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A NEW TAX SYSTEM (BONUSES FOR OLDER AUSTRALIANS) ACT 1999 - SECT 45

Amount of bonus payment

Client qualified for bonus payment for 1 qualifying year

(1)
If the Commissioner is satisfied that an ATO client is qualified for a bonus payment in respect of 1 qualifying year, the client is entitled to the amount of the bonus payment worked out in respect of that year.

Client qualified for bonus payment for both qualifying years

(2)
If the Commissioner is satisfied that an ATO client is qualified for a bonus payment in respect of both qualifying years:

(a)
the Commissioner must work out the amount of the bonus payment in respect of each qualifying year; and

(b)
the client is entitled to:

(i)
the higher of those amounts; or
(ii)
if those amounts are equal—one of those amounts.

Amount of bonus payment

(3)
The amount of an ATO client's bonus payment in respect of a qualifying year is:

(a)
if he or she is qualified for only the aged persons savings bonus component of the bonus payment—the amount of that component; or

(b)
if he or she is qualified for only the self-funded retirees supplementary bonus component of the bonus payment—the amount of that component; or

(c)
if he or she is qualified for both the aged persons savings bonus component and the self-funded retirees supplementary bonus component of the bonus payment—the sum of those components.

Aged persons savings bonus component

(4)
The aged persons savings bonus component of a bonus payment for a qualifying year is worked out in accordance with the following table:

Amount of aged persons savings bonus component
Item If the ATO client's taxable income as shown in his or her assessment for the qualifying year is: ...the amount of the aged persons savings bonus component is equal to:
1 $20,000 or less his or her adjusted savings and investment income for that year, up to a maximum of $1,000
2 more than $20,000 but less than $30,000 (a) his or her adjusted savings and investment income for that year, up to a maximum of $1,000; less (b) the phasing out fraction (see subsection (8)) of the amount worked out under paragraph (a) of this item
Example: For the 1998-1999 income year Malcolm has an assessed taxable income of $23,000 and adjusted savings and investment income of $1,500.

Malcolm's aged persons savings bonus component is worked out as follows.

Malcolm's adjusted savings and investment income of $1,500 exceeds the maximum of $1,000, so only $1,000 is potentially allowable.

The phasing out fraction of the $1,000 then needs to be subtracted. The fraction is:

Therefore 3 /10 of $1,000 (i.e. $300) needs to be subtracted. This leaves an aged persons savings bonus component of $700.

Self-funded retirees supplementary bonus component—person aged over 60

(5)
The self-funded retirees supplementary bonus component of a bonus payment for an ATO client aged 60 or more for a qualifying year is worked out in accordance with the following table:

Amount of self-funded retirees supplementary bonus component
Item If the ATO client's taxable income as shown in his or her assessment for the qualifying year is: ...the amount of the self-funded retirees supplementary bonus component is equal to:
1 $20,000 or less the amount, up to a maximum of $2,000, by which his or her adjusted savings and investment income for that year exceeds $1,000
2 more than $20,000 but less than $30,000 (a) the amount, up to a maximum of $2,000, by which his or her adjusted savings and investment income for that year exceeds $1,000; less (b) the phasing out fraction (see subsection (8)) of the amount worked out under paragraph (a) of this item
Example: For the 1999-2000 income year Joan, aged 63, has an assessed taxable income of $24,000 and adjusted savings and investment income of $5,000.

Joan's self-funded retirees supplementary bonus component is worked out as follows.

Joan's adjusted savings and investment income of $5,000 exceeds the lower limit of $1,000 by $4,000, but this is only allowable up to a maximum of $2,000.

The phasing out fraction of the $2,000 then needs to be subtracted. The fraction is:

Therefore 4 /10 of $2,000 (i.e. $800) needs to be subtracted. This leaves a self-funded retirees supplementary bonus component of $1,200.

Joan is also entitled to an aged persons savings bonus component of $600: worked out under subsection (4).

Joan is entitled to a bonus payment of $1,800.

Self-funded retirees supplementary bonus component—person aged under 60

(6)
The self-funded retirees supplementary bonus component of a bonus payment for an ATO client aged under 60 is worked out in accordance with the following table:

Amount of self-funded retirees supplementary bonus component
Item If the ATO client's taxable income as shown in his or her assessment for the qualifying year is: ...the amount of the self-funded retirees supplementary bonus component is equal to:
1 $20,000 or less his or her adjusted savings and investment income, up to a maximum of $2,000
2 more than $20,000 but less than $30,000 (a) his or her adjusted savings and investment income, up to a maximum of $2,000; less (b) the phasing out fraction (see subsection (8)) of the amount worked out under paragraph (a) of this item
Example: For the 1999-2000 income year Susan, aged 59, has an assessed taxable income of $24,000, all of which is annual savings and investment income.

Susan's self-funded retirees supplementary bonus component is worked out as follows.

Susan's adjusted savings and investment income of $24,000 is only allowable up to a maximum of $2,000.

The phasing out fraction of the $2,000 then needs to be subtracted. The fraction is:

Therefore 4 /10 of $2,000 (i.e. $800) needs to be subtracted. This leaves a self-funded retirees supplementary bonus component of $1,200.

Bonus payments less than $1 rounded up to $1

(7)
If the amount of an ATO client's bonus payment worked out under this section is greater than nil and less than $1, the amount is rounded up to $1.

Phasing out fraction

(8)
In this section:

"phasing out fraction" means the following fraction:


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