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Edited version of private advice
Authorisation Number: 1052409100427
Date of advice: 16 June 2025
Ruling
Subject: Deduction
Question 1
Are you entitled to a deduction for pension reduced from your spouse's pension due to your work income?
Answer 1
No.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You are semi-retired.
You receive a part Pension.
Your spouse receives a Pension.
You are working for a company in addition to the receipt of your part-pension.
Your Pensions are reduced for every dollar you earn over a specific amount per period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
The reduction in both your pension and your spouse's pension is not an allowable deduction under section 8-1 of the ITAA 1997 as this reduction does not relate to the derivation of your assessable income with the company.
Your pension is being reduced because of your income you are earning from the company as per the rules around the eligibility of the Pension.
The reduction does not result due to the carrying out of your work duties.
This reduction therefore does not have the nexus with your income earning activity.
For an expense to be an allowable deduction it must have a direct connection with your work duties such as a person who uses their car to carry out their work duties can usually claim a deduction for expenses related to the use of the car for work purposes.
The Australian Taxation Office is not able to comment on the rules in place by other entities.
You will need to take the reduction of your pension up with the pension provider directly.
There is no taxation connection to these reductions.
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