ATO Interpretative Decision
ATO ID 2001/238 (Withdrawn)
Income Tax
Pension Tax Offset - receipt of exempt pensionFOI status: may be released
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This ATO ID is a simple restatement of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 taxpayer eligible for a Pension Tax Offset (PTO) under section 160AAA of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
No, the taxpayer is not eligible for a Pension Tax Offset (PTO) under section 160AAA of the ITAA 1936.
Facts
The taxpayer received a Department of Veterans Affairs (DVA) invalidity service pension during the income year.
The taxpayer did not receive any other Commonwealth Government income support payment.
The taxpayer is not of pension age within the meaning of either the Social Security Act 1991 (SSA 1991) or the Veterans' Entitlements Act 1986 (VEA 1986).
Reasons for Decision
Eligibility for a PTO is determined under section 160AAA of the ITAA 1936. Subsection 160AAA(2) provides that a taxpayer will be entitled to a PTO where their assessable income includes an amount of rebatable pension.
Rebatable pension is defined in subsection 160AAA(1) to include a pension, allowance or benefit paid under the VEA 1986 (other than Part VII). The DVA invalidity service pension is paid under Part III of that Act and so qualifies as a rebatable pension.
However, section 52-65 of the Income Tax Assessment Act 1997 provides that an invalidity service pension paid to a recipient who is not of pension age, within the meaning of the SSA 1991, is exempt from income tax. Exempt income is not included in the assessable income of a taxpayer.
The taxpayer is not of pension age and so the invalidity service pension is exempt and is not included in the taxpayer's assessable income. It follows that the taxpayer's assessable income does not include an amount of rebatable pension, and so the eligibility requirements set out in subsection 160AAA(2) of the ITAA 1936 are not satisfied. The taxpayer will therefore not be entitled to a PTO.
Date of decision: 18 July 2001
Legislative References:
Income Tax Assessment Act 1936
section 160AAA
subsection 160AAA(1)
subsection 160AAA(2)
section 52-65 Social Security Act 1991
The Act Veterans' Entitlements Act 1986
The Act
Keywords
Tax free threshold
Rebates
Veterans pensioner rebates
ISSN: 1445-2782
| Date: | Version: | |
| 18 July 2001 | Original statement | |
| You are here | 1 April 2010 | Archived |
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