Home > Compensation and Support Policy Library > Part 11 Administration of Payments > 11.6 Taxation > 11.6.5 Payment of Tax Withholdings to Commissioner of Taxation

11.6.5 Payment of Tax Withholdings to Commissioner of Taxation

This section concerns the deduction of tax withholdings from taxable pensions, and the payment of this money direct to the Commissioner of Taxation.


Payment of Tax Withholdings at Pensioner's Request

Last amended: 3 March 2006

Pensioner may have tax withheld from pension

VEA ? [3]

A pensioner can ask for tax withholdings to be made and paid directly to the Commissioner of Taxation. This method is often used as a budget measure to avoid an end of financial year tax bill.

Which pensions can have tax withheld?

The following payments can have tax withheld from them for payment to the Australian Tax Office:

Pensioner must make request for withholdings in writing

    

VEA ? [7]

In order to have tax directly withheld from pension payments, a pensioner must request in writing that a specific fortnightly amount is to be withheld.


Section 122B [8] VEA

VEA ? (go back) [9]

Veterans' Entitlements (Direct Deductions Arrangements) Instrument 2005

http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200509323?OpenDocument [10]

More ? (go back) [11]

Section 122B [8] VEA

VEA ? (go back) [12]

Disability pension, for the purposes of service pension and income support supplement, means:

  • a pension paid for incapacity from war caused conditions, or peacetime, peacekeeping or hazardous service caused conditions (other than a war widow's or orphan's pension); or
  • temporary incapacity allowance; or
  • any other payment in respect of incapacity or death resulting from war or war-like operations in which the Crown has been engaged [usually paid by another Commonwealth country].

A form of pension that is paid to the partner of a veteran where the veteran has died as a result of war service or eligible Defence Service [4].  War widow's/widower's pension is also paid to the partner of a veteran whose death was not war caused if the veteran was a ex-prisoner of war or if the veteran was receiving Extreme Disablement Adjustment Rate [4], Special Rate (T&PI) [4] or a rate increased in respect of certain war-caused injury or disease.

 

A form of pension that is paid to a child of a veteran where the veteran has died as a result of war service [4] or defence service [4].  The child may be the natural or adopted child of the veteran or any other child who was wholly or substantially dependent [4] on the veteran.

 

 

A service pension is an income support payment broadly equivalent to the social security age and disability support pensions. It may be paid once a veteran or partner has reached the nominated age or is incapacitated for work.

ISS is an income support payment that may be paid to eligible war widows and widowers under the VEA and persons receiving wholly dependent partners' compensation under the MRCA, and who satisfy the means tests. It is an indexed rate, increased twice-yearly in March and September in line with changes to the cost of living and/or average wages. Income Support Supplement (ISS) legislation commenced on 20 March 1995. It is a payment created to replace the ceiling rate income support age, carer, wife and disability support pensions, paid to war widows/widowers by Centrelink.

 

 

The Veterans' Children Education Scheme, prepared by the Commission under s117 of the VEA [13].

 

 

Defence Force Income Support Allowance (DFISA) is an income support payment [4] to be made by DVA [4] to people whose income support payment under Social Security Law [4] is reduced, or not payable, because of the impact of adjusted disability pension [4]. DFISA is the difference between the person's existing entitlement, and what the entitlement would have been had adjusted DP been exempt, but was assessed in the calculation of rent assistance.

 

 

Payment of Tax Withholdings at the Commissioner of Taxation's Direction

Last amended: 22 July 2013

Commissioner of Taxation may direct DVA to withhold amounts related to tax liabilities

The Commissioner of Taxation is given the discretion in the Taxation Administration Act 1953 to require DVA to withhold money from instalments of pension to pay an amount owing to the Commissioner of Taxation.

DVA to comply with Commissioner of Taxation's request

    

VEA ? [15]

The VEA stipulates that Commission [4] must comply with notices issued under Subdivision 260-A in Schedule 1 to the Taxation Administration Act 1953 by:

  • withholding money that is due or accruing to the debtor, or which is held for or on account of the debtor, and
  • paying the withheld amount to the Commissioner of Taxation.
Reasons why the Commissioner of Taxation can request deductions

The Commissioner of Taxation may request withholdings for the following reasons:

  • penalty for unpaid taxes,
  • annual assessment of tax payable,
  • amendment of a tax assessment, or
  • a fine or costs imposed by the Commissioner of Taxation for an offence under the Income Tax Assessment Act or associated legislation.
Amount of taxation withholdings

The amount of withholding is decided by the Commissioner of Taxation. If a pensioner has any queries regarding the amount of withholding, they should be advised to contact the Australian Taxation Office.


Payments to Commissioner of Taxation

Section 58J [8] VEA

VEA ? (go back) [16]

According to Section 179 [13]of the VEA [13], the Commission is a body corporate under the name of Repatriation Commission.

 

 

Source URL (modified on 14/10/2014 - 11:10am): https://clik.dva.gov.au/compensation-and-support-policy-library/part-11-administration-payments/116-taxation/1165-payment-tax-withholdings-commissioner-taxation

Links
[1] https://clik.dva.gov.au/user/login?destination=node/16919%23comment-form
[2] https://clik.dva.gov.au/user/login?destination=node/16971%23comment-form
[3] https://clik.dva.gov.au/book/export/html/16919#tgt-cspol_part11_ftn184
[4] https://clik.dva.gov.au/%23
[5] clikpopup://DEF/Veterans' Children Education Scheme (VCES)
[6] https://clik.dva.gov.au/book/export/html/16919#tgt-cspol_part11_ftn185
[7] https://clik.dva.gov.au/book/export/html/16919#tgt-cspol_part11_ftn186
[8] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[9] https://clik.dva.gov.au/book/export/html/16919#ref-cspol_part11_ftn184
[10] http://www.comlaw.gov.au/comlaw/management.nsf/lookupindexpagesbyid/IP200509323?OpenDocument
[11] https://clik.dva.gov.au/book/export/html/16919#ref-cspol_part11_ftn185
[12] https://clik.dva.gov.au/book/export/html/16919#ref-cspol_part11_ftn186
[13] http://clik.dva.gov.au/legislation-library
[14] https://clik.dva.gov.au/user/login?destination=node/16969%23comment-form
[15] https://clik.dva.gov.au/book/export/html/16919#tgt-cspol_part11_ftn187
[16] https://clik.dva.gov.au/book/export/html/16919#ref-cspol_part11_ftn187