Document ID: chunk:federal_register_of_legislation:F2023C01077:front:0:p8
Version: federal_register_of_legislation:F2023C01077
Segment Type: other
Provision Reference: 
Character Range: 17704–20375

of parliamentary allowance is increased.

Note   If there is a decrease in the rate of parliamentary allowance, section 22T of the Act deals with the relationship between a member's retiring allowance and the member's parliamentary allowance. This is also relevant to the amount worked out under this section.

2.06 Commutation of small associate annuity — lump sum payable on election

  For paragraph 22CF (3) (b) of the Act, the amount of the lump sum is an amount equal to the transfer amount, increased in the way described in step 2A in subsection 2.03 (1).

2.07 Reduction of associate annuity where original interest is entitlement to associate deferred annuity

  For subsection 22CI (2) of the Act, the annual rate of an associate deferred annuity is to be reduced as follows:

Step 1  Identify the transfer amount at the operative time.
Step 2  Increase the transfer amount as if it were the lump sum amount calculated in step 2A in subsection 2.03 (1) when the associate deferred annuity becomes payable.

        Note   A lump sum amount is increased under section 2.03 only if there is a period between the operative time and the time at which benefits first become payable. Therefore, in a particular case, it is possible that the transfer amount will not need to be increased in this step.
Step 3  Identify the lump sum value of the associate deferred annuity, as calculated under subsection 22CE (1) of the Act to the date of payment.

        Note   The lump sum value of the associate deferred annuity represents the increased transfer amount worked out under section 2.03.

        If the lump sum value of the associate deferred annuity has previously been reduced in accordance with these Orders, the reduction must be taken into account.
Step 4  Reduce the lump sum value of the associate deferred annuity as identified in step 3 by the increased transfer amount worked out in step 2.
Step 5  Substitute the reduced lump sum amount worked out in step 4 for the lump sum calculated in step 2A in subsection 2.03 (1), for payment under section 22CE.

Example for section 2.07
A member spouse has an entitlement to associate deferred annuity. The scheme value of those benefits at the operative time is $300 000.
The agreement served on the Secretary specifies that half of the interest is to be transferred to the non-member spouse. Therefore, the transfer amount is $150 000.
Step 1 identifies the transfer amount to be $150 000.
Step 2 increases the transfer amount to the day on which the associate deferred annuity becomes payable to the non-member spouse.
The $150 000 is increased by the bond rate to $160 000.
Step 3 calculates the lump sum