Section 34 — Veterans' Entitlements Act 1986: Payment and income tax consequences of receiving service pension or income support supplement at rate affected by clause 30

Application (1) This clause applies if clause 30 affects the rate at which service pension or income support supplement is payable to a person. Purpose (2) The purpose of this clause is to ensure that the person is treated appropriately in relation to the payment, and income taxation, of the pension or supplement by modifying the operation of this Act (and thus affecting the related income tax law) in relation to the person and the pension or supplement. Note: This clause does not modify the operation of subsection 5GA(3), which provides for working out the person’s minimum pension supplement amount. Pension supplement amount (3) This Act applies in relation to the person’s pension or supplement as if each of the following: (a) the amount described in subparagraph 30(4)(a)(i), as affected by any indexation and any relevant reduction described in paragraph 30(4)(a); (b) the amount described in subparagraph 30(6)(a)(i), as affected by any indexation and any relevant reduction described in paragraph 30(6)(a); were an amount worked out and added under the pension supplement Module of the Rate Calculator. Note 1: One effect of subclause (3) is that whichever of the amounts described in paragraphs (3)(a) and (b) is relevant is the person’s pension supplement amount (as defined in subsection 5Q(1) of this Act). Note 2: If that amount exceeds the person’s pension supplement basic amount (as affected by subclause (4)), another effect of subclause (3) is that the excess affects the tax-exempt pension supplement under subsection 5GA(5) of this Act in some cases. Note 3: Yet another effect of subclause (3) is that clause 4 of Schedule 6 will affect the operation of reductions of the maximum payment rate because of the income test and assets test in some cases. Pension supplement basic amount (4) This Act applies in relation to the person’s service pension or income support supplement as if: (a) each reference in the table in subsection 5GA(4) to $509.60 were a reference to $14,903.20; and (b) the reference in the table in subsection 5GA(4) to $426.40 were a reference to $12,448.80. Note 1: This affects the person’s pension supplement basic amount. Note 2: The provisions for indexing amounts in the table in subsection 5GA(4) apply to the higher figures mentioned in this subclause. Energy supplement (5) If subclause 31(1) or (2) is relevant to the person, this Act applies in relation to the person’s service pension as if the person’s energy supplement (if any) resulting from Module BB of the Rate Calculator were used to work out the rate of the person’s service pension. Note 1: This energy supplement is included in the total worked out under paragraph 30(4)(a) (see subparagraph 30(4)(a)(ia)). Note 2: Subclause (5) causes section 62E to apply. If quarterly energy supplement is payable, then no energy supplement will be available to be included in the total worked out under paragraph 30(4)(a) (see point SCH6-BB2 of the Rate Calculator). Note 3: Other effects of subclause (5) include: (a) the possibility of the minimum amount of fortnightly instalments of the pension being affected under section 58A; and (b) clause 4 of Schedule 6 affecting the operation of reductions of the maximum payment rate because of the ordinary/adjusted income test and assets test.