph (1)(a) “$204.20” and substituting “$312.10”.

Service Pension Rate Calculator Where There Are No Dependent Children

22. The Rate Calculator in section 41 of the Principal Act is amended by omitting Table B in point 41-B1 and substituting the following table:

Service Pension Rate Calculator Where There Are Dependent Children

23. The Rate Calculator in section 42 of the Principal Act is amended by omitting Table B in point 42-B1 and substituting the following table:

Service Pension Rate Calculator for Blinded Veterans

24. The Rate Calculator in section 43 of the Principal Act is amended by omitting Table B in point 43-B1 and substituting the following table:

Service Pension Rate Calculator for Widows, Widowers and Non-illness Separated Spouses

25. The Rate Calculator in section 44 of the Principal Act is amended by omitting Table B in point 44-B1 and substituting the following table:

CPI Indexation Table

26. Section 59B of the Principal Act is amended:

(b)    by inserting after subsection (1) the following subsection:

“(1A) The pension MBR amount (item 1 of table) is not to be indexed on 20 March 1993.”.

Variations of rates of certain pensions

27. Section 198 of the Principal Act is amended by inserting in subparagraph (a)(iv) of the definition of “relevant period” in subsection (1) “(other than the period of 6 months starting on 20 September 1992)” after “months”.

Division 4—Investments

Investment income definitions

28. Section 5J of the Principal Act is amended:

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

“ ‘investment product’, in relation to a managed investment, means all the investments that are:

‘managed investment’ has the meaning given by subsections (1A), (1B) and (1C);”;

(b) by inserting after subsection (1) the following subsections:

“(1A) Subject to subsections (1B) and (1C), an investment is a managed investment for the purposes of this Act if:

“(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;

(f) an investment in a deferred annuity.

“(1C) The following are not managed investments for the purposes of this Act:

(d)     deposit money;

(e)     a loan within the meaning of Division 8B of Part III.

Note 1: for ‘pension age’ see subsection 5Q(1).

Note 2: for ‘deposit money’ see subsection 5H(1).

Note 3: for ‘loan’ see section 46ZC”.

Repeal of section 46 and substitution of new section

29. Section 46 of the Principal Act is repealed and the following section is substituted:

Structure of Division

“46.(1) This Division deals with various forms of investments and non-periodic receipts. The following Table indicates which provisions are relevant to particular investments and receipts:

“(2) If the person’s ordinary income is not covered by any of the other Subdivisions, it may be covered by section 46A below.”.

Insertion of new Subdivision

30. After Subdivision A of Division 8 of Part III of the Principal Act the following Subdivision is inserted:

“Subdivision AA—Managed investments

Investments to which this Subdivision applies

“46AA. This Subdivision applies to an investment that is a managed investment unless it is:

(a) an accruing return investment that:

(i) was made or acquired before 1 January 1988; and

(ii) is covered by section 46B; or

Note: for ‘accruing return investment’ see subsection 5J(1).

Note 1: for ‘market-linked investment’ see subsection 5J(1).

How investment returns are taken into account in working out pension rates

“46AB. If:

(a)     a person has an investment; and

(b)     this Subdivision applies to the investment; and

Note: for return on an investment product see section 46AD.

the person’s ordinary income on a yearly basis is taken to be increased by:

value of investment × annualised rate of return on investment product

where:

‘value of investment’ is the value of the person’s investment;

‘annualised rate of return on investment product’ is the annualised rate of return on the investment product based on its performance over that 12 months.

Note 1: for ‘annualised rate of return’ on the investment product see section 46AE below.

How investment losses are taken into account in working out pension rates

“46AC.(1) If:

(a)     a person has an investment; and

(b)     this Subdivision applies to the investment; and

Note: for loss on an investment product see section 46AD.

the person’s ordinary income on a yearly basis is, subject to subsection (2), taken to be reduced by:

value of investment × annualised rate of loss on investment product

where:

‘value of investment’ is the value of the person’s investment;

‘annualised rate of loss on investment product’ is the annualised rate of loss on the investment product based on its performance over that 12 months.

Note: for ‘annualised rate of loss’ on the investment product see section 46AE below.

“(2) The reductions under subsection (1) in calculating a person’s rate as at a particular day are not to exceed the sum of the increases to be made under section 46AB in working out the person’s pension rate as at that day.

Returns and losses on investment products

“46AD. An investment product:

(a) shows a return for a 12 month period if:

(ii) the formula below gives a positive number; and

where:

‘closing value’ is the value of the product at the end of the period;

‘distributions’ is the sum of:

‘opening value’ is:

(a) if the product has been available for the whole of the period—the value of the product at the beginning of the period; or

Annualised rate of return or loss on investment product

“46AE.(1) The annualised rate of return on an investment product for a period of 12 months is:

“(2) In applying paragraph (1)(a) disregard provisional or conditional declarations of rates of return.

“(3) For the purposes of this section, a declaration of a dividend is not a declaration of a rate of return.

“(4) The annualised rate of loss on an investment product for a period of 12 months is the rate worked out in accordance with subsections (5), (6) and (7).

“(5) The annualised rate of return or loss on an investment product is the rate of return or loss on the product expressed as a percentage per year.

