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Veterans Entitlements Act 1986

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Veterans Entitlements Act 1986

Veterans’ Entitlements Act 1986

    Act No. 27 of 1986 as amended

    This compilation was prepared on 5 October 2007 taking into account amendments up to Act No. 183 of 2007 Volume 2 includes: Table of Contents

     Sections 46 93ZG

    The text of any of those amendments not in force on that date is appended in the Notes section The operation of amendments that have been incorporated may be affected by application provisions that are set out in the Notes section

    Contents

    Part IIIBProvisions applicable to service pensions and

    income support supplement 1

    Division 1Ordinary income concept 1

    46 General meaning of ordinary income ..............................................1

    46A Certain amounts taken to be received over 12 months ......................1

    Division 2Business income 2

    46B Ordinary income from a businesstreatment of trading

    stock ..............................................................................................2

    46C Permissible reductions of business income ......................................2

    Division 3Deemed income from financial assets 4

    46D Deemed income from financial assetspersons other than

    members of couples .......................................................................4

    46E Deemed income from financial assetsmembers of a couple ..........6

    46H Deeming threshold .........................................................................8

    46J Below threshold rate, above threshold rate ......................................8

    46K Actual return on financial assets not treated as ordinary

    income ...........................................................................................8

    46L Certain money and financial investments not taken into

    account ..........................................................................................9

    46M Valuation and revaluation of certain financial investments...............9

    Division 4Income from income streams 11 Subdivision BIncome streams that are not family law affected

    income streams 11

    46SA Scope of Subdivision.................................................................... 11

    46T Income from asset-test exempt income stream ............................... 11

    46U Incomeincome stream not a defined benefit income stream ........ 11

    46V Incomeincome stream is a defined benefit income stream .......... 12

    46VA Income from market-linked asset-test exempt income stream ......... 12

    46W Income from asset-tested income stream (long term) ..................... 14

    46X Incomeincome stream not a defined benefit income stream ........ 14

    46Y Incomeincome stream is a defined benefit income stream .......... 15

    46YA Income from certain low-payment asset-tested income

    streams ........................................................................................ 16 Subdivision CFamily law affected income streams 17

    46Z Scope of Subdivision.................................................................... 17

    46ZA Income from asset-test exempt income streams ............................. 18

    46ZB Income from asset-tested income stream (long term) ..................... 18

    46ZC Decision-making principles .......................................................... 18

    Veterans’ Entitlements Act 1986 iii

    Division 6Income testsconversion of foreign currency

     19 amounts

    47 Application of Division ................................................................ 19

    47A Conversion of foreign currency amounts ....................................... 19

    47B Base exchange rate ....................................................................... 19

    47C Re-assessed exchange rate ............................................................ 19

    47D Applicability of re-assessed exchange rate .................................... 20

    47E Rounding off exchange rates ........................................................ 20

    Division 7Income testsdisposal of ordinary income 21

    48 Disposal of ordinary income ......................................................... 21

    48A Amount of disposition .................................................................. 21

    48B Disposal of ordinary incomenot a member of a couple ............... 22

    48C Disposal of ordinary incomemembers of couples ....................... 22

    48E Dispositions more than 5 years old to be disregarded ..................... 23

    Division 8Retirement assistance for farmers 24 Subdivision 1General 24

    49 Purpose of Division ...................................................................... 24

    49AA Applicable cut-off date ................................................................. 24

    49AB Pre-assessment request ................................................................. 24

    49A Division to apply to certain transfers of estates in farms etc. .......... 26

    49B How to assess the value of farms etc. subject to a transfer .............. 28 Subdivision 2Modification of provisions relating to assets test 30

    49C Transfer of estate in farm etc. not disposal of an asset.................... 30 Subdivision 3Claims for service pension or income support

    supplement 31

    49D Provisional commencement day.................................................... 31 Subdivision 4Requests for increase in rate of service pension or

    income support supplement 32

    49E Application .................................................................................. 32

    49F Request for increase ..................................................................... 32

    49G Making a request .......................................................................... 32

    49H Determination of request .............................................................. 33 Subdivision 5—Farmers’ income test 33

    49J Does a person satisfy the farmers’ income test? ............................. 33 Subdivision 6Transitional: ex gratia payments 38

    49K Ex gratia payments ....................................................................... 38

    Division 8ARetirement assistance for sugarcane farmers 39 Subdivision AGeneral 39

    49L Purpose of Division ...................................................................... 39

    49M RASF commencement and closing days ........................................ 39

    iv Veterans’ Entitlements Act 1986

    49N Applicable cut-off date ................................................................. 39

