Commonwealth: Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Act 2019 (Cth)

Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Act 2019 No. 5, 2019 An Act to amend the law relating to social security and veterans' entitlements, and for related purposes Contents 1 Short title 2 Commencement 3 Schedules Schedule 1—Lifetime income streams Social Security Act 1991 Veterans' Entitlements Act 1986 Schedule 2—Work bonus Social Security Act 1991 Veterans' Entitlements Act 1986 Schedule 3—Pension loans scheme Part 1—Main amendments Social Security Act 1991 Veterans' Entitlements Act 1986 Part 2—Contingent amendments Social Security Act 1991 Schedule 4—Other amendments Social Security Act 1991 Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Act 2019 No. 5, 2019 An Act to amend the law relating to social security and veterans' entitlements, and for related purposes [Assented to 1 March 2019] The Parliament of Australia enacts: 1 Short title This Act is the Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Act 2019. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms. Commencement information Column 1 Column 2 Column 3 Provisions Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day this Act receives the Royal Assent. 1 March 2019 2. Schedules 1 and 2 1 July 2019. 1 July 2019 3. Schedule 3, Part 1 1 July 2019. 1 July 2019 4. Schedule 3, Part 2 Immediately after the commencement of Schedule 4 to the Social Services Legislation Amendment (Welfare Reform) Act 2018. 20 March 2020 5. Schedule 4 The day after this Act receives the Royal Assent. 2 March 2019 Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act. (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act. 3 Schedules Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Lifetime income streams Social Security Act 1991 1 Subparagraph 8(8)(b)(iii) Repeal the subparagraph. 2 Subsection 9(1) Insert: asset‑tested income stream (lifetime) has the meaning given by section 9E. 3 Subsection 9(1) (subparagraphs (b)(i) and (ii) of the definition of asset‑tested income stream (long term)) Omit "a term", substitute "a specified term". 4 Subsection 9(1) (at the end of the definition of asset‑tested income stream (long term)) Add: Note: Since the income stream must be for a specified term, an asset‑tested income stream (long term) cannot be an asset‑tested income stream (lifetime). 5 Subsection 9(1) (definition of asset‑tested income stream (short term)) Omit "neither", substitute "none of the following". 6 Subsection 9(1) (paragraph (a) of the definition of asset‑tested income stream (short term)) Omit "nor;". 7 Subsection 9(1) (at the end of the definition of asset‑tested income stream (short term)) Add: ; (c) an asset‑tested income stream (lifetime). 8 Subsection 9(1) (definition of deferred annuity) Repeal the definition. 9 Subsection 9(1) (at the end of the definition of income stream) Add: ; (n) a payment of compensation to a person, or a payment to a person under an insurance scheme, in relation to: (i) the person's inability to earn, derive or receive income from remunerative work; or (ii) the person's total and permanent disability or incapacity. 10 Subsection 9(1) (paragraph (a) of the definition of investment) Omit ", approved deposit fund or deferred annuity", substitute "or approved deposit fund". 11 Paragraph 9(1B)(f) Repeal the paragraph. 12 After paragraph 9(1B)(g) Insert: ; (h) an asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993. 13 Subsection 9(1B) (note 3) Repeal the note. 14 At the end of subsection 9(1B) Add: Note 5: For paragraph (h), see paragraph (1C)(j) for a person's asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 if the person's assessment day (within the meaning of section 1120AB) for the income stream has occurred. 15 Paragraph 9(1C)(c) Repeal the paragraph. 16 After paragraph 9(1C)(h) Insert: ; (i) a person's asset‑tested income stream (lifetime) that arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; (j) a person's asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 if the person's assessment day (within the meaning of section 1120AB) for the income stream has occurred. 17 Subsection 9(9) Omit ", approved deposit fund or deferred annuity", substitute "or approved deposit fund". 18 Subsection 9(9) Omit "or under the annuity". 19 After paragraph 9D(1)(b) Insert: or (c) an asset‑tested income stream (lifetime); 20 Paragraph 9D(2)(b) Omit "either an asset‑tested income stream (long term) or an asset‑tested income stream (short term)", substitute "an asset‑tested income stream (long term), an asset‑tested income stream (short term) or an asset‑tested income stream (lifetime)". 21 After section 9D Insert: 9E Asset‑tested income stream (lifetime) (1) Subject to subsection (2), an income stream is an asset‑tested income stream (lifetime) if: (a) the contract, or governing rules, for the provision of the income stream ensure that, once payments of the income stream start, the income stream is to continue for the remainder of the life of one or more individuals; and (b) the contract, or governing rules, for the provision of the income stream ensure that the amounts of those payments are determined by having regard to the age, life expectancy or other factors relevant to the mortality of those individuals; and (c) the income stream is not an asset‑test exempt income stream; and (d) the income stream is not a defined benefit income stream. (2) If: (a) paragraphs (1)(a) to (d) are satisfied in relation to an income stream; and (b) the income stream is of a kind determined in an instrument under subsection (3); the income stream is an asset‑tested income stream (lifetime) only to the extent determined in the instrument. (3) The Secretary may make a legislative instrument for the purposes of subsection (2). (4) An income stream is an asset‑tested income stream (lifetime) if: (a) the income stream satisfies the conditions determined in an instrument under subsection (5); and (b) the income stream is not an asset‑test exempt income stream; and (c) the income stream is not a defined benefit income stream. (5) The Secretary may, by legislative instrument, determine conditions for the purposes of paragraph (4)(a). 22 Subsection 23(1) (definition of deferred annuity) Repeal the definition. 23 Subsection 23(1) (paragraph (a) of the definition of investment) Omit ", approved deposit fund or deferred annuity", substitute "or approved deposit fund". 24 Section 1099C (heading) Repeal the heading, substitute: 1099C Income—asset‑tested income stream (long term) that is not a defined benefit income stream 25 Section 1099D (heading) Repeal the heading, substitute: 1099D Income—asset‑tested income stream (long term) that is a defined benefit income stream 26 At the end of Subdivision B of Division 1C of Part 3.10 Add: 1099DAB Income—asset‑tested income stream (lifetime) If the income stream is an asset‑tested income stream (lifetime), the amount that the person is taken to receive from the income stream each year is worked out as follows: where: annual payment means the amount payable to the person for the year under the income stream. 27 After section 1099DC Insert: 1099DCA Income from asset‑tested income stream (lifetime) (1) For the purpose of working out the annual rate of ordinary income of a person from an asset‑tested income stream (lifetime) to which this Subdivision applies, the person is taken to receive from that income stream each year the amount determined by the Secretary under this subsection. (2) In making a determination under subsection (1), the Secretary must comply with any relevant decision‑making principles in force under section 1099DD. 28 At the end of section 1099DD Add: ; or (e) subsection 1099DCA(1). 