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Edited version of your written advice
Authorisation Number: 1012832110571
Date of advice: 2 July 2015
Ruling
Subject: Veterans' Affairs Pension
Question
Is the pension that you receive from the Department of Veterans' Affairs taxable?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2015
The scheme commenced on
1 July 2014
Relevant facts
You are under retirement age and you are in receipt of a disability pension that is paid to you by the Department of Veterans' Affairs. You receive a special rate of payment due to your level of disability.
You are entitled to this payment under provisions of the Veterans' Entitlement Act 1986.
Tax is not withheld from the pension that you receive.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-20
Income Tax Assessment Act 1997 Subsection 52-65(1)
Income Tax Assessment Act 1997 Subsection 52-65(4)
Reasons for decision
Subsection 6-20(2) of the Income Tax Assessment Act 1997 (ITAA 1997) allows for ordinary income to be exempt income for taxation purposes to the extent that the Act excludes it.
Subsection 52-65(4) of the ITAA1997 at item 7.2 states that a veterans' affairs payment of the invalidity services pension to a person under pension age is exempt income for income tax purposes.
In your case, you are under pension age and in receipt of a disability pension. The pension that you receive is classed as exempt income for taxation purposes and as such you are not taxed on this income.