“(6) If the investment product became available during the period, the performance of the product while it has been available is to be extrapolated for a whole 12 months.

“(7) In working out the rate of return or loss on an investment product for a period of 12 months, the following are to be taken into account:

(a) if the product was available at the beginning of the period—the value of the product at the beginning of the period;

(c)     the value of the product at the end of the period;

Investment and disposal costs

“46AF.(1) If:

(a)     the person has an investment; and

(b)     this Subdivision applies to the investment; and

the amount of the increase is to be reduced by the amount of the reasonable costs that the person has incurred during the preceding 12 months in relation to the making, acquisition or disposal of investments to which this Subdivision applies.

“(2) For the purposes of subsection (1), costs incurred by the person are reasonable if any other person making, acquiring or disposing of an identical investment would be required to pay those costs as a condition of being permitted to make, acquire or dispose of that investment.

Actual return on investments not treated as ordinary income

“46AG. If:

(a) a person has an investment; and

(b) this Subdivision applies to the investment;

any return on the investment that the person actually receives is taken, for the purposes of this Act, not to be ordinary income of the person.”.

Heading to Subdivision B of Division 8 of Part III

31. The heading to Subdivision B of Division 8 of Part III of the Principal Act is amended by adding at the end “made or acquired before 1 January 1988”.

Investments made before 1 January 1988 with friendly societies or where no immediate return

32. Section 46B of the Principal Act is amended by omitting from subsection (1) all the words after “, for the purposes of this Act,” and substituting:

“taken to receive as ordinary income of the person during each week in the assumed receipt period the amount worked out using the formula:

where:

‘assessable return’ is so much (if any) of the amount of the return as is attributable to the person’s assessable period.

Note: for ‘assessable period’ see subsection 5J(1).”.

Repeal of sections 46C to 46H

33. Sections 46C to 46H (inclusive) of the Principal Act are repealed.

Heading to Subdivision C of Division 8 of Part III

34. The heading to Subdivision C of Division 8 of Part III of the Principal Act is amended by adding at the end “made or acquired before 9 September 1988”.

Investments made before 9 September 1988

35. Section 46J of the Principal Act is amended by omitting from subsection (1) all the words after “, for the purposes of this Act,” and substituting:

“taken to receive as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive that amount the amount worked out using the formula:

where:

‘assessable return’ is so much (if any) of the amount of the return as is attributable to the person’s assessable period.”.

Repeal of sections 46L to 46R

36. Sections 46L to 46R (inclusive) of the Principal Act are repealed.

Heading to Division 8A of Part III

37. The heading to Division 8A of Part III of the Principal Act is omitted and the following heading is substituted:

“Division 8A—Ordinary income test—Income money and other available money and deposit money”.

Repeal of section 46V and substitution of new section

38. Section 46V of the Principal Act is repealed and the following section is substituted:

Structure of Division

“46V. The various provisions of this Division that apply to available money and deposit money are shown in the following table:

New section 46YA

39. After section 46Y of the Principal Act the following section is inserted:

Other deposit money

“46YA.(1) If a person has:

(a)     deposit money that is not income money; or

(b)     deposit money that:

(i) is income money of a person; and

the person’s ordinary income on a yearly basis is taken to be increased by:

amount of deposit money × current annual rate of interest

where:

‘amount of deposit money’ is the amount of the deposit money;

‘current annual rate of interest’ is the annual rate of interest payable on the money.

“(2) If:

(b)     the person actually receives a return from that money;

the return actually received is taken, for the purposes of this Act, not to be ordinary income of the person.

“(3) If the rate of return on deposit money is not a fixed rate or a quantifiable rate, for the purposes of subsection (1), the current annual rate of return on that income money is a reasonable approximation of the rate of return.”.

New section 46ZBA

40. After section 46ZB of the Principal Act the following section is inserted:

Structure of Division

“46ZBA. The various provisions of this Division that apply to loans are shown in the following table:

New section 46ZEA

41. After section 46ZE of the Principal Act the following section is inserted:

Other loans

“46ZEA.(1) If:

(a)     there is a loan by a person; and

(b)     the person is paid interest on the loan; and

the person’s ordinary income on a yearly basis is taken to be increased by:

amount of loan × current annual rate of interest on the loan

where:

‘amount of loan’ is the amount of the loan;

‘current annual rate of interest’ is the annual rate of interest payable on the loan.

“(2) If:

(b)     the person actually receives interest on that loan;

the interest actually received is taken, for the purposes of this Act, not to be ordinary income of the person.

“(3) If the rate of interest on a loan is not a fixed rate or a quantifiable rate, for the purposes of subsection (1), the current annual rate of interest on that loan money is a reasonable approximation of the rate of interest.”.

Division 5—Rent assistance

Service Pension Rate Calculator Where There Are No Dependent Children

42. The Rate Calculator in section 41 of the Principal Act is amended:

(b) by adding at the end of point 41-C2 the following Note:

“Note 2: for ‘rent threshold rate’ see point 41-C2A.”;

(c) by inserting after point 41-C2 the following point:

Rent threshold rate

“41-C2A. A person’s rent threshold rate depends on the person’s family situation. Work out which family situation in Table C applies to the person. The rent threshold rate is the corresponding amount in column 3.

