Commonwealth: Social Security Legislation Amendment Act (No. 2) 1993 (Cth)

Social Security Legislation Amendment Act (No. 2) 1993 No. 61 of 1993 TABLE OF PROVISIONS PART 1—PRELIMINARY Section 1. Short title etc. 2. Commencement 3. Application PART 2—FRINGE BENEFITS 4. Insertion of new section 10A: 10A. Family payment income test and parental means test definitions 5. Benefit Rate Calculator A 6. Family Payment Rate Calculator 7. Insertion of new Part 3.12A: TABLE OF PROVISIONS—continued Section PART 3.12A—GENERAL PROVISIONS RELATING TO THE FAMILY PAYMENT INCOME TEST AND THE PARENTAL MEANS TEST Division 1—Purpose of this Part 1157A. Purpose of Part Division 2—Benefits that may be assessable fringe benefits 1157B. Benefits received in or outside Australia 1157C. Car benefits 1157D. Exempt car benefits 1157E. School fees benefits 1157F. Health insurance benefits 1157G. Loan benefits 1157H. Exempt loan benefits 1157I. Housing benefits 1157J. Exempt housing benefits—live-in residential care workers Division 3—Value of car fringe benefits 1157K. Method of valuing car fringe benefits 1157L. Value of car fringe benefits 1157M. Minister may determine alternative method of valuing car fringe benefits Division 4—Value of school fees fringe benefits 1157N. Value of school fees fringe benefits Division 5—Value of health insurance fringe benefits 11570. Value of health insurance fringe benefits Division 6—Value of loan fringe benefits 1157P. Method of valuing loan fringe benefits 1157Q. Value of loan fringe benefits 1157R. Minister may determine alternative method of valuing loan fringe benefits Division 7—Value of housing fringe benefits 1157S. Method of valuing housing fringe benefits 1157T. Value of housing fringe benefits 1157U Minister may determine alternative method of valuing housing fringe benefits Division 8—Foreign currency rates 1157V. Foreign currency rates to be used for the purposes of this Part 8. Consequential amendments of the Principal Act PART 3—SENIORS HEALTH CARD 9. Insertion of new section 6A: 6A. Seniors health card definitions TABLE OF PROVISIONS—continued Section 10. General definitions 11. Insertion of new Chapter 2A: CHAPTER 2A—BENEFITS AND CONCESSIONS OTHER THAN PAYMENTS PART 2A.1—SENIORS HEALTH CARD Division 1—Qualification for and entitlement to a seniors health card Subdivision A—Qualification 1061ZA. Qualification for seniors health card Subdivision B—Entitlement 1061ZB. Entitlement to a seniors health card Division 2—Claim for seniors health card 1061ZC. Need for a claim 1061ZD. Form of claim 1061ZE. Lodgment of claim 1061ZF. Claimant must be an Australian resident and in Australia 1061ZG. Claim may be withdrawn Division 3—Determination of entitlement 1061ZH. Secretary to determine claim 1061ZI. Entitlement determination 1061ZJ. Date of effect of determination Division 4—Cardholder's obligations 1061ZK. Secretary may require notice of the happening of event or a change in circumstances 1061ZL. Secretary may require particular information relevant to qualification for seniors health card Division 5—Continuation, variation and termination 1061ZM. Continuing effect of determination 1061ZN. Person ceases to be entitled to card automatically—recipient complying with section 1061ZK notification obligations 1061ZO. Person ceases to be entitled to card automatically—recipient not complying with section 1061ZK notification obligations 1061ZP. Person ceases to be entitled to card automatically—given effect to by computer 1061ZQ. Determination that a person ceases to be entitled to a seniors health card 1061ZR. Person may cease to be entitled to a seniors health card for failure to comply with section 1061ZL notice 1061ZS. Changes to a person's entitlement to a seniors health card by computer 1061ZT. Resumption of entitlement 1061ZU. Date of effect of favourable determination 1061ZV. Date of effect of adverse determination 12. Insertion of new Part 3.9: TABLE OF PROVISIONS—continued Section PART 3.9—SENIORS HEALTH CARD ORDINARY INCOME TEST CALCULATOR 1071. Seniors Health Card Ordinary Income Test Calculator 13. Indexed and adjusted amounts 14. Insertion of new section 1206C: 1206C. Adjustment of seniors health card ordinary income limit 15. Secretary may review decisions 16. Application for review 17. Amendments of the National Health Act 18. Amendment of the Hearing Services Act PART 4—FAMILY PAYMENT (FOREIGN INCOME) 19. Family payment income test and parental income test definitions 20. Family Payment Rate Calculator 21. Foreign currency rates PART 5—CONVERSION OF FOREIGN CURRENCY AMOUNTS 22. General definitions 23. Application of Division 24. Repeal of sections 1101 to 1105 and substitution of new section 1101: 1101. Determination of value of payments received in a foreign currency 25. Non-reviewable decisions 26. SSAT review powers PART 6—EXTENSION OF ADVANCE PHARMACEUTICAL ALLOWANCE 27. Commencement 28. Qualification for advance pharmaceutical allowance SCHEDULE CONSEQUENTIAL AMENDMENTS OF THE SOCIAL SECURITY ACT 1991 Social Security Legislation Amendment Act (No. 2) 1993 No. 61 of 1993 An Act to amend the Social Security Act 1991, and for related purposes [Assented to 3 November 1993] The Parliament of Australia enacts: PART 1—PRELIMINARY Short title etc. 1.(1) This Act may be cited as the Social Security Legislation Amendment Act (No. 2) 1993. (2) In this Act, "Principal Act" means the Social Security Act 19911. Commencement 2.(1) Subject to subsections (2), (3), (4) and (5), this Act commences on the day on which it receives the Royal Assent. (2) Section 23 is taken to have commenced on 12 November 1991. (3) Part 2 and the Schedule commence on 1 January 1994. (4) Part 4 commences on 1 January 1994, immediately after Part 2. (5) Part 3 commences on 1 July 1994. Application 3.(1) The amendments made by Parts 2 and 4 apply to all payments that fall due on or after 1 January 1994. (2) The amendments made by Part 2 apply to all fringe benefits whether received before, on or after 1 January 1994. (3) The amendments made by Part 4 apply to foreign income whether received before, on or after 1 January 1994. PART 2—FRINGE BENEFITS Insertion of new section 10A 4. After section 10 of the Principal Act the following section is inserted: Family payment income test and parental means test definitions "10A.(1) Some of the definitions in this section are the same as definitions in the Fringe Benefits Tax Assessment Act 1986. Most of the other definitions in this section are based on definitions in that Act. "(2) In this section and in Module G of Benefit Rate Calculator A in section 1067, Module H of the Family Payment Rate Calculator in section 1069 and Part 3.12A, unless the contrary intention appears: 'arm's length loan' means a loan where the parties to the loan are dealing with each other at arm's length in relation to the loan; 'arm's length transaction' means a transaction where the parties to the transaction are dealing with each other at arm's length in relation to the transaction; 'arrangement' means: (a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; and (b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise; 'assessable fringe benefit' means a fringe benefit that is: (a) a car benefit (see section 1157C); or (b) a school fees benefit (see section 1157E); or (c) health insurance benefit (see section 1157F); or (d) a loan benefit (see section 1157G); or (e) a housing benefit (see section 1157I); but does not include a car benefit, loan benefit or housing benefit that is exempt; Note: For exempt benefits see sections 1157D (car benefits), 1157H (loan benefits) and 1157J (housing benefits). 