The Assistant Treasuer, Senator Rod Kemp, today announced the Pay As You Go (PAYG) instalments exemption thresholds to apply to pensioners and persons in receipt of low income aged persons rebate in respect of the 2000-2001 income year.
PAYG is part of the New Tax System – a range of tax reforms that will benefit Australia. PAYG instalments is a system for businesses and individuals to pay instalments of their expected tax liability on their business and investment income for the current year.
In the past, pensioners receiving a pensioner rebate have generally been exempted from paying provisional tax. With the introduction of PAYG instalments, which abolishes provisional tax and the ‘uplift’ factor, this same concession continues. As from 2000-2001 income year, aged persons in receipt of low income aged persons rebate will also be exempt from paying PAYG instalments. Taxpayers who were entitled to the pensioner rebate or the low income aged persons rebate on their most recent income tax assessment will be exempted from paying PAYG instalments.
Social Security Pensioners who received the standard 26 fortnights pension and aged persons in receipt of low income aged persons rebate will not be liable for 2000-2001 PAYG instalments where:
- the 1998-1999 taxable income of an aged person or a single pensioner did not exceed $22,313. For single pensioners and aged persons who have received their 1999-2000 income tax assessment, this threshold rises to $23,054; or
- the combined taxable income for 1998-1999 for partnered low income aged persons or a pensioner couple receiving the partnered rate pension did not exceed $34,980. Where the couple has received their 1999-2000 income tax assessments this threshold rises to $36,280; or
- the combined taxable income for 1998-1999 for a low income aged couple living apart or a pensioner couple receiving the separated rate pension (where the pensioners or aged persons live apart as a result of illness or infirmity) did not exceed $42,988. This threshold rises to $44,496 where the couple has received their 1999-2000 income tax assessments.
The Department of Veterans’ Affairs pensioners will not be liable for 2000-2001 PAYG instalments where:
- the 1998-1999 taxable income of a single pensioner did not exceed $22,313. For single pensioners who have received their 1999-2000 income tax assessment, this threshold rises to $24,263; or
- the combined taxable income for 1998-1999 did not exceed $34,980 for a pensioner couple receiving the partnered rate pension. This threshold rises to $38,334 where the couple has received their 1999-2000 income tax assessments; or
- the combined taxable income for 1998-1999 did not exceed $42,988 for a pensioner couple receiving the separated rate pension (where the pensioners live apart as a result of illness or infirmity). This threshold rises to $46,836 where the couple has received their 1999-2000 income tax assessments.
The Australian Taxation Office will be writing individually to those Social Security pensioners who changed their payday during the year. Those people will be individually informed of their thresholds.
Taxpayers will not have to pay PAYG instalments when the New Tax System commences on 1 July 2000 if:
- they qualified for a full or partial pensioner rebate or low income aged persons rebate in the 1998-1999 income year, or
- they have received their 1999-2000 income tax assessment and qualified for a full or partial pensioner rebate or low income aged persons rebate for that income year.
For the purpose of determining whether a taxpayer is eligible for exclusion from PAYG instalments, bonuses received from friendly societies or insurance companies are excluded from taxable income.
CANBERRA
13 April 2000
Media contacts: Richard Allsop Assistant Treasurer’s Office (02) 6277 7360 Ranjeet Reddy Australian Taxation Office (Thresholds) (02) 6216 2249 Richard Abbey Australian Taxation Office (PAYG) (02) 6216 2149