Income Tax Regulations (Amendment)

Administered by Department of the Treasury

Legislation au F1997B00378 Regulations Not in force Legislative Instrument

Select Document

Income Tax Regulations (Amendment) (Beneficiary Rebates) 1991 No. 158

EXPLANATORY STATEMENT

STATUTORY RULES 1991 No. 158

Issued by authority of the Treasurer

Income Tax Assessment Act 1936

Income Tax Regulations (Amendment) (Beneficiary Rebates)

The amending regulations amend regulations 148 and 152 of Part 8 of the Income Tax Regulations to incorporate changes in categories of beneficiary consequent on amendment of the Social Security Act 1947 by the Social Security and Veterans' Affairs Legislation Amendment Bill 1990 which came into operation on 21 September 1990.. The categories of beneficiary are integral to the operation of regulation 152 which determines the levels of tax rebates and rebate thresholds to which beneficiaries are entitled. The rebates of tax are operative for 1990-91 and subsequent income years.

Section 160AAA of the Act authorises the making of regulations to determine:

(a) the amount of the rebate of tax (the pensioner rebate) allowable to the recipient of certain social security pensions, benefits or allowances (other than unemployment, sickness or special benefits) or service pensions [subsection 160AAA(2)], where the pension, benefit or allowance is included in the assessable income of the recipient; and

(b) the amount of the rebate of tax (the beneficiary rebate) allowable to the recipient of social security unemployment, sickness or special benefits, the Job Search Allowance, the Formal Training Allowance or allowances paid under certain Commonwealth education schemes [subsection 160AAA(3)], where the benefit or allowance is included in the assessable income of the recipient.

Subsection 160AAA(5) of the Act overrides the provisions of the Acts Interpretation Act 1901 which would otherwise prevent the making of regulations to apply retrospectively. As a consequence, the regulations for the purpose of section 160AAA of the Act may apply in relation to a year of income any part of which occurred before the notification of the regulations.

The amending Regulations amend the Income Tax Regulations to accommodate changes in the categories of beneficiaries eligible for the beneficiary rebate. The beneficiary rebates ascertained as a result of the amending regulations provide for different levels of rebates in respect of a year of income. The different levels are as a consequence of a person receiving a benefit or allowance if he or she is in any of the following categories:

• single, under 18 years and living at home;

• single, under 18 years and living away from home;

• single, aged 18 to 20 years and living at home;

• single, aged 18 to 20 years and living away from home;

• single, aged 21 years or over;

• single, aged 60 years to 64 years and in receipt of

• unemployment benefits for six months or more;

• married, under 18 years, no dependent children;

• married, aged 18 to 20 years, no dependent children;

• married, aged 21 years or over, no dependent

• children, spouse under 21 years and/or on AUSTUDY; and

• other married including married with dependent children.

The changes in proposed categories came in to effect as from 21 September 1990. They are as follows:

(a) Single beneficiaries aged 18 to 20 years would be divided into two categories:

(i) living at home; and

(ii) living away from home.

Category (i) would be entitled to a lower level of rebate than category (ii). However if they got the benefit after 30 June 1990 and before 21 September 1990 they would be entitled to the same level of rebate as category (ii).

(b) Married beneficiaries aged below 21 years who have no dependent children are to be entitled to the same level of rebate as single beneficiaries in the same age group.

(i) is aged less than 21 years; or

(ii) is in receipt of an AUSTUDY allowance

would be entitled to a lower level of rebate than those married with children; and

(d) Married beneficiaries aged over 21 years with spouse aged 21 years or over not in receipt of an AUSTUDY allowance would be entitled to the same level of rebate as those married with children.

Beneficiaries in category (b) or (c) who got the benefit after 30 June and before 21 September are entitled to the same level of rebate as those married with children.

A beneficiary eligible for more than one level of rebate is entitled to the rebate which gives the greatest benefit.

The rebates shade out at a rate of 12.5 cents for each dollar of taxable income in excess of the level of the appropriate shade-out threshold.

Details of the amending Regulations are set out below.

Commencement

Subregulation 1.1 proposes that the amendments to the Income Tax Regulations come into effect from 1 July 1990.

Amendment

Subregulation 2.1 states that the Income Tax Regulations are amended as set out in these regulations.

Interpretation

Regulation 3 amends a number of existing definitions in regulation 148 and provides some new definitions to be included in that regulation. Both the new and amended definitions are necessary for the operation of regulation 152.

Subreguulation 3.1 amends the definition of "dependant spouserate benefit" in regulation 148 to take account of amendments to Division 3 of the Social Security Act 1947. (Division 3 of that Act determines the rates of benefits and allowances under Part XIII of that Act). The term means an unemployment or sickness benefit for a married person:

(a) who:

- has turned 21

- has a spouse who has turned 21 and who does not get an AUSTUDY allowance or a prescribed pension as defined in the Regulations;

- does not have a dependent child;

(b) who has a dependent child;

The benefit, under paragraph 118(1)(f) of the Social Security Act, is now increased for eligible persons by subsection 118(2) or (2AA) of that Act, by an amount not exceeding the level of benefit provided by paragraph 118(1)(f).

