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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private ruling

Authorisation Number: 1011717171286

Ruling

Subject: Senior Australians Tax Offset

Question 1

Are you entitled to the Senior Australians Tax Offset?

Answer: No.

Question 2

If you are not entitled to the Senior Australians Tax Offset under domestic law, are you otherwise entitled to the Senior Australians Tax Offset pursuant to a Non-discrimination Article in the International Tax Agreements Act 1953?

Answer: No.

This ruling applies for the following period:

1 July 2009 to 30 June 2010

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You have stated that you are a resident of Australia for income tax purposes.

You have permanent residency in Australia through a visa.

You derive pension income from Country A.

You have stated that your pension income is assessable in Australia pursuant to the International Tax Agreements Act 1953 (Country A Convention).

You are a female and you were 64 years old at 30 June 2010.

You have stated that your income is below the threshold for the Senior Australians Tax Offset (SATO).

You were not in prison during 2009-2010.

You have stated that you did not receive an Australian Government age pension during 2009-2010 because you have a visa and are therefore, required to wait for 10 years ("10 year waiting period") before you can receive an age pension.

You have stated that the 10 year waiting period is the only reason why you did not receive an Australian Government age pension.

You were not eligible for a pension, allowance or benefit from Veterans Affairs during 2009-2010.

Relevant legislative provisions

Income Tax Assessment Act 1936 160AAAA

International Tax Agreements Act 1953

Senior Australians Tax Offset (SATO)

The eligibility requirements for the SATO are found in section 160AAAA of the Income Tax Assessment Act 1936. In accordance with section 160AAAA, you are eligible for the SATO in the year ended 30 June 2010 if:

In relation to the second condition, you are eligible for an Australian Government age pension if:

The pension age for females at 30 June 2010 is 64 years old. Accordingly, you satisfy the first, third and fourth requirements listed above.

However, you do not satisfy the second requirement. This was because you were not eligible for a pension, allowance or benefit from Veterans Affairs during 2009-2010. Also, you were not eligible for an Australian Government age pension during 2009-2010 as you are required to wait for 10 years before you can receive an age pension. Therefore, the reason why you did not receive an age pension was not because you did not make a claim or because of the application of the income test or the assets test.

(Furthermore, even if you had satisfied the income or assets test, you would not qualify under an international social security agreement. According to Centrelink's website at www.centrelink.gov.au, Australia does not have an international social security agreement with Country A.)

As you do not meet all of the four conditions, you are not eligible for the SATO pursuant to section 160AAAA.

Non-discrimination Article in the International Tax Agreements Act 1953

A paragraph of the Non-discrimination Article in Country A Convention in the International Tax Agreements Act 1953 states that nationals of one state shall not be subjected in the other state to any taxation which is more burdensome than the taxation to which nationals of the other states may be subjected in the same circumstances.

However, another paragraph of the Non-discrimination Article specifies that the this Article shall apply to the taxes which are the subject of the Country A Convention. Article X states that the existing taxes to which Country A Convention shall apply are income tax imposed under the federal law of Australia.

Therefore, the Non-discrimination Article does not apply to tax offsets such as SATO because pursuant to Article X, tax offsets are not the subject of the Country A Convention. This is because tax offsets are not income upon which tax is levied, rather, tax offsets directly reduce the amount of tax a taxpayer must pay. Accordingly, you are not entitled to the SATO pursuant to the Non-discrimination Article.

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