Private ruling: WA cost of living rebate
Date of advice: 9 June 2021
Published: August 2021
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the WA Cost of Living rebate assessable income in the hands of the recipients? Answer No, the WA Cost of Living rebate is not assessable income in the hands of the recipients.

Relevant facts and circumstances: The COLR is an annual payment made to WA Senior card holders and is made to approximately 310,000 seniors in WA every year. The COLR is paid only to eligible seniors. It was introduced by the WA government as a replacement to a similar Commonwealth payment which no longer received funding. The other purpose of the payment was to counteract the effects of the high inflation during the WA mining boom (2006-2010). It was designed to: • Help the elderly on a fixed income who dramatically felt the rise in living costs. • COLR is not an automatic entitlement and Seniors must apply. It is then paid automatically thereafter. • There is a different rate for singles and couples. • It is paid in one instalment as an EFT to the Senior's nominated back account in July every year. In 2009, the ATO provided advice about the taxation treatment of the COLR to the WA Department of Communities when the payment was introduced. At that time, we concluded that the factual matrix supported a finding that the COLR was a one-off payment, paid in four instalments that was in the nature of a gift or windfall (and therefore not taxable). On the basis of the information provided in 2009, we did not consider that the four payments, were in the nature of income (as outlined by Dixon and other leading cases) because there was no relevant connection to employment or the provision of services nor were there other indicia of income. Further, we concluded that receipt of the payments did not result in a Capital Gains Tax (CGT) event. The 2009 ATO advice was based on the Cost of Living Rebate being a one-off payment made in four instalments. Each successive WA Government has continued to make the annual COLR payment to eligible WA seniors. However, each administration can choose whether or not to continue the payment of COLR. The current WA government has no present intention to change the payment. The rebate amount for the 2020 payment was $91.51 for singles and $137.22 for couples.

Relevant legislative provisions: Section 6-5 Income Tax Assessment Act 1997 (ITAA 1997).


This ruling applies for the following period periods :