The term also applies to other categories of rebatable benefit -including a special benefit payable under section 129 of the Social Security Act - if the benefit applies to married persons who meet the criteria set out in subparagraphs (a), (b) and (c) above.

The recipient of the benefit defined by the term will be entitled tee a beneficiary rebate determined under regulation 152. The term is necessary for the operation of regulation 152.

Subregulation 3.2 inserts a new definition, that of a "married person", which has the same meaning as in the Social Security Act. The term includes a de facto spouse but does not include a legally married person who is living separately and apart from the spouse of the person on a permanent basis. The term is used in the definition of "dependant spouse-rate benefit" as amended by amending regulation 2.1 in regulation 148. It is also used in amending regulation 3 which amends regulation 152.

Subregulation 3.3 amends the style of expression in the definition of "paragraph 118(1) (a) benefit" in regulation 148 by omitting the present definition and inserting a new definition.

Subregulation 3.4 amends the style of expression in the definition of "paragraph 118(1)(aa)-rate benefit" in regulation 148 by omitting the present definition and inserting a new definition.

Subregulation 3.5 amends regulation 148 to reflect amendments to the Social Security Act.

This subregulation omits the present definition of "118(1)(b) rate benefit" in regulation 148 and inserts a new definition which reflects the amendment of paragraph 118(1)(b) of the Social Security Act. The term means an unemployment or sickness benefit the level of which is specified in paragraph 118(1)(b) of that Act. The benefit is payable to a married person aged 16 or 17 who has no dependent child. The term will also include other categories of rebatable benefit including a special benefit under section 129 of the Social Security Act - where the recipient is a married person aged 16 or 17 who has no dependent children. The term is necessary for the operation of regulation 152.

The amending subregulation adds three new definitions to regulation 148.

"Paragraph 118(l)(ba)-rate benefit" means an unemployment or sickness benefit the level of which is specified in paragraph 118(1)(ba) of the Social Security Act. The benefit is payable to a married person aged 18 to 20 who has no dependent child. It will also include the other categories of rebatable benefit - including a special benefit paid under section 129 of the Social Security Act - where the recipient is married, aged 18 to 20 years and has no dependent children. The term is necessary for the operation of regulation 152.

"paragraph 118(1)(bb) - rate benefit" means an unemployment or sickness benefit the level of which is specified in paragraph 118(1)(bb) of the Social Security Act. The benefit is payable to an unmarried person aged 18 to 20 who has no dependent child and is living at home. It will also include the other categories of rebatable benefit - including a special benefit paid under section 129 of the Social Security Act - where the recipient is unmarried, aged 18 to 20 years, has no dependent children and is living at home with his or her parents. The term is necessary for the operation of regulation 152.

"paragraph 118(1)(bc) - rate benefit" means an unemployment or sickness benefit the level of which is specified in paragraph 118(1)(bc) of the Social Security Act. The benefit is payable to an unmarried person aged 18 to 20 who has no dependent child and is not living at home. It will also include the other categories of rebatable benefit - including a special benefit paid under section 129 of the Social Security Act where the recipient is unmarried, aged 18 to 20 years, has no dependent children and is not living at home. The term is necessary for the operation of regulation 152.

Subregulation 3.6 amends the style of expression in the definition of "paragraph 118(1)(c)-rate benefit" in regulation 148 by omitting the present definition and inserting a new definition.

Subreaulation 3.7 adds a new definition. "paragraph 118(1)(f)-rate benefit" means an unemployment or sickness benefit the level of which is specified in paragraph 118(1)(f) of the Social Security Act. The benefit is payable to a married person aged 21 and over who has no dependent child and whose spouse is under 21 and/or on AUSTUDY. It will also include the other categories of rebatable benefit -including a special benefit paid under section 129 of the Social Security Act - where the recipient is married, aged 21 years or over, has no dependent children and whose spouse is under 21 and/or a recipient of AUSTUDY. The term is necessary for the operation of regulation 152.

Subregulation 3.8 inserts a new definition, "prescribed pension" which has the same meaning as that term in the Social Security Act which means:

(a) an aged, invalid, wives' and carers' pension under Part IV ;

(b) a sole parent's pension under Part V;

(d) an unemployment, sickness or special benefit under Part XIII;

(e) a widowed person's allowance under Part VI;

(f) a sheltered employment allowance under Part XIV;

(g) a rehabilitation allowance under Part XVI; and

(h) a service pension, a wife's service pension or a carer's service pension under Part III of the Veterans' Entitlements Act 1986.