29 Subparagraph 1118(1)(f)(iii) Repeal the subparagraph. 30 Subsection 1118A(1) Omit ", a deferred annuity". 31 Paragraphs 1118A(2)(a) and (b) Omit ", a deferred annuity". 32 Section 1119 (heading) Repeal the heading, substitute: 1119 Value of asset‑tested income streams that are not defined benefit income streams, asset‑tested income streams (lifetime) or family law affected income streams 33 Subsection 1119(1) After "defined benefit income stream", insert ", it is not an asset‑tested income stream (lifetime)". 34 Subsection 1119(1) (note) Repeal the note, substitute: Note: For defined benefit income streams, see section 1120. For asset‑tested income streams (lifetime), see sections 1120AA and 1120AB. For family law affected income streams, see section 1120A. 35 At the end of subsection 1120(1) Add: Note: For family law affected income streams, see section 1120A. 36 After section 1120 Insert: 1120AA Value of asset‑tested income streams (lifetime) that are managed investments (1) This section applies to a person's asset‑tested income stream (lifetime), that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993, in relation to a day that is before the person's assessment day (within the meaning of section 1120AB) for the income stream. Note: For asset‑tested income stream (lifetime), see subsection 9(1). (2) However, this section does not apply to a family law affected income stream. Note: For family law affected income streams, see section 1120A. Value of income stream (3) Subject to this section, the value of the person's income stream is, for the purposes of the assets test, the purchase amount for the income stream. Purchase amount (4) For the purposes of this section, the purchase amount for the income stream is: (a) subject to paragraph (b)—if one or more amounts have been paid for the income stream, the sum of each compounded amount in relation to an amount paid for the income stream, as worked out under subsection (5), less any commuted amounts; or (b) if the circumstances determined in an instrument under subsection (7) apply in relation to the income stream—the amount worked out in accordance with that instrument. (5) A compounded amount in relation to an amount paid for the income stream is worked out by applying the following formula for each relevant adjustment day (from the earliest to the latest): where: compounded amount for the relevant adjustment day means: (a) for the earliest relevant adjustment day—the amount that was paid for the income stream; or (b) for each later relevant adjustment day—the result of applying the formula for the most recent earlier relevant adjustment day. relevant above threshold rate for the relevant adjustment day means the following: (a) if the relevant adjustment day is the relevant payment day—zero; (b) if the relevant adjustment day is a 12‑month anniversary of the relevant payment day—the rate applicable under subsection 1082(2) for that relevant adjustment day, expressed as a decimal fraction. relevant adjustment day means each of the following: (a) the relevant payment day; (b) each 12‑month anniversary of the relevant payment day. relevant payment day means the day that the amount was paid for the income stream. (6) If the income stream is a joint income stream, then, for the purposes of applying subsections (4) and (5) to the person and to a day covered by subsection (1), an amount paid for the income stream is taken to be that amount multiplied by the proportion of the income stream attributable to the person on that day. (7) The Secretary may make a legislative instrument for the purposes of paragraph (4)(b). 1120AB Value of asset‑tested income streams (lifetime) that are not managed investments (1) This section applies to a person's asset‑tested income stream (lifetime) in relation to a day that is on or after the person's assessment day for the income stream. Note 1: For asset‑tested income stream (lifetime), see subsection 9(1). For assessment day, see subsections (6) and (7) of this section. Note 2: This section applies separately in relation to each asset‑tested income stream (lifetime) of a person. (2) However, this section does not apply to a family law affected income stream. Note: For family law affected income streams, see section 1120A. Value of income stream (3) Subject to this section, the value of the person's income stream is, for the purposes of the assets test, worked out as follows: (a) for a day in the period beginning on the person's assessment day for the income stream and ending at the end of the person's threshold day for the income stream: (b) for a day after the person's threshold day for the income stream: Note: For threshold day, see subsections (9) and (10). For purchase amount, see subsection (12). (4) The Secretary may, by legislative instrument, determine one or more methods for working out the value of an asset‑tested income stream (lifetime) for persons to whom this section applies. (5) If one or more amounts worked out in accordance with the instrument are higher than the amount under subsection (3), then the value of the person's income stream is, for the purposes of the assets test, the highest of those amounts. Assessment day (6) Subject to subsection (7), for the purposes of this section, a person's assessment day for an asset‑tested income stream (lifetime) is: (a) if the income stream arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993—the latest of the following: (i) the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (8); (ii) the day the first amount was paid for the income stream; (iii) the day the person acquired the income stream (if no amount is identifiable as having been paid for the income stream); or (b) otherwise: (i) if the commencement day in relation to the income stream is before the day the person reaches pension age—the commencement day in relation to the income stream; or (ii) in any other case—the latest of the day the first amount was paid for the income stream, the day the person reaches pension age and the day the person acquired the income stream (if no amount is identifiable as having been paid for the income stream). Note: For commencement day, see subsection 9(1). (7) For the purposes of this section, a person's assessment day for an asset‑tested income stream (lifetime) that reverted to the person as a reversionary beneficiary is: (a) if the income stream reverted to the person on or after the commencement day in relation to the income stream—the day of the reversion; or (b) if the income stream reverted to the person before the commencement day in relation to the income stream and the income stream arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993: (i) if the commencement day in relation to the income stream is before the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (8)—the commencement day in relation to the income stream; or (ii) in any other case—the later of the day of the reversion and the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (8); or (c) if the income stream reverted to the person before the commencement day in relation to the income stream and the income stream does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993: (i) if the commencement day in relation to the income stream is before the day the person reaches pension age—the commencement day in relation to the income stream; or (ii) in any other