Private ruling: Veterans' Affairs Pension
Date of advice: 2 July 2015
Published: July 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Is the pension that you receive from the Department of Veterans' Affairs taxable? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-20 | Income Tax Assessment Act 1997 Subsection 52-65(1) | Income Tax Assessment Act 1997 Subsection 52-65(4)

Reasons for decision: Summary: Subsection 6-20(2) of the Income Tax Assessment Act 1997 (ITAA 1997) allows for ordinary income to be exempt income for taxation purposes to the extent that the Act excludes it. Subsection 52-65(4) of the ITAA1997 at item 7.2 states that a veterans' affairs payment of the invalidity services pension to a person under pension age is exempt income for income tax purposes. In your case, you are under pension age and in receipt of a disability pension. The pension that you receive is classed as exempt income for taxation purposes and as such you are not taxed on this income.

Relevant facts: You are under retirement age and you are in receipt of a disability pension that is paid to you by the Department of Veterans' Affairs. You receive a special rate of payment due to your level of disability. | You are entitled to this payment under provisions of the Veterans' Entitlement Act 1986. | Tax is not withheld from the pension that you receive.