Regulation 4 of the amending regulations amends subregulation 152(5) which provides the basis of arriving at the component "annual benefit amount" to be used in the formulae in subregulation (2) and (3). Subregulation 152(2) provides a formula for calculation of the rebate thresholds above which the rebate shades-out. Subregulation 152(3) provides a formula for calculation of the rebate amount to which recipients of rebatable benefits are entitled.

Subregulation 4.1 omits existing paragraph 152(5)(a) of the Regulations and substitutes a new paragraph. This paragraph specifies the level of the "annual benefit amount" relating to a "dependant spouse-rate benefit"(defined by regulation 148 as amended). The annual benefit amount is the amount of benefit which would have been included in the assessable income if the taxpayer had received this benefit at the level paid by the Department of Social Security throughout the year of income. The level of benefit is that provided in paragraph 118(1)(f) of the Social Security Act as increased because of subsection 118(2) or (2AA) of that Act.

Subregulation 4.2 amends subparagraph 152(5)(c)(ii) of the Regulations to enable paragraph(5)(c) to specify the amount of the annual benefit amount where on 30 June of the income year the taxpayer is aged 16 or 17 years and received a benefit paid as:

(a) a "paragraph 118(1)(aa)-rate benefit" (paid where the taxpayer is unmarried, has no dependants and is living away from home or independent);

(b) a "paragraph 118(1)(b)-rate benefit" (where the taxpayer is married and has no dependent child); or

The amendment is necessary because of the amendment of the Social Security Act to include the new category of beneficiary in paragraph 118(1)(b) of that Act.

The amount of the annual benefit amount is the amount that would have been included in the assessable income of the taxpayer if he or she had received the benefit throughout the year of income at the level specified in paragraph 118(1)(aa) of the Social Security Act.

Subregulation 4.3 amends paragraph 152(5)(d) of the Regulations to enable paragraph 5(d) to continue to specify the annual benefit amount where on 30 June of the income year the taxpayer:

(a) a double orphan aged 16 or 17 years; and

(b) receives a living allowance under the Veterans' Children Education Scheme.

The annual benefit amount is the amount that would have been included in the taxpayer's assessable income if the unemployment benefit:

(a) specified in paragraph 118(1)(bc) of the Social Security Act for the year of income; and

(b) attributable to an unmarried person aged 18 to 20

- without dependent child; and

- living away from home;

had been received throughout the year of income.

Subregulations 4.4 and 4.5 amend subparagraph 152(5)(e)(ii) of the Regulations to enable paragraph (5)(e) to specify the amount of the annual benefit amount where on 30 June of the income year the taxpayer is unmarried, aged 18 to 20 years, has no dependent child and is living at home.

The amendment is necessary because of the amendment of the Social Security Act to apply to a new and different category of beneficiary in paragraph 118(1)(b) of that Act (married, aged 16 or 17 with no dependent child). Paragraph 118(i)(b) formerly applied to all recipients of unemployment benefits aged 18 to 20.

The annual benefit amount is the amount that would have been included in the assessable income of the taxpayer if an unemployment benefit the level of which is specified in paragraph 118(1)(bb) of the Social Security Act had been received throughout the year of income.

Subregulation 4.6 omits the existing paragraph 152(5)(f) of the Regulations. This paragraph applies to:

(a) a double orphan aged 20 years at 30 June in the income year; and

(b) who in 1989-90 received an amount paid as a living allowance under the Veterans' Children Education Scheme (VCES) at a level which applies to an unmarried unemployment beneficiary aged 21 and over.

In 1990-91, a double orphan VCES recipient who satisfies the above criteria will no longer be treated differently from other beneficiaries aged 20. Therefore it will no longer be necessary to make separate provision for this group.

Subregulation 4.6 inserts a new paragraph 152(5)(f). This paragraph specifies the annual benefit amount for a year of income of a taxpayer aged 18 to 20 years on 30 June in the income year who received:

• a paragraph 118(1)(ba)-rate benefit;

• a paragraph 118(1)(bc)-rate benefit; or

• a paragraph 118(1)(d) rate benefit;

and who is:

(a) married, with no dependent child [paragraph 118(1)(ba)-rate benefit];

(b) unmarried, with no dependent child and who is living away from home or independent [paragraph 118(1)(bc) - rate benefit]; and

Paragraph 152(5)(f) also specifies the level of annual benefit amount for a taxpayer aged 18 to 20 years, living at home and who began to receive the benefit after 30 June 1990 and before 21 September 1990. This person possesses the characteristics of a recipient of a paragraph 118(1)(bb)-rate benefit.

The annual benefit amount is the amount that would have been included in a taxpayer's taxable income for the year of income if the unemployment benefit specified in paragraph 118(1)(ba) or (bc) of the Social Security Act had been received throughout the year of income.

