“Adjusted Taxable Income” is an income formula used as a means test to determine eligibility for several tax offsets calculations, concessions and Centrelink benefits.
As the name suggests, the Adjusted Taxable Income formula begins with Taxable Income, then adds or subtracts various specific items of adjustment to arrive at a single income figure.
Other formulations of income used to test or limit eligibility, including income for Medicare levy surcharge purposes and rebatable income, are listed below.Change to Adjusted Taxable Income Formula in 2017
The government has adjusted the formula for the inclusion of the value of fringe benefits in Adjusted Taxable Income.
The meaning of ‘adjusted fringe benefits total’ is modified so that the gross value rather than adjusted net value (previously 51%) of reportable fringe benefits is used, except for PBIs, hospitals and charities.
‘adjusted fringe benefits total’ is a component of Adjusted Taxable Income
This affects eligibility for:
family tax benefits, stillborn baby payment,child care benefit, Youth Allowance, Abstudy and Isolated Children’s Allowance
parental leave pay and dad and partner pay
low income superannuation contribution payment
net medical expenses offset
dependant (invalid and carer) (DICTO) tax offset
Notional dependent’s offset for the Zone & overseas personnel tax offsets
For details of the amending legislation see Budget Savings (Omnibus) Act 2016 (Schedule 15). The measures received royal assent on 16 September 2016 and according to its terms therefore take effect from 1 January 2017 for family assistance payments and for income tax tests from 1 July 2017.
This page was last modified on 23 Aug 2017