Private ruling: Workers compensation
Published: November 2014
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 42 43 or 32 of the Workers Rehabilitation and Compensation Act 1986(X ) (WRCA), 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 either or sections 32, 42 and 43 of the Workers Rehabilitation and Compensation Act 1986 (X) (WRCA). | As part of the agreement you have to resign.