Note 1: for ‘member of a couple’ and ‘partnered’ see section 5E.

Note 2: for ‘partner with a rent increased pension’ see point 41-C5.

(e) by adding at the end of point 41-C6 the following Note:

(f) by inserting after point 41-C6 the following point:

Rate B increase

“41-C6A. Rate B for a person in item 1 or 2 of Table C-1 in point 41-C6 is increased by $104.00 on 1 April 1993.

Note: Rate B was indexed on 20 March 1993 (see sections 59B to 59E).”;

(g) by omitting from point 41-C12 the Rent Assistance Examples.

Service Pension Rate Calculator Where There Are Dependent Children

43. The Rate Calculator in section 42 of the Principal Act is amended:

(b) by adding at the end of point 42-D2 the following Note:

“Note 2: for ‘rent threshold rate’ see point 42-D2A.”;

(c) by inserting after point 42-D2 the following point:

Rent threshold rate

“42-D2A. A person’s rent threshold rate depends on the person’s family situation. Work out which family situation in Table D applies to the person. The rent threshold rate is the corresponding amount in column 3.

Note 1: for ‘member of a couple’ and ‘partnered’ see section 5E.

Note 2: for ‘partner with a rent increased pension’ see point 42-D5.

(e) by adding at the end of point 42-D6 the following Note:

(f) by omitting from point 42-D16 the Rent Assistance Examples.

Service Pension Rate Calculator for Blinded Veterans

44. The Rate Calculator in section 43 of the Principal Act is amended by omitting paragraph 43-D2(c) and substituting the following paragraph:

“(c) the rent is payable at a rate of more than:

Service Pension Rate Calculator For Widows, Widowers and Non-illness Separated Spouses

45. The Rate Calculator in section 44 of the Principal Act is amended:

(b) by adding at the end of point 44-C2 the following Note:

“Note 2: for ‘rent threshold rate’ see point 44-C2A.”;

(c) by inserting after point 44-C2 the following point:

Rent threshold rate

“44-C2A. A person’s rent threshold rate depends on the person’s family situation. Work out which family situation in Table C applies to the person. The rent threshold rate is the corresponding amount in column 3.

Note 1: for ‘member of a couple’ and ‘partnered’ see section 5E.

Note 2: for ‘pension increase child’ see section 5F.

Note 3: for ‘partner with a rent increased pension’ see point 44-C5.

(e) by adding at the end of point 44-C6 the following Note:

(f) by inserting after point 44-C6 the following point:

Rate B increase

“44-C6A. Rate B for a person in item 1 or 2 of Table C-1 in point 44-C6 is increased by $104.00 on 1 April 1993.

Note: Rate B was indexed on 20 March 1993 (see sections 59B to 59E).”.

Indexed and adjusted amounts

46. Section 59A of the Principal Act is amended by inserting after item 6 of the Indexed and Adjusted Amounts Table the following item:

CPI Indexation Table

47. Section 59B of the Principal Act is amended by inserting after item 3 of the CPI Indexation Table in subsection (1) the following item:

Division 6—Superannuation investments prior to pension age

Income test definitions

48. Section 5H of the Principal Act is amended by omitting paragraph (8)(i) and substituting the following paragraph:

“(i) any return on a person’s investment in:

(i) a superannuation fund; or

(ii) an approved deposit fund; or

(iii) a deferred annuity;

until the person:

(iv) reaches pension age; or

Note 1: for ‘pension age’ see subsection 5Q(1).

Investment income definitions

49. Section 5J of the Principal Act is amended:

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

“ ‘investment’, in relation to a superannuation fund, approved deposit fund or deferred annuity, has the meaning given by subsection (6);

‘realise’, in relation to an investment, has the meaning given by subsections (7) and (8);”;

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

“(6) For the purposes of this Act, a person has an investment in a superannuation fund, approved deposit fund or deferred annuity if the person has benefits in the fund or under the annuity (whether the benefits are attributable to amounts paid by the person or someone else).

“(7) For the purposes of this Act, a person realises an investment if, and only if:

(d)     the investment matures; or

“(8) For the purposes of subsection (7), if:

(a)     a person realises an investment; and

(b)     the return on the investment is paid to another person;

the return is taken to be received by the person realising the investment.”.

Investments made before 1 January 1988 with friendly societies or where no immediate return

50. Section 46B of the Principal Act is amended by omitting subsection (2) and substituting the following Notes:

“Note 1: for ‘assessable period’ see subsection 5J(1).

Note 2: for ‘realising’ an investment see subsections 5J(7) and (8).”

Repeal of section 46BA

51. Section 46BA of the Principal Act is repealed.

Investments made before 9 September 1988

52. Section 46J of the Principal Act is amended by omitting subsection (2) and substituting the following Note:

“Note: for ‘realising’ an investment see subsections 5J(7) and (8).”.

