Private ruling: Excepted income
Published: May 2014
Ruling period: Year ended 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you an excepted person under subsection 102AC(2) of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: No

Relevant facts and circumstances: You previously received an Allowance but were recently disqualified due to not meeting the criteria. You have provided a medical certificate, which states you have a medical condition and thus you meet the definition of a 'disabled child' under the Social Security Act 1991 .

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

Reasons for decision: Summary: Division 6AA of the ITAA 1936 taxes at higher rates the income of certain children who are deemed to be a 'prescribed person'. Subsection 102AC(2), therein, provides a person will be an 'excepted person' (i.e., not a prescribed person) for Division 6AA if: (c) the minor is a person: (i) in respect of whom a carer allowance under the Social Security Act 1991 was payable in respect of a period that included the last day of the year of income; or (d) the Commissioner: (i) has received a certificate issued by a legally qualified medical practitioner certifying that the minor is: (B) a disabled child, or a disabled adult, within the meaning of Part 2.19 of the Social Security Act 1991 ; and… (ii) is satisfied that, on the last day of the year of income, the minor was a person of the kind mentioned in sub-subparagraph (i)(A)… The phrase 'within the meaning' is not defined within income tax legislation or case law; as such, it will take on its ordinary meaning. It follows we consider paragraph 102AC(2)(d)(i)(A) of the ITAA 1936 to refer to a disabled child who has an intensity of disability equivalent to that which meets the eligibility criteria to receive the Carers Allowance within the intention of Social Security Act 1991 . In other words, we consider the phrase: "within the meaning of Part 2.19" to mean within the meaning of the whole of Part 2.19 of the Social Security Act 1991 , which includes its section 953 (about eligibility criteria for a carers allowance), rather than merely within the limits of its section 952 (about the definition of a disabled child). Therefore, when combining sections 952 and 953, the meaning of "disabled child" for the purposes of Part 2.19 of the Social Security Act 1991 is: "disabled child" means a person aged under 16 who: (a) has a physical, intellectual or psychiatric disability; and (b) is likely to suffer from that disability permanently or for an extended period. and either of the following conditions apply; (i) the disability from which the care receiver is suffering is declared, under subsection 38E(3), to be a recognised disability for the purposes of this section; (ii) the person has been given a qualifying rating of intense under the Disability Care Load Assessment (Child) Determination for caring for the care receiver; and In your case, we accept that you suffer from a medical condition and may suffer from it for an extended period of time. However, as it appears your medical condition is not a recognised disability for Carer Allowance, we consider you do not satisfy the conditions necessary to be a 'disabled child' within the meaning of part 2.19 of the Social Security Act 1991 . Accordingly, you are not an excepted person under subsection 102AC(2) of the ITAA 1936.