Private ruling: the assessability of your compensation payments
Date of advice: 17 August 2015
Published: August 2015
Ruling period: Year ended 30 June 2015.
Date scheme commenced: 1 July 2014.

Ruling: Q1: Will the amounts or any portion thereof to be paid pursuant to sections 67 and 76 of the Workers' Compensation and Injury Management Act 1981, be included in your assessable income? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 15-30 | Income Tax Assessment Act 1997 Section 118-37

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. Additionally, as the criteria in subsection 82-135(i) of the ITAA 1997 is satisfied the payment is excluded from being an Eligible Termination Payment. The other applicable sections, section 15-30 of the ITAA 1997 and section 118-37 of the ITAA 1997, also will not apply to make the income assessable. Therefore the payments you receive will not be included in your assessable income.

Relevant facts: You sustained compensable disabilities said to have arisen from your employment. | You will receive a redemption offer pursuant to sections 67 and 76 of the Workers' Compensation and Injury Management Act 1981. | As part of the agreement you have to resign.