Section 4 — Veterans' Entitlements Act 1986: Application for income tax purposes of reductions in respect of service pension, income support supplement or veteran payment

Service pension and veteran payment (1) If a person’s rate of service pension or veteran payment is affected by a reduction under any or all of the following: (a) Module E (ordinary/adjusted income test) of the Rate Calculator; (b) Module F (assets test) of the Rate Calculator; (c) section 59T (compensation recovery); the reduction is to be applied as follows (in descending order): Item Component of the rate 1 all of the rate apart from the person’s pension supplement amount and any increase under Module C (rent assistance) of the Rate Calculator 2 the portion of the person’s pension supplement amount equal to the person’s pension supplement basic amount 3 (a) if an election by the person under subsection 60A(1) is in force—any remaining portion of the person’s pension supplement amount; or (b) otherwise—any remaining portion of the person’s pension supplement amount to the extent to which it exceeds the person’s minimum pension supplement amount 4 the amount of any increase under Module C 4A the amount of any increase under Module BB 5 the person’s minimum pension supplement amount Note 1: Table item 4A will not apply if an election by the person under subsection 60A(1) is in force, as there will not be any increase under Module BB (see point SCH6-BB2 of the Rate Calculator). Note 2: Table item 5 will not apply if an election by the person under subsection 60A(1) is in force, as the rate would have already been reduced to nil. Note 3: Section 60A applies to a person receiving a service pension (but does not apply to a person receiving a veteran payment). (2) If a person’s rate of service pension: (a) is worked out under subpoint SCH6-A1(4) of Schedule 6 and is the revised rate; or (b) is worked out under subpoint SCH6-A1(5) of Schedule 6; subclause (1) applies in relation to the person and the pension as if: (c) paragraphs (1)(a) and (b) were omitted; and (d) the person had a pension supplement amount equal to what would be the person’s pension supplement amount if the person were receiving the service pension at the rate worked out under subpoint SCH6-A1(4) of Schedule 6 and equal to the provisional rate. Income support supplement (3) If a person’s rate of income support supplement is affected by a reduction under any or all of the following: (a) Module E (ordinary/adjusted income test) of the Rate Calculator; (b) Module F (assets test) of the Rate Calculator; (c) section 59T (compensation recovery); the reduction is to be applied as follows (in descending order): Item Component of the rate 1 all of the rate apart from any increase under Module C (rent assistance) of the Rate Calculator and the person’s minimum pension supplement amount 2 the amount of any increase under Module C 3 the person’s minimum pension supplement amount Quarterly pension supplement (4) If: (a) the rate (the main rate) of a person’s service pension or income support supplement is to be reduced as described in subclause (1) (applying of its own force or as affected by subclause (2)) or subclause (3); and (b) an election by the person under subsection 60A(1) is in force; the person’s quarterly pension supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s minimum pension supplement amount would be reduced under subclause (1) or (3) were the election not in force. Note: The reduction will be disregarded unless the person’s quarterly pension supplement is reduced to nil (see subsection 60C(4)). Quarterly energy supplement for service pension (5) If: (a) the rate (the main rate) of a person’s service pension is to be reduced as described in subclause (1) (applying of its own force or as affected by subclause (2)); and (b) an election by the person under subsection 60A(1) is in force; the person’s quarterly energy supplement is reduced to the same extent (if any) that the component of the main rate that would correspond to the person’s energy supplement would be reduced under subclause (1) were the election not in force. Note: The reduction will be disregarded unless the main rate would be reduced to nil (see subsection 62E(6)).