New Subdivision D of Division 8 of Part III

53. Subdivision D of Division 8 of Part III of the Principal Act is repealed and the following Subdivision is substituted:

“Subdivision D—Superannuation fund investments before pension age

Provisions affecting superannuation fund investments before pension age

“46S.(1) If:

(a) a person has an investment in:

(i) a superannuation fund; or

(ii) an approved deposit fund; or

(iii) a deferred annuity; and

(b)     the person has not reached pension age; and

this is how the investment is treated:

Early withdrawal from superannuation fund

“46SA. If:

(b)     the amount realised is not rolled over into:

(i) a superannuation fund; or

(ii) an approved deposit fund; or

(iii) a deferred annuity;

the person is, for the purposes of this Act, taken to receive one fifty-second of the assessable growth component of that amount as ordinary income of the person during each week in the period of 12 months starting on the day when the person realises the investment.

Note: for ‘assessable growth component’ see subsection 5J(1).”.

Certain assets to be disregarded in calculating the value of a person’s assets

54. Section 52 of the Principal Act is amended by omitting paragraph (1)(f) and substituting the following paragraph:

“(f) the value of the person’s investment in:

(i) a superannuation fund; or

(ii) an approved deposit fund; or

(iii) a deferred annuity; until the person:

(iv) reaches pension age; or

Division 7—Fringe benefits and treatment benefits

Disposal of ordinary income

55. Section 48 of the Principal Act is amended by omitting subparagraph (1)(c)(iii) and substituting the following subparagraph:

Disposal of assets

56. Section 52E of the Principal Act is amended by omitting subparagraph (1)(c)(iii) and substituting the following subparagraph:

Effect of participation in pension loans scheme—pension rate

57. Section 52ZB of the Principal Act is amended by omitting from subsection (3) “Division 15 (fringe benefits)” and substituting “Subdivision C of Division 15 (treatment benefits)”.

Division heading

58. The heading to Division 15 of Part III of the Principal Act is amended by omitting “Fringe benefits” and substituting “Service pensioner benefits”.

Fringe benefits and treatment at Departmental expense for certain service pensioners

59. Section 53 of the Principal Act is amended:

“(1) If a person is eligible for fringe benefits, benefits and concessions of various kinds may be made available to the person by the Commonwealth, State and Territory governments and authorities and local authorities.

“(2) If:

(b)     the veteran satisfies the conditions in section 53D;

the veteran may be entitled to certain medical treatment at Departmental expense.”.

Repeal of sections and substitution of new section

60. Sections 53A, 53B and 53C of the Principal Act are repealed and the following section is substituted:

Fringe benefits

“53A. A person who is receiving a service pension is eligible for fringe benefits.

Eligibility for treatment at Departmental expense

61. Section 53D of the Principal Act is amended:

(b) by omitting Note 1 to subsection (1).

Insertion of new sections

62. After section 53D of the Principal Act the following sections are inserted in Subdivision C of Division 15 of Part III:

Veterans to satisfy certain conditions

“53E. This section applies to a veteran if:

(a)     the veteran is permanently blind; or

Treatment benefits ordinary income test

“53F. The Treatment Benefits Income Test Calculator at the end of this section is to be used in working out whether a person satisfies the treatment benefits ordinary income test for the purposes of this Division.

“TREATMENT BENEFITS INCOME TEST CALCULATOR

“53F-1. This is how to work out whether a person satisfies the treatment benefits ordinary income test:

Treatment benefits income of person without dependent children

“53F-2. If a person has no dependent children, the person’s treatment benefits income is the person’s annual rate of ordinary income.

Treatment benefits income of person with dependent child or children

“53F-3. If a person has a dependent child or dependent children, the person’s treatment benefits income is worked out using Table F-1.

How to calculate treatment benefits income under point 53F-3

“53F-4. If a person has a dependent child or dependent children, use Table F-1 to work out the person’s treatment benefits income reduction amount (column 3). Multiply the treatment benefits income reduction amount by the number of dependent children the person has. Take away the result from the person’s annual rate of ordinary income. The result is the person’s treatment benefits income.

Note 1: for ‘dependent child’ see section 5F.

Effect of certain child payments on treatment benefits income reduction amount

“53F-5. The treatment benefits income reduction amount for a dependent child of a person is reduced by the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 53F-7 do not result in a reduction.

“53F-6. The treatment benefits income reduction amount for a dependent child of a person who is partnered (partner getting pension) is reduced by 50% of the annual amount of any payment received by the person or the person’s partner for or in respect of that particular child. The payments referred to in point 53F-7 do not result in a reduction.

Note: for ‘partnered (partner getting pension)’ see section 5E.

“53F-7. A reduction is not to be made under point 53F-5 or 53F-6 for a payment:

(a)     under this Act; or

(b)     of maintenance income; or

(c)     under the Social Security Act; or

(d)     under the AUSTUDY Scheme; or

(e)     under an Aboriginal study assistance scheme; or

(f) under the Assistance for Isolated Children Scheme; or

Note: for ‘Aboriginal study assistance scheme’ see section 5F.

Financial hardship cases

“53F-8. For the purposes of point 53F-1, a person’s treatment benefits income is to be taken to include an amount per year that is taken into account under subsection 52Z(5).

Changes in income rate (13 week buffer)

“53F-9. If on a particular day a person’s annual rate of treatment benefits income increases from a rate below or equal to the person’s treatment benefits income free area to a rate not more than 25% above

that free area, the person is to be taken to satisfy the treatment benefits ordinary income test until:

whichever happens first.

