The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia.

1.1.S.250 Special reduction amount


This definition applies to all payments.


In reference to a military invalidity pension income stream for a year, a special reduction amount means the sum of the amounts that would be the tax free components of the payments received from the military invalidity pension income stream during the year, if it were assumed that the income stream is a superannuation income stream within the meaning of the Income Tax Assessment Act 1997.

Tax-free components are determined with reference to the Income Tax Assessment Act.

Note: If the income stream that is related to military service has a special reduction amount greater than 10% of the gross income, the special reduction amount is NOT capped at 10%.

However, if the Secretary makes a determination that an income stream is a military invalidity pension income stream, and that income stream is not related to military service, the special reduction amount is capped at 10%.

Act reference: SSAct section 1099AAA(1)-‘special reduction amount’

Policy reference: SS Guide Income test assessment of asset-test exempt income streams

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