Tax Laws Amendment (2009 Measures No. 1) Act 2009 (27 of 2009)

Schedule 3   Reforms to income tests

Part 5   Dependency rebates

Income Tax Assessment Act 1936

94   Subsection 159J(1AB)

Repeal the subsection, substitute:

(1AB) A taxpayer is not entitled, in his or her assessment in respect of a year of income, to a rebate under this section in respect of a dependant included in class 1, 2, 5 or 6 in the table in subsection (2) if:

(a) for a dependant included in class 1 - the taxpayer’s adjusted taxable income for the year is more than the income limit for family tax benefit (Part B) for the year; or

(b) for a dependant included in class 2, 5 or 6 - subsection (1AC) applies to the taxpayer for the year.

(1AC) This subsection applies to a taxpayer for a year of income if the sum of:

(a) the taxpayer’s adjusted taxable income for the year; and

(b) if the taxpayer has a spouse during the year - the spouse’s adjusted taxable income for the year; and

(c) if the taxpayer has a spouse during only part of the year - this amount:

is more than the income limit for family tax benefit (Part B) for the year.

Note: If the taxpayer has a different spouse during different parts of the year, the adjusted taxable income of each spouse will be included under paragraph (c).