Private ruling: Child income from Transport Accident Commission
Published: August 2014
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019
Date scheme commenced: 1 July 2012

Ruling: Q1: Are the income benefits paid to you from the Transport Accident Commission excepted income under subsection 102AE(2) of the Income Tax Assessment Act 1936 (ITAA 1936)? Answer: Yes

Relevant facts and circumstances: You are receiving periodic payments from the Transport Accident Commission in relation to your deceased parent and will do so until you turn 18 years old.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 102AE

Reasons for decision: Summary: Under Division 6AA of the Income Tax Assessment Act 1936 (ITAA 1936), special higher rates of tax apply to certain income derived by prescribed persons who are under 18 years of age (referred to as minors). However, subsection 102AE(2) of the ITAA 1936 sets out the limited circumstances in which certain forms of income are deemed to be 'excepted assessable income'. If income is excepted assessable income it is taxed at normal rates and the higher rates of tax under Division 6AA do not apply. Subsection 102AE(2) states that excepted assessable income includes 'employment income'. Taxation Determination TD 92/133 deals with the application of Division 6AA to weekly compensation payments made under workers' compensation legislation to a dependent child of a deceased employee (who died as a result of an accident). It states: We consider that weekly compensation payments…are received in the form of a pension and are therefore within…the definition of 'salary or wages'…the compensation payments are therefore employment income and the special rates of tax set down in Division 6AA do not apply. Periodic payments made under other accident or compensation legislation (e.g. section 59 of the Transport Accident Act 1986 ) to dependent children of deceased persons are also considered to be a pension and are taxed at normal rates. In your case, your income benefits paid to you from the Transport Accident Commission are pension or employment income and thus excepted income under subsection 102AE(2) of the ITAA 1936.