case—the later of the day of the reversion and the day the person reaches pension age. Note: For commencement day, see subsection 9(1). (8) The Secretary may, by notifiable instrument, determine a kind of condition of release for the purposes of subparagraphs (6)(a)(i) and (7)(b)(i) and (ii). Threshold day (9) Subject to subsection (10), for the purposes of this section, a person's threshold day for an asset‑tested income stream (lifetime) is worked out using the following method statement: Method statement Step 1. Work out, in relation to a man aged 65 on the person's assessment day for the income stream, the number of expected years remaining in the man's life, by reference to the instrument in force under subsection (11) on that assessment day, rounded down to the nearest whole number of years. Note: The number of expected years remaining in a 65‑year old man's life is used no matter how old the person is and whether the person is a man or a woman. Step 2. Increase the number of years at step 1 by 65. Step 3. Subject to step 4, the person's threshold day for the income stream is the later of the following days: (a) the day before the person reaches the age in years worked out at step 2; (b) the last day of the 5‑year period beginning on the person's assessment day for the income stream. Step 4. If the income stream is a joint income stream, the person's threshold day for the income stream is the later of the following days: (a) the day before the oldest of the persons, to whom a proportion of the income stream is attributable on the person's assessment day for the income stream, reaches the age in years worked out at step 2; (b) the last day of the 5‑year period beginning on the person's assessment day for the income stream. (10) If: (a) an asset‑tested income stream (lifetime) reverts to a person as a reversionary beneficiary on the death of another person; and (b) before the death of the other person, the other person's assessment day for the income stream had occurred; then: (c) if, before the death of the other person, the other person's threshold day for the income stream had not occurred—the reversionary beneficiary's threshold day for the income stream is taken to be the day that would have been the other person's threshold day if the other person had not died; and (d) if, before the death of the other person, the other person's threshold day for the income stream had occurred—the reversionary beneficiary's threshold day for the income stream is taken to be the other person's threshold day; and (e) if the reversionary beneficiary's assessment day for the income stream worked out under subsection (7) is on or after the reversionary beneficiary's threshold day for the income stream worked out under paragraph (c) or (d) of this subsection: (i) paragraph (3)(a) is taken not to apply to the reversionary beneficiary and the income stream; and (ii) paragraph (3)(b) is taken to apply to the reversionary beneficiary and the income stream for a day that is on or after the reversionary beneficiary's assessment day for the income stream. (11) The Secretary may make a notifiable instrument for the purposes of step 1 of the method statement in subsection (9). If there are Life Tables published by the Australian Government Actuary, the Secretary must be satisfied that the instrument is consistent with the latest of those Life Tables. Purchase amount (12) For the purposes of this section, the purchase amount for the income stream is: (a) subject to paragraph (b)—if one or more amounts have been paid for the income stream—the sum of: (i) each compounded amount in relation to an amount paid for the income stream before the person's assessment day for the income stream, as worked out under subsection (13); and (ii) each amount paid for the income stream on or after that assessment day; less any commuted amounts; or (b) if the circumstances determined in an instrument under subsection (15) apply in relation to the income stream—the amount worked out in accordance with that instrument. (13) A compounded amount in relation to an amount paid for the income stream before the person's assessment day for the income stream is worked out by applying the following formula for each relevant adjustment day (from the earliest to the latest): where: compounded amount for the relevant adjustment day means: (a) for the earliest relevant adjustment day—the amount that was paid for the income stream; or (b) for each later relevant adjustment day—the result of applying the formula for the most recent earlier relevant adjustment day. relevant above threshold rate for the relevant adjustment day means: (a) if the relevant adjustment day is a 12‑month anniversary of the relevant payment day—the rate applicable under subsection 1082(2) for that relevant adjustment day, expressed as a decimal fraction; or (b) if the relevant adjustment day is the assessment day—the amount worked out in accordance with the following formula: relevant adjustment day means each of the following: (a) each 12‑month anniversary of the relevant payment day that happens before the person's assessment day; (b) the person's assessment day. Note: For assessment day, see subsections (6) and (7). relevant number of days means the number of days in the period: (a) beginning on the day after: (i) if the assessment day is at least 12 months after the relevant payment day—the most recent 12‑month anniversary of the relevant payment day; or (ii) otherwise—the relevant payment day; and (b) ending at the end of the assessment day. relevant payment day means the day that the amount was paid for the income stream. (14) If the income stream is a joint income stream, then, for the purposes of applying subsections (12) and (13) to the person and to a day covered by subsection (1), an amount paid for the income stream is taken to be that amount multiplied by the proportion of the income stream attributable to the person on that day. (15) The Secretary may make a legislative instrument for the purposes of paragraph (12)(b). 37 After subsection 1121(3B) Insert: (3C) Subsection (1) does not apply to an asset that is an asset‑tested income stream (lifetime). 38 After section 1121A Insert: 1121B Value of life policy (1) This section applies in relation to a person and a day (the assessment day) if: (a) the person has reached pension age; and (b) the person is the owner (within the meaning of subsection 10(2) of the Life Insurance Act 1995) of a life policy covered by paragraph 9(1)(a) or (b) of that Act; and (c) the person became the owner of the policy after the person reached pension age; and (d) the sum of each amount paid for the policy (regardless of who paid the amount) in any period of 12 months exceeds 15% of the maximum death benefit that would be payable in the event of the death of the person whose life is insured on the assessment day. (2) The value of the life policy on the assessment day is, for the purposes of the assets test, the higher of the following: (a) the amount that would be payable to the person covered by paragraph (1)(b) if the policy were surrendered on that day; (b) the sum of each amount paid for the policy by the person covered by paragraph (1)(b), less any commuted amounts. 