'associate' has the same meaning as in the Fringe Benefits Tax Assessment Act 1986; Note: Subsection 136(1) of the Fringe Benefits Tax Assessment Act adopts the definition of 'associate' in section 26AB of the Income Tax Assessment Act. Section 159 of the Fringe Benefits Tax Assessment Act modifies the way in which the income tax definition applies and also extends that definition in other ways. 'Australian Parliament' means: (a) the Parliament of the Commonwealth of Australia; or (b) the Parliament of a State; or (c) the Legislative Assembly for the Australian Capital Territory; or (d) the Legislative Assembly of the Northern Territory of Australia; Note: See paragraph (d) of the definition of 'current employee'. 'car' means a motor vehicle that is a road vehicle designed to carry a load of less than 1 tonne or fewer than 9 passengers but does not include a motor cycle or similar vehicle; 'car benefit' has the meaning given by section 1157C; 'car fringe benefit' means a fringe benefit that is a car benefit; 'census population', in relation to an urban centre, means the census count on an actual location basis of the population of that urban centre specified in the results of the Census of Population and Housing taken by the Australian Statistician on 30 June 1981, being the results published by the Australian Statistician in the document entitled "Persons and Dwellings in Local Government Areas and Urban Centres"; 'current employee' means: (a) a person who is an employee within the ordinary meaning of that word; and (b) a person who holds or performs the duties of an appointment, office or position under the Constitution or under a law of the Commonwealth, a State or a Territory; and (c) a person who is otherwise in the service of the Commonwealth, a State or a Territory (including service as a member of the Defence Force or as a member of a police force); and (d) a member of an Australian Parliament; 'current employer' means a person who pays or is liable to pay any salary or wages to an employee, and includes: (a) in the case of an unincorporated body of persons other than a partnership—the manager or other principal officer of that body; and (b) in the case of a partnership)—each partner; and (c) a government body; 'disadvantaged person' means a person who is intellectually, psychiatrically or physically handicapped; 'dwelling' has the meaning given by subsection (7); 'eligible urban area' means: (a) an area that: (i) is situated in an area described in Schedule 2 to the Income Tax Assessment Act; and (ii) is an urban centre with a census population of 28,000 or more; or (b) any other area that is an urban centre with a census population of 14,000 or more; Note: See paragraph (c) of the definition of 'special housing location' in subsection (5). 'employee' means: (a) a current employee; or (b) a future employee; or (c) a former employee; 'employer' means: (a) a current employer; or (b) a future employer; or (c) a former employer; 'employment', in relation to a person, means the holding of any office or appointment, the performance of any functions or duties, the engaging in of any work, or the doing of any acts or things that results, will result or has resulted in the person being treated as an employee; 'former employee' means a person who has been a current employee; 'former employer' means a person who has been a current employer; 'fringe benefit' means a benefit that is provided to an employee or to an associate of the employee by: (a) the employer of the employee; or (b) an associate of the employer; or (c) a person (the 'arranger') other than the employer or an associate of the employer under an arrangement between: (i) the employer or an associate of the employer; and (ii) the arranger or another person; and that is provided in respect of the employment of the employee; 'future employee' means a person who will become a current employee; 'future employer' means a person who will become a current employer; 'government body' means the Commonwealth, a State, a Territory or an authority of the Commonwealth or a State or Territory; Note: See paragraph (c) of the definition of 'current employer'. 'health insurance benefit' has the meaning given by section 1157F; 'health insurance fringe benefit' means a fringe benefit that is a health insurance benefit; 'housing benefit' has the meaning given by section 1157I; 'housing fringe benefit' means a fringe benefit that is a housing benefit; 'housing loan' has the meaning given by subsection (9); 'housing right', in relation to a person, means a lease or licence granted to the person to occupy or use a unit of accommodation, in so far as that lease or licence subsists at a time when the unit of accommodation is the person's usual place of residence; 'in respect of', in relation to the employment of an employee, includes by reason of, by virtue of, or for or in relation directly or indirectly to, that employment; Note: See definition of 'fringe benefit'. 'lease' includes a sub-lease; 'loan' includes: (a) an advance of money; and (b) the provision of credit or any other form of financial accommodation; and (c) the payment of an amount for, on account of, on behalf of or at the request of a person where there is an obligation (whether expressed or implied) to repay the amount; and (d) a transaction (whatever its terms or form) which in substance effects a loan of money; 'loan benefit' has the meaning given by section 1157G; 'loan fringe benefit' means a fringe benefit that is a loan benefit; 'mature person' means a person who has reached the age of 60 years; 'metropolitan location' has the meaning given by subsection (3); 'non-arm's length arrangement' means an arrangement other than an arm's length arrangement; 'non-metropolitan location' has the meaning given by subsection (4); 'obligation', in relation to the payment or repayment of an amount, includes an obligation that is not enforceable by legal proceedings; 'place of residence', in relation to a person, means: (a) a place at which the person resides; or (b) a place at which the person has sleeping accommodation; whether on a permanent or temporary basis and whether or not on a shared basis; 'private use', in relation to a car and in relation to an employee or an associate of an employee, means any use of the car by the employee or associate that is not exclusively within the employee's employment; 'provide', in relation to a benefit, includes allow, confer, give, grant or perform; 'provider', in relation to a benefit, means the person who