NO. 57

EMBARGO Budget. Not for release before 7.30 pm AEST, 13 May 1997.

PROVISIONAL TAX EXEMPTION FOR PENSIONERS

Financial Implications ($m)

Explanation

The Government is announcing the provisional tax exemption thresholds to apply for pensioners in respect of the 1997­98 income year.

Each year new levels of provisional tax exemption thresholds are set for single­rate, partnered­rate and partnered­illness­separated­rate pensioners. Generally, the thresholds for a year of income are the cut­out thresholds for the pensioner rebate (ie the level of taxable income at which the rebate reduces to nil) for the previous year.

Pensioners will not be liable for 1997­98 provisional tax where:

• the 1996­97 taxable income of a single pensioner is less than $21,377;
• the combined taxable income for 1996­97 is less than $33,368 for a pensioner couple receiving the partnered­rate pension; and
• the combined taxable income for 1996­97 is less than $41,116 for a pensioner couple receiving the separated­rate pension (where the pensioners live apart as a result of illness or infirmity).

Pensioners who qualify for a full or partial pensioner rebate in 1996­97 will therefore be exempt from 1997­98 provisional tax.

For the purpose of determining whether a pensioner is eligible for a provisional tax exemption, bonuses received from friendly societies or insurance companies are excluded from taxable income.

The above material is a full extract of the description of the measure as contained in Budget Paper No 2: Budget Measures 1997-98. This paper explains all outlays and revenue measures, and is available from the Treasury Internet site at Budget Paper 2.