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No. An amount received under the pension loans scheme is not assessable income.

The pension loans scheme is designed to assist people whose entitlement to a pension under the Social Security Act 1991 is reduced because of their financial situation.

If a person participates in the pension loans scheme the pension otherwise payable is supplemented by additional payments.

Under the legislation, the additional payments together with a commercial rate of interest on the payments become a debt owed by the person to the Commonwealth.

We take the view that payments in the particular circumstances of the pension loans scheme, are in the nature of loans and do not constitute assessable income.

This Determination involves a change in our view outlined in Taxation Ruling TR 2413 which is now withdrawn.

Amendments to the Social Security Act 1991 relating to the pension loans scheme have been outlined in the Social Security and Veterans' Affairs Legislation Amendment Act 1995. The views expressed in this Determination will apply to the scheme in operation under the amending provisions.