Military Rehabilitation and Compensation (Consequential and Transitional Provisions) Act 2004 (52 of 2004)
Schedule 4 Consequential amendments of Income Tax Assessment Acts
Part 2 Amendment of the Income Tax Assessment Act 1997
10 Sections 51-32 and 51-33
Repeal the sections, substitute:
51-32 Compensation payments for loss of tax exempt payments
(1) A compensation payment for the loss of pay or an allowance for your warlike service is exempt from income tax if:
(a) the compensation payment is made under the Safety, Rehabilitation and Compensation Act 1988 in respect of an injury (as defined in that Act) you suffered; and
(b) you suffered your injury while covered by a certificate in force under paragraph 23AD(1)(a) of the Income Tax Assessment Act 1936; and
(c) your injury or disease caused the loss of your pay or allowance; and
(d) your pay or allowance was payable under the Defence Act 1903 or under a determination under that Act.
(2) A compensation payment for the loss of pay or an allowance for your warlike service is exempt from income tax if:
(a) the compensation payment is made under the Military Rehabilitation and Compensation Act 2004 in respect of a service injury or disease (as defined in that Act); and
(b) you sustained your service injury or contracted your service disease, or your service injury or disease was aggravated or materially contributed to, while covered by a certificate in force under paragraph 23AD(1)(a) of the Income Tax Assessment Act 1936; and
(c) your injury or disease caused the loss of your pay or allowance; and
(d) your pay or allowance was payable under the Defence Act 1903 or under a determination under that Act.
(3) Subsections (4) and (5) apply to:
(a) a deployment allowance; or
(b) some other allowance that is exempt from income tax specified in writing by the Minister administering section 1 of the Defence Act 1903 for the purposes of this subsection;
that is payable under a determination under that Act for your non-warlike service.
(4) A compensation payment for the loss of the allowance is exempt from income tax if:
(a) the compensation payment is made under the Safety, Rehabilitation and Compensation Act 1988 in respect of an injury (as defined in that Act) you suffered; and
(b) your injury caused the loss of your allowance.
(5) A compensation payment for the loss of the allowance is exempt from income tax if:
(a) the compensation payment is made under the Military Rehabilitation and Compensation Act 2004 in respect of a service injury or disease (as defined in that Act); and
(b) your injury or disease caused the loss of your allowance.
51-33 Compensation payments for loss of pay and/or allowances as a Defence reservist
(1) A compensation payment for the loss of your pay or an allowance is exempt from income tax if:
(a) the compensation payment is made under the Safety, Rehabilitation and Compensation Act 1988 in respect of an injury (as defined in that Act) you suffered; and
(b) you suffered your injury while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve (but not while on continuous full time service); and
(c) your pay or allowance was payable for service of a kind described in paragraph (b).
(2) A compensation payment for the loss of your pay or an allowance is exempt from income tax if:
(a) the compensation payment is made under the Military Rehabilitation and Compensation Act 2004 in respect of a service injury or disease (as defined in that Act); and
(b) you sustained your service injury or contracted your service disease, or your service injury or disease was aggravated or materially contributed to, while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve; and
(c) your pay or allowance was payable for service of a kind described in paragraph (b); and
(d) the compensation payment is worked out by reference to your normal earnings (as defined in that Act) as a part-time Reservist (as defined in that Act).