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ATO Interpretative Decision

ATO ID 2002/924

Income Tax

Assessability of a disability support pension paid under the Safety Rehabilitation and Compensation Act
FOI status: may be released

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CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the disability support pension paid to a taxpayer by the Commonwealth Department of Veteran's Affairs in accordance with the Safety Rehabilitation and Compensation Act 1988 (SRCA) included in their assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

Yes. The disability support pension paid to a taxpayer by the Commonwealth Department of Veteran's Affairs in accordance with the SRCA is included in their assessable income under section 6-5 of the ITAA 1997.

Facts

The Commonwealth Department of Veteran's Affairs pays a disability support pension to the taxpayer in accordance with the SRCA.

Reasons for Decision

Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.

Pensions are generally assessable as 'ordinary' income. Therefore, the disability pension is assessable unless it is made exempt from tax by a provision of the Income Tax Assessment Act 1936 (ITAA 1936) or ITAA 1997.

Subdivision 52-B of the ITAA 1997 exempts from income tax disability pensions paid under the Veterans' Entitlements Act 1986 (VEA).

Although the taxpayer receives a disability support pension from the Commonwealth Department of Veteran's Affairs, the pension is paid under the SRCA and not under the VEA. There is no provision in the ITAA 1936 or ITAA 1997 that exempts a disability support pension paid under the SRCA.

Date of decision:  24 June 2002

Year of income:  Year ended 30 June 2001

Legislative References:
Income Tax Assessment Act 1936
   1

Income Tax Assessment Act 1997
   section 6-5
   subsection 6-5(2)
   Subdivision 52-B

Veterans' Entitlements Act 1986
   1

Safety Rehabilitation and Compensation Act 1988
   the Act

Keywords
Disability payments & subsidies
Veterans payments
Workers compensation income

Business Line:  Small Business/Individual Taxpayers

Date of publication:  26 September 2002

ISSN: 1445-2782

history
  Date: Version:
You are here 24 June 2002 Original statement
  18 December 2015 Updated statement
  31 March 2017 Archived

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