Tax Laws Amendment (2005 Measures No. 1) Act 2005 (77 of 2005)

Schedule 4   Mature age worker tax offset

Income Tax Assessment Act 1997

2   At the end of Division 61

Add:

Subdivision 61-K - Mature age worker tax offset

Guide to Subdivision 61-K

61-550 What this Subdivision is about

You may get a tax offset under this Subdivision if you are an Australian resident individual who is aged 55 or over at the end of the income year and who has worked during the year.

The amount of the offset depends on the amount of your net income from working, but is up to a maximum of $500. (Basically, your net income from working is the total of amounts of assessable income that are mainly a reward for your personal efforts or skills, less any relevant deductions.)

Table of sections

Operative provisions

61-555 Object of this Subdivision

61-560 Entitlement to the mature age worker tax offset

61-565 The amount of the tax offset

61-570 Definition of net income from working

Operative provisions

61-555 Object of this Subdivision

The object of this Subdivision is to provide a *tax offset (subject to certain income conditions) as an incentive to Australians aged 55 or over to remain in work.

61-560 Entitlement to the mature age worker tax offset

You are entitled to a *tax offset for an income year if you are an Australian resident individual who is aged 55 or over at the end of the income year.

Note: However, the amount of the tax offset is nil if have you no net income from working or your net income from working is over $63,000 (or $58,000 for the 2004-2005 income year).

61-565 The amount of the tax offset

(1) If your *net income from working for the income year is equal to or less than $53,000, the amount of the *tax offset is the lesser of the amount worked out under the following formula and $500:

5% * Your net income from working for the year

(2) If your *net income from working for the income year is greater than $53,000, the amount of the *tax offset is the amount worked out under the following formula (but not below nil):

$500 - [5% * (Your income from working for the year - $53,000)]

Special rule for the 2004-2005 income year

(3) For the 2004-2005 income year, references in subsections (1) and (2) to $53,000 are taken instead to be references to $48,000.

61-570 Definition of net income from working

(1) Your net income from working for an income year is the sum of the following amounts (excluding amounts covered by subsection (2)):

(a) your assessable income for the year to the extent that it consists of the following:

(i) *personal services income;

(ii) assessable income from a *business you carry on;

(iii) an amount included under section 393-15 of Schedule 2G to the Income Tax Assessment Act 1936 as a result of the repayment of a *farm management deposit;

(b) your *reportable fringe benefits total for the year;

less the sum of any amounts you can deduct for the year to the extent that they relate to assessable income mentioned in subparagraph (a)(i) or (ii).

(2) Your net income from working for an income year does not include your assessable income for the year to the extent that it consists of the following:

(a) amounts of *eligible termination payments;

(b) amounts to which section 26AC or 26AD of the Income Tax Assessment Act 1936 applies (about annual or long service leave payments);

(c) amounts of passive income (within the meaning of subsection 160AEA(1) of the Income Tax Assessment Act 1936).