Private ruling: Flood levy exemption
Published: August 2013
Ruling period: Financial year ended 30 June 2012.
Date scheme commenced: 1 July 2011.

Ruling: Q1: Are you exempt from paying the flood levy for the financial year ended 30 June 2012? | A1: Yes.

Relevant facts and circumstances: Your taxable income for the financial year exceeds $50,000. Your home was directly affected by an event that occurred during the 2010-11 or 2011-12 financial year which was declared as a natural disaster under the Natural Disaster Relief and Recovery Arrangements in that your home was without an essential service for a period not less than 48 hours. You are over 16 years of age. You are an Australian resident for social security purposes at the time of the disaster. You did not apply for an Australian Government Disaster Recovery Payment.

Relevant legislative provisions: Income Tax (Transitional Provisions) Act 1997 section 4-10.

Reasons for decision: Summary: The Australian Government introduced the flood levy for the financial year ended 30 June 2012. The flood levy is designed to assist affected communities to recover from the recent natural disasters by providing additional funding to rebuild essential infrastructure, such as, roads, bridges and schools. Section 4-10 of the Income Tax (Transitional Provisions) Act 1997 states you must pay the flood levy where your taxable income for the financial year ended 30 June 2012 exceeds $50,000 unless you are covered by the exemption provision. The exemption provision requires the Minister to specify the classes of individuals in a legislative instrument who are not required to pay the levy. As stated in the legislative instrument Income Tax - Temporary Flood and Cyclone Reconstruction Levy Exemption 2011 , you are not required to pay the levy if you are a member of one of the three exemption classes described below: Class 1 - you were eligible for an Australian Government disaster relief payment for a natural disaster that occurred during the 2010-11 or 2011-12 year and you received the payment by 30 June 2012. Class 2 - you were affected by: (a) an event that occurred during the 2010-11 or 2011-12 financial year which was declared as a natural disaster under the Natural Disaster Relief and Recovery Arrangements (NDRRA), and (b) you were at least 16 years old at the time of the disaster, and (c) