§ Mr. Oakesasked the Chancellor of the Exchequer whether payments made to the mother of an illegitimate child under an affiliation order or an affiliation agreement are treated as unearned income for Income Tax purposes.
§ Mr. Harold Lever:Yes.
§ Sir E. Erringtonasked the Chancellor of the Exchequer why the Inland Revenue have ruled that a discharged Service man's pension is only exempt from Income Tax liability if he is discharged medically unfit by reason of a disability attributable to his service and is not allowed the exemption unless so discharged. even if he has been awarded a percentage disability pension; and if he will amend this rule to apply to disability pensions of any percentage attributable to service.
§ Mr. Diamond:A Forces disability pension is exempt from tax, but this exemption does not apply to a Service pension received together with a disability pension. It is the general rule that service pensions are taxable, and I see no reason to exempt Forces service pensions.