Treatment benefits income free area

“53F-10. A person’s treatment benefits income free area is worked out using Table F-2. Work out which family situation in the table applies to the person. The treatment benefits income free area is the corresponding amount in column 3 plus an additional corresponding amount in column 4 for each dependent child of the person.

Note: the basic free area is indexed in line with CPI increases (see sections 59B to 59E).

Treatment benefits assets test

“53G. The Treatment Benefits Assets Test Calculator at the end of this section is to be used in working out whether a person satisfies the treatment benefits assets test for the purposes of this Division.

“TREATMENT BENEFITS ASSETS TEST CALCULATOR

Satisfying the treatment benefits assets test

“53G-1. A person satisfies the treatment benefits assets test if the value of the person’s assets does not exceed the person’s treatment benefits assets value limit.

Note: for ‘treatment benefits assets value limit’ see point 53G-2 below.

Treatment benefits assets value limit

“53G-2. A person’s treatment benefits assets value limit is worked out using the Table. Work out which family situation applies to the person. The treatment benefits assets value limit is the corresponding amount in column 3.

Note 1: for ‘property owner’ see subsection 5L(4).

Note 2: the column 3A amounts are indexed in line with CPI increases (see sections 59Bto 59E).

Note 3: the column 3B amounts are adjusted annually (see section 59K.).”.

Secretary may require notification of an event or change of circumstances

63. Section 54 of the Principal Act is amended:

(a)     by omitting from paragraph (1)(c) “fringe”;

(b)    by omitting from paragraph (3)(b) “fringe”.

Secretary may require recipient to give particular information relevant to the payment of pension

64. Section 54A of the Principal Act is amended:

(a)     by omitting from paragraph (1)(c) “fringe”;

(b)    by omitting from paragraph (1)(e) “fringe”.

Service pension may be suspended or forfeited when pensioner in gaol

65. Section 55 of the Principal Act is amended by omitting from Note 2 to subsection (1) “fringe benefits” and substituting “benefits under Division 15”.

Instalments may be redirected to partner or child

66. Section 55A of the Principal Act is amended by omitting from the Note to subsection (3) “the person may, for instance, be eligible for fringe benefits or” and substituting “for instance, the person would be eligible for fringe benefits and may be eligible”.

Automatic termination—recipient complying with section 54 notification obligations

67. Section 56 of the Principal Act is amended by omitting from Note 2 to subsection (2) “fringe benefits (including treatment at Departmental expense)” and substituting “benefits under Division 15”.

Automatic termination—recipient not complying with section 54 notification obligations

68. Section 56A of the Principal Act is amended by omitting from the Note to subsection (2) “fringe benefits (including treatment at Departmental expense)” and substituting “benefits under Division 15”.

Cancellation or suspension determination—general

69. Section 56E of the Principal Act is amended:

Cancellation or suspension determination for failure to comply with section 54A notice

70. Section 56EA of the Principal Act is amended:

Indexed and adjusted amounts

71. Section 59A of the Principal Act is amended:

(c) by omitting from column 4 of item 8 of that Table “53B-4—Table B-2” and substituting “53F-10—Table F-2”;

CPI Indexation Table

72. Section 59B of the Principal Act is amended by omitting from column 2 of items 5, 9 and 10 of the CPI Indexation Table “fringe” and substituting “treatment”.

Adjustment of treatment benefits AVLs

73. Section 59K of the Principal Act is amended:

Veterans eligible to be provided with treatment

74. Section 85 of the Principal Act is amended by omitting from the Note to subsection (5) “fringe” and substituting “treatment”.

Division 8—Carer service pension

Eligibilty for carer service pension

75. Section 39 of the Principal Act is amended:

(b)    by adding at the end of subsection (2) the following Note:

(c) by inserting after subsection (2) the following subsection:

“(2A) If:

(c)     the cessation does not exceed 10 hours per week;

the person does not cease to be eligible for a carer service pension merely because of that cessation.”.

Insertion of new section

76. After section 39Q of the Principal Act, the following section is inserted in Subdivision F of Division 6 of Part III:

Lump sum payable in some circumstances

“39QA. (1) A lump sum is payable to a person under this section if:

(a) the person is receiving a carer service pension; and

(c)     the person being cared for dies; and

(A)    was not receiving a service pension; and

(B)     was not receiving a social security pension; and

(C)     was not receiving a social security benefit.

“(2) The amount of the lump sum under this section is the lesser of the amount worked out under subsection (3) and the amount worked out under subsection (4).

“(3) The amount under this subsection is:

partnered MBR × 7

where:

‘partnered MBR’ is the maximum basic rate applicable, on the day that the person being cared for dies, to a person covered by item 3 of Table B in point 41-B1 of the Rate Calculator in section 41.

“(4) The amount under this subsection is:

carer’s current instalment × 7

where:

‘carer’s current instalment’ is the amount of the last instalment of carer service pension paid to the carer before the person cared for died.”.