provides the benefit; 'recipient', in relation to a benefit, means the person to whom the benefit is provided; 'salary or wages' means salary, wages, commission, bonuses or allowances paid (whether at piece-work rates or otherwise) to an employee as such; 'school' means a school, college or other educational institution that provides primary or secondary level education; 'school fees benefit' has the meaning given by section 1157E; 'school fees fringe benefit' means a fringe benefit that is a school fees benefit; 'special housing location' has the meaning given by subsections (5) and (6); 'stratum unit' has the meaning given by subsection (8); 'surface route' means a route other than an air route; 'taxi' means a motor vehicle that is licensed to operate as a taxi; 'unit of accommodation' includes: (a) a house, flat or home unit; and (b) accommodation in a house, flat or home unit; and (c) accommodation in a hotel, hostel, motel or guesthouse; and (d) accommodation in a bunkhouse or any living quarters; and (e) accommodation in a ship, vessel or floating structure; and (f) a caravan or other mobile home; 'urban centre' means an area that is described as an urban centre or bounded locality in the results of the Census of Population and Housing taken by the Australian Statistician on 30 June 1981 and that were published by the Australian Statistician in the document entitled "Persons and Dwellings in Local Government Areas and Urban Centres"; 'work-related travel', in relation to an employee, means: (a) travel by the employee between: (i) the employee's place of residence; and (ii) the employee's place of employment or any other place from which or at which the employee performs duties of his or her employment; or (b) travel by the employee that is incidental to travel in the course of performing the duties of his or her employment. Metropolitan location "(3) The following cities are metropolitan locations: (a) Adelaide; (b) Brisbane; (c) Canberra; (d) Darwin; (e) Hobart; (f) Melbourne; (g) Perth; (h) Sydney. Non-metropolitan location "(4) A unit of accommodation is in a non-metropolitan location if the unit of accommodation: (a) is in Australia; and (b) is not in a metropolitan location; and (c) is not in a special housing location. Special housing location "(5) A unit of accommodation is in a special housing location if the unit of accommodation is at a location that is in Australia and one of the following paragraphs applies to the unit of accommodation: (a) the unit of accommodation is at a location that is in an area that: (i) is described in Schedule 2 to the Income Tax Assessment Act; and (ii) is an urban centre with a census population of less than 28,000; (b) the unit of accommodation is at a location that is in an area that: (i) is not described in Schedule 2 to the Income Tax Assessment Act; and (ii) is an urban centre with a census population of less than 14,000; (c) at the date of commencement of this section, the unit of accommodation is at a location that is: (i) 40 kilometres or more, by the shortest practicable surface route, from the centre point of an eligible urban area with a census population of less than 130,000; or (ii) 100 kilometres or more, by the shortest practicable surface route, from the centre point of an eligible urban area with a census population of more than 130,000. "(6) For the purposes of paragraph (5)(c), the distance, by the shortest practicable surface route, between a location (the 'tested location') and the centre point of an eligible urban area is: (a) if there is only one location within the eligible urban area from which distances between the eligible urban area and other places are usually measured—the distance, by the shortest practicable surface route, between the tested location and that location; and (b) if there are 2 or more locations within the eligible urban area from which distances between parts of the eligible urban area and other places are usually measured—the distance, by the shortest practicable surface route, between the tested location and the location that is the principal location of those parts. "(7) A unit of accommodation is a 'dwelling' if: (a) the unit of accommodation is constituted by, or contained in, a building; and (b) the unit consists, in whole or in substantial part, of residential accommodation. "(8) A unit is a 'stratum unit' in relation to a dwelling if: (a) the unit is a unit on a unit plan registered under a law of a State or Territory that provides for the registration of titles of a kind known as unit titles or strata titles; and (b) the unit comprises: (i) a part of a building that contains the dwelling and consists of a flat or home unit; or (ii) a part of a parcel of land and the building containing the dwelling is constructed on that part. Housing loan "(9) A loan is taken to be a 'housing loan' if: (a) the loan is made to, or used by, a person (whether in his or her own right or jointly with his or her partner) wholly: (i) to enable the person to acquire a prescribed interest in land on which a dwelling or a building containing a dwelling was subsequently to be constructed; or (ii) to enable the person to acquire a prescribed interest in land and construct, or complete the construction of, a dwelling or a building containing a dwelling on the land; or (iii) to enable the person to construct, or complete the construction of, a dwelling or a building containing a dwelling on land in which the person held a prescribed interest; or (iv) to enable the person to acquire a prescribed interest in land on which there was a dwelling or a building containing a dwelling; or (v) to enable the person to acquire a prescribed interest in a stratum unit in relation to a dwelling; or (vi) to enable the person to extend a building that: (A) is a dwelling or contains a dwelling; and (B) is constructed on land in which the person held a prescribed interest; by adding a room or part of a room to the building or the part of the building containing the dwelling, as the case may be; or (vii) in a case where the person held a prescribed interest in a stratum unit in relation to a dwelling—to enable the person to extend the dwelling by adding a room or part of a room to the dwelling; or (viii) to enable the person to repay a loan that was made to, and used by, the person wholly for a purpose mentioned in subparagraphs (i) to (vii); and (b) at the time the loan was made, the dwelling was used or proposed to be used as the person's usual place of residence. Note: For prescribed interest see subsections (10) to (14). Freehold interest "(10) If: (a) a person; or (b) 2 or more persons as joint tenants or tenants in common; acquire, hold or held an estate in fee simple in land or in a stratum unit, the person or those persons are taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit. Leasehold interest "(11) If: (a) a person acquires, holds or held an interest in land or in a stratum unit as lessee or licensee under a lease or licence; and (b) the Secretary is satisfied that the lease or licence gives or gave reasonable