    49P Pre-assessment request ................................................................. 40

    49Q Division to apply to certain transfers of estates in sugarcane

    farms etc. ..................................................................................... 41

    49R How to assess the total net value of sugarcane farms etc.

    subject to a transfer ...................................................................... 44

    Subdivision BModification of provisions relating to assets test 47

    49S Transfer of estate in sugarcane farm etc. not disposal of an

    asset ............................................................................................ 47

    Subdivision CClaims for service pension or income support

    supplement 48

    49T Provisional commencement day.................................................... 48

    Subdivision DRequests for increase in rate of service pension or

    income support supplement 49

    49U Application .................................................................................. 49

    49V Request for increase ..................................................................... 49

    49W Making a request .......................................................................... 49

    49X Determination of request .............................................................. 50

    Subdivision E—Sugarcane farmers’ income test 50

    49Y Does a person satisfy the sugarcane farmers’ income test? ............. 50

    Division 9New Enterprise Incentive Scheme 55

    50 General effect of Division ............................................................ 55

    50A Reduction in rate of payments under this Part if recipient or

    partner also receiving payments under NEIS ................................. 55

    50B Rate reduction under this Division ................................................ 56

    Division 10General provisions relating to maintenance income 57

    51 Apportionment of capitalised maintenance income ........................ 57

    51A In-kind housing maintenancevalue of substitute for family

    home ........................................................................................... 59

    Division 11General provisions relating to the assets test 60

    Subdivision A—Value of person’s assets 60

    52 Certain assets to be disregarded in calculating the value of a

    person’s assets ............................................................................. 60

    52AA Value of superannuation investments determined by Minister

    to be disregarded .......................................................................... 67

    52A Value of asset-tested income streams that are not defined

    benefit income streams ................................................................. 68

    52B Value of asset-tested income streams that are defined benefit

    income streams ............................................................................ 69

    52BA Value of asset-tested FLA income streams .................................... 70

    52BB Value of partially asset-test exempt income streams ...................... 70

    52BC Value of superannuation reserves for superannuation funds

    of 4 members or less .................................................................... 71

    Veterans’ Entitlements Act 1986 v

52C Effect of charge or encumbrance on value of assets ....................... 71

    52CA Effect of certain liabilities on value of assets used in primary

    production ................................................................................... 72

    52D Loans .......................................................................................... 73

    Subdivision BDispositions of assets (general provisions) 74

    52E Disposal of assets ......................................................................... 74

    52F Amount of disposition .................................................................. 74

    52FAAA Application of asset deprivation rules to cease in respect of

    certain assets ................................................................................ 75

    Subdivision BADispositions of assets before 1 July 2002 75

    52FAA Application .................................................................................. 75

    52FA Disposal of assets in pre-pension yearsnot a member of a

    couple .......................................................................................... 76

    52G Disposal of assets in pension yearsnot a member of a

    couple .......................................................................................... 76

    52GA Disposal of assets in pre-pension yearsmembers of

    couples ........................................................................................ 77

    52H Disposal of assets in pension yearsmembers of couples.............. 79

    52J Dispositions more than 5 years old to be disregarded ..................... 80

    Subdivision BBDispositions of assets on or after 1 July 2002 81

    52JA Disposition of assets in tax yearindividuals ............................... 81

    52JB Dispositions of assets in 5 year periodindividuals ...................... 82

    52JC Disposition of assets in tax yearmembers of couples .................. 83

    52JD Disposition of assets in 5 year periodmembers of couples .......... 84

    52JE Certain dispositions to be disregarded ........................................... 86

    Subdivision CProvisions relating to special residences and

    special residents 86

    52KA Application of Subdivision to granny flat residents ........................ 86

    52L Basis for different treatment ......................................................... 86

    52M Entry contribution ........................................................................ 87

    52N Extra allowable amount ................................................................ 88

    52P Renegotiation of retirement village agreement............................... 90

    52Q Residents who are not members of a couple .................................. 91

    52R Members of couples ..................................................................... 91

    52S Members of illness separated couple (both in special

    residences) ................................................................................... 92

    52T Members of illness separated couple (partner not in special

    residence and partner property owner) .......................................... 94

    52U Members of illness separated couple (partner not in special

    residence and partner not property owner) ..................................... 96

    52V Members of ordinary couple with different principal homes

    (both in special residences) ........................................................... 97

    52W Members of ordinary couple with different principal homes

    (partner not in special residence and partner property owner) ......... 99

    vi Veterans’ Entitlements Act 1986

    52X Members of ordinary couple with different principal homes

    (partner not in special residence and partner not property

    owner) ....................................................................................... 100

