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Edited version of your written advice
Authorisation Number: 1051224087066
Date of advice: 11 May 2017
Ruling
Subject: Superannuation Pension Offset
Question
Were the payments received by The Taxpayer from his income protection policy in the 2014-15 and 2015-16 income year eligible for the 10% tax offset under section 301-100 of the ITAA 1997?
Answer
Yes.
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
The Taxpayer is over 60 years of age.
The Taxpayer was diagnosed with a an illness and as a result his income protection policy commenced payments to meet the claim.
The Taxpayer's income protection policy deducts the insurance premiums from the Taxpayer's superannuation to make said payments.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 301-100
Income Tax Assessment Act 1997 section 307-70
Summary
Yes. The payments received by The Taxpayer from the income protection policy in the 20XX-XX and 20XX-XX income year are eligible for the 10% tax offset under section 301-100 of the ITAA 1997.
Detailed reasoning
Superannuation Income Stream - element untaxed in fund attracts 10% offset
A person can claim a 10% offset if they are 60 years or older when they receive a super income stream benefit under section 301-100 of the ITAA 1997.
Subsection 301-100 of ithe ITAA 1997 states:
(1) If you are 60 years or over when you receive a superannuation income stream benefit, the element untaxed in the fund of the benefit is assessable income.
(2) You are entitled to a tax offset equal to 10% of the element untaxed in the fund of the benefit.
The Taxpayer's was over 60 years of age during the 2014-15 and 2015-16 income years.
Meaning of superannuation income stream and superannuation income stream benefit
Subsection 307-10 of the ITAA 1997 states:
(1) A superannuation income stream benefit is a superannuation benefit specified in the regulations that it is paid from a superannuation income stream
(2) A superannuation income stream has the meaning given by the regulations
Conclusion
As the Taxpayer is over 60 years of age in both the 20XX-XX and 20XX-XX income years and receives a superannuation income stream benefit they are entitled to a tax offset equal to 10% of the element untaxed in the fund of the benefit.
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