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Wednesday, 29 June 1994
Page: 2225

Senator PATTERSON (11.12 a.m.) —The government's amendments will mean that from 1 January 1995 the income test for family payment and the income test for underage jobsearch allowance and sickness allowance will be amended so that certain tax deductible expenses on rental property are included as income. This measure follows from a decision in the 1992 budget to add back to taxable income the value of certain employer provided fringe benefits for the purposes of applying the income tests for those same payments.

  Currently, the income test for the family payment is based on taxable income as defined in the Income Tax Assessment Act 1936. Under the tax act, the benefits of negative gearing are allowed in assessing income for tax purposes. However, when taxable income is used for determining income for social security purposes, those people who have negatively geared benefit unfairly. The government amendments will mean that deductions used for negative gearing will be included as income for social security purposes. The amendments, if passed, will result in what we believe is a more equitable assessment of income for social security purposes and better targeting of government plans. The coalition will be supporting these amendments.