Private ruling: Lump sum compensation
Date of advice: 18 June 2020
Published: August 2020
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the amount the lump sum compensation pursuant to section 56 and 58 of the Return to Work Act 2014 (SA), be included in your assessable income? | A1: No

Relevant facts and circumstances: You sustained compensable disabilities said to have arisen from your employment. You will receive a lump sum compensation for loss of future earnings pursuant to section 56 and 58 of the Return to Work Act 2014 (SA). Relevant legislative provisions Income Tax Assessment Act 1997 Section 6-5 Income Tax Assessment Act 1997 Section 15-30


Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with receipts of ordinary income. It does not operate to include in assessable income amounts of a capital nature. The money to be received will be capital in nature and therefore not assessable income. The other applicable sections, section 15-30 of the ITAA 1997 and the capital gains tax provisions of the ITAA 1997, also will not operate to make the payment assessable. Therefore, the payment you receive will not be included in your assessable income.