security of tenure to the lessee or licensee, for a period of, or for periods aggregating, 10 years or more; the person is taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit. Instalment contract "(12) If: (a) a person acquires, holds or held interest in land or in a stratum unit as purchaser of an estate in fee simple in the land or in the stratum unit under an agreement; and (b) the agreement provides or provided for payment of the purchase price, or a part of the purchase price, to be made at a future time or by instalments; the person is taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit. Right to acquire leasehold "(13) If: (a) a person acquires, holds or held an interest in land or in a stratum unit as purchaser of a right to be granted a lease of the land or of the stratum unit under an agreement; and (b) the agreement provides or provided for payment of the purchase price, or a part of the purchase price, for the lease to be made at a future time or by instalments; and (c) the Secretary is satisfied that the lease will give reasonable security of tenure, to the lessee for a period of, or for periods aggregating, 10 years or more; the person is taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit. Two or more persons acquiring or holding interest under subsection (11), (12) or (13) "(14) If: (a) 2 or more persons acquire, hold or held an interest referred to in paragraph (11)(a), (12)(a) or (13)(a) in land or in a stratum unit as joint tenants or tenants in common; and (b) paragraph (11)(b) or (12)(b) or paragraphs (13)(b) and (c) are satisfied; those persons are taken to acquire or hold, or to have held, a prescribed interest in that land or stratum unit.". Benefit Rate Calculator A 5. The Rate Calculator in section 1067 of the Principal Act is amended: (a) by omitting Steps 7 and 8 from the Method statement in point 1067-G1 and substituting the following Steps: " Step 7. Work out the amount of the person's combined parental fringe benefits value for the appropriate tax year using points 1067-G14A to 1067-G14C. Step 8. Work out the parental fringe benefits value free area using point 1067-G14D. Step 9. Work out the person's parental adjusted fringe benefits value using points 1067-G14E and 1067-G14F. Step 10. Add the amount obtained in Step 6 and the amount obtained in Step 9: the result is called the parental adjusted income. Step 11. Work out the amount of the parental income free area limit using points 1067-G16 to 1067-G18. Step 12. Take the limit away from the parental adjusted income: the result is called the annual parental income excess. "; (b) by renumbering Steps 9 to 11 of the Method statement in point 1067-G1 as Steps 13 to 15; (c) by adding at the end of point 1067-G1 the following Note: "Note 2: It is only assessable fringe benefits that are used to work out the person's combined parental fringe benefits value. An assessable fringe benefit is a fringe benefit that is a car benefit, school fees benefit, health insurance benefit, loan benefit or housing benefit. However, if one of these kinds of benefits is an exempt benefit, it is not an assessable fringe benefit. For 'assessable fringe benefit' see section 10A."; (d) by inserting after point 1067-G14 the following points: Combined parental fringe benefits value "1067-G14A. If a person has only one means test parent and that parent does not have a partner, the person's combined parental fringe benefits value for the appropriate tax year is the sum of the values of all the assessable fringe benefits received by the parent in that tax year. Note 1: For 'means test parent' see points 1067-G4 to 1067-G7 above. Note 2: For 'appropriate tax year' see point 1067-G15 below. "1067-G14B. If a person has only one means test parent and that parent has a partner, the person's combined parental fringe benefits value for the appropriate tax year is the sum of: (a) the values of all the assessable fringe benefits received by the parent in that tax year; and (b) the values of all the assessable fringe benefits received by the parent's partner in that tax year. Note 1: For 'means test parent' see points 1067-G4 to 1067-G7 above. Note 2: For 'appropriate tax year' see point 1067-G15 below. "1067-G14C. If a person has 2 means test parents, the person's combined parental fringe benefits value for the appropriate tax year is the sum of the values of all the assessable fringe benefits received by both parents in that tax year. Note 1: For 'means test parent' see points 1067-G4 to 1067-G7 above. Note 2: For 'appropriate tax year' see point 1067-G15 below. Parental fringe benefits value free area "1067-G14D. The parental fringe benefits value free area is $1,000.00. Parental adjusted fringe benefits value "1067-G14E. If the person's combined parental fringe benefits value exceeds the free area, the person's parental adjusted fringe benefits value is the person's combined parental fringe benefits value less the free area. "1067-G14F. If the person's combined parental fringe benefits value does not exceed the free area, the person's parental adjusted fringe benefits value is nil.". Family Payment Rate Calculator 6.(1) The Rate Calculator in section 1069 of the Principal Act is amended: (a) by omitting Step 4 from the Method statement in point 1069-A1 and substituting the following Step: " Step 4. Apply the family payment income test in Submodule 3 of MODULE H to work out whether the person satisfies the family payment income test. Note: If the person does not satisfy the family payment income test, family payment is not payable to the person. "; (b) by omitting Step 9 from the Method statement in point 1069-A1 and substituting the following Step: " Step 9. Apply the family payment income test in Submodule 4 of MODULE H to the person's provisional additional payment to work out any reduction for income. Take any reduction away from the person's provisional additional payment: the result is the person's income tested amount. "; (c) by omitting the heading to Module H and substituting the following heading: "MODULE H—FAMILY PAYMENT INCOME TEST"; (d) by omitting point 1069-H1 and substituting the following point: Persons to whom the income test applies "1069-H1. The income tests in Submodules 3 and 4 apply to a person unless the person, or the person's partner, is receiving: (a) a social security pension or benefit or a service pension; or (b) payments under a prescribed educational scheme. Note: For 'prescribed educational scheme' see subsection 5(1)."; (e) by inserting after point 1069-H2 the following points: Fringe benefits value "1069-H2A. For the purposes of this Module, if a person is not a member of a couple, the person's fringe benefits value for a tax year is the sum of the values of all the assessable fringe benefits received by the person in that tax year. "1069-H2B. For the purposes of this Module, if a person is a member of a couple, the person's fringe benefits value for a tax year is the sum of: (a) the values of all the assessable fringe benefits received by the person in that tax year; and (b) the