Private ruling: Lump Sum Compensation
Date of advice: 21 February 2019
Published: May 2019
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the ex-gratia payment assessable income? | A1: No. The lump sum ex-gratia payment you received is not assessable income in accordance with the ATO view contained in Taxation Ruling TR 95/35 Income tax: capital gains: treatment of compensation receipts.

Relevant facts and circumstances: You were employed by Company A for a period of time. You ceased employment with Company A. You lodged a complaint with the Anti-Discrimination Tribunal alleging breaches under the relevant state act, and complaints under the federal employment framework. Your complaint with the Anti-Discrimination Tribunal subsumed the federal complaint into its deliberations. Company A denied all liability and following conciliation an agreement was reached under which Company A made an ex-gratia payment of a specified amount to settle your claim.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5. | Income Tax Assessment Act 1997 Section 6-10. | Income Tax Assessment Act 1997 Section 6-15. | Income Tax Assessment Act 1997 Section 15-30. | Income Tax Assessment Act 1997 Paragraph 118-37(1)(a).