Commonwealth Numbered Acts

MILITARY REHABILITATION AND COMPENSATION (CONSEQUENTIAL AND TRANSITIONAL PROVISIONS) ACT 2004 NO. 52, 2004 - SCHEDULE 4

Part 1—Amendment of the Income Tax Assessment Act 1936
1 Subsection 6(1) (after subparagraph (b)(iv) of the definition of Commonwealth education or training payment )

Insert:

(iva) the scheme under section 258 of the Military Rehabilitation and Compensation Act 2004 to provide education and training; or
2 After paragraph 16(4)(g)

Insert:

(gaa) the Military Rehabilitation and Compensation Commission established by section 361 of the Military Rehabilitation and Compensation Act 2004 , for purposes consistent with the functions of that body under that Act;
3 At the end of section 202CB

Add:

Persons receiving benefits under Military Rehabilitation and Compensation Act

(8)

Subsections (2) to (4) do not apply to a TFN declaration given to the Military Rehabilitation and Compensation Commission:

(a) by a person who is an applicant for compensation or an allowance under the Military Rehabilitation and Compensation Act 2004 ; or
(b) by a person who is a recipient for the purposes of this Part because the person receives, or expects to receive, such compensation or allowance.
4 At the end of section 202CE

Add:

(9)

Subsection (6) does not apply to a TFN declaration given to the Military Rehabilitation and Compensation Commission:

(a) by a person who is an applicant for compensation or an allowance under the Military Rehabilitation and Compensation Act 2004 ; or
(b) by a person who is a recipient for the purposes of this Part because the person receives, or expects to receive, such compensation or allowance.
5 Subsection 221A(1) (definition of prescribed non-resident )

Before "a pension", insert "compensation or".

6 Subsection 221A(1) (after paragraph (b) of the definition of prescribed non-resident )

Insert:

(ba) the Military Rehabilitation and Compensation Act 2004 ; or
7 Paragraph 251U(1)(b)

After " Veterans' Entitlements Act 1986 ", insert "or the Military Rehabilitation and Compensation Act 2004 ".

8 Subsection 265A(3)

Repeal the subsection, substitute:

(3)

The provisions of subsection (1) do not apply in any case where the death of the taxpayer has occurred in circumstances (including the circumstances of his or her service) in which the Commonwealth would not be liable to pay pensions or compensation:

(a) under Part II or IV of the Veterans' Entitlements Act 1986 to the dependants of deceased members of the Forces or veterans; or
(b) mentioned in paragraph 234(1)(b) of the Military Rehabilitation and Compensation Act 2004 to the wholly dependent partners of deceased members (within the meaning of that Act).
9 Subsection 265A(4)

After "Part II or IV of that Act,", insert "or any decision of the Military Rehabilitation and Compensation Commission established under section 361 of the Military Rehabilitation and Compensation Act 2004 on a question affecting the right of a dependant of a deceased member (within the meaning of that Act) to compensation under Chapter 5 of that Act,".

Part 2—Amendment of the Income Tax Assessment Act 1997
10 Sections 51-32 and 51-33

Repeal the sections, substitute:

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 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 Minister administering section 1 of the Defence Act 1903 for the purposes of this subsection;

that is payable under a determination under that Act 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 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.
51-33 Compensation payments for loss of pay and/or allowances as a Defence reservist

(1)

A compensation payment for the loss of your pay or an allowance is exempt from income tax if:

(a) the compensation payment is made under the Safety, Rehabilitation and Compensation Act 1988 in respect of an injury (as defined in that Act) you suffered; and
(b) you suffered your injury while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve (but not while on continuous full time service); and
(c) your pay or allowance was payable for service of a kind described in paragraph (b).

(2)

A compensation payment for the loss of your pay or an 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) you sustained your service injury or contracted your service disease, or your service injury or disease was aggravated or materially contributed to, while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve; and
(c) your pay or allowance was payable for service of a kind described in paragraph (b); and
(d) the compensation payment is worked out by reference to your normal earnings (as defined in that Act) as a part-time Reservist (as defined in that Act).
11 After Subdivision 52-C

Insert:

Guide to Subdivision 52-CA
52-112 What this Subdivision is about

This Subdivision tells you:

(a) the payments under the Military Rehabilitation and Compensation Act 2004 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

52-114 How much of a payment under the Military Rehabilitation and Compensation Act is exempt?

[This is the end of the Guide.]

Operative provisions
52-114 How much of a payment under the Military Rehabilitation and Compensation Act is exempt?

(1)

The table in this section tells you about the income tax treatment of payments under the Military Rehabilitation and Compensation Act 2004 . References in the table to provisions are to provisions of that Act.

(2)

Expressions used in this Subdivision that are also used in the Military Rehabilitation and Compensation Act 2004 have the same meanings as in that Act.

(3)

Ordinary payment means a payment other than a payment made because of a person's death.

12 After subparagraph 52-145(1)(b)(iii)

Insert:

(iiia) the scheme under section 258 of the Military Rehabilitation and Compensation Act 2004 to provide education and training; or
13 Subsection 995-1(1) (definition of ordinary payment )

Omit "and 52-65", substitute ", 52-65 and 52-114".

Part 3—Application and amendment of assessments
14 Application of amendments

(1) The amendments made by Part 1 of this Schedule apply to assessments for the 2004-05 year of income and later years of income.
(2) Subject to subitem (3), the amendments made by Part 2 of this Schedule apply to assessments for the 2004-05 income year and later income years.
(3) Subsections 51-32(1) and (4) and 51-33(1) of the Income Tax Assessment Act 1997 , substituted by item 10 of this Schedule, apply to assessments for the 1996-97 income year and later income years.

15 Amendment of assessments

Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment made before the commencement of this item for the purposes of giving effect to subsections 51-32(1) and (4) and 51-33(1) of the Income Tax Assessment Act 1997 substituted by item 10 of this Schedule.