Earnings credit account balance may be set-off against ordinary income from remunerative work

77. Section 49 of the Principal Act is amended by omitting from paragraph (a) “(other than a carer service pension)”.

Earnings credit account

78. Section 49A of the Principal Act is amended:

(f)      by omitting from paragraph (2)(b) “(other than a carer pension)”.

Earnings credit account balance (Earnings Credit Account Balance Calculator)

79. The Earnings Credit Account Balance Calculator in section 49B of the Principal Act is amended:

(b)    by inserting after point 49B-B2 the following point:

People receiving carer service pension sometime between 1 January 1993 and 1 July 1993

“49B-B2A. If:

there is to be added to the opening balance of the person’s earning credit account on 1 July 1993:

(d)     if the person:

the amount of that account balance.

Age, invalidity and partner service pensions generally portable

80. Section 58K of the Principal Act is amended:

(b) by inserting after subsection (2) the following subsection:

“(2A) If:

subsection (2) does not apply to any absence of the person from Australia during that period.”.

Division 9—Shares and other listed securities

Investment income definitions

81. Section 5J of the Principal Act is amended:

“ ‘investment product’, in relation to a managed investment or listed security, means all the investments or securities that are:

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

“ ‘listed security’ means:

(a)     a share in a company; or

(b)    another security;

listed on a stock exchange in Australia;”.

Heading to Subdivision AA of Division 8 of Part III

82. The heading to Subdivision AA of Division 8 of Part III of the Principal Act is amended by adding at the end “and listed securities”.

Investments to which this Subdivision applies

83. Section 46AA of the Principal Act is. amended by adding at the end the following subsections:

“(2) This Subdivision applies to an investment in the form of a listed security.

Note: for ‘listed security’ see subsection 5J(1).

“(3) This Subdivision does not apply to bonds and debentures.

Note: bonds and debentures are dealt with under Division 8B.”.

Division 10—Pharmaceutical allowance

Insertion of new section

84. After section 5P of the Principal Act the following section is inserted:

Pharmaceutical allowance and advance pharmaceutical allowance definitions

“5PA.(1) If:

the amount of pharmaceutical allowance paid to the person on that day is worked out using subsections (2), (3), (4) and (5).

“(2) If the instalment is an instalment of service pension or social security pension, the amount of allowance paid is:

where:

‘pharmaceutical allowance rate’ is the yearly amount of pharmaceutical allowance added to the person’s maximum basic rate in working out the amount of the instalment.

“(3) If:

(a)     the instalment is an instalment of social security benefit; and

(b)     the instalment is for a fortnight or a period of whole fortnights; the amount of allowance paid is:

pharmaceutical allowance rate × number of fortnights

where:

‘pharmaceutical allowance rate’ is the fortnightly amount of pharmaceutical allowance added to the person’s maximum basic rate in working out the amount of the instalment;

‘number of fortnights’ is the number of fortnights in the period for which the instalment is paid.

“(4) If:

(a)     the instalment is an instalment of social security benefit; and

(b)     the instalment is for a period of less than a fortnight; the amount of the allowance paid is:

where:

‘pharmaceutical allowance rate’ is the fortnightly amount of pharmaceutical allowance added to the person’s maximum basic rate in working out the amount of the instalment;

‘week days in period’ is the number of week days in the period for which the instalment is paid.

“(5) If:

(a)     the instalment is an instalment of social security benefit; and

(b)     the instalment is for a period that consists of:

(i) a fortnight or a number of whole fortnights; and

(ii) a period of less than a fortnight;

the amount of allowance paid is:

where:

‘pharmaceutical allowance rate’ is the fortnightly amount of pharmaceutical allowance added to the person’s maximum basic rate in working out the amount of the instalment;

‘number of whole fortnights’ is the number of whole fortnights in the period for which the instalment is paid;

‘week days in short period’ is the number of week days in the period that is less than a fortnight.”.

Age service pension may not be payable in some circumstances

85. Section 36A of the Principal Act is amended:

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

“(3) Subsection (2) does not apply to a veteran if the veteran’s rate is nil merely because an advance pharmaceutical allowance has been paid to the veteran under:

(a)     Division 2 of Part VIIA of this Act; or

(b)    Part 2.23 of the Social Security Act.”.

Invalidity service pension may not be payable in some circumstances

86. Section 37A of the Principal Act is amended:

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

“(3) Subsection (2) does not apply to a veteran if the veteran’s rate is nil merely because an advance pharmaceutical allowance has been paid to the veteran under:

(a)     Division 2 of Part VIIA of this Act; or

(b)     Part 2.23 of the Social Security Act.”.

Partner service pension may not be payable in some circumstances

87. Section 38A of the Principal Act is amended:

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

“(3) Subsection (2) does not apply to a person if the person’s rate is nil merely because an advance pharmaceutical allowance has been paid to the person under:

(a)     Division 2 of Part VIIA of this Act; or

(b)     Part 2.23 of the Social Security Act.”.

Carer service pension may not be payable in some circumstances

88. Section 39A of the Principal Act is amended:

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

“(3) Subsection (2) does not apply to a person if the person’s rate is nil merely because an advance pharmaceutical allowance has been paid to the person under:

(a)     Division 2 of Part VIIA of this Act; or

(b)     Part 2.23 of the Social Security Act.”.

