CHAPTER 2
-
LIABILITY RULES OF GENERAL APPLICATION
PART 2-15
-
NON-ASSESSABLE INCOME
History
Pt 2-15 (heading) substituted by No 66 of 2003.
Pt 2-15 inserted by No 121 of 1997.
Division 52
-
Certain pensions, benefits and allowances are exempt from income tax
History
Div 52 inserted by No 121 of 1997.
Subdivision 52-A
-
Exempt payments under the Social Security Act 1991
Operative provisions
SECTION 52-25
Tax-free amount of certain bereavement lump sum payments
52-25(1)
This section applies if a lump sum of any of these categories of social security payments becomes due to you because of your partner
'
s death.
|
Category of social security payment
|
| Age pension |
| Carer payment |
| Disability support pension |
| Special needs age pension |
| Special needs disability support pension |
| Special needs wife pension |
History
S 52-25(1) amended by No 107 of 2020, s 3 and Sch 3 item 7, by omitting
"
Mature age allowance (paid under Part 2.12A)
"
after
"
Disability support pension
"
and
"
Mature age partner allowance
"
before
"
Special needs age pension
"
from the table, effective 27 November 2020.
S 52-25(1) amended by No 26 of 2018, s 3 and Sch 3 item 7, by omitting
"
Wife pension
"
after
"
Special needs wife pension
"
from the table, effective 20 March 2020. No 26 of 2018, s 3 and Sch 3 item 102 contains the following saving provision:
102 Saving provision
-
Income Tax Assessment Act 1997
102
Despite the amendments made by this Schedule, items 34.1 to 34.4 of the table in section
52-10
and sections
52-15
and
52-25
of the
Income Tax Assessment Act 1997
, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to a payment of wife pension under Part
2.4
of the
Social Security Act 1991
before, on or after that commencement.
S 52-25(1) amended by
No 97 of 2008
, s 3 and Sch 3 item 73, by repealing the table item dealing with
"
disability wage supplement
"
, effective 3 October 2008. The table item formerly read:
Disability wage supplement
S 52-25(1) amended by No 13 of 1999 and No 197 of 1997.
52-25(2)
The total of the following are exempt up to the *tax-free amount:
(a)
the lump sum payment;
(b)
all other payments that become due to you under the
Social Security Act 1991
during the bereavement lump sum period.
History
S 52-25(2) amended by No 132 of 1998.
52-25(3)
This is how to work out the
tax-free amount
:
Method statement
Step 1.
Work out the payments under the
Social Security Act 1991
that would have become due to you during the bereavement lump sum period if:
(a) your partner had not died; and
(b) your partner had been under *pension age; and
(c) immediately before your partner died, you and your partner had been neither an illness separated couple nor a respite care couple.
Step 2.
Work out how much of those payments would have been exempt in those circumstances.
Step 3.
Work out the payments under the
Social Security Act 1991
or Part III of the
Veterans
'
Entitlements Act 1986
that would have become due to your partner during the bereavement lump sum period if:
(a) your partner had not died; and
(b) immediately before your partner died, you and your partner were neither an illness separated couple nor a respite care couple;
even if the payments would not have been exempt.
Step 4.
Total the payments worked out at Steps 2 and 3: the result is the
tax-free amount
.
Example:
You are receiving a disability support pension of $300 a fortnight and a pharmaceutical allowance of $5 a fortnight. You are over pension age. Your partner is receiving a jobseeker payment of $250 a fortnight and rent assistance of $75 a fortnight.
Your partner dies. Seven instalments are due to you during the bereavement lump sum period. You work out the tax-free amount as follows:
Step 1: The instalments that would have become due to you during the bereavement lump sum period are:
$300 + $5 = $305
The total for the period is $2,135.
Step 2: The exempt component of each instalment is $5. The total for the 7 instalments is $35.
Step 3: The instalments that would have become due to your partner during the same period are:
$250 + $75 = $325
The total for the period is $2,275.
Step 4: The tax-free amount is:
$35 + $2,275 = $2,310
History
S 52-25(3) amended by No 26 of 2018, s 3 and Sch 7 item 4, by substituting
"
jobseeker payment
"
for
"
partner allowance
"
in the example, effective 1 January 2022.
S 52-25(3) amended by No 94 of 2019, s 3 and Sch 1 item 4, by substituting
"
*pension age
"
for
"
pension age
"
in para (b) of method statement, step 1, effective 29 October 2019.
S 52-25(3) amended by No 60 of 2009, s 3 and Sch 4 item 37, by substituting
"
rent assistance
"
for
"
rental assistance
"
in the example, effective 20 September 2009.
S 52-25(3) amended by No 132 of 1998.
S 52-25 inserted by No 121 of 1997.
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