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INCOME TAX ASSESSMENT ACT 1997 - SECT 51.32

Compensation payments for loss of tax exempt payments

  (1)   A compensation payment for the loss of pay or an allowance for your warlike service is exempt from income tax if:

  (a)   the compensation payment is made under the Safety, Rehabilitation and Compensation (Defence - related Claims) Act 1988 in respect of an injury (as defined in that Act) you suffered; and

  (b)   you suffered your injury while covered by a certificate in force under paragraph   23AD(1)(a) of the Income Tax Assessment Act 1936 ; and

  (c)   your injury or disease caused the loss of your pay or allowance; and

  (d)   your pay or allowance was payable under the Defence Act 1903 or under a determination under that Act.

  (2)   A compensation payment for the loss of pay or an allowance for your warlike service is exempt from income tax if:

  (a)   the compensation payment is made under the Military Rehabilitation and Compensation Act 2004 in respect of a service injury or disease (as defined in that Act); and

  (b)   you sustained your service injury or contracted your service disease, or your service injury or disease was aggravated or materially contributed to, while covered by a certificate in force under paragraph   23AD(1)(a) of the Income Tax Assessment Act 1936 ; and

  (c)   your injury or disease caused the loss of your pay or allowance; and

  (d)   your pay or allowance was payable under the Defence Act 1903 or under a determination under that Act.

  (3)   Subsections   (4) and (5) apply to:

  (a)   a deployment allowance; or

  (b)   some other allowance that is exempt from income tax specified in writing by the * Defence Minister for the purposes of this subsection;

that is payable under a determination under the Defence Act 1903 for your non - warlike service.

  (4)   A compensation payment for the loss of the allowance is exempt from income tax if:

  (a)   the compensation payment is made under the Safety, Rehabilitation and Compensation (Defence - related Claims) Act 1988 in respect of an injury (as defined in that Act) you suffered; and

  (b)   your injury caused the loss of your allowance.

  (5)   A compensation payment for the loss of the allowance is exempt from income tax if:

  (a)   the compensation payment is made under the Military Rehabilitation and Compensation Act 2004 in respect of a service injury or disease (as defined in that Act); and

  (b)   your injury or disease caused the loss of your allowance.



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