values of all the assessable fringe benefits received by the person's partner in that tax year."; (f) by omitting "taxable" (wherever occurring) from point 1069-H13; (g) by adding at the end of point 1069-H13 the following Note: "Note: For 'income' see point 1069-H21."; (h) by omitting "taxable" (wherever occurring) from paragraph 1069-H14(b); (i) by omitting Note 2 to point 1069-H14 and substituting the following Note: "Note 2: For 'income free area' see Table H."; (j) by adding at the end of point 1069-H14 the following Note: "Note 4: For 'income' see point 1069-H21."; (k) by omitting "taxable" (wherever occurring) from paragraph 1069-H15(c); (l) by adding at the end of point 1069-H15 the following Note: "Note: For 'income' see point 1069-H21."; (m) by omitting "taxable" (wherever occurring) from paragraph 1069-H16(b); (n) by adding at the end of point 1069-H16 the following Note: "Note 2: For 'income' see point 1069-H21."; (o) by omitting "taxable" (wherever occurring) from paragraph 1069-H17(c); (p) by adding at the end of point 1069-H17 the following Note: "Note: For 'income' see point 1069-H21."; (q) by omitting "taxable" (wherever occurring) from paragraph 1069-H19(c); (r) by adding at the end of point 1069-H19 the following Note: "Note: For 'income' see point 1069-H21."; (s) by inserting after point 1069-H20 the following point in Submodule 2 of Module H: Income "1069-H21. In points 1069-H13, 1069-H14, 1069-H15, 1069-H16, 1069-H17 and 1069-H19: 'income', in relation to a person, means the person's taxable income and the person's adjusted fringe benefits value."; (t) by omitting Submodules 3, 4 and 5 from Module H and substituting the following Submodules: "Submodule 3—Family payment income test Satisfying the family payment income test "1069-H22. This is how to work out whether a person satisfies the family payment income test: Method statement Step 1. Work out the person's appropriate tax year using Submodule 2. Step 2. Work out the person's taxable income for that tax year. Note: For the treatment of the taxable income of members of a couple see point 1069-H2. Step 3. Work out the person's fringe benefits value for that tax year using points 1069-H2A and 1069-H2B. Step 4. Work out the fringe benefits value free area using point 1069-H23. Step 5. Work out the person's adjusted fringe benefits value using points 1069-H24 and 1069-H25. Step 6. Add the amount obtained in Step 2 and the amount obtained in Step 5: the result is called the person's adjusted income. Step 7. Work out the person's income ceiling using point 1069-H26. Step 8. If the person's adjusted income does not exceed the income ceiling, the person satisfies the family payment income test and the person's basic family payment rate is not affected. Step 9. If the person's adjusted income exceeds the income ceiling, the person does not satisfy the family payment income test and the person's basic family payment rate is nil. Note: It is only assessable fringe benefits that are used to work out the person's fringe benefits value. An assessable fringe benefit is a fringe benefit that is a car benefit, school fees benefit, health insurance benefit, loan benefit or housing benefit. However, if one of these kinds of benefits is an exempt benefit, it is not an assessable fringe benefit. For 'assessable fringe benefit' see section 10A. Fringe benefits value free area "1069-H23. A person's fringe benefits value free area is $1,000.00. Person's adjusted fringe benefits value "1069-H24. If the person's fringe benefits value exceeds the fringe benefits value free area, the person's adjusted fringe benefits value is the person's fringe benefits value less the free area. "1069-H25. If the person's fringe benefits value does not exceed the fringe benefits value free area, the person's adjusted fringe benefits value is nil. Income ceiling "1069-H26. A person's income ceiling is worked out using Table H. A person's income ceiling is the basic ceiling amount in column 1 plus an additional amount in column 2 for each FP child of the person (after the first). TABLE H FAMILY PAYMENT BASE RATE—INCOME CEILING column 1 column 2 basic ceiling additional amount for each FP child (after the first) $64,938.00 $3,249.00 Note: The basic ceiling is indexed in line with CPI increases (see sections 1191 to 1194). "Submodule 4—Additional family payment: effect of family payment income test Effect of income test on additional family payment "1069-H27. This is how to work out the effect of a person's income on the person's additional family payment rate: Method statement Step 1. Work out the person's appropriate tax year using Submodule 2. Step 2. Work out the person's taxable income for that tax year. Note: For the treatment of the taxable income of members of a couple see point 1069-H2. Step 3. Work out the person's fringe benefits value for that tax year using points 1069-H2A and 1069-H2B. Step 4. Work out the fringe benefits value free area using point 1069-H28. Step 5. Work out the person's adjusted fringe benefits value using points 1069-H29 and 1069-H30. Step 6. Add the amount obtained in Step 2 and the amount obtained in Step 5: the result is called the person's adjusted income. Method statement—continued Step 7. Work out the person's income free area using point 1069-H31. Note: A person's income free area is the amount of income that the person can have without any deduction being made from the person's additional family payment. Step 8. Work out whether the person's adjusted income exceeds the person's income free area. Step 9. If the person's adjusted income does not exceed the person's income free area, the person's annual income excess is nil. Step 10. If the person's adjusted income exceeds the person's income free area, the person's annual income excess is the person's adjusted income less the person's income free area. Step 11. Convert the annual income excess into a fortnightly excess using point 1069-H33. Step 12. Work out the amount of the person's reduction for income using point 1069-H34. Note: It is only assessable fringe benefits that are used to work out the person's fringe benefits value. An assessable fringe benefit is a fringe benefit that is a car benefit, school fees benefit, health insurance benefit, loan benefit or housing benefit. However, if one of these kinds of benefits is an exempt benefit, it is not an assessable fringe benefit. For 'assessable fringe benefit' see section 10A. Fringe benefits value free area "1069-H28. A person's fringe benefits value free area is $1,000.00. Adjusted fringe benefits value "1069-H29. If the person's fringe benefits value exceeds the fringe benefits value free area, the person's adjusted fringe benefits value is the person's fringe benefits value less the free area. "1069-H30. If the person's fringe benefits value does not exceed the fringe benefits value free area, the person's adjusted fringe benefits value is nil. Income free area "1069-H31. A person's income free area is worked out using Table HA. A person's income free area is the AFP basic free area amount in column 1 