Section 136 — Social Security Act 1991: Transitional definition of deductible amount (commencing 1 July 2007)

(1) This clause applies if: (a) a person has received at least one payment from a defined benefit income stream before 1 July 2007, and is still receiving payments from the income stream; and (b) the person receives income support payment in respect of a continuous period starting before, and ending on or after, the person’s trigger day (see subsection (5)); and (c) the amount of the income support payment received before the person’s trigger day was affected by the deduction of a deductible amount (within the meaning of this Act or the Veterans’ Entitlements Act, as the case requires, apart from this clause) from the amount of the payments payable to the person for a year under the income stream; and (d) if the person’s trigger day is after 1 July 2007—the income stream has not been partially commuted on or after 1 July 2007 and before the person’s trigger day. Note 1: If the income stream is wholly commuted, this clause will stop applying because the person will no longer be receiving payments from the income stream (see paragraphs (1)(a) and (d)). Note 2: For the deduction of a deductible amount from amounts payable under certain defined benefit income streams, see sections 1099A and 1099D of this Act and sections 46V and 46Y of the Veterans’ Entitlements Act. (2) Despite the amendment of this Act by Part 2 of Schedule 8 to the Tax Laws Amendment (Simplified Superannuation) Act 2007, for the purposes of working out the amount of any income support payment (other than a service pension or income support supplement) received by the person on or after the trigger day in respect of the remaining part of the period mentioned in paragraph (1)(b), the deductible amount, in relation to the income stream for a year, is the greater of the following amounts: (a) the deductible amount mentioned in paragraph (1)(c); (b) the sum of the amounts that are the tax free components (worked out under subsections 307-125(4) to (7) of the Income Tax (Transitional Provisions) Act 1997) of the payments received from the income stream during the year. (3) However, this clause stops applying to an income stream immediately after the time (if any) that the deductible amount in relation to the income stream is, under subclause (2), the amount mentioned in paragraph (2)(b). (3A) If: (a) this clause applies; and (b) an amount (the transitional amount) is worked out under subclause (2) in relation to a defined benefit income stream for a year starting on or after 1 January 2016; and (c) that income stream is not a military defined benefit income stream; and (d) that amount is worked out in relation to the operation of section 1099A or 1099D; then, for the purposes of the operation of paragraph 1099A(2)(b) or 1099D(2)(b), the transitional amount is taken to be the deductible amount under subsection 1099A(1) or 1099D(1) in relation to that income stream for that year. Note: The effect of this subclause is that the cap on the deductible amount under subsection 1099A(2) or 1099D(2) might apply. (4) For the purposes of this clause, without limiting paragraph (1)(b), if the form of a person’s income support payment mentioned in paragraph (1)(b) changes during a period, the continuity of the period is not broken by the change. Example: The form of a person’s income support payment may change from one kind of payment (for instance, a service pension under the Veterans’ Entitlements Act) to another (for instance, a social security pension under this Act). (5) In this clause: trigger day, for a person, means: (a) if the person is under 60 years at the end of 30 June 2007—the day the person turns 60; or (b) if the person is 60 years or over at the end of 30 June 2007—1 July 2007.