VANZ News Issue 4
GST Compensation Package
With the increase of GST from 12.5 percent to 15 percent on 1 October 2010, many veterans have enquired why their War Disablement Pension did not attract the GST Compensation Package.
War Disablement Pensions are tax exempt and are not an income support payment. They are a compensatory payment paid as a periodic payment and are paid in addition to income and not counted as income when assessments are made for other income and asset based entitlements.
As a consequence, the GST compensation package has not been applied to War Disablement Pensions.
The GST compensation package has been applied to the main benefits that a veteran might receive; Veterans’ Pension, New Zealand Superannuation, Disability Allowance, tax credits (paid through working for families) and Government Superannuation Fund payments.
War Disablement Pensions are indexed against the Consumers Price Index (CPI) as a means of maintaining the value of the payment. The 1 April 2011 CPI indexation will take into account the impact of the GST rise.