Veteran Superannuation Invalidity Benefits are not paid for life, and Government can review or cancel them at any time up to the age of 55. They should not be taxed as if they are a permanent benefit.
Because of a Federal Court case – known as Douglas – some veteran superannuation invalidity benefits are taxed properly as reviewable benefits.
Other veteran superannuation invalidity benefits continue to be taxed as if they are permanent benefits. This includes the newest and youngest veterans and Defence Force members who are covered by the ADF Cover scheme.
The Government has introduced legislation – Schedule 9 of the Treasury Laws Amendment (2022 No 4) Bill – that ensures those younger veterans who are injured and receive invalidity benefits, will forever be taxed as if they are permanent benefits.
Older veterans who started receiving veteran superannuation (DFRDB and MSBS) invalidity benefits before 20 September 2007 will continue to be taxed as if they are receiving permanent benefits.
All veteran superannuation invalidity benefits should receive the same tax treatment provided by the Douglas Case, regardless of which scheme or when payments commenced.
If passed, this legislation will entrench unequal and unfair taxation between injured veterans who receive the same invalidity benefits.
How Can You Help?
You can write to your local Member of Parliament and state Senators. Politicians don’t pay much attention to form letters, so here are some tips on how to write to your MP or Senator.
Tell them that:
Schedule 9 of the Treasury Laws Amendment (2022 No 4) Bill should not be passed.
And that the Government must develop and pass legislation that ensures all veteran superannuation invalidity benefits receive the same tax treatment provided by the Douglas Case, regardless of which scheme or when payments commenced.
You can include a link to this page dfwa.org.au/drop-schedule-9 for the details.
You can read more about Veteran Superannuation Invalidity Benefits Taxation and the Douglas Case here.