Steps in rate calculation

89. Section 40 of the Principal Act is amended by omitting from Note 1 to subsection (1) “and rent assistance” and substituting “, rent assistance and pharmaceutical allowance”.

Application of income and assets test reductions for income tax purposes

90. Section 40C of the Principal Act is amended:

“; and (f) finally, to the amount of any increase under the pharmaceutical allowance Module.”;

(e)      by omitting from the Relevant Modules Table in subsection (2) columns 1, 2 and 3 and substituting the following columns:

Rate of age, invalidity, partner and carer service pension (no dependent children)

91. Section 41 of the Principal Act is amended in the Service Pension Rate Calculator Where There Are No Dependent Children:

(d)    by inserting after Module C the following Module:

“MODULE CA—PHARMACEUTICAL ALLOWANCE

Eligibility for pharmaceutical allowance

“41-CA1. Subject to points 41-CA2, 41-CA3 and 41-CA5, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate.

No pharmaceutical allowance if person receiving pharmaceutical allowance under the Social Security Act

“41-CA2. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Social Security Act.

No pharmaceutical allowance before advance payment period ends

“41-CA3. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(i) Division 2 of Part VIIA of this Act; or

(ii) Part 2.23 of the Social Security Act; and

(b) the person’s advance payment period has not ended.

Note: for ‘advance payment period’ see point 41-CA4.

Advance payment period

“41-CA4. A person’s advance payment period:

where:

‘amount of advance’ is the amount of the advance paid to the person;

‘pharmaceutical allowance rate’ is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for the day on which the advance is paid if pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.

No pharmaceutical allowance if annual limit reached

“41-CA5. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(b)     the total amount paid to the person for that year by way of:

(i) pharmaceutical allowance; and

(ii) advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1: for the amount ‘paid’ to a person by way of pharmaceutical allowance see section 5PA.

Note 2: the annual limit is affected by:

Social Security Act payments taken into account

“41-CA6. In points 41-CA4 and 41-CA5:

‘advance pharmaceutical allowance’ includes advance pharmaceutical allowance under the Social Security Act;

‘pharmaceutical allowance’ includes pharmaceutical allowance under the Social Security Act.

Rate of pharmaceutical allowance—double rate

“41-CA7. Subject to point 41-CA8, the rate of pharmaceutical allowance is twice the amount of the rate specified in point 41-CA8.

Rate of pharmaceutical allowance—standard rate

“41-CA8. The rate of pharmaceutical allowance for a person is $67.60 per year if:

(a)     the person is a service pensioner; and

(b)     the person is a member of a couple; and

“(aa) either:

(A)     Division 2 of Part VIIA of this Act; or

(B)     Part 2.23 of the Social Security Act; and”.

Rate of age, invalidity, partner and carer service pension (dependent child or children)

92. Section 42 of the Principal Act is amended in the Service Pension Rate Calculator Where There Are Dependent Children:

(d)    by inserting after Module D the following Module:

“MODULE DA—PHARMACEUTICAL ALLOWANCE

Eligibility for pharmaceutical allowance

“42-DA1. Subject to points 42-DA2, 42-DA3 and 42-DA5, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate.

No pharmaceutical allowance if person receiving pharmaceutical allowance under the Social Security Act

“42-DA2. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Social Security Act.

No pharmaceutical allowance before advance payment period ends

“42-DA3. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(i) Division 2 of Part VILA of this Act; or

(ii) Part 2.23 of the Social Security Act; and

(b) the person’s advance payment period has not ended.

Note: for ‘advance payment period’ see point 42-DA4.

Advance payment period

“42-DA4. A person’s advance payment period:

where:

‘amount of advance’ is the amount of the advance paid to the person;

‘pharmaceutical allowance rate’ is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for the day on which the advance is paid if pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.

No pharmaceutical allowance if annual limit reached

“42-DA5. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(b)     the total amount paid to the person for that year by way of:

(i) pharmaceutical allowance; and

(ii) advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1: for the amount ‘paid’ to a person by way of pharmaceutical allowance see section 5PA.

Note 2: the annual limit is affected by:

Social Security Act payments taken into account

“42-DA6. In points 42-DA4 and 42-DA5:

‘advance pharmaceutical allowance’ includes advance pharmaceutical allowance under the Social Security Act;

‘pharmaceutical allowance’ includes pharmaceutical allowance under the Social Security Act.

Rate of pharmaceutical allowance—double rate

“42-DA7. Subject to point 42-DA8, the rate of pharmaceutical allowance is twice the amount of the rate specified in point 42-DA8.

Rate of pharmaceutical allowance—standard rate

“42-DA8. The rate of pharmaceutical allowance for a person is $67.60 per year if:

(a) the person is a service pensioner; and

(b)     the person is a member of a couple; and

“(aa) either:

(A)    Division 2 of Part VIIA of this Act; or

(B)     Part 2.23 of the Social Security Act; and”.

Rate of age and invalidity service pension (blinded veterans)

93. Section 43 of the Principal Act is amended in the Service Pension Rate Calculator for Blinded Veterans:

(c)     by inserting after Module D the following Module:

“MODULE DA—PHARMACEUTICAL ALLOWANCE

Eligibility for pharmaceutical allowance

“43-DA1. Subject to points 43-DA2, 43-DA3 and 43-DA5, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate.

