INCOME TAX ASSESSMENT ACT 1997
This section applies if a lump sum of any of these categories of social security payments becomes due to you because of your partner ' s death.
|Category of social security payment|
|Disability support pension|
|Mature age allowance (paid under Part 2.12A)|
|Mature age partner allowance|
|Special needs age pension|
|Special needs disability support pension|
|Special needs wife pension|
S 52-25(1) will be amended by No 26 of 2018, s 3 and Sch 3 item 7, by omitting
from the table, effective 20 March 2020. No 26 of 2018, s 3 and Sch 3 item 102 contains the following saving provision:
102 Saving provision
Income Tax Assessment Act 1997
Despite the amendments made by this Schedule, items 34.1 to 34.4 of the table in section 52-10 and sections 52-15 and 52-25 of the Income Tax Assessment Act 1997 , as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to a payment of wife pension under Part 2.4 of the Social Security Act 1991 before, on or after that commencement.
The total of the following are exempt up to the *tax-free amount:
(a) the lump sum payment;
(b) all other payments that become due to you under the Social Security Act 1991 during the bereavement lump sum period.
This is how to work out the tax-free amount : Method statement
Work out the payments under the Social Security Act 1991 that would have become due to you during the bereavement lump sum period if:
Work out how much of those payments would have been exempt in those circumstances.
Work out the payments under the Social Security Act 1991 or Part III of the Veterans ' Entitlements Act 1986 that would have become due to your partner during the bereavement lump sum period if:
even if the payments would not have been exempt.
Total the payments worked out at Steps 2 and 3: the result is the tax-free amount .
You are receiving a disability support pension of $300 a fortnight and a pharmaceutical allowance of $5 a fortnight. You are over pension age. Your partner is receiving a partner allowance of $250 a fortnight and rent assistance of $75 a fortnight.
Your partner dies. Seven instalments are due to you during the bereavement lump sum period. You work out the tax-free amount as follows:
Step 1: The instalments that would have become due to you during the bereavement lump sum period are:
$300 + $5 = $305
The total for the period is $2,135.
Step 2: The exempt component of each instalment is $5. The total for the 7 instalments is $35.
Step 3: The instalments that would have become due to your partner during the same period are:
$250 + $75 = $325
The total for the period is $2,275.
Step 4: The tax-free amount is:
$35 + $2,275 = $2,310
[ CCH Note: S 52-25(3) will be amended by No 26 of 2018, s 3 and Sch 7 item 4, by substituting " jobseeker payment " for " partner allowance " in the example, effective 1 January 2022.]