39 Application provisions (1) The amendment made by item 9 applies in relation to a payment made on or after the commencement of this item. (2) Sections 1099DAB, 1120AA and 1120AB of the Social Security Act 1991, as added or inserted by this Schedule, apply in relation to an asset‑tested income stream (lifetime), where: (a) the first payment for the income stream is made on or after the commencement of this item (whether the payment represents the whole payment for the income stream or part only); or (b) the income stream is acquired on or after the commencement of this item (if no amount is identifiable as having been paid for the income stream). (3) Section 1099DCA of the Social Security Act 1991, as inserted by this Schedule, applies in relation to an asset‑tested income stream (lifetime) that is a family law affected income stream, where: (a) the first payment for the income stream covered by paragraph 9C(a) of that Act (that resulted in the family law affected income stream) is made on or after the commencement of this item (whether the payment represents the whole payment for the income stream covered by paragraph 9C(a) of that Act or part only); or (b) the income stream covered by paragraph 9C(a) of that Act (that resulted in the family law affected income stream) is acquired on or after the commencement of this item (if no amount is identifiable as having been paid for the income stream covered by paragraph 9C(a) of that Act). (4) Section 1121B of the Social Security Act 1991, as inserted by this Schedule, applies in relation to a person who became the owner of the policy concerned on or after the commencement of this item (whether the person reached pension age before, on or after that commencement). Veterans' Entitlements Act 1986 40 Subparagraph 5H(8)(i)(iii) Repeal the subparagraph. 41 Paragraph 5H(8)(i) (note 2) Omit ", deferred annuity". 42 Subsection 5J(1) Insert: asset‑tested income stream (lifetime) has the meaning given by section 5JE. 43 Subsection 5J(1) (subparagraphs (b)(i) and (ii) of the definition of asset‑tested income stream (long term)) Omit "a term", substitute "a specified term". 44 Subsection 5J(1) (at the end of the definition of asset‑tested income stream (long term)) Add: Note: Since the income stream must be for a specified term, an asset‑tested income stream (long term) cannot be an asset‑tested income stream (lifetime). 45 Subsection 5J(1) (definition of asset‑tested income stream (short term)) Omit "neither", substitute "none of the following". 46 Subsection 5J(1) (paragraph (a) of the definition of asset‑tested income stream (short term)) Omit "nor". 47 Subsection 5J(1) (at the end of the definition of asset‑tested income stream (short term)) Add: ; (c) an asset‑tested income stream (lifetime). 48 Subsection 5J(1) (definition of deferred annuity) Repeal the definition. 49 Subsection 5J(1) (at the end of the definition of income stream) Add: ; (n) a payment of compensation to a person, or a payment to a person under an insurance scheme, in relation to: (i) the person's inability to earn, derive or receive income from remunerative work; or (ii) the person's total and permanent disability or incapacity. 50 Subsection 5J(1) (paragraph (a) of the definition of investment) Omit ", approved deposit fund or deferred annuity", substitute "or approved deposit fund". 51 Paragraph 5J(1B)(f) Repeal the paragraph. 52 After paragraph 5J(1B)(g) Insert: ; (h) an asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993. 53 Subsection 5J(1B) (note 3) Repeal the note. 54 At the end of subsection 5J(1B) Add: Note 5: For paragraph (h), see paragraph (1C)(j) for a person's asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 if the person's assessment day (within the meaning of section 52BAB) for the income stream has occurred. 55 Paragraph 5J(1C)(c) Repeal the paragraph. 56 After paragraph 5J(1C)(h) Insert: ; (i) a person's asset‑tested income stream (lifetime) that arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993; (j) a person's asset‑tested income stream (lifetime) that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993 if the person's assessment day (within the meaning of section 52BAB) for the income stream has occurred. 57 Subsection 5J(6) Omit ", approved deposit fund or deferred annuity", substitute "or approved deposit fund". 58 Subsection 5J(6) Omit "or under the annuity". 59 After paragraph 5JD(1)(b) Insert: or (c) an asset‑tested income stream (lifetime); 60 Paragraph 5JD(2)(b) Omit "either an asset‑tested income stream (long term) or an asset‑tested income stream (short term)", substitute "an asset‑tested income stream (long term), an asset‑tested income stream (short term) or an asset‑tested income stream (lifetime)". 61 After section 5JD Insert: 5JE Asset‑tested income stream (lifetime) (1) Subject to subsection (2), an income stream is an asset‑tested income stream (lifetime) if: (a) the contract, or governing rules, for the provision of the income stream ensure that, once payments of the income stream start, the income stream is to continue for the remainder of the life of one or more individuals; and (b) the contract, or governing rules, for the provision of the income stream ensure that the amounts of those payments are determined by having regard to the age, life expectancy or other factors relevant to the mortality of those individuals; and (c) the income stream is not an asset‑test exempt income stream; and (d) the income stream is not a defined benefit income stream. (2) If: (a) paragraphs (1)(a) to (d) are satisfied in relation to an income stream; and (b) the income stream is of a kind determined in an instrument under subsection (3); the income stream is an asset‑tested income stream (lifetime) only to the extent determined in the instrument. (3) The Commission may make a legislative instrument for the purposes of subsection (2). (4) An income stream is an asset‑tested income stream (lifetime) if: (a) the income stream satisfies the conditions determined in an instrument under subsection (5); and (b) the income stream is not an asset‑test exempt income stream; and (c) the income stream is not a defined benefit income stream. (5) The Commission may, by legislative instrument, determine conditions for the purposes of paragraph (4)(a). 62 Subsection 5Q(1) (definition of deferred annuity) Repeal the definition. 63 Subsection 5Q(1) (paragraph (a) of the definition of investment) Omit ", approved deposit fund or deferred annuity", substitute "or approved deposit fund". 64 Section 46X (heading) Repeal the heading, substitute: 46X Income—asset‑tested income stream (long term) that is not a defined benefit income stream 65 Section 46Y (heading) Repeal the heading, substitute: 46Y Income—asset‑tested income stream (long term) that is a defined benefit income stream 66 At the end of Subdivision B of Division 4 of Part IIIB Add: 46YB Income—asset‑tested income stream (lifetime) If the income stream is an asset‑tested income stream (lifetime), the amount that the person is taken to receive from the income stream each year is worked out as follows: where: annual payment means the amount payable to the person for the year under the income stream. 67 After section 46ZB Insert: 46ZBA Income from asset‑tested income stream (lifetime) (1) For the purpose of working out the annual rate of ordinary income of a person from an asset‑tested income stream (lifetime) to which this Subdivision applies, the person is taken to receive from that income stream each year the amount determined by the Commission under this subsection. (2) In making a determination under subsection (1), the Commission must comply with any relevant decision‑making principles in force under section 46ZC. 68 At the end of section 46ZC Add: ; or (e) subsection 46ZBA(1). 69 Subparagraph 52(1)(f)(iii) Repeal the subparagraph. 