plus an additional amount in column 2 for each AFP child of the person (after the first). TABLE HA ADDITIONAL FAMILY PAYMENT—INCOME FREE AREA column 1 column 2 AFP basic free area additional amount for each AFP child (after the first) $21,350.00 $624.00 Note: The AFP basic free area is indexed in line with CPI increases (see sections 1191 to 1194). AFP child in point 1069-H31 includes children receiving prescribed educational scheme payments and "shared" children "1069-H32. In point 1069-H31, 'AFP child' includes: (a) a student child who: (i) has reached 16 but has not reached 18; and (ii) is receiving payments under a prescribed educational scheme; or (b) a child in relation to whom the Secretary has made a declaration under subsection 869(1). Fortnightly income excess "1069-H33. The fortnightly income excess is: annual income excess 26 Reduction for income "1069-H34. The reduction for income is: fortnightly income excess 2 .". (2) The indexation of the AFP basic free area that occurs on 1 January 1994 (see item 16 of the CPI Indexation Table in section 1191 of the Principal Act) operates on the amount in Table HA in point 1069-H31 that is being inserted in the Principal Act by Part 2 of this Act. Insertion of new Part 3.12A 7. After Part 3.12 of the Principal Act the following Part is inserted: "PART 3.12A—GENERAL PROVISIONS RELATING TO THE FAMILY PAYMENT INCOME TEST AND THE PARENTAL MEANS TEST "Division 1—Purpose of this Part Purpose of Part "1157A.(1) Division 2 of this Part describes the kind of benefits that can be assessable fringe benefits. Division 3 to 7 tell you how to work out the value of the assessable fringe benefits received by a person in a tax year. Division 8 deals with foreign currency conversions. These provisions are necessary for the purposes of: (a) the family payment income test; and (b) the parental means test for social security benefits. Note 1: For the family payment income test see Module H of the Family Payment Rate Calculator in section 1069. Note 2: For the parental means test see Module G of Benefit Rate Calculator A in section 1067. Note 3: For 'assessable fringe benefit' see section 10A. Note 4: A fringe benefit is one that is provided by an employer to an employee in respect of the employee's employment (see section 10A). "(2) Section 10A contains many of the definitions that are relevant to the provisions of this Part. "Division 2—Benefits that may be assessable fringe benefits Benefits received in or outside Australia "1157B. This Part applies to a fringe benefit whether the benefit is received in or outside Australia. Car benefits "1157C.(1) A person (the 'employee') receives a car benefit if: (a) a car held by another person (the 'provider'): (i) is applied to a private use by the employee or an associate of the employee; or (ii) is taken under subsection (2), (3) or (4) to be available for the private use of the employee or an associate of the employee; and (b) either: (i) the provider is the employer, or an associate of the employer, of the employee; or (ii) the car is applied or available in that way under an arrangement between: (A) the provider or another person; and (B) the employer or an associate of the employer. "(2) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if: (a) the car is held by a person who is: (i) the employer; or (ii) an associate of the employer; or (iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and (b) the car is garaged or kept at or near a place of residence of the employee or of an associate of the employee. "(3) A car is taken, for the purposes of subsection (1), to be available at a particular time for the private use of the employee or an associate of the employee if: (a) the car is held by a person who is: (i) the employer; or (ii) an associate of the employer; or (iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and (b) the car is not at business premises of: (i) the employer; or (ii) an associate of the employer; or (iii) some other person with whom, or in respect of whom, the employer or associate has an arrangement relating to the use or availability of the car; and (c) either: (i) the employee is entitled to apply the car to a private use at that time; or (ii) the employee is not performing the duties of his or her employment at that time and has custody or control of the car; or (iii) an associate of the employee is entitled to use the car at that time; or (iv) an associate of the employee has custody or control of the car at that time. "(4) For the purposes of subsection (3), if a prohibition on the use of a car, or on the application of a car for a private use, by a person is not consistently enforced, the person is taken to be entitled to use the car, or to apply the car to a private use, despite the prohibition. "(5) For the purposes of this section, a car that is let on hire to a person under a hire-purchase agreement is taken: (a) to have been purchased by the person at the time when the person first took the car on hire; and (b) to have been owned by the person at all material times. "(6) A reference in this Part to a car held by a person (the 'provider') does not include a reference to: (a) a taxi let on hire to the provider; or (b) a car let on hire to the provider under an agreement of a kind that is ordinarily entered into by persons taking cars on hire intermittently as occasion requires on an hourly, daily, weekly or other short-term basis. "(7) Paragraph (6)(b) does not apply if the car has been or may reasonably be expected to be on hire under successive agreements of a kind that result in substantial continuity of the hiring of the car. Exempt car benefits "1157D.(1) Except in so far as section 1157C provides that the application or availability of a car held by a person is a car benefit, the application or availability of a car held by a person is exempt. "(2) A car benefit provided in respect of the employment of the employee is exempt if: (a) the car is: (i) a taxi, panel van or utility truck; or (ii) any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passengers); and (b) the only private use of the car at a time when the benefit was provided was: (i) work-related travel of the employee; and (ii) other minor, infrequent and irregular private use by the employee or an associate of the employee. "(3) A car benefit provided in respect of the employment of the employee is exempt if the car was unregistered at all times when the car was held by the person who provided the car. School fees benefits Payment to recipient "1157E.