Commonwealth Consolidated Acts Commonwealth Consolidated Acts
Income Tax Assessment Act 1997
1 Section 11 - 15 (table)
After:
social security or like payments |
|
insert:
ABSTUDY scheme, payment under .............. | Subdivision 52 - E |
2 Section 51 - 35 (note)
Omit "52 - F", substitute "52 - E or 52 - F".
3 Section 51 - 40 (note)
Omit "52 - F", substitute "52 - E or 52 - F".
4 After Subdivision 52 - D
Insert:
Subdivision 52 - E -- Exempt payments under the ABSTUDY scheme
52 - 130 What this Subdivision is about
This Subdivision tells you:
(a) the payments under the ABSTUDY scheme that are wholly or partly exempt from income tax; and
(b) any special circumstances, conditions or exceptions that apply to a payment in order for it to be exempt; and
(c) how to work out how much of a payment is exempt.
Table of sections
Operative provisions
52 - 131 Payments under ABSTUDY scheme
52 - 132 Supplementary amounts of payments
52 - 133 Tax - free amount of ordinary payment on death of partner if no bereavement payment payable
52 - 134 Tax - free amount if you receive a bereavement lump sum payment
52 - 131 Payments under ABSTUDY scheme
(1) This section tells you about the income tax treatment of a payment under the ABSTUDY scheme made in respect of a period commencing at a time when you were at least 16 years old.
Note: The whole of a payment made under the ABSTUDY scheme in respect of a period commencing at a time when you are under 16 years old may be exempt under section 51 - 10.
(2) A crisis payment made to you under the ABSTUDY scheme is exempt from income tax.
(3) If:
(a) an * ordinary payment becomes due to you; and
(b) the payment is not covered by subsection (4) or (6);
the * supplementary amount of the ordinary payment is exempt from income tax.
Note: To work out the supplementary amount of the ordinary payment, see section 52 - 132.
(4) If:
(a) your partner dies; and
(b) you do not qualify for a payment under the ABSTUDY scheme in respect of that death; and
(c) an * ordinary payment becomes due to you during the bereavement period;
the * supplementary amount and the * tax - free amount of the ordinary payment are exempt from income tax.
Note 1: To work out the supplementary amount of the ordinary payment, see section 52 - 132.
Note 2: To work out the tax - free amount of the ordinary payment, see section 52 - 133.
(5) If a payment becomes due to you under the ABSTUDY scheme because of a person's death (except a lump sum payment because of your partner's death), the payment is exempt from income tax.
(6) If:
(a) your partner dies; and
(b) a lump sum payment under the ABSTUDY scheme becomes due to you because of your partner's death;
the total of the following are exempt from income tax up to the * tax free amount:
(c) the lump sum payment; and
(d) all other payments that become due to you under the ABSTUDY scheme during the bereavement lump sum period.
Note: To work out the tax - free amount, see section 52 - 134.
(7) ABSTUDY scheme means the scheme known as ABSTUDY.
(8) Ordinary payment means a payment under the ABSTUDY scheme, other than:
(a) a crisis payment; or
(b) a payment made because of a person's death.
(9) The following expressions used in this Subdivision have the same meaning as in the ABSTUDY Policy Manual:
(a) bereavement lump sum period;
(b) bereavement period;
(c) illness separated couple;
(d) lump sum payment;
(e) partner;
(f) pension age;
(g) respite care couple.
Note: In 2007, the ABSTUDY Policy Manual was accessible through the website of the Department of Education, Science and Training.
52 - 132 Supplementary amount of payment
The * supplementary amount of a payment is the total of:
(a) so much of the payment as is included to assist you with, or to reimburse you for, the costs of any one or more of the following:
(i) rent;
(ii) living in a remote area;
(iii) commencing employment;
(iv) travel to, or participation in, courses, interviews, education or training;
(v) a child or children wholly or substantially dependent on you;
(vi) telephone bills;
(vii) living away from your usual residence;
(viii) maintaining your usual residence while living away from that residence;
(ix) accommodation, books or equipment;
(x) discharging a HEC assessment debt (within the meaning of Chapter 4 of the Higher Education Funding Act 1988 );
(xi) discharging a compulsory repayment amount (within the meaning of the Higher Education Support Act 2003 );
(xii) transport in travelling to undertake education or training, or to visit your usual residence when undertaking education or training away from that residence;
(xiii) if you are disabled--acquiring any special equipment, services or transport as a result of the disability;
(xiv) anything that would otherwise prevent you from beginning, continuing or completing any education or training; and
(b) so much of the payment as is included by way of pharmaceutical allowance.
52 - 133 Tax - free amount of ordinary payment on death of partner if no bereavement payment payable
This is how to work out the tax - free amount of an * ordinary payment for the purposes of subsection 52 - 131(4):
Method statement
Step 1. Work out the * supplementary amount of the payment.
Note: The supplementary amount is also exempt and is worked out under section 52 - 132.
Step 2. Subtract the * supplementary amount from the amount of the payment.
Step 3. Work out what would have been the amount of the payment if your partner had not died.
Step 4. Work out what would have been the * supplementary amount of the payment if your partner had not died.
Step 5. Subtract the amount at Step 4 from the amount at Step 3.
Step 6. Subtract the amount at Step 5 from the amount at Step 2: the result is the tax - free amount .
52 - 134 Tax - free amount if you receive a bereavement lump sum payment
This is how to work out the tax - free amount for the purposes of subsection 52 - 131(6):
Method statement
Step 1. Work out the payments under the ABSTUDY scheme 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 ABSTUDY scheme or the Social Security Act 1991 that would have become due to your partner during the bereavement lump sum period if your partner had not died, 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 .
5 At the end of subsection 52 - 140(1)
Add "(other than a payment to or on behalf of a student under the scheme known as ABSTUDY)".
6 At the end of subsection 52 - 140(1)
Add:
Note: The income tax treatment of payments under the scheme known as ABSTUDY is dealt with in Subdivision 52 - E.
7 Subsection 995 - 1(1) (definition of ordinary payment )
Repeal the definition, substitute:
"ordinary payment" is defined as set out in this table:
Ordinary payment | ||
Item | Ordinary payment , in relation to this kind of a payment: | has the meaning given by: |
1 | Payment under the ABSTUDY scheme | subsection 52 - 131(8) |
2 | Payment under the Military Rehabilitation and Compensation Act 2004 | subsection 52 - 114(3) |
3 | Social security payment | subsection 52 - 10(3) |
4 | Veterans' affairs payment | subsection 52 - 65(4) |
8 Subsection 995 - 1(1) (after table item 2 in the definition of supplementary amount )
Insert:
2A | Payment under the ABSTUDY scheme | section 52 - 132 |
9 Subsection 995 - 1(1) (at the end of the table in the definition of tax - free amount )
Add:
2 | Payment under the ABSTUDY scheme | sections 52 - 133 and 52 - 134 |
10 Application
The amendments made by this Schedule apply in relation to a payment made on or after 1 January 2008.