70 Paragraph 52(1)(f) (note) Omit ", deferred annuities". 71 Subsection 52AA(1) Omit ", a deferred annuity". 72 Paragraphs 52AA(2)(a) and (b) Omit ", a deferred annuity". 73 Section 52A (heading) Repeal the heading, substitute: 52A Value of asset‑tested income streams that are not defined benefit income streams, asset‑tested income streams (lifetime) or family law affected income streams 74 Subsection 52A(1) After "defined benefit income stream", insert ", it is not an asset‑tested income stream (lifetime)". 75 Subsection 52A(1) (note) Repeal the note, substitute: Note: For defined benefit income streams, see section 52B. For asset‑tested income streams (lifetime), see sections 52BAA and 52BAB. For family law affected income streams, see section 52BA. 76 At the end of subsection 52B(1) Add: Note: For family law affected income streams, see section 52BA. 77 After section 52B Insert: 52BAA Value of asset‑tested income streams (lifetime) that are managed investments (1) This section applies to a person's asset‑tested income stream (lifetime), that does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993, in relation to a day that is before the person's assessment day (within the meaning of section 52BAB) for the income stream. Note: For asset‑tested income stream (lifetime), see subsection 5J(1). (2) However, this section does not apply to a family law affected income stream. Note: For family law affected income streams, see section 52BA. Value of income stream (3) Subject to this section, the value of the person's income stream is, for the purposes of the assets test, the purchase amount for the income stream. Purchase amount (4) For the purposes of this section, the purchase amount for the income stream is: (a) subject to paragraph (b)—if one or more amounts have been paid for the income stream, the sum of each compounded amount in relation to an amount paid for the income stream, as worked out under subsection (5), less any commuted amounts; or (b) if the circumstances determined in an instrument under subsection (7) apply in relation to the income stream—the amount worked out in accordance with that instrument. (5) A compounded amount in relation to an amount paid for the income stream is worked out by applying the following formula for each relevant adjustment day (from the earliest to the latest): where: compounded amount for the relevant adjustment day means: (a) for the earliest relevant adjustment day—the amount that was paid for the income stream; or (b) for each later relevant adjustment day—the result of applying the formula for the most recent earlier relevant adjustment day. relevant above threshold rate for the relevant adjustment day means the following: (a) if the relevant adjustment day is the relevant payment day—zero; (b) if the relevant adjustment day is a 12‑month anniversary of the relevant payment day—the rate applicable under subsection 46J(2) for that relevant adjustment day, expressed as a decimal fraction. relevant adjustment day means each of the following: (a) the relevant payment day; (b) each 12‑month anniversary of the relevant payment day. relevant payment day means the day that the amount was paid for the income stream. (6) If the income stream is a joint income stream, then, for the purposes of applying subsections (4) and (5) to the person and to a day covered by subsection (1), an amount paid for the income stream is taken to be that amount multiplied by the proportion of the income stream attributable to the person on that day. (7) The Commission may make a legislative instrument for the purposes of paragraph (4)(b). 52BAB Value of asset‑tested income streams (lifetime) that are not managed investments (1) This section applies to a person's asset‑tested income stream (lifetime) in relation to a day that is on or after the person's assessment day for the income stream. Note 1: For asset‑tested income stream (lifetime), see subsection 5J(1). For assessment day, see subsections (6) and (7) of this section. Note 2: This section applies separately in relation to each asset‑tested income stream (lifetime) of a person. (2) However, this section does not apply to a family law affected income stream. Note: For family law affected income streams, see section 52BA. Value of income stream (3) Subject to this section, the value of the person's income stream is, for the purposes of the assets test, worked out as follows: (a) for a day in the period beginning on the person's assessment day for the income stream and ending at the end of the person's threshold day for the income stream: (b) for a day after the person's threshold day for the income stream: Note: For threshold day, see subsections (10) and (11). For purchase amount, see subsection (13). (4) The Commission may, by legislative instrument, determine one or more methods for working out the value of an asset‑tested income stream (lifetime) for persons to whom this section applies. (5) If one or more amounts worked out in accordance with the instrument are higher than the amount under subsection (3), then the value of the person's income stream is, for the purposes of the assets test, the highest of those amounts. Assessment day (6) Subject to subsection (7), for the purposes of this section, a person's assessment day for an asset‑tested income stream (lifetime) is: (a) if the income stream arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993—the latest of the following: (i) the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (9); (ii) the day the first amount was paid for the income stream; (iii) the day the person acquired the income stream (if no amount is identifiable as having been paid for the income stream); or (b) otherwise: (i) if the commencement day in relation to the income stream is before the day the person reaches pension age—the commencement day in relation to the income stream; or (ii) in any other case—the latest of the day the first amount was paid for the income stream, the day the person reaches pension age and the day the person acquired the income stream (if no amount is identifiable as having been paid for the income stream). Note: For commencement day, see subsection 5J(1). For pension age, see section 5Q. (7) For the purposes of this section, a person's assessment day for an asset‑tested income stream (lifetime) that reverted to the person as a reversionary beneficiary is: (a) if the income stream reverted to the person on or after the commencement day in relation to the income stream—the day of the reversion; or (b) if the income stream reverted to the person before the commencement day in relation to the income stream and the income stream arises under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993: (i) if the commencement day in relation to the income stream is before the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (9)—the commencement day in relation to the income stream; or (ii) in any other case—the later of the day of the reversion and the day the person first satisfies a condition of release that is mentioned in regulations under the Superannuation Industry (Supervision) Act 1993 and is of a kind determined in an instrument under subsection (9); or (c) if the income stream reverted to the person before the commencement day in relation to the income stream and the income stream does not arise under arrangements that are regulated by the Superannuation Industry (Supervision) Act 1993: (i) if the commencement day in relation to the income stream is before the day the person reaches pension age—the commencement day in relation to