Commonwealth Numbered Regulations - Explanatory Statements

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INCOME TAX ASSESSMENT AMENDMENT REGULATIONS 2004 (NO. 2) 2004 NO. 278

Section 266 of the Income Tax Assessment Act 1936 provides, in part, that the Governor-General may make regulations not inconsistent with the Income Tax Assessment Act 1997 (the Act), prescribing all matters which by the Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for giving effect to the Act.

Division 51 of the Act provides that certain items of ordinary and statutory income are exempt from income tax. Section 51-5 contains a table that lists various payments in respect of members of the Defence Force that are exempt from income tax. Items 1.1 and 1.2 in that table provide that payments of allowances or bounty of a kind prescribed in the regulations are exempt amounts.

Regulation 51-5.01 of the Income Tax Assessment Regulations 1997 provides a list of those allowances or bounties that are prescribed for the purposes of items 1.1 and 1.2 in section 51-5 of the Act. The descriptions of the allowances and bounties refer to the specific Determination under the Defence Act 1903 under which the allowance or bounty is payable, and the dates of application of the Determination.

Defence Determination 2003/21, issued on 28 July 2003, commenced on 1 August 2003. Defence Determination 2003/21 contains all the income tax exempt allowances currently available to Defence Force members. A number of the previously listed allowances have been consolidated into other allowances. These were the Education Assistance Overseas and Child Education allowances, consolidated with the Education Allowance; and the Living Out Allowance and the Living Out Away From Home Allowance, which have been consolidated and renamed Rent Allowance. The Re-engagement Bounty has been repealed.

The amending Regulations updated Regulation 51-5.01 to reflect the allowances contained in Defence Determination 2003/21, which are as follows:

(a) deployment allowance;

(b) disturbance allowance;

(c) education allowance (reimbursement of education costs for a child);

(d) scholarship allowance (reimbursement in place of child's scholarship);

(e) separation allowance;

(f) transfer allowance; and

(g) rent allowance (payable to a member without dependants or a member with dependants (separated) within the meaning of that Determination).

Subsection 48(2) of the Acts Interpretation Act 1901 provides that a regulation, or a provision of regulations, has no effect if it would take effect before the date of notification, and the rights or liabilities of a person (other than the Commonwealth) would be disadvantaged. Even though the amending Regulations applies to allowances paid on or after 1 August 2003, they were not made retrospectively, in that each substantive provision would take effect on the date on which they are notified in the Gazette.

Details of Regulations are as follows.

Regulation 1: Names Regulations.

Regulation 2: Provides that Regulations commence on gazettal.

Regulation 3: Provides that Schedule 1 amends the Income Tax Assessment Regulations 1997.

Schedule 1 - Amendments (regulation 3)

Item 1 - Regulation 51-5.01

Item 1 substitutes Regulation 51-5.01 to prescribe the following allowances, paid on or after 1 August 2003:

(a) a deployment allowance paid under Division 2 of Part 4 of Chapter 17 of the Determination;

(b) a disturbance allowance paid under Part 3 of Chapter 4 of the Determination;

(c) a reimbursement of education costs for a child paid under Part 1 of Chapter 5 of the Determination;

(d) a reimbursement in place of a child's scholarship paid under Part 2 of Chapter 5 of the Determination;

(e) a separation allowance paid under Part 2 of Chapter 4 of the Determination;

(f) a transfer allowance paid under Part 3 of Chapter 15 of the Determination; and

(g) a rent allowance paid under Division 5 of Part 1 of Chapter 7 of the Determination to a member without dependants or a member with dependants (separated) within the meaning of the Determination.

Item 1 also defines the meaning of Determination as Defence Determination 2003/21, Conditions of Service under the Defence Act 1903, as in force on 1 August 2003.

The Regulations commenced on gazettal.