Regulation 4.7 inserts a new paragraph 152(5)(cfa) whichspecifies the annual benefit amount for a year of income for a taxpayer who:

(a) had, on 30 June in the year of income, turned 21; and

(b) is a married person who does not have a dependent child and who:

- has a spouse who has not turned 21 and/or who gets an AUSTUDY allowance or a prescribed pension;

- has assessable income for the year that includes an amount paid as a paragraph 118(1)(f)-rate benefit.

The annual benefit amount is the the amount that would have been included in the taxpayer's assessable income if the unemployment benefit, the level of which is specified in paragraph 118(1)(f) of the Social Security Act, had been received throughout the year of income.

Overview

The Income Tax Regulations (Amendment) (Beneficiary Rebates) 1991, enacted by the Australian Parliament, addresses the need to update the categories of beneficiaries eligible for tax rebates following amendments to the Social Security Act 1947. The objective of these amending regulations is to ensure that the Income Tax Regulations reflect the new categories of beneficiaries as determined by the Social Security and Veterans' Affairs Legislation Amendment Bill 1990, which came into effect on 21 September 1990. These changes aim to accurately determine the levels of tax rebates and rebate thresholds applicable to different beneficiary categories, thereby ensuring that the tax system operates efficiently and equitably in accordance with the most recent legislative changes. The regulations apply retrospectively to income years starting from 1 July 1990.

Scope and Application

The Income Tax Regulations (Amendment) (Beneficiary Rebates) 1991 applies to the regulation of income tax rebates for beneficiaries of social security benefits and allowances in Australia. These regulations amend the existing Income Tax Regulations to accommodate changes in the categories of beneficiaries eligible for tax rebates, effective from 1 July 1990. The changes are necessitated by amendments to the Social Security Act 1947 that were brought into effect on 21 September 1990. The regulations specify different levels of tax rebates for various categories of beneficiaries, including single and married individuals, and those with or without dependent children, living at home or away from home, and aged between 16 and 20 years. The regulations also cater to specific circumstances, such as individuals receiving unemployment benefits for six months or more, and spouses who are under 21 years of age or on AUSTUDY. The rebates shade out at a rate of 12.5 cents for each dollar of taxable income in excess of the appropriate shade-out threshold. The regulations further amend definitions and provisions in the existing Income Tax Regulations to reflect these changes, ensuring the correct calculation of rebate thresholds and amounts.

Key Provisions

The Income Tax Regulations (Amendment) (Beneficiary Rebates) 1991 No. 158 amends regulations 148 and 152 of Part 8 of the Income Tax Regulations to reflect changes in the categories of beneficiaries under the Social Security Act 1947, as amended by the Social Security and Veterans' Affairs Legislation Amendment Bill 1990. These changes became effective on 21 September 1990. Regulation 148 introduces new definitions and amends existing ones to incorporate the new beneficiary categories. For example, it defines a "dependant spouse-rate benefit" as an unemployment or sickness benefit for a married person meeting specific criteria, such as age and dependency status. Regulation 152 adjusts the formulae for calculating the "annual benefit amount" and the rebate thresholds and amounts, taking into account the new beneficiary categories and their respective benefits. The amendments ensure that the rebate thresholds and amounts are correctly applied to the new categories of beneficiaries. The amending regulations impose specific obligations on the parties involved. Beneficiaries must ensure they fall under the correct category as defined by the regulations to receive the appropriate level of tax rebate. Tax administrators and the Australian Taxation Office (ATO) must apply the new definitions and formulae to accurately calculate and apply the rebates. The new definitions and regulations must be incorporated into tax assessment processes, ensuring that all beneficiaries eligible for rebates under the amended regulations receive the correct amount. Additionally, taxpayers must declare the correct level of benefits received, aligning with the new categories and definitions. Breaches of the regulations may result in civil or criminal consequences, depending on the nature and intent of the non-compliance. For example, deliberately underreporting income or misclassifying benefits to receive an incorrect rebate may be considered tax evasion, which carries significant penalties. Under Australian law, tax evasion can result in both criminal charges and substantial fines. The penalties for tax evasion can include imprisonment, fines, or both, depending on the severity of the offence. Additionally, failure to declare income or benefits correctly may lead to civil penalties imposed by the ATO, such as additional taxes, interest on unpaid amounts, and administrative penalties. The specific penalties will depend on the amount of tax evaded and the circumstances of the non-compliance. It is crucial for all parties to adhere to the new regulations to avoid these potential consequences.

Area of Law: Taxation Law
Instrument: Regulation
Concepts: Definitions & Interpretation; Reporting & Disclosure Obligations; Regulatory Standards

Interactions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

Legislation content

Overview

Scope and Application

Key Provisions

Legal classification tags

Interactions

Authorises

All Versions