Issue
Is an undeducted contributions component of an Eligible Tax Payment (ETP) included in 'adjusted savings and investment income' under paragraph 35(3)(c)of the A New Tax System (Bonuses for Older Australians) Act 1999 (BOA Act)?
Decision
No. The undeducted contributions component of an ETP is not included in 'adjusted savings and investment income' under paragraph 35(3)(c) of the BOA Act because undeducted contributions are not assessable income under sections 27B or 27C of the Income Tax Assessment Act 1936 (ITAA 1936).
Facts
The taxpayer is eligible for the 'aged persons savings bonus component' of the bonus payment for older Australians.
The taxpayer received an ETP which included undeducted contributions.
Reasons for Decision
Paragraph 35(3)(c) of the BOA Act includes in adjusted savings and investment income so much of the amount of any eligible termination payments (as defined in section 27A of the ITAA 1936) made to the individual as is included in the individual's assessable income under sections 27B or 27C of that Act.
Neither section 27B nor 27C of the ITAA 1936 include undeducted contributions in assessable income. Accordingly, undeducted contributions do not form part of the taxpayer's 'adjusted savings and investment income' for the purposes of paragraph 35(3)(c) of the BOA Act.