Commonwealth of Australia Explanatory Memoranda

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SOCIAL SECURITY (HELPING PENSIONERS HIT BY THE SKILLS SHORTAGE) BILL 2006

    Social Security (Helping Pensioners Hit by the Skills Shortage) Bill 2006

                             Explanatory Memorandum


This Bill amends the Social Security Act 1991 to provide the Secretary of the
Department with the discretion to extend the period in which people have to construct
a new home.

Under the current arrangements, under section 1118(2) of the Act, a person has 12
months to sell their existing home and construct a new home, before the funds raised
from the sale of the existing home become assessable assets.

Because of the national skills shortage in the building trades, people in some areas are
now unable to construct a new home within that 12 month time frame.

As a result some people are disadvantaged under the current arrangements, suffering a
cut in their pension, if they cannot complete the construction of their new home
within 12 months.

Under the amendment the Secretary of the Department would have to be satisfied that
the delay in construction was beyond the control of the person. An example of such a
situation would be where the person has purchased a block of land and signed a
contract for the construction of a new home to be completed within 12 months, but
the builder has then informed the person that they will be unable to complete the new
home within that time.