Last amended: 13 June 2012
The table below shows a number of the commonly used terms under previous taxation system and the current names:
Previous Terminology |
Now known as |
Group Certificate |
PAYG Payment Summary – Individual Non Business (Payment Summary) |
Tax Instalment Deductions |
Tax Withholdings |
Tax Rebate |
Tax Offset |
Taxable Amount of Pension |
Gross Taxable Payment |
Group Number |
Payer's ABN |
The Income Tax Assessment Act 1997 defines which payments are taxable and which are not. In most circumstances, income support payments are taxable.
More ? [2]
Because of the compensatory nature of disability and war widow's/widower's pensions, these payments, along with their associated allowances, are not taxable. Income support pensions paid on the basis of permanent incapacity for work are not taxable, depending on the recipient or their partner's age.
More ? [3]
When requested by either the pensioner or the Commissioner of Taxation, DVA [4] can deduct amounts of taxable pension from a pensioner's instalment and make payment to the Commissioner of Taxation.
More ? [5]
DVA is responsible for calculating the amount of taxable payments it makes to a pensioner in the financial year. It is not responsible for calculating a pensioner's possible tax liability as that is a matter between the client and the Australian Taxation Office. Any inquiries regarding either the requirements of the Australian Taxation Office or tax assessments should be referred to the nearest Australian Taxation Office.
At the end of each financial year, DVA [4] issues payment summaries to people who have received payments from this department. Taxable and non-taxable payments are separately included on these payment summaries.
The payment summary also identifies those non-taxable DVA payments which are a “tax free pension or benefit” as defined in the A New Tax System (Family Assistance) Act 1999. Tax free pensions and benefits must be separately declared on income tax returns for the purpose of income testing of other government benefits.
More ? [6]
Remote area allowance also appears on the payment summary as it affects a person's eligibility for a Zone Tax Offset (formerly Zone Rebate) under the Income Tax Assessment Act 1936.
More ? [7]
VEA ? [8]
The legislation provides for pensions calculated under the transitional rules to be treated as pension supplement components for income tax purposes. Thus, the tax status attached to the particular pension supplement components will apply to the attributed portion of a transitional pension.
Transitional pension components |
treated as ... for application of income tax rules |
The individual's pension rate (VIEW pension component (basic rate) + all amounts labelled as supplements) |
pension supplement amount |
Amount specified in Sch5 34(4) VEA VEA ? [9]
(equivalent to VIEW pension component (basic rate) + amount labelled as “Pension supplement Tx”) |
basic amount of pension supplement |
For service pension: Transitional maximum payment rate less the sum of VIEW pension component (basic rate) + “Pension supplement Non Tx” For ISS: minimum pension supplement amount |
Tax-exempt pension supplement amount, which is the minimum pension supplement amount and the remaining portion of the pension supplement in excess of the basic amount |
The Department of Veterans' Affairs.
The Department of Veterans' Affairs.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16939%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16939#tgt-cspol_part11_ftn158
[3] https://clik.dva.gov.au/book/export/html/16939#tgt-cspol_part11_ftn159
[4] https://clik.dva.gov.au/%23
[5] https://clik.dva.gov.au/book/export/html/16939#tgt-cspol_part11_ftn160
[6] https://clik.dva.gov.au/book/export/html/16939#tgt-cspol_part11_ftn161
[7] https://clik.dva.gov.au/book/export/html/16939#tgt-cspol_part11_ftn162
[8] https://clik.dva.gov.au/book/export/html/16939#tgt-cspol_part11_ftn163
[9] https://clik.dva.gov.au/book/export/html/16939#tgt-cspol_part11_ftn164
[10] https://clik.dva.gov.au/compensation-and-support-policy-library/part-11-administration-payments/116-taxation/1162-taxable-payments
[11] https://clik.dva.gov.au/book/export/html/16939#ref-cspol_part11_ftn158
[12] https://clik.dva.gov.au/compensation-and-support-policy-library/part-11-administration-payments/116-taxation/1163-non-taxable-payments
[13] https://clik.dva.gov.au/book/export/html/16939#ref-cspol_part11_ftn159
[14] https://clik.dva.gov.au/compensation-and-support-policy-library/part-11-administration-payments/116-taxation/1165-payment-tax-withholdings-commissioner-taxation
[15] https://clik.dva.gov.au/book/export/html/16939#ref-cspol_part11_ftn160
[16] https://clik.dva.gov.au/compensation-and-support-policy-library/part-11-administration-payments/116-taxation/1163-non-taxable-payments/1163-tax-free-payments-and-benefits
[17] https://clik.dva.gov.au/book/export/html/16939#ref-cspol_part11_ftn161
[18] https://clik.dva.gov.au/compensation-and-support-policy-library/part-11-administration-payments/116-taxation/1164-payment-summaries
[19] https://clik.dva.gov.au/book/export/html/16939#ref-cspol_part11_ftn162
[20] https://clik.dva.gov.au/legislation-library
[21] https://clik.dva.gov.au/book/export/html/16939#ref-cspol_part11_ftn163
[22] https://clik.dva.gov.au/book/export/html/16939#ref-cspol_part11_ftn164