INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 52 - Certain pensions, benefits and allowances are exempt from income tax  

Subdivision 52-A - Exempt payments under the Social Security Act 1991  

Operative provisions

SECTION 52-30   Tax-free amount of certain other bereavement lump sum payments  

52-30(1)  


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
Austudy payment
Mature age allowance (paid under Part 2.12B)
Newstart allowance
Parenting payment (benefit PP (partnered))
Partner allowance
Sickness allowance
Special benefit
Youth allowance

Note:

A reference in this table to newstart allowance or youth allowance includes a reference to farm household allowance under the Farm Household Support Act 2014 (see Part 5 of that Act).

52-30(2)  
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.

52-30(3)  


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

Step 1.

Work out the payments under the Social Security Act 1991 that would have become due to you during the bereavement lump sum period if:

  • (a) your partner had not died; and
  • (b) your partner had been under pension age; and
  • (c) immediately before your partner died, you and your partner had been neither an illness separated couple nor a respite care couple.

  • Step 2.

    Work out how much of those payments would have been exempt in those circumstances.


    Step 3.

    Work out the payments under the Social Security Act 1991 that would have become due to your partner during the bereavement lump sum period if your partner had not died, even if the payments would not have been exempt.


    Step 4.

    Total the payments worked out at Steps 2 and 3: the result is the tax-free amount .


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