Senate Foreign Affairs, Defence and Trade Legislation Committee
Department of Veterans' Affairs
20 November, 2013
Senator WRIGHT: I am asking a question about cases where Australian Defence Force personnel are injured during deployment and they lose the tax exemption that would normally apply during their deployment under section 23AD of the taxation act. Is that a scenario that people in the department are familiar with? I imagine it is.
Mr Carmody: Yes, it is a scenario that we are familiar with. When members of the Australian Defence Force are returned from operations early, whether they are injured or ill, their allowances seek and their tax status changes as well. In terms of their allowances, if they are wounded, injured or ill, we pay the allowance up until the time they would normally have come back.
In terms of the tax treatment, there has been quite a lot of discussion about this over the last 12 months or so. Both we and Defence have been working with the ATO. It started out with a private ruling for one member who managed to recoup his tax status for the period that he would have been away. Defence and DVO were both working with the ATO on this. We have stepped back and Defence are taking the lead now looking for a ruling from the ATO, which I understand is in process. I cannot say exactly what the ruling will be, but I understand it is in line with that individual's determination, and everyone is working towards a situation where the allowances and the tax status will be harmonised.
Senator WRIGHT: That is good to hear. Then maybe I need to put the question on notice to Defence to get some clarity about that, if they are taking the running on it. I wonder if you could help me with this particular aspect, but you may not be able to. I was interested in knowing the number of defence force personnel affected by this particular feature of the taxation system in each of the last four financial years. But I imagine that would perhaps be something Defence would have the statistics about and not DVA.
Mr Carmody: I think they would have the statistics. We would probably have them in a slightly different way in terms of those who had put in a claim with us. But it is possible someone did not put in a claim with us, so Defence I assume would know who has returned early from operations, and they would be able to give you a number. But unfortunately I cannot do that.
Senator Ronaldson: Why don't we give you what we have got—
Senator WRIGHT: Thank you. If you could take that on notice and give me what you can.