(1) If: (a) a person (the 'provider') pays an amount to another person (the 'recipient'); and (b) the amount is for fees for: (i) tuition at primary or secondary level provided by a school; or (ii) books or equipment provided by the school in relation to that tuition; and (c) the tuition, books or equipment is provided to: (i) a dependent child of the recipient or the recipient's partner; or (ii) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a job search allowance or a sickness allowance; the payment constitutes a school fees benefit provided by the provider to the recipient. Note: For 'school' see section 10A. Payment to or on behalf of the school "(2) If: (a) a person (the 'provider') pays an amount to or on behalf of a school; and (b) the amount is for fees for: (i) tuition at primary or secondary level provided by the school; or (ii) books or equipment provided by the school in relation to that tuition; and (c) the tuition, books or equipment is provided to: (i) a dependent child of a person (the 'recipient') or the recipient's partner; or (ii) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a job search allowance or a sickness allowance; the payment constitutes a school fees benefit provided by the provider to the recipient. Note: For 'school' see section 10A. Boarding fees "(3) For the purposes of subsections (1) and (2), if: (a) a school is providing tuition at primary or secondary level to a dependent child of a person; and (b) the child is boarding at the school; the fees that are payable for the child to board at the school are taken to be fees for the tuition provided by the school to the child. Health insurance benefits Payment to recipient "1157F.(1) If: (a) a person (the 'provider') pays an amount to another person (the 'recipient'); and (b) the amount is for the cost of health insurance; and (c) the health insurance covers: (i) the recipient; or (ii) the recipient's partner; or (iii) a dependent child of the recipient or the recipient's partner; or (iv) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a job search allowance or a sickness allowance; the payment constitutes a health insurance benefit provided by the provider to the recipient. Payment to the health insurance fund "(2) If: (a) a person (the 'provider') pays an amount to a health insurance fund; and (b) the amount is for the cost of health insurance; and (c) the health insurance covers: (i) a person (the 'recipient'); or (ii) the recipient's partner; or (iii) a dependent child of the recipient or the recipient's partner; or (iv) a person who would be a dependent child of the recipient or the recipient's partner if the person was not receiving a job search allowance or a sickness allowance; the payment constitutes a health insurance benefit provided by the provider to the recipient. Loan benefits "1157G.(1) If a person (the 'provider') makes a loan to another person (the 'recipient'), the making of the loan constitutes a loan benefit provided by the provider to the recipient. Late payment of debt "(2) For the purposes of this section, if: (a) a person (the 'debtor') is under an obligation to pay or repay an amount (the 'principal amount') to another person (the 'creditor'); and (b) the principal amount is not the whole or a part of the amount of a loan; and (c) after the due date for payment or repayment of the principal amount, the whole or part of the principal amount remains unpaid; the following provisions have effect: (d) the creditor is taken, immediately after the due date, to have made a loan (the 'deemed loan') of the principal amount to the debtor; (e) at any time when the debtor is under an obligation to repay any part of the principal amount, the debtor is taken to be under an obligation to repay that part of the deemed loan; (f) the deemed loan is taken to have been made: (i) if interest accrues on so much of the principal amount as remains from time to time unpaid—at the rate of interest at which that interest accrues; or (ii) in any other case—at a nil rate of interest. "(3) Subject to subsection (4), a loan is a deferred interest loan if interest is payable on the loan at a rate that exceeds nil. "(4) A loan is not a deferred interest loan if: (a) the whole of the interest is due for payment within 6 months after the loan is made; or (b) all of the following conditions are satisfied: (i) interest on the loan is payable by instalments; (ii) the intervals between instalments do not exceed 6 months; (iii) the first instalment is due for payment within 6 months after the loan is made. "(5) For the purposes of this section, if a person (the 'provider') makes a deferred interest loan (the 'principal loan') to another person (the 'recipient'), the following provisions apply: (a) the provider is taken, at the end of: (i) the period of 6 months starting on the day on which the principal loan was made; and (ii) each subsequent period of 6 months; to have made a loan (the 'deemed loan') to the recipient; (b) the amount of the loan is taken to be equal to the amount by which the interest (the 'accrued interest') that has accrued on the principal loan in respect of the period exceeds the amount (if any) paid in respect of the accrued interest before the end of the period; (c) if any part of the accrued interest becomes payable or is paid after the time when the deemed loan is taken to have been made, the deemed loan is to be reduced accordingly; (d) the deemed loan is taken to have been made at a nil rate of interest. "(6) Paragraph (5)(a) only applies to a period of 6 months if the recipient is under an obligation during the whole of the period to repay the whole or a part of the principal loan. "(7) For the purposes of this Part, if no interest is payable in respect of a loan, a nil rate of interest is taken to be payable in respect of the loan. Exempt loan benefits "1157H.(1) The making of a loan is exempt if: (a) the loan is made by a person who carries on a business that consists of or includes making loans to members of the public; and (b) the rate of interest payable in respect of the loan: (i) is specified in a document in existence at the time the loan is made; and (ii) is not less than the rate of interest in respect of a similar arm's length loan made by the person, at or about that time, to a member of the public in the ordinary course of carrying on that business; and (iii) cannot be varied. "(2) The making of a loan is exempt if: (a) the loan is made by a person who carries on a business that consists of or includes making loans to members of the public; and (b) the rate of interest from time to time payable in respect of the loan is not less than the rate of interest applicable at the time the loan is made in respect of a similar arm's length loan made by the person, at or about that time, to a member of the public in the ordinary course of carrying on that business. "(3) The making of a loan is exempt if: (a) the loan consists of an advance by the employer to the employee; and (b) the sole purpose of the making of the loan is to enable the employee to meet the expenses incurred by the employee: (i) in the course of performing the duties of that employment; and (ii) not later than 6 months after the loan is made; and (c) the amount of the loan is not substantially greater than the amount of those expenses that could reasonably be expected to be incurred by the employee; and (d) the employee is required: (i) to account to the employer, not later than 6 months after the loan is made, for expenses met from the loan; and (ii) to repay (whether by set-off or otherwise) any amount not so accounted for. "(4) The making of a loan is exempt if: (a) the loan consists of an advance by the employer to the employee; and (b) the sole purpose of the making of the loan is to enable the employee to pay any of the following amounts payable by the employee in respect of accommodation: (i) a rental bond; (ii) a security deposit in respect of electricity, gas or telephone services; (iii) any similar amount; and (c) the employee is required to repay (whether by set-off or otherwise) the loan not later than 12 months after the loan is made. Housing benefits "1157I. The subsistence of a housing right granted by a person (the 'provider') to another person (the 'recipient') constitutes a housing benefit provided by the provider to the recipient. Exempt housing benefits—live-in residential care workers "1157J.