DAY BY DAY.
The Full Court decided that a super,-
Taxation and Superannuation.
annuation allowance is not earned within the meaning of the . statute, and is, therefore, taxable as
unearned Income. The judgment conceded that superannuation allowance “is a payment. . . in consideration of the services rendered,” but it was held by their Honours that this was not sufficient to bring it within the meaning of “earned” as defined in the Act. Briefly stated, the statutory meaning of the term “earned income” differs from that ordinarily accepted. Attention 'having been drawn to this difference, it Is probable that the issue will not be allowed to rest with a judgment of the Full Court (says the Evening Post) but that an attempt will be made to induce Parliament to amend the definition. If a special exemption is made for superannuation amendment will be a simple matter; but can the exemption be fairly limited in this way? What is the position of those persons who, for their retiring allowances and provision for old age, must depend upon their own savings, with no State subsidy such as that paid upon superannuation funds? The average man has no superannuation fund to fall back upon. He must make his own provision by saving a few pounds and investing those savings. If he is fortunate, and thrifty, he may accumulate sufficient to enable him to live upon the return from these investments. But the State does not help him with subsidies. Instead, it insists that while his earnings are accumulating the interest paid upon them shall be subject to income tax. and taxed as “unearned income.” Even if the savings are only two or three hundred pounds in the Savings Bank, the Taxation Department takes its toll. We are not criticising the Department. While the law stands as it does now, the officers are bound to administer it without favour. It is admitted also that there is difficulty in distinguishing between interest upon investments which result of thrift and the income wnioM is wholly unearned. Distinction may involve an investigation as to the source of the capital fund.
But the present exaction is in no way an encouragement of thrift, and it is most exasperating to the person who is trying to save. Rightly or wrongly, the Savings Bank depositor feels that he is being put upon. It should not be beyond the power of the Legislature to devise a system which would avoid some part of this irritation.
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Bibliographic details
Waikato Times, Volume 99, Issue 16485, 2 May 1925, Page 4
Word Count
412DAY BY DAY. Waikato Times, Volume 99, Issue 16485, 2 May 1925, Page 4
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