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 52-35   Tax-free amount of a lump sum payment made because of the death of a person you are caring for  

52-35(1)  


This section applies if a lump sum payment becomes due to you under section 236A of the Social Security Act 1991 because of the death of the care receiver or any of the care receivers.

52-35(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.

52-35(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) the care receiver had not died; and
  • (b) the care receiver had been under pension age.

  • 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 the care receiver during the bereavement lump sum period if the care receiver 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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