Private ruling: Lump sum payment paid pursuant to the Return to Work Act 2014 (South Australia) (RWA)
Date of advice: 12 December 2019
Published: February 2020
Ruling period: Year ending 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Will the amount or any portion thereof to be paid pursuant to section 33 and paragraph 54(1)(a) of the RWA or for the purpose of retraining, 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 the payment is excluded from being an Eligible Termination Payment. 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. | Q2: Will the amount or any portion thereof to be paid for retraining, be included in your assessable income? | A2: No. This portion of the lump sum is not a compensation payment and has not been paid for loss of earnings nor will it recur in the future. The payment is a contribution towards a private expense and is not included in your assessable income.

Relevant facts and circumstances: · You were employed. · You sustained an injury due to a workplace. · You were offered a lump sum amount pursuant to section 33 and paragraph 54(1)(a) of RWA. · You were also offered lump sum amount for retraining. · You accepted the offer. · In acceptance of the offer, you were required 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