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Item IT3 - Tax-free government pensions

See Income Test item 3 on the ATO website.

Did you receive a tax-free government pension or benefit during the income year?

For a list of Government pensions and allowances refer to the Special circumstances and glossary on the ATO website.

Label U - Tax-free government pernsions

You must use the Tax worksheet at this item (IT3 Tax-free Government pensions worksheet (tgp)) to record a non-zero amount.

If you need to record a zero amount, at label U click the checkbox.

The worksheet separates Centrelink and DVA payments from those made under the Military Rehabilitation Act. This is important for partnered taxpayers when completing the spouse details items.

The "Tax-free Government Pensions amount" is not included in taxable income and therefore is not subject to income tax or to the Medicare levy. It is used solely in the income tests for Adjusted Taxable Income (ATI) for the purposes of discerning eligibility to the dependency tax offsets (T4 and T6).

Items IT1 to IT8 must have a value, even if zero. MYOB Tax will check IT5 and IT6 where income entered at various labels in the return have pre-filled the worksheets. For other items if there is no amount to be disclosed at these items, you must tick the checkbox for MYOB Tax to default a zero at those fields. [F3] validation message V2721 will be generated if this has not been done.

To indicate a zero amount at label U, click the checkbox.

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