Taxation Laws Amendment Act 1994 (56 of 1994)

Part 3   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 4   Exemptions for pensions and allowances

Subdivision A   Bereavement payments

31   Insertion of new sections

After section 24ABZB of the Principal Act the following sections are inserted in Subdivision B of Division 1AA of Part III:

Exempt bereavement payment calculator AA

"24ABZC. The exempt bereavement payment calculator AA is as follows:

EXEMPT BEREAVEMENT PAYMENT CALCULATOR AA

This is how to work out the tax-free amount:

Method statement

Step 1: Work out the amount of payments under the Social Security Act 1991 that would have been derived by the taxpayer during the bereavement lump sum period and that would have been exempt if:

(a) the severely handicapped person had not died; and

(b) the severely handicapped person had been under pension age;

the result is called the notional exempt amount for the taxpayer.

Step 2: Work out the amount of payments under the Social Security Act 1991 that would have been derived by the severely handicapped person during the bereavement lump sum period if the severely handicapped person had not died:

the result is called the notional amount for the caree.

Step 3: Add up the notional exempt amount for the taxpayer and the notional amount for the caree: the result is the tax-free amount.

Exempt bereavement payment calculator AB

"24ABZD. The exempt bereavement payment calculator AB is as follows:

EXEMPT BEREAVEMENT PAYMENT CALCULATOR AB

This is how to work out the tax-free amount:

Method statement

Step 1: Work out the amount of payments under the Social Security Act 1991 that would have been derived by the taxpayer during the bereavement lump sum period and that would have been exempt if:

(a) the partner had not died; and

(b) the partner had been under pension age; and

(c) if immediately before the partner's death the couple were an illness separated couple or a respite care couple-they were not such a couple;

the result is called the notional exempt amount for the taxpayer.

Step 2: Work out the amount of payments (if any) under the Social Security Act 1991 that would have been derived by the partner during the bereavement lump sum period if the partner had not died; the result is called the notional amount for the partner.

Step 3: Add up the notional exempt amount for the taxpayer and the notional partner amount: the result is the tax-free amount.".