Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 54 - Exemption for certain payments made under structured settlements and structured orders  

Subdivision 54-B - Tax exemption for personal injury annuities  

Operative provisions

SECTION 54-40   Requirement for minimum monthly level of support  

54-40(1)    
Either:

(a) the *annuity instrument must provide; or

(b) if there is more than one *annuity provided under the *structured settlement or *structured order - the annuity instruments for all of those annuities that satisfy the other conditions in this Subdivision, taken as a whole, must provide;

that at least once a month for the life of the *injured person, he or she is to be paid an amount that equals or exceeds the minimum monthly level of support.

54-40(2)    
The minimum monthly level of support means:

(a) for the year starting on the *date of the settlement or order - one twelfth of the amount that is, on that date, the sum of:

(i) the maximum basic rate of age pension payable to a person in accordance with item 1 of Table B in point 1064-B1 of Pension Rate Calculator A in section 1064 of the Social Security Act 1991 ; and

(ii) the amount of a person ' s pension supplement, worked out (using that maximum basic rate) in accordance with Module BA of that Pension Rate Calculator; and

(b) for any subsequent year starting on an anniversary of the date of the settlement or order:

(i) if the indexation factor for the year (see subsection (3)) is greater than 1 - the amount worked out under subsection (4); or

(ii) otherwise - the minimum monthly level of support for the previous year.

Note:

In working out the rate and amount that count for the purposes of paragraph (a), the effect of the indexation provisions in sections 1191 to 1195 of the Social Security Act 1991 must be taken into account. The indexed figures are available from the Department administered by the Minister administering the Human Services (Centrelink) Act 1997 .

54-40(3)    
The indexation factor for a year is to be worked out on the anniversary of the *date of the settlement or order in accordance with the formula:

Most recently published *All Groups Consumer Price Index number for a *quarter *All Groups Consumer Price Index number for the same *quarter in the base year

where:

base year
means:

(a) if there have been one or more previous years for which the indexation factor was greater than 1 - the year ending immediately before the most recent year for which the indexation factor was greater than 1; or

(b) otherwise - the year ending immediately before the *date of the settlement or order.

Note:

This has effect subject to subsection (6).

54-40(4)    
If the indexation factor for a year is greater than 1, then the minimum monthly level of support for the year is the amount worked out in accordance with the following formula:

Indexation factor for the year

×

Minimum monthly level of support for the previous year

54-40(5)    
The results under subsections (3) and (4) must be rounded to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

54-40(6)    
The indexation factor for a year must be worked out by reference to figures for the same *quarter (for example, the March quarter) as has been used in previous years, even if, on the anniversary of the *date of the settlement or order, the *All Groups Consumer Price Index number for that quarter has not yet been published. If this happens, the calculation must be made as soon as practicable after the number for that quarter is published.

54-40(7)    
In this section:

pay to a person
includes pay to the trustee of a trust of which the person is the beneficiary.