Document ID: chunk:federal_register_of_legislation:C2025C00162:section:1130:p1
Version: federal_register_of_legislation:C2025C00162
Segment Type: section
Provision Reference: s 1130 (pt 1/2)
Character Range: 2223831–2226516

1130  Application of financial hardship rules—pensions

Value of unrealisable asset to be disregarded
 (1) If section 1129 applies to a person, the value of:
 (a) any unrealisable asset of the person; and
 (b) any unrealisable asset of the person's partner;
is to be disregarded in working out the person's social security pension rate.

Deduction from social security pension maximum payment rate
 (2) If section 1129 applies to a person, there is to be deducted from the person's social security pension maximum payment rate an amount equal to the person's adjusted annual rate of ordinary income.

Adjusted annual rate of ordinary income
 (3) A person's adjusted annual rate of ordinary income is an amount per year equal to the sum of:
 (a) the person's annual rate of ordinary income (other than income from assets); and
 (b) the person's annual rate of ordinary income from assets that are not assets tested; and
 (c) either:
 (i) the person's annual rate of ordinary income from unrealisable assets; or
 (ii) the person's notional annual rate of ordinary income from unrealisable assets;
  whichever is the greater; and
 (d) an amount per year equal to $19.50 for each $250 of the value of the person's assets (other than disregarded assets); and
 (e) any amounts that are not income of the person because of paragraph 8(8)(zp).

Assets tested asset
 (4) For the purposes of subsection (3), an asset is not assets tested if the value of the asset is to be disregarded under subsection 1118(1).

Notional annual rate of ordinary income from unrealisable assets
 (5) A person's notional annual rate of ordinary income from unrealisable assets is:
 (a) the amount per year equal to 2.5% of the value of the person's and the person's partner's unrealisable assets; or
 (b) the amount per year that could reasonably be expected to be obtained from a purely commercial application of the person's and the person's partner's unrealisable assets;
whichever is the less.

Family farms
 (6) If:
 (a) an unrealisable asset is a farm; and
 (b) the farm is operated by a person who is a family member of the person to whom this section applies; and
 (c) it is not reasonable to expect the farm to be used for another purpose;
the Secretary, in working out the amount per year that could reasonably be expected to be obtained from a purely commercial application of the farm, is to have regard to the overall financial situation of the person operating the farm.
 (6A) If:
 (a) section 1129 applies to a person; and
 (b) the person, or the person's partner, owns residential premises; and
 (c) the premises are an unrealisable asset; and
 (d) a family member of the person, or of the partner,