1.1.D.44 Deductible amount
This definition applies to all payments.
In reference to a defined benefit income stream for a year, a deductible amount means the sum of the amounts that are the tax free components of the payments received from the defined benefit income stream during the year.
The tax-free component is determined with reference to the Income Tax Assessment Act 1997 and the Income Tax (Transitional Provisions) Act 1997.
Note: From 1 January 2016, the deductible amount is capped at 10% of the gross income from the income stream. This means if the income stream has a tax-free component greater than 10% of the gross income from the income stream, the deductible amount for social security purposes is 10% of the gross income from the income stream.