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This is a Bill, not an Act. For current law, see the Acts databases.
2022
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Social Services and Other Legislation
Amendment (Incentivising Pensioners to
Downsize) Bill 2022
No. , 2022
(Social Services)
A Bill for an Act to amend the law relating to social
security and veterans' entitlements, and for related
purposes
No. , 2022
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Amendments
3
Social Security Act 1991
3
Veterans' Entitlements Act 1986
5
No. , 2022
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
1
A Bill for an Act to amend the law relating to social
1
security and veterans' entitlements, and for related
2
purposes
3
The Parliament of Australia enacts:
4
1 Short title
5
This Act is the
Social Services and Other Legislation Amendment
6
(Incentivising Pensioners to Downsize)
Act 2022
.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
column 2 of the table. Any other statement in column 2 has effect
11
according to its terms.
12
2
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
No. , 2022
1
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. The whole of
this Act
The later of:
(a) 1 January 2023; and
(b) the day after the end of the period of 1
month beginning on the day this Act
receives the Royal Assent.
Note:
This table relates only to the provisions of this Act as originally
2
enacted. It will not be amended to deal with any later amendments of
3
this Act.
4
(2) Any information in column 3 of the table is not part of this Act.
5
Information may be inserted in this column, or information in it
6
may be edited, in any published version of this Act.
7
3 Schedules
8
Legislation that is specified in a Schedule to this Act is amended or
9
repealed as set out in the applicable items in the Schedule
10
concerned, and any other item in a Schedule to this Act has effect
11
according to its terms.
12
Amendments
Schedule 1
No. , 2022
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
3
Schedule 1--Amendments
1
2
Social Security Act 1991
3
1 After subsection 1076(3A)
4
Insert:
5
(3B) However, if subsection 1118(2) applies in relation to the person
6
and:
7
(a) the person has financial assets that are proceeds:
8
(i) from the sale of the person's principal home; and
9
(ii) described in paragraph 1118(2)(a) or (c); and
10
(b) the earlier of the times mentioned in that paragraph has not
11
occurred for the person and the proceeds;
12
then:
13
(c) those financial assets are to be disregarded for the purposes
14
of working out the ordinary income the person is taken to
15
receive under subsection (3) or (3A); and
16
(d) the ordinary income the person is taken to receive per year on
17
those financial assets is the amount worked out by
18
multiplying the value of those financial assets by the below
19
threshold rate.
20
2 Subsection 1076(4)
21
Omit "amount calculated under subsection (3) or (3A)", substitute "sum
22
of the amount calculated under subsection (3) or (3A) and the amount
23
(if any) calculated under paragraph (3B)(d)".
24
3 After subsection 1077(3A)
25
Insert:
26
(3B) However, if subsection 1118(2) applies in relation to a member of
27
the couple and:
28
(a) the couple have financial assets that are proceeds:
29
(i) from the sale of the principal home of a member of the
30
couple; and
31
(ii) described in paragraph 1118(2)(a) or (c); and
32
Schedule 1
Amendments
4
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
No. , 2022
(b) the earlier of the times mentioned in that paragraph has not
1
occurred for the member of the couple and the proceeds;
2
then:
3
(c) those financial assets are to be disregarded for the purposes
4
of working out the ordinary income the couple is taken to
5
receive under subsection (3) or (3A); and
6
(d) the ordinary income the couple is taken to receive per year on
7
those financial assets is the amount worked out by
8
multiplying the value of those financial assets by the below
9
threshold rate.
10
4 Subsection 1077(4) (formula)
11
Repeal the formula, substitute:
12
Sum of the amount calculated under subsection (3) or (3A)
and the amount (if any) calculated under paragraph (3B)(d)
0.5
52
13
5 After subsection 1078(3A)
14
Insert:
15
(3B) However, if subsection 1118(2) applies in relation to the person
16
and:
17
(a) the person has financial assets that are proceeds:
18
(i) from the sale of the person's principal home; and
19
(ii) described in paragraph 1118(2)(a) or (c); and
20
(b) the earlier of the times mentioned in that paragraph has not
21
occurred for the person and the proceeds;
22
then:
23
(c) those financial assets are to be disregarded for the purposes
24
of working out the ordinary income the person is taken to
25
receive under subsection (3) or (3A); and
26
(d) the ordinary income the person is taken to receive per year on
27
those financial assets is the amount worked out by
28
multiplying the value of those financial assets by the below
29
threshold rate.
30
Amendments
Schedule 1
No. , 2022
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
5
6 Subsection 1078(4)
1
Omit "amount calculated under subsection (3) or (3A)", substitute "sum
2
of the amount calculated under subsection (3) or (3A) and the amount
3
(if any) calculated under paragraph (3B)(d)".
4
7 Paragraph 1118(1B)(c)
5
Omit "12", substitute "24".
6
8 Subsection 1118(2B)
7
Omit "24", substitute "36".
8
Veterans' Entitlements Act 1986
9
9 Subsection 46D(3) (example)
10
Repeal the example, substitute:
11
Example: How deemed income of a person who is not a member of a couple is
12
worked out per year for the person's financial assets other than
13
financial assets described in subsection (3A) (using rates and deeming
14
thresholds in force on 1 July 2022).
15
Elaine, a single pensioner, has $164,000 worth of financial assets,
16
made up of $150,000 in proceeds from the sale of Elaine's principal
17
home and $14,000 of other financial assets. Elaine intends to apply
18
$100,000 of the proceeds of sale to purchase another residence that is
19
to be Elaine's principal home. The below threshold rate is 0.25%. The
20
above threshold rate is 2.25%.
