House of Representatives

Tax Laws Amendment (2012 Measures No. 3) Bill 2012

Income Tax (Seasonal Labour Mobility Program Withholding Tax) Bill 2012

Income Tax (Seasonal Labour Mobility Program Withholding Tax) Act 2012

Tax Laws Amendment (Income Tax Rates) Bill 2012

Explanatory Memorandum

(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)

Clean energy payments

Outline of chapter

4.1 Schedule 4 to this Bill amends the Income Tax Assessment Act 1997 (ITAA 1997) to exempt clean energy payments made to recipients of payments under the ABSTUDY scheme, Veterans' Children Education Scheme, Military Rehabilitation and Compensation Act Education and Training Scheme, the transitional farm family payment and exceptional circumstances relief payment.

Context of amendments

4.2 Clean energy payments are being provided to recipients of pensions, allowances and family payments to assist with the cost-of-living impacts of putting a price on emissions of carbon dioxide and other greenhouse gases.

Summary of new law

4.3 This Schedule provides an income tax exemption for clean energy payments made to recipients of payments under the ABSTUDY scheme, Veterans' Children Education Scheme, and Military Rehabilitation and Compensation Act Education and Training Scheme, the transitional farm family payment and exceptional circumstances relief payment.

Comparison of key features of new law and current law

New law Current law
Clean energy payments made to recipients of payments under the ABSTUDY scheme, Veterans' Children Education Scheme, Military Rehabilitation and Compensation Act Education and Training Scheme, the transitional farm family payment and exceptional circumstances relief payment will be exempt from income tax. No specific exemption is provided for clean energy payments made to recipients of payments under the ABSTUDY scheme, Veterans' Children Education Scheme, Military Rehabilitation and Compensation Act Education and Training Scheme, the transitional farm family payment and exceptional circumstances relief payment, but such payments are not currently being made.

Detailed explanation of new law

4.4 These amendments provide an income tax exemption for clean energy payments made to recipients of payments under the ABSTUDY scheme, Veterans' Children Education Scheme, Military Rehabilitation and Compensation Act Education and Training Scheme, the transitional farm family payment and exceptional circumstances relief payment.

4.5 This Schedule:

·
adds clean energy payments under the scheme prepared under Part VII of the Veterans' Entitlement Act 1986 to the list of types of ordinary or statutory income in section 11-15 of the ITAA 1997 which are exempt if derived by certain entities [Schedule 4, item 1, section 11-15] ;
·
adds clean energy payments under the scheme determined under section 258 of the Military Rehabilitation and Compensation Act 2004 to the list of types of ordinary or statutory income in section 11-15 of the ITAA 1997 which are exempt if derived by certain entities [Schedule 4, item 1, section 11-15] ;
·
adds the transitional farm family payment to the list of types of ordinary or statutory income in section 11-15 of the ITAA 1997 which are exempt if derived by certain entities [Schedule 4, item 1, section 11-15] ;
·
adds a reference to clean energy payments under the scheme prepared under Part VII of the Veterans' Entitlement Act 1986 to the list of payments that are not dealt with in the table in section 52-65 of the ITAA 1997. Payments not dealt with in the table are dealt with elsewhere in section 52-65 [Schedule 4, item 4, subsection 52-65(1)] ;
·
repeals the existing subsection 52-65(1G) of the ITAA 1997 and replaces it with an expanded reference to clean energy payments being exempt from income tax under the Veterans' Entitlement Act 1986 generally as well as under the scheme prepared under Part VII of that Act that concerns educating veterans' children [Schedule 4, item 5, subsection 52-65(1G)] ;
·
inserts a reference to clean energy payments under the Veterans' Children Education Scheme to the list of items under which veterans' affairs payments are exempt from income tax under Subdivision 52-B of the ITAA 1997 [Schedule 4, item 6, section 52-75] ;
·
amends item 16 in the table in section 52-114 by including a clean energy payment in the type of ordinary payment that is exempt from income tax [Schedule 4, item 7, section 52-114] ;
·
adds a note to section 52-114 to make clear that the supplementary amount of a payment covered by item 16 of the table in section 52-114 is also exempt from income tax [Schedule 4, item 8, section 52-114] ;
·
specifies that a clean energy payment made under the ABSTUDY scheme is exempt from income tax [Schedule 4, item 9, subsection 52-131(2)] ;
·
inserts 'or clean energy payment' after 'crisis payment' in the list of payments under the ABSTUDY scheme that are not an ordinary payment. An ordinary payment is generally not exempt from income tax [Schedule 4, item 10, subsection 52-131(8)] ;
·
adds the clean energy supplement to the list of components of supplementary amounts of payment under the ABSTUDY scheme. Supplementary payments under the ABSTUDY scheme are generally exempt from income tax [Schedule 4, item 11, section 52-132] ;
·
adds a reference to clean energy supplement paid to recipients of Commonwealth education or training payments to the list of supplementary amounts of payments to such students. Supplementary amounts of such payments are exempt from income tax [Schedule 4, item 12, subsection 52-140(3)] ;
·
provides that payments in lieu of clean energy advance and by way of clean energy supplement to recipients of transitional farm family payments are exempt from income tax [Schedule 4, item 13 , subsection 53-10] ; and
·
includes clean energy supplements paid to recipients of exceptional circumstances relief payment in the supplementary amount of exceptional circumstances relief payment. The supplementary amount of exceptional circumstances relief payment is exempt from income tax [Schedule 4, item 14, subsection 53-15] .

Application and transitional provisions

4.6 The amendments commence on the day the Act receives Royal Assent. [Schedule 4, item 15] .

4.7 The amendments apply to income tax assessments for the 2011-12 and later income years, other than the amendments made by items 3 and 13, which apply to income tax assessments for the 2012-13 and later income years.


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