Private ruling: Assessable income
Date of advice: 7 March 2015
Published: March 2015
Ruling period: Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you assessable on interest earned on disability support payments? | A1: 


Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5

Reasons for decision: Detailed Reasoning - Interest income: Under subsection 6-5(1) of the Income Tax Assessment Act (ITAA 1997) an amount is assessable income if it is ordinary income. Interest earned on money held in a bank account is usually ordinary income and assessable to the owner or owners of the bank account. In the present case, however, any interest accrued on funds deposited in a separate bank account disability funding. The disability funding is not taxable and therefore neither is the interest earned on these funds.

Relevant facts: You receive disability support funding from a government entity. | You have opened a separate bank account into which these funds would be deposited by the so that you would not confuse it with your own funds. | The money in the account is not you’re your own to be used as you like but for two specific services for which you are accountable.