Credit abatement

Heading: substituted, on 1 April 2008, by section 476(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

MD 13 Calculation of family credit abatement
When this section applies

(1)

This section applies for the purposes of section MD 1 to determine the amount of a person’s family credit abatement for an entitlement period.

Formula

(2)

The formula is—

full-year abatement × days ÷ 365.

Definition of items in formula

(3)

In the formula,—

(a)

full-year abatement is,—

(i)

if the person has no spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitlement period is more than $42,700, 25 cents for each complete dollar of the excess; or

(ii)

if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for the relationship period containing the entitlement period is more than $42,700, 25 cents for each complete dollar of the excess:

(b)

days is the number of days in the entitlement period excluding the days of any calendar months in which the person receives protected family tax credit as described in section MD 14.

When 70-day period crosses 2 tax years and parental tax credit paid in instalments

(4)

If a person who qualifies under section MC 2 (Who qualifies for entitlements under family scheme?) receives instalments of the parental tax credit in a 70-day period that crosses 2 tax years, the formula is applied so that—

(a)

instalments of the parental tax credit received in the first tax year are abated against the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year; and

(b)

instalments of the parental tax credit received in the second tax year are abated against the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year.

When 70-day period crosses 2 tax years and parental tax credit paid in lump sum

(4B)

If a person who qualifies under section MC 2 has a 70-day parental entitlement period that crosses 2 tax years and the person receives a lump sum payment of the parental tax credit for the tax year of the birth, then—

(a)

an additional amount of parental tax credit abatement for the tax year of the birth is calculated under section MD 16, based on the number of days that are—

(i)

in the parental entitlement period; and

(ii)

in an entitlement period in the tax year following the tax year of the birth; and

(b)

the formula in subsection (2) should not be used to calculate an amount of parental tax credit abatement for the days described in paragraph (a), except for the purposes of determining the amount of parental tax credit abatement for the single day described in section MD 16(3)(a)(ii).

Order in Council increasing amount

(5)

In subsection (3)(a), the amounts appearing as the amount of the threshold may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).

Defined in this Act: amount, civil union partner, de facto partner, entitlement period, family credit abatement, family scheme income, parental tax credit, protected family tax credit, relationship period, spouse, tax year

Compare: 2004 No 35 s KD 2(6), (7)

Section MD 13(3)(a)(i): amended (with effect on 1 July 2018), on 18 March 2019, by section 238(1) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).

Section MD 13(3)(a)(ii): amended (with effect on 1 July 2018), on 18 March 2019, by section 238(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).

Section MD 13(3)(b): amended, on 1 April 2008, by section 476(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 13(4) heading: replaced (with effect on 1 April 2014), on 30 March 2017, by section 173(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section MD 13(4) heading: amended, on 1 April 2015 (applying for dependent children born on or after that date), by section 8(1) of the Taxation (Parental Tax Credit) Act 2014 (2014 No 28).

Section MD 13(4): amended (with effect on 1 April 2014), on 30 March 2017, by section 173(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section MD 13(4): amended, on 1 April 2015 (applying for dependent children born on or after that date), by section 8(2) of the Taxation (Parental Tax Credit) Act 2014 (2014 No 28).

Section MD 13(4): amended, on 27 February 2014, by section 117 of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).

Section MD 13(4B) heading: inserted (with effect on 1 April 2014), on 30 March 2017, by section 173(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section MD 13(4B) heading: amended (with effect on 1 April 2015 and applying for dependent children born on and after that date), on 30 March 2017, by section 173(4) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section MD 13(4B): inserted (with effect on 1 April 2014), on 30 March 2017, by section 173(3) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section MD 13(4B): amended (with effect on 1 April 2015 and applying for dependent children born on and after that date), on 30 March 2017, by section 173(5) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section MD 13(5): amended, on 30 March 2017, by section 173(6) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).

Section MD 13 list of defined terms protected family support: repealed, on 1 April 2008, by section 476(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 13 list of defined terms protected family tax credit: inserted, on 1 April 2008, by section 476(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).