Private ruling: Income - assessable - honorarium
Published: August 2013
Ruling period: Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2013

Ruling: Q1: Is the payment you receive assessable? | A1: No

Relevant facts and circumstances: You are a member of a group. The term of the member appointment is up to three years. You perform duties as a member of the group. You receive $X per month from the group as an 'honorarium'. The purpose of the payment is to cover any expenses incurred by the members in undertaking their duties in that capacity. You have no formal contract or agreement with the group in relation to the member position held.


Reasons for decision: Summary: An honorarium is a payment or gesture made on personal grounds that is either tangible or intangible and can be referred to as an ex gratia payment, bona fide (or true) honorarium or gift. True honorariums are not included in assessable income. In determining whether an amount is ordinary income, the courts have established the following principles: · What receipts ought to be treated as income must be determined in accordance with the ordinary concepts and usages of mankind, except in so far as a statute dictates otherwise · Whether the payments received is income depends on a close examination of all relevant circumstances, and · Whether the payment received is considered income is an objective test. The following factors indicate a 'true honorarium'. · The payment is received for personal reasons · The payment has no connection to the recipient's income earning activities or services rendered · The payment is not received as remuneration or a consequence of employment · The payment is not relied upon or expected by the recipient for day-to-day living · The payment is not legally required or expected · There is no obligation on the part of the payer to make the payment, and · The payment is a token amount compared to the services provided or expenses incurred by the recipient. In your case, the payment is made to cover expenses incurred in performing the tasks required as a member of the group. The payment made would be considered a token amount compared to the services you provide and the expenses you incur. The payment is not legally required to be made by the group and although it is paid on a regular basis it would not be considered to be relied upon or expected for day-to-day living. The payment you receive from the group would be considered an honorarium and therefore would not be assessable income.