:
"The salary and allowances of ADF members on warlike service are exempt from tax under section 23AD of the Income Tax Assessment Act 1936 (ITAA). The foreign income of personnel on non-warlike service, in common with all other Australian citizens, may be exempt under section 23AG of the ITAA subject to certain conditions. Although referred to as an exemption, the section 23AG provision effectively recognises the tax liability a person has in the foreign jurisdiction and that he/she should not be taxed twice.
The Family Assistance Office has confirmed the intention is to capture all tax exempt income of Australian citizens who receive an exemption under section 23AG (and section 23AF) of the ITAA. Only those Australian Defence Force personnel on non-warlike operations will therefore be affected by this change. Entitlements subject to an exemption under section 23AD, warlike service, do not fall within the definition of 'exempt foreign employment income' included in the Income Tax Assessment Act 1997 and therefore cannot be included in the Family Assistance Office assessement".