21
The total value of Elaine's financial assets ($64,000), disregarding
22
part of the proceeds of sale ($100,000--see subsection (3A)), is higher
23
than Elaine's deeming threshold ($56,400--see subsection 46H(1)).
24
So, the deeming threshold is multiplied by the below threshold rate
25
(0.25%):
26
0.25
$56,400
$141
100
=
27
Elaine's deeming threshold of $56,400 is subtracted from the total
28
value of Elaine's financial assets ($64,000), disregarding part of the
29
proceeds of sale ($100,000--see subsection (3A)). The remainder is
30
$7,600.
31
The amount of $7,600 is multiplied by the above threshold rate
32
(2.25%):
33
Schedule 1
Amendments
6
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
No. , 2022
2.25
$7,600
$171
100
=
1
The ordinary income that Elaine is taken to receive on Elaine's
2
financial assets, other than financial assets described in
3
subsection (3A), is $312 per year ($141 plus $171).
4
10 After subsection 46D(3)
5
Insert:
6
(3A) However, if subsection 52(2) applies in relation to the person and:
7
(a) the person has financial assets that are proceeds:
8
(i) from the sale of the person's principal home; and
9
(ii) described in paragraph 52(2)(a) or (c); and
10
(b) the earlier of the times mentioned in that paragraph has not
11
occurred for the person and the proceeds;
12
then:
13
(c) those financial assets are to be disregarded for the purposes
14
of working out the ordinary income the person is taken to
15
receive under subsection (3); and
16
(d) the ordinary income the person is taken to receive per year on
17
those financial assets is the amount worked out by
18
multiplying the value of those financial assets by the below
19
threshold rate.
20
Example: To continue the example in subsection (3), Elaine's financial assets
21
($100,000) described in this subsection are multiplied by the below
22
threshold rate (0.25%):
23
0.25
$100,000
$250
100
=
24
The ordinary income that Elaine is taken to receive on Elaine's
25
financial assets described in this subsection is $250 per year.
26
11 Subsection 46D(4)
27
Omit "amount calculated under subsection (3)", substitute "sum of the
28
amount calculated under subsection (3) and the amount (if any)
29
calculated under paragraph (3A)(d)".
30
Amendments
Schedule 1
No. , 2022
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
7
12 Subsection 46E(3) (example)
1
Repeal the example, substitute:
2
Example: How deemed income of a couple is worked out per year for the
3
couple's financial assets other than financial assets described in
4
subsection (3A) (using rates and deeming thresholds in force on 1 July
5
2022).
6
Maree and Peter, a couple, have $622,000 worth of financial assets,
7
made up of $500,000 in proceeds from the sale of the couple's
8
principal home and $122,000 of other financial assets. Maree and
9
Peter intend to apply the whole of the proceeds of sale to build another
10
residence that is to be the couple's principal home. The below
11
threshold rate is 0.25%. The above threshold rate is 2.25%.
12
The total value of the couple's financial assets ($122,000),
13
disregarding the whole of the proceeds of sale ($500,000--see
14
subsection (3A)), is higher than the couple's deeming threshold
15
($93,600--see subsection 46H(2)). So, the deeming threshold is
16
multiplied by the below threshold rate (0.25%):
17
0.25
$93,600
$234
100
=
18
The couple's deeming threshold of $93,600 is subtracted from the
19
total value of the couple's financial assets ($122,000), disregarding
20
the whole of the proceeds of sale ($500,000--see subsection (3A)).
21
The remainder is $28,400.
22
The amount of $28,400 is multiplied by the above threshold rate
23
(2.25%):
24
2.25
$28,400
$639
100
=
25
The ordinary income that the couple is taken to receive on the
26
couple's financial assets, other than financial assets described in
27
subsection (3A), is $873 per year ($234 plus $639).
28
13 After subsection 46E(3)
29
Insert:
30
(3A) However, if subsection 52(2) applies in relation to a member of the
31
couple and:
32
(a) the couple have financial assets that are proceeds:
33
Schedule 1
Amendments
8
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
No. , 2022
(i) from the sale of the principal home of a member of the
1
couple; and
2
(ii) described in paragraph 52(2)(a) or (c); and
3
(b) the earlier of the times mentioned in that paragraph has not
4
occurred for the member of the couple and the proceeds;
5
then:
6
(c) those financial assets are to be disregarded for the purposes
7
of working out the ordinary income the couple is taken to
8
receive under subsection (3); and
9
(d) the ordinary income the couple is taken to receive per year on
10
those financial assets is the amount worked out by
11
multiplying the value of those financial assets by the below
12
threshold rate.
13
Example: To continue the example in subsection (3), Maree and Peter's
14
financial assets ($500,000) described in this subsection are multiplied
15
by the below threshold rate (0.25%):
16
0.25
$500,000
$1,250
100
=
17
The ordinary income that the couple is taken to receive on the
18
couple's financial assets described in this subsection is $1,250 per
19
year.
20
14 Subsection 46E(4) (formula)
21
Repeal the formula, substitute:
22
Sum of the amount calculated under subsection (3) and
the amount (if any) calculated under paragraph (3A)(d)
0.5
52
23
15 Paragraph 52(1E)(c)
24
Omit "12", substitute "24".
25
16 Subsection 52(2A)
26
Omit "24", substitute "36".
27
Amendments
Schedule 1
No. , 2022
Social Services and Other Legislation Amendment (Incentivising
Pensioners to Downsize) Bill 2022
9
17 Application of amendments
1
The amendments made by this Schedule apply in relation to the sale of
2
a person's principal home that occurs on or after the commencement of
3
this Schedule.
4
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