No pharmaceutical allowance if person receiving pharmaceutical allowance under the Social Security Act

“43-DA2. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Social Security Act.

No pharmaceutical allowance before advance payment period ends

“43-DA3. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(i) Division 2 of Part VIIA of this Act; or

(ii) Part 2.23 of the Social Security Act; and

(b) the person’s advance payment period has not ended.

Note: for ‘advance payment period’ see point 43-DA4.

Advance payment period

“43-DA4. A person’s advance payment period:

where:

‘amount of advance’ is the amount of the advance paid to the person;

‘pharmaceutical allowance rate’ is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for the day on which the advance is paid if pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.

No pharmaceutical allowance if annual limit reached

“43-DA5. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(b)     the total amount paid to the person for that year by way of:

(i) pharmaceutical allowance; and

(ii) advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1: for the amount ‘paid’ to a person by way of pharmaceutical allowance see section 5PA.

Note 2: the annual limit is affected by:

Social Security Act payments taken into account

“43-DA6. In points 43-DA4 and 43-DA5:

‘advance pharmaceutical allowance’ includes advance pharmaceutical allowance under the Social Security Act;

‘pharmaceutical allowance’ includes pharmaceutical allowance under the Social Security Act.

Rate of pharmaceutical allowance—double rate

“43-DA7. Subject to point 43-DA8, the rate of pharmaceutical allowance is twice the amount of the rate specified in point 43-DA8.

Rate of pharmaceutical allowance—standard rate

“43-DA8. The rate of pharmaceutical allowance for a person is $67.60 per year if:

(a)     the person is a service pensioner; and

(b)     the person is a member of a couple; and

Rate of partner service pension for widows, widowers and non-illness separated spouses

94. Section 44 of the Principal Act is amended in the Service Pension Rate Calculator for Widows, Widowers and Non-illness Separated Spouses:

(d) by inserting after Module C the following Module:

“MODULE CA—PHARMACEUTICAL ALLOWANCE

Eligibility for pharmaceutical allowance

“44-CA1. Subject to points 44-CA2, 44-CA3 and 44-CA5, an additional amount by way of pharmaceutical allowance is to be added to a person’s maximum basic rate.

No pharmaceutical allowance if person receiving pharmaceutical allowance under the Social Security Act

“44-CA2. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if the person is receiving pharmaceutical allowance under the Social Security Act.

No pharmaceutical allowance before advance payment period ends

“44-CA3. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(i) Division 2 of Part VIIA of this Act; or

(ii) Part 2.23 of the Social Security Act; and

(b) the person’s advance payment period has not ended.

Note: for ‘advance payment period’ see point 44-CA4.

Advance payment period

“44-CA4. A person’s advance payment period:

where:

‘amount of advance’ is the amount of the advance paid to the person;

‘pharmaceutical allowance rate’ is the yearly amount of pharmaceutical allowance which would be added to the person’s maximum basic rate in working out the instalment for the day on which the advance is paid if pharmaceutical allowance were to be added to the person’s maximum basic rate on that day.

No pharmaceutical allowance if annual limit reached

“44-CA5. Pharmaceutical allowance is not to be added to a person’s maximum basic rate if:

(b) the total amount paid to the person for that year by way of:

(i) pharmaceutical allowance; and

(ii) advance pharmaceutical allowance;

equals the total amount of pharmaceutical allowance that would have been paid to the person during that year if the person had not received any advance pharmaceutical allowance.

Note 1: for the amount ‘paid’ to a person by way of pharmaceutical allowance sec section 5PA.

Note 2: the annual limit is affected by:

Social Security Act payments taken into account

“44-CA6. In points 44-CA4 and 44-CA5:

‘advance pharmaceutical allowance’ includes advance pharmaceutical allowance under the Social Security Act;

‘pharmaceutical allowance’ includes pharmaceutical allowance under the Social Security Act.

Rate of pharmaceutical allowance—double rate

“44-CA7. Subject to point 44-CA8, the rate of pharmaceutical allowance is twice the amount of the rate specified in point 44-CA8.

Rate of pharmaceutical allowance—standard rate

“44-CA8. The rate of pharmaceutical allowance for a person is $67.60 per year if:

(a)     the person is a service pensioner; and

(b)     the person is a member of a couple; and

“(aa) either:

pharmaceutical allowance has been paid to the person under:

(A)     Division 2 of Part VIIA of this Act; or

(B)     Part 2.23 of the Social Security Act; and”.

Rate of age, invalidity and carer service pensions (war widow and war widower)

95. Section 45 of the Principal Act is amended in the Service Pension Rate Calculator for “Frozen Rate” Widows and Widowers by omitting Step 1 of the Method statement in point 45-A1 and substituting the following Step:

The result is called the provisional rate.

Calculation of amount of fortnightly instalment

96. Section 58A of the Principal Act is amended by inserting after subsection (3) the following subsections:

“(3A) If:

the amount of the instalment is to be increased to the person’s fortnightly pharmaceutical allowance rate.