(1) If, during a period: (a) the employer of an employee is: (i) a government body; or (ii) a religious institution; or (iii) a non-profit company; whose activities consist of, or include, caring for mature persons or disadvantaged persons; and (b) the duties of the employee's employment consist of, or consist principally of, caring for mature or disadvantaged persons; and (c) in the performance of those duties, the employee lives, together with mature persons or disadvantaged persons, in residential premises of the employer; and (d) the fact that the employee lives in those premises is directly related to the provision, in the course of the performance of the duties of the employee's employment, of care to the mature persons or disadvantaged persons living in those premises; any benefit arising from the provision, during that period, of that accommodation to the employee or to the employee and a partner or dependent child of the employee who resides in those premises with the employee is exempt. "(2) In this section: 'residential premises' means a house or hostel used exclusively for the provision of residential accommodation to: (a) mature persons or disadvantaged persons and dependent children of mature persons or disadvantaged persons; and (b) persons the duties of whose employment consist of, or consist principally of, caring for persons referred to in paragraph (a); and (c) partners and children of persons referred to in paragraph (b) "Division 3—Value of car fringe benefits Method of valuing car fringe benefits "1157K.(1) Subject to subsection (2), the value of a car fringe benefit is to be worked out in accordance with section 1157L. "(2) If a determination is in force under section 1157M, the value of a car fringe benefit is to be worked out in accordance with the determination. Value of car fringe benefits "1157L.(1) This is how to work out the value of a car fringe benefit: Method statement Step 1. Work out the engine capacity of the car and go to the relevant Part of the Car Fringe Benefits Value Table. Step 2. Work out how old the car is and go to the appropriate row in the Table. Step 3. Work out how many complete months in the appropriate tax year the person had or will have the car fringe benefit and go to the appropriate column in the Table: the number where that row and column intersect is the value of the car fringe benefit. Note: If the person is a member of a couple, the value of the car fringe benefit is to be halved in certain circumstances (see subsection (3)). "(2) The following Table is to be used in working out the value of a car fringe benefit: CAR FRINGE BENEFITS VALUE TABLE PART A—Car engine size up to 1600cc car age (years) Period of use (completed months) item 1 2 3 4 5 6 7 8 9 10 11 12 1. 1 93.8 188 281 375 469 563 656 750 844 938 1031 1125 2. 2 83.6 168 252 336 420 504 588 672 756 840 923.8 1008 3. 3 74.2 148 223 297 371 445 520 594 668 742 816.4 890.6 4. 4 64.5 129 193 258 322 387 451 516 580 645 709 773.4 5. 5 54.7 109 164 219 273 328 383 438 492 547 601.6 656.3 6. 6 44.9 89.8 135 180 225 270 314 359 404 449 494.1 539.1 7. 7 35.2 70.3 105 141 176 211 246 281 316 352 386.7 421.9 8. 8 25.4 50.8 76.2 102 127 152 178 203 229 254 279.3 304.7 9. 9 15.6 31.3 46.9 62.5 78.1 93.8 109 125 141 156 171.9 187.5 10. 10+ 5.86 11.7 17.6 23.4 29.3 35.2 41 46.9 52.7 58.6 64.45 70.31 PART B—Car engine size 1601cc to 2850cc 11. 1 229 458 688 917 1146 1375 1604 1833 2063 2292 2521 2750 12. 2 210 422 633 844 1055 1266 1477 1688 1898 2109 2320 2531 13. 3 193 385 578 771 964 1156 1349 1542 1734 1927 2120 2313 14. 4 174 349 523 698 872 1047 1221 1396 1570 1745 1919 2094 15. 5 156 313 469 625 781 938 1094 1250 1406 1563 1719 1875 16. 6 138 276 414 552 690 828 966 1104 1242 1380 1518 1656 17. 7 120 240 359 479 599 719 839 958 1078 1198 1318 1438 18. 8 102 203 305 406 508 609 711 813 914 1016 1117 1219 19. 9 83.3 167 250 333 417 500 583 667 750 833 916.7 1000 20. 10+ 65.1 130 195 260 326 391 456 521 586 651 716.1 781.3 PART C—Car engine size more than 2850cc 21. 1 354 708 1063 1417 1771 2125 2479 2833 3188 3542 3896 4250 22. 2 327 656 984 1313 1641 1969 2297 2625 2953 3281 3609 3938 23. 3 302 604 906 1208 1510 1813 2115 2417 2719 3021 3323 3625 24. 4 276 552 828 1104 1380 1656 1932 2208 2484 2760 3036 3313 25. 5 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 26. 6 224 448 672 896 1120 1344 1568 1792 2016 2240 2464 2688 27. 7 198 396 594 792 990 1188 1385 1583 1781 1979 2177 2375 28. 8 172 344 516 688 859 1031 1203 1375 1547 1719 1891 2063 29. 9 146 292 438 583 729 875 1021 1167 1313 1458 1604 1750 30. 10+ 120 240 359 479 599 719 839 958 1078 1198 1318 1438 "(3) If: (a) the person is a member of a couple; and (b) the person's partner receives a car fringe benefit in the appropriate tax year; and (c) the person's and the partner's car fringe benefits relate to the same car; the value of the car fringe benefit is to be halved. Minister may determine alternative method of valuing car fringe benefits "1157M.(1) The Minister may determine an alternative method for valuing car fringe benefits. "(2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. "(3) A determination in subsection (1): (a) starts to have effect on the day on which it is notified in the Gazette; and (b) ceases to have effect at the end of 6 months after the day on which it is notified in the Gazette if it has not been revoked before then. "Division 4—Value of school fees fringe benefits Value of school fees fringe benefits "1157N. The value of a school fees fringe benefit is the amount of the payment that constitutes the school fees benefit. "Division 5—Value of health insurance fringe benefits Value of health insurance fringe benefits "11570. The value of a health insurance fringe benefit is the amount of the payment that constitutes the health insurance benefit. "Division 6—Value of loan fringe benefits Method of valuing loan fringe benefits "1157P.(1) Subject to subsection (2), the value of a loan fringe benefit is to be worked out in accordance with section 1157Q. "(2) If a determination is in force under section 1157R, the value of a loan fringe benefit is to be worked out in accordance with the determination. Value of loan fringe benefits "1157Q.(1) This is how to work out the value of a loan fringe benefit: Method stat