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SOCIAL SECURITY ACT 1991 - SECT 1126AC

Disposal of assets in income year--members of couples

Disposals to which section applies

             (1)  If there is a disposal (the relevant disposal ) on or after 1 July 2002 of an asset by:

                     (a)  a person who, at the time of the relevant disposal, is a member of a couple; or

                     (b)  the person referred to in paragraph (a) and the person who is, at that time, the partner of the person referred to in that paragraph;

subsection (2) has effect.

Increase in value of assets

             (2)  Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person, the person's partner, or the person and the person's partner, during the income year in which the relevant disposal took place (whether before or after they became members of the couple), exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place:

                     (a)  one-half of the amount of the relevant disposal;

                     (b)  one-half of the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the person, the partner, or the person and the partner, during the income year in which the relevant disposal took place, exceeds $10,000.

Note:          See also section 1126E (about modification of this Division in respect of certain assets).

Effect of ceasing to be member of couple

             (3)  If, after the disposal referred to in paragraph (1)(a), the person and the person's partner cease to be members of the same couple:

                     (a)  no amount is to be included after the cessation in the value of the assets of the former partner because of that disposal; and

                     (b)  any amount that would, apart from this subsection, have been so included is to be included in the value of the assets of the person.

Effect of death of person

             (4)  If, after the disposal referred to in paragraph (1)(a), the person dies, no amount is to be included in the value of the assets of the person's partner because of that disposal.

Effect of death of partner

             (5)  If, after the disposal referred to in paragraph (1)(a), the person's partner dies, any amount that, if the partner had not died, would have been included in the value of the assets of the partner because of that disposal is to be included in the value of the assets of the person.



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