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Edited version of private advice
Authorisation Number: 1012631982006
Subject: Excepted income
Question
Are you an excepted person under subsection 102AC(2) of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
No
This ruling applies for the following periods:
Year ended 30 June 2013
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
Year ending 30 June 2017
Year ending 30 June 2018
The scheme commences on:
1 July 2012
Relevant facts and circumstances
You previously received an Allowance but were recently disqualified due to not meeting the criteria. You have provided a medical certificate, which states you have a medical condition and thus you meet the definition of a 'disabled child' under the Social Security Act 1991.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 102AC
Reasons for decision
Division 6AA of the ITAA 1936 taxes at higher rates the income of certain children who are deemed to be a 'prescribed person'. Subsection 102AC(2), therein, provides a person will be an 'excepted person' (i.e., not a prescribed person) for Division 6AA if:
(c) the minor is a person:
(i) in respect of whom a carer allowance under the Social Security Act 1991 was payable in respect of a period that included the last day of the year of income; or
(d) the Commissioner: (i) has received a certificate issued by a legally qualified medical practitioner certifying that the minor is: (B) a disabled child, or a disabled adult, within the meaning of Part 2.19 of the Social Security Act 1991; and… (ii) is satisfied that, on the last day of the year of income, the minor was a person of the kind mentioned in sub-subparagraph (i)(A)… |
The phrase 'within the meaning' is not defined within income tax legislation or case law; as such, it will take on its ordinary meaning. It follows we consider paragraph 102AC(2)(d)(i)(A) of the ITAA 1936 to refer to a disabled child who has an intensity of disability equivalent to that which meets the eligibility criteria to receive the Carers Allowance within the intention of Social Security Act 1991.
In other words, we consider the phrase: "within the meaning of Part 2.19" to mean within the meaning of the whole of Part 2.19 of the Social Security Act 1991, which includes its section 953 (about eligibility criteria for a carers allowance), rather than merely within the limits of its section 952 (about the definition of a disabled child).
Therefore, when combining sections 952 and 953, the meaning of "disabled child" for the purposes of Part 2.19 of the Social Security Act 1991 is:
"disabled child" means a person aged under 16 who:
(a) has a physical, intellectual or psychiatric disability; and
(b) is likely to suffer from that disability permanently or for an extended period.
and either of the following conditions apply;
(i) the disability from which the care receiver is suffering is declared, under subsection 38E(3), to be a recognised disability for the purposes of this section;
(ii) the person has been given a qualifying rating of intense under the Disability Care Load Assessment (Child) Determination for caring for the care receiver; and
In your case, we accept that you suffer from a medical condition and may suffer from it for an extended period of time. However, as it appears your medical condition is not a recognised disability for Carer Allowance, we consider you do not satisfy the conditions necessary to be a 'disabled child' within the meaning of part 2.19 of the Social Security Act 1991.
Accordingly, you are not an excepted person under subsection 102AC(2) of the ITAA 1936.
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