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Is the taxpayer eligible for a pensioner tax offset under section 160AAA of the Income Tax Assessment Act 1936 ('ITAA 1936') where they are in receipt of only a foreign pension?

No. The taxpayer is not eligible for a pensioner tax offset under section 160AAA of the ITAA 1936 where they are in receipt of only a foreign pension as it is not a rebatable pension.

The taxpayer is a resident of Australia.

The taxpayer receives a foreign sourced pension.

The taxpayer is not in receipt of an Australian sourced pension.

Subsection 160AAA(2) of the ITAA 1936 provides that if the assessable income of a taxpayer includes an amount of 'rebatable pension', they are entitled to a tax offset.

A 'rebatable pension' is defined in subsection 160AAA(1) of the ITAA 1936 as being a pension, allowance or benefit under: • the Veterans' Entitlements Act 1986 (VEA), other than Part VII of that Act; or • the Social Security Act 1991 (SSA)

As the taxpayer's assessable income does not include a pension payable under either the VEA or the SSA , the taxpayer is not in receipt of a 'rebatable pension'. Accordingly the taxpayer is not entitled to a pensioner tax offset under section 160AAA of the ITAA 1936.