the income stream; or (ii) in any other case—the later of the day of the reversion and the day the person reaches pension age. Note: For commencement day, see subsection 5J(1). For pension age, see section 5Q. (8) For the purposes of the application of subsection (6) or (7) in relation to income support supplement, the references in that subsection to pension age are taken to be references to qualifying age. Note: For qualifying age, see section 5Q. (9) The Commission may, by notifiable instrument, determine a kind of condition of release for the purposes of subparagraphs (6)(a)(i) and (7)(b)(i) and (ii). Threshold day (10) Subject to subsection (11), for the purposes of this section, a person's threshold day for an asset‑tested income stream (lifetime) is worked out using the following method statement: Method statement Step 1. Work out, in relation to a man aged 65 on the person's assessment day for the income stream, the number of expected years remaining in the man's life, by reference to the instrument in force under subsection (12) on that assessment day, rounded down to the nearest whole number of years. Note: The number of expected years remaining in a 65‑year old man's life is used no matter how old the person is and whether the person is a man or a woman. Step 2. Increase the number of years at step 1 by 65. Step 3. Subject to step 4, the person's threshold day for the income stream is the later of the following days: (a) the day before the person reaches the age in years worked out at step 2; (b) the last day of the 5‑year period beginning on the person's assessment day for the income stream. Step 4. If the income stream is a joint income stream, the person's threshold day for the income stream is the later of the following days: (a) the day before the oldest of the persons, to whom a proportion of the income stream is attributable on the person's assessment day for the income stream, reaches the age in years worked out at step 2; (b) the last day of the 5‑year period beginning on the person's assessment day for the income stream. (11) If: (a) an asset‑tested income stream (lifetime) reverts to a person as a reversionary beneficiary on the death of another person; and (b) before the death of the other person, the other person's assessment day for the income stream had occurred; then: (c) if, before the death of the other person, the other person's threshold day for the income stream had not occurred—the reversionary beneficiary's threshold day for the income stream is taken to be the day that would have been the other person's threshold day if the other person had not died; and (d) if, before the death of the other person, the other person's threshold day for the income stream had occurred—the reversionary beneficiary's threshold day for the income stream is taken to be the other person's threshold day; and (e) if the reversionary beneficiary's assessment day for the income stream worked out under subsection (7) is on or after the reversionary beneficiary's threshold day for the income stream worked out under paragraph (c) or (d) of this subsection: (i) paragraph (3)(a) is taken not to apply to the reversionary beneficiary and the income stream; and (ii) paragraph (3)(b) is taken to apply to the reversionary beneficiary and the income stream for a day that is on or after the reversionary beneficiary's assessment day for the income stream. (12) The Commission may make a notifiable instrument for the purposes of step 1 of the method statement in subsection (10). If there are Life Tables published by the Australian Government Actuary, the Commission must be satisfied that the instrument is consistent with the latest of those Life Tables. Purchase amount (13) For the purposes of this section, the purchase amount for the income stream is: (a) subject to paragraph (b)—if one or more amounts have been paid for the income stream—the sum of: (i) each compounded amount in relation to an amount paid for the income stream before the person's assessment day for the income stream, as worked out under subsection (14); and (ii) each amount paid for the income stream on or after that assessment day; less any commuted amounts; or (b) if the circumstances determined in an instrument under subsection (16) apply in relation to the income stream—the amount worked out in accordance with that instrument. (14) A compounded amount in relation to an amount paid for the income stream before the person's assessment day for the income stream is worked out by applying the following formula for each relevant adjustment day (from the earliest to the latest): where: compounded amount for the relevant adjustment day means: (a) for the earliest relevant adjustment day—the amount that was paid for the income stream; or (b) for each later relevant adjustment day—the result of applying the formula for the most recent earlier relevant adjustment day. relevant above threshold rate for the relevant adjustment day means: (a) if the relevant adjustment day is a 12‑month anniversary of the relevant payment day—the rate applicable under subsection 46J(2) for that relevant adjustment day, expressed as a decimal fraction; or (b) if the relevant adjustment day is the assessment day—the amount worked out in accordance with the following formula: relevant adjustment day means each of the following: (a) each 12‑month anniversary of the relevant payment day that happens before the person's assessment day; (b) the person's assessment day. Note: For assessment day, see subsections (6) and (7). relevant number of days means the number of days in the period: (a) beginning on the day after: (i) if the assessment day is at least 12 months after the relevant payment day—the most recent 12‑month anniversary of the relevant payment day; or (ii) otherwise—the relevant payment day; and (b) ending at the end of the assessment day. relevant payment day means the day that the amount was paid for the income stream. (15) If the income stream is a joint income stream, then, for the purposes of applying subsections (13) and (14) to the person and to a day covered by subsection (1), an amount paid for the income stream is taken to be that amount multiplied by the proportion of the income stream attributable to the person on that day. (16) The Commission may make a legislative instrument for the purposes of paragraph (13)(b). 78 After subsection 52C(3B) Insert: (3C) Subsection (1) does not apply to an asset that is an asset‑tested income stream (lifetime). 79 After section 52CA Insert: 52CB Value of life policy (1) This section applies in relation to a person and a day (the assessment day) if: (a) the person has reached: (i) pension age; or (ii) in relation to income support supplement—qualifying age; and (b) the person is the owner (within the meaning of subsection 10(2) of the Life Insurance Act 1995) of a life policy covered by paragraph 9(1)(a) or (b) of that Act; and (c) the person became the owner of the policy after the person reached that age; and (d) the sum of each amount paid for the policy (regardless of who paid the amount) in any period of 12 months exceeds 15% of the maximum death benefit that would be payable in the event of the death of the person whose life is insured on the assessment day. Note: For pension age and qualifying age, see section 5Q. (2) The value of the life policy on the assessment day is, for the purposes of the assets test, the higher of the following: (a) the amount that would be payable to the person covered by paragraph (1)(b) if the policy were surrendered on that day; (b) the sum of each amount paid for the policy by the person covered by paragraph (1)(b), less any commuted amounts. 