    Subdivision DFinancial hardship 101

    52Y Access to financial hardship rules ............................................... 101

    52Z Application of financial hardship rules ........................................ 102

    Subdivision EPension loans scheme 105

    52ZAAAPension loans scheme definitions................................................ 105

    52ZA Eligibility for participation in pension loans scheme .................... 106

    52ZB Effect of participation in pension loans schemepension

    rate ............................................................................................ 108

    52ZC Effect of participation in pension loans schemecreation of

    debt ........................................................................................... 109

    52ZCA Effect of participation in pension loans schememaximum

    loan available ............................................................................. 110

    52ZD Need for a request to participate ................................................. 112

    52ZE Need for a request to later nominate or change guaranteed

    amount or rate of pension ........................................................... 113

    52ZF Existence of debt results in charge over real assets ...................... 113

    52ZG Debt not to be recovered until after death .................................... 114

    52ZH Enforcement of charge ............................................................... 116

    52ZJ Person ceases to participate in pension loans scheme if debt

    exceeds maximum loan available ................................................ 116

    52ZK Person withdraws from pension loans scheme ............................. 117

    52ZKA Repayment or recovery of debt after pension loans scheme

    ceases to operate because debt exceeds maximum loan

    available or person withdraws..................................................... 117

    52ZL Registration of charge ................................................................ 118

    52ZM Manner of enforcement of charge ............................................... 118

    Subdivision FCommutation of asset-test exempt income stream 119

    52ZMA Debt resulting from commutation of asset-test exempt

    income stream contrary to subsection 5JA(2), 5JB(2) or

    5JBA(2) ..................................................................................... 119

    Division 11AMeans test treatment of private companies and private trusts 123

    Subdivision AIntroduction 123

    52ZN Simplified outline ...................................................................... 123

    52ZO Definitions ................................................................................. 124

    52ZP Relatives .................................................................................... 127

    52ZQ Associates .................................................................................. 128

    52ZR When a company is sufficiently influenced by an entity............... 130

    52ZS Majority voting interest in a company ......................................... 130

    52ZT Entitled to acquire ...................................................................... 130

    52ZU Transfer of property or services .................................................. 130

    Veterans’ Entitlements Act 1986 vii

    52ZV Constructive transfers of property or services to an entity ............ 131

    52ZW Active involvement with a primary production enterprise ............ 132

    52ZX Power to veto decisions of a trustee ............................................ 132

    52ZY Extra-territorial operation ........................................................... 133

    52ZZ Application to things happening before commencement .............. 133 Subdivision BDesignated private companies 133

    52ZZA Designated private companies .................................................... 133 Subdivision CDesignated private trusts 135

    52ZZB Designated private trusts ............................................................ 135 Subdivision DControlled private companies 136

    52ZZC Controlled private companies ..................................................... 136

    52ZZD Direct voting interest in a company ............................................. 137

    52ZZE Voting power ............................................................................. 138

    52ZZF Direct control interest in a company ............................................ 139

    52ZZG Interest in a share ....................................................................... 140 Subdivision EControlled private trusts 141

    52ZZH Controlled private trusts ............................................................. 141

    52ZZI Interest in a trust ........................................................................ 142 Subdivision FAttributable stakeholders and attribution

    percentages 143

    52ZZJ Attributable stakeholder, asset attribution percentage and

    income attribution percentage ..................................................... 143 Subdivision GAttribution of income of controlled private

    companies and controlled private trusts 145

    52ZZK Attribution of income ................................................................. 145

    52ZZL No double counting of attributed income..................................... 146

    52ZZM Ordinary income of a company or trust ....................................... 147

    52ZZN Ordinary income from a businesstreatment of trading

    stock .......................................................................................... 148

    52ZZO Permissible reductions of business and investment income .......... 148

    52ZZP Derivation periods ...................................................................... 149

    52ZZQ Attribution periods ..................................................................... 150 Subdivision HAttribution of assets of controlled private

    companies and controlled private trusts 151

    52ZZR Attribution of assets ................................................................... 151

    52ZZS When attributed asset is unrealisable ........................................... 151

    52ZZT Effect of charge or encumbrance on value of assets ..................... 152

    52ZZU Effect of unsecured loan on value of assets ................................. 154

    52ZZV Value of company’s or trust’s assets etc. ..................................... 154 Subdivision IModification of asset deprivation rules 155

    52ZZW Individual disposes of asset to company or trust .......................... 155

