Private ruling: Lump sum compensation payment.
Date of advice: 19 December 2018
Published: April 2019
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the amounts or any portion thereof to be paid pursuant to sections 32, 42 or 43 of the Workers Rehabilitation and Compensation Act 1986 (X) (WRCA), be included in your assessable income? | A1: No. 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 and 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 and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. 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.

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