80 Application provisions (1) The amendment made by item 49 applies in relation to a payment made on or after the commencement of this item. (2) Sections 46YB, 52BAA and 52BAB of the Veterans' Entitlements Act 1986, as added or inserted by this Schedule, apply in relation to an asset‑tested income stream (lifetime), where: (a) the first payment for the income stream is made on or after the commencement of this item (whether the payment represents the whole payment for the income stream or part only); or (b) the income stream is acquired on or after the commencement of this item (if no amount is identifiable as having been paid for the income stream). (3) Section 46ZBA of the Veterans' Entitlements Act 1986, as inserted by this Schedule, applies in relation to an asset‑tested income stream (lifetime) that is a family law affected income stream, where: (a) the first payment for the income stream covered by paragraph 5JC(a) of that Act (that resulted in the family law affected income stream) is made on or after the commencement of this item (whether the payment represents the whole payment for the income stream covered by paragraph 5JC(a) of that Act or part only); or (b) the income stream covered by paragraph 5JC(a) of that Act (that resulted in the family law affected income stream) is acquired on or after the commencement of this item (if no amount is identifiable as having been paid for the income stream covered by paragraph 5JC(a) of that Act). (4) Section 52CB of the Veterans' Entitlements Act 1986, as inserted by this Schedule, applies in relation to a person who became the owner of the policy concerned on or after the commencement of this item (whether the person reached pension age or qualifying age before, on or after that commencement). Schedule 2—Work bonus Social Security Act 1991 1 Subsection 1073AA(2) (heading) Omit "Employment income", substitute "Work bonus income". 2 Subsection 1073AA(2) Omit "employment income" (wherever occurring), substitute "work bonus income". 3 At the end of subsection 1073AA(2) (before the examples) Add: Note: For work bonus income, see subsection (4BA). 4 Subsection 1073AA(2) (examples 1 and 2) Repeal the examples, substitute: Example 1: David earns $2,300 of work bonus income in an instalment period of 14 days. David's rate of social security pension for that period is greater than nil. David's work bonus income for that period is reduced by $300, leaving David $2,000 of work bonus income for that period. Example 2: Amy earns $1,000 of work bonus income in an instalment period of 14 days. Amy's rate of social security pension for that period is greater than nil. Amy's work bonus income for that period is reduced by $300, leaving Amy $700 of work bonus income for that period. 5 Subsection 1073AA(3) Omit "employment income" (wherever occurring), substitute "work bonus income". 6 Subsection 1073AA(3) (examples 1 and 2) Repeal the examples, substitute: Example 1: To continue example 1 in subsection (2), assume David's unused concession balance is $2,000. The current amount is $2,000. David's work bonus income for that period is further reduced to nil. David's unused concession balance is now nil. Example 2: To continue example 2 in subsection (2), assume Amy's unused concession balance is $1,600. The current amount is $700. Amy's work bonus income for that period is further reduced to nil. Amy's unused concession balance is now $900. 7 Subsection 1073AA(4) Omit "employment income" (wherever occurring), substitute "work bonus income". 8 Subsection 1073AA(4) (example) Repeal the example, substitute: Example: Bill earns $1,300 of work bonus income in an instalment period of 14 days. Bill's rate of social security pension for that period is greater than nil. Under subsection (2), Bill's work bonus income for that period is reduced by $300, leaving Bill $1,000 of work bonus income for that period. Assume Bill's unused concession balance is $800. Under subsection (4), Bill's work bonus income for that period is further reduced by $800 leaving Bill $200 of work bonus income for that period. Bill's unused concession balance is now nil. 9 Subsection 1073AA(4A) (heading) Omit "Employment income", substitute "Work bonus income". 10 Subsection 1073AA(4A) Omit "employment income" (wherever occurring), substitute "work bonus income". 11 At the end of subsection 1073AA(4A) (before the example) Add: Note: For work bonus income, see subsection (4BA). 12 Subsection 1073AA(4A) (example) Repeal the example, substitute: Example: Emma earns $100 of work bonus income in an instalment period of 14 days. Emma's rate of social security pension for that period is greater than nil. Emma's work bonus income for that period is reduced to nil. Emma's unused concession balance is increased by $200. 13 Subsection 1073AA(4B) (heading) Omit "employment income", substitute "work bonus income". 14 Paragraph 1073AA(4B)(a) Omit "employment income", substitute "work bonus income". 15 At the end of subsection 1073AA(4B) Add: Note: For work bonus income, see subsection (4BA). 16 Subsection 1073AA(4C) (heading) Repeal the heading, substitute: Definitions 17 Before subsection 1073AA(4C) (after the heading) Insert: (4BA) For the purposes of this section, a person's work bonus income for an instalment period is the sum of the following: (a) the person's employment income for that period; (b) the sum of the person's gainful work income for each day in that period. Note: For employment income, see section 8. (4BB) For the purposes of this section, a person's gainful work income for a day in an instalment period is the amount worked out using the following formula: where: annual amount means the annual amount of ordinary income of the person that is earned, derived or received by the person from gainful work (within the meaning of section 1073AAA) undertaken by the person, being the annual amount as last determined by the Secretary. (4BC) The amount at paragraph (4BA)(b) is to be rounded to the nearest cent (rounding 0.5 cents downwards). 18 Paragraph 1073AA(4C)(a) Omit "$250", substitute "$300". 19 Paragraph 1073AA(4C)(b) (formula) Omit "$250", substitute "$300". 20 After subsection 1073AA(5) Insert: (5A) If a person has gainful work income for an instalment period, the rate of the person's gainful work income on a yearly basis for each day in that period may be worked out using the following formula: Note: This subsection will be relevant to working out the person's rate of social security pension in accordance with Pension Rate Calculator A at the end of section 1064 or Pension Rate Calculator C at the end of section 1066. (5B) An amount worked out under subsection (5A) is to be rounded to the nearest cent (rounding 0.5 cents downwards). 21 Paragraph 1073AA(8)(b) Omit "employment income (within the meaning of section 46AB", substitute "work bonus income (within the meaning of section 46AA". 