    52ZZX Disposal of asset by company or trust ......................................... 155

    viii Veterans’ Entitlements Act 1986

    52ZZY Individual ceases to be an attributable stakeholder of a

    company or trust ........................................................................ 158

    52ZZZ Individual disposes of asset to company or trust before

    1 January 2002individual is attributable stakeholder ................ 159

    52ZZZA Individual disposes of asset to company or trust before

    1 January 2002—individual’s spouse is attributable

    stakeholder ................................................................................ 160

    Subdivision JModification of income deprivation rules 161

    52ZZZB Individual disposes of ordinary income to company or trust ......... 161

    52ZZZC Disposal of income by company or trust ..................................... 162

    52ZZZD Individual disposes of income to company or trust before

    1 January 2002individual is attributable stakeholder ................ 164

    52ZZZE Individual disposes of income to company or trust before

    1 January 2002—individual’s spouse is attributable

    stakeholder ................................................................................ 165

    Subdivision KConcessional primary production trusts 166

    52ZZZF Concessional primary production trusts ....................................... 166

    52ZZZG Individual ceases to be an attributable stakeholder of a

    trustreceipt of remuneration or other benefits from trust

    during asset deprivation period ................................................... 170

    52ZZZH Net value of asset ....................................................................... 172

    52ZZZI Value of entity’s assets ............................................................... 172

    52ZZZJ When asset is controlled by an individual.................................... 172

    52ZZZK Adjusted net value of asset ......................................................... 173

    52ZZZL Adjusted net primary production income ..................................... 174

    52ZZZM Net income of a primary production enterprise ............................ 175

    52ZZZN Net income from a primary production enterprisetreatment

    of trading stock .......................................................................... 175

    52ZZZO Permissible reductions of income from carrying on a primary

    production enterprise .................................................................. 176

    Subdivision LAnti-avoidance 177

    52ZZZP Anti-avoidance........................................................................... 177

    Subdivision MDecision-making principles 178

    52ZZZQ Decision-making principles ........................................................ 178

    Subdivision NInformation management 178

    52ZZZR Transitional period ..................................................................... 178

    52ZZZS Information-gathering powers..................................................... 179

    52ZZZT Commission may obtain tax information ..................................... 179

    52ZZZU Disclosure of tax information ..................................................... 181

    52ZZZV Disclosure of tax file number information ................................... 182

    Veterans’ Entitlements Act 1986 ix

    Division 11BPrivate financial provision for certain people with

     183 disabilities

    Subdivision ASpecial disability trusts 183

    52ZZZWWhat is a special disability trust?................................................ 183

    52ZZZWABeneficiary requirements ......................................................... 183

    52ZZZWBTrust purpose requirements ...................................................... 184

    52ZZZWCTrust deed requirements ........................................................... 185

    52ZZZWDTrustee requirements ............................................................... 186

    52ZZZWETrust property requirements ..................................................... 186

    52ZZZWFReporting requirements ............................................................ 187

    52ZZZWGAudit requirements .................................................................. 187

    52ZZZWHWaiver of contravention of this Division .................................. 189 Subdivision BIncome of special disability trusts 190

    52ZZZWIAttribution of income ................................................................ 190

    52ZZZWJIncome amounts from special disability trusts ............................ 190 Subdivision CAssets of special disability trusts 190

    52ZZZWKAttribution of assets................................................................. 190 Subdivision DTransfers to special disability trusts 191

    52ZZZWLEffect of certain transfers to special disability trusts .................. 191

    52ZZZWMThe effect of exceeding the $500,000 limit .............................. 192

    52ZZZWNTransfers by the immediate family members prior to

    reaching pension age etc. ............................................................ 193

    52ZZZWOTransfers by principal beneficiaries or partners ......................... 194

    52ZZZWPCessation of special disability trusts .......................................... 194

    52ZZZWQEffect of this Subdivision......................................................... 196

    Division 12Service pensioner and income support supplement

    recipient benefits 197 Subdivision AIntroduction 197

    53 Fringe benefits and treatment at Departmental expense for

    certain service pensioners ........................................................... 197 Subdivision BFringe benefits 197

    53A Fringe benefits ........................................................................... 197

    53B Commission must determine continued fringe benefits

    eligibility circumstances ............................................................. 198 Subdivision CTreatment at Departmental expense 198

    53D Eligibility for treatment at Departmental expense ........................ 198

    53E Veterans to satisfy certain conditions .......................................... 199

    Division 12APayments after bereavement 202 Subdivision ABereavement period 202

    53H Definition .................................................................................. 202

    x Veterans’ Entitlements Act 1986

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