ATO Interpretative Decision
ATO ID 2001/259
Income Tax
Reduction in dependant spouse rebateFOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Whether the taxpayer, whose spouse is in receipt of a basic parenting allowance, is required to take this allowance into account in determining their entitlement to a dependant spouse rebate under section 159J of the Income Tax Assessment Act 1936 (ITAA 1936).
Decision
The taxpayer must take the basic parenting allowance into account in determining their entitlement to a dependant spouse rebate under section 159J (ITAA 1936).
Facts
The taxpayer is in receipt of a job search allowance. The taxpayer's spouse is in receipt of a basic parenting allowance of $400. The taxpayer's spouse also has a separate net income that exceeds $282 in addition to the basic parenting allowance.
The couple has a dependant child for the full year and all are residents of Australia.
Reasons for Decision
A taxpayer may be entitled to a rebate for a dependant under section 159J (ITAA 1936) where the taxpayer contributes to the maintenance of a dependant and that dependant is a resident.
Subsection 159J(5E) (ITAA 1936) operates to reduce the rebate allowable in respect of a dependant spouse by any basic parenting allowance paid to the spouse during the year of income. The spouse rebate is reduced on a dollar for dollar basis.
This reduction only occurs after taking into account any reduction of the rebate under any other provision of section 159J (ITAA 1936).
In this case, the dependant spouse rebate is calculated by commencing with the prescribed maximum rebate entitlement under section 159J (ITAA 1936) for a dependant spouse with a child. As the spouse has a separate net income, the dependant spouse rebate entitlement is reduced under subsection 159J(4) (ITAA 1936) by $1 for every $4 by which the separate net income derived by the dependant spouse in the year of income exceeds $282. Under subsection 159J(5E) (ITAA 1936) the rebate entitlement is then further reduced by the basic parenting allowance of $400 that is received by the dependant spouse.
Date of decision: 1 December 2000Year of income: Year ended 30 June 2000
Legislative References:
Income Tax Assessment Act 1936
section 159J
subsection 159J(4)
subsection 159J(5E)
Keywords
Rebates
Dependants
Dependant rebates
Spouse rebates
Income support payments
Family income support payments
Parenting allowance rebates
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 1 December 2000 | Original statement |
| 28 October 2005 | Archived |
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