22 After section 1073AA Insert: 1073AAA Meaning of gainful work General rule (1) For the purposes of this Division, gainful work is work for financial gain or reward (other than as an employee), where: (a) the work involves personal exertion on the part of the person concerned; and (b) the work is carried on within or outside Australia. Disregard managing or administering family financial investments and real property (2) Work undertaken by a person is taken not to be gainful work for the purposes of this Division to the extent to which the work consists of the management or administration of any financial investment, or any real property, in which any of the following has a legal or equitable interest: (a) a member of the person's family group; (b) a company that is a family company in relation to the person; (c) the trustee or trustees of a trust that is a family trust in relation to the person. Note: For financial investment, see section 9. Disregard domestic duties (3) Work undertaken by a person is taken not to be gainful work for the purposes of this Division if the work consists of carrying out: (a) domestic tasks; or (b) household maintenance tasks; or (c) gardening tasks; or (d) similar tasks; in relation to: (e) the person's place of residence; or (f) if the person has 2 or more places of residence—any of those places of residence. Definitions (4) For the purposes of this section, a place of residence includes: (a) if the place is a dwelling‑house—any land or building that is adjacent to the dwelling‑house and that is used primarily for private or domestic purposes in association with that dwelling‑house; or (b) if the place is a flat or home unit—a garage or storeroom that is used for private or domestic purposes in association with the flat or home unit. (5) In this section: family company, in relation to a person, means a company where: (a) the company is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of any or all of the members of the person's family group; or (b) any or all of the members of the person's family group are in a position to cast, or control the casting of, more than 50% of the maximum number of votes that may be cast at a general meeting of the company; or (c) both: (i) the company has one or more shareholders; and (ii) each shareholder is a member of the person's family group. family group, in relation to a person, means the group consisting of the person and the family members of the person. If the person has no family members, the person is taken to be a family group in the person's own right. Note: For family member, see subsection 23(1). family trust, in relation to a person, means a trust where a member of the person's family group benefits, or is capable (whether by the exercise of a power of appointment or otherwise) of benefiting, under the trust. 23 Subsection 1073AB(2) Omit "$6,500" (wherever occurring), substitute "$7,800". 24 Subsection 1073AB(2) (example) Repeal the example, substitute: Example: John has an unused concession balance of $7,700. John earns $100 of work bonus income in an instalment period of 14 days. Instead of John's unused concession balance increasing to $7,900 under subsection 1073AA(4A), John's unused concession balance increases to $7,800. 25 Application provision The amendments of the Social Security Act 1991 made by this Schedule apply in relation to the instalment period that includes 1 July 2019 and later instalment periods. Veterans' Entitlements Act 1986 26 Subsection 46AA(2) (heading) Omit "Employment income", substitute "Work bonus income". 27 Subsection 46AA(2) Omit "employment income" (wherever occurring), substitute "work bonus income". 28 Subsection 46AA(2) (note) Repeal the note, substitute: Note: For work bonus income, see subsection (4BA). 29 Subsection 46AA(2) (examples 1 and 2) Repeal the examples, substitute: Example 1: David earns $2,300 of work bonus income in a pension period. David's rate of service pension or income support supplement for that period is greater than nil. David's work bonus income for that period is reduced by $300, leaving David $2,000 of work bonus income for that period. Example 2: Amy earns $1,000 of work bonus income in a pension period. Amy's rate of service pension or income support supplement for that period is greater than nil. Amy's work bonus income for that period is reduced by $300, leaving Amy $700 of work bonus income for that period. 30 Subsection 46AA(3) Omit "employment income" (wherever occurring), substitute "work bonus income". 31 Subsection 46AA(3) (examples 1 and 2) Repeal the examples, substitute: Example 1: To continue example 1 in subsection (2), assume David's unused concession balance is $2,000. The current amount is $2,000. David's work bonus income for that period is further reduced to nil. David's unused concession balance is now nil. Example 2: To continue example 2 in subsection (2), assume Amy's unused concession balance is $1,600. The current amount is $700. Amy's work bonus income for that period is further reduced to nil. Amy's unused concession balance is now $900. 32 Subsection 46AA(4) Omit "employment income" (wherever occurring), substitute "work bonus income". 33 Subsection 46AA(4) (example) Repeal the example, substitute: Example: Bill earns $1,300 of work bonus income in a pension period. Bill's rate of service pension or income support supplement for that period is greater than nil. Under subsection (2), Bill's work bonus income for that period is reduced by $300, leaving Bill $1,000 of work bonus income for that period. Assume Bill's unused concession balance is $800. Under subsection (4), Bill's work bonus income for that period is further reduced by $800 leaving Bill $200 of work bonus income for that period. Bill's unused concession balance is now nil. 34 Subsection 46AA(4A) (heading) Omit "Employment income", substitute "Work bonus income". 35 Subsection 46AA(4A) Omit "employment income" (wherever occurring), substitute "work bonus income". 36 Subsection 46AA(4A) (note) Repeal the note, substitute: Note: For work bonus income, see subsection (4BA). 37 Subsection 46AA(4A) (example) Repeal the example, substitute: Example: Emma earns $100 of work bonus income in a pension period. Emma's rate of service pension or income support supplement for that period is greater than nil. Emma's work bonus income for that period is reduced to nil. Emma's unused concession balance is increased by $200. 38 Subsection 46AA(4B) (heading) Omit "employment income", substitute "work bonus income". 39 Paragraph 46AA(4B)(a) Omit "employment income", substitute "work bonus income". 40 Subsection 46AA(4B) (note) Repeal the note, substitute: Note: For work bonus income, see subsection (4BA). 41 Subsection 46AA(4C) (heading) Repeal the heading, substitute: Definitions 42 Before subsection 46AA(4C) (after the heading) Insert: (4BA) For the purposes of this section, a person's work bonus income for a pension period is the sum of the following: (a) the person's employment income for that period; (b) the person's gainful work income for that period. Note: For employment income, see section 46AB. (4BB) For the purposes of this section, a person's gainful work income for a pension period is the amount worked out using the following formula: where: annual amount means the annual amount of ordinary income of the person that is earned, derived or received by the person from gainful work (within the meaning of section 46ABA) undertaken by the person, being the annual amount as last determined by the Commission. 43 Subsection 46AA(4C) Omit "$250", substitute "$300". 44 Paragraph 46AA(5A)(b) Omit "employment income", substitute "work bonus income". 45 Paragraph 46AA(5A)(b) After "meaning of", insert "section 1073AA of". 46 After section 46AB Insert: 46ABA Meaning of gainful work (1) For the purposes of this Division, gainful work is work for financial gain or reward (other than as an employee), where: (a) the work involves personal exertion on the part of the person concerned; and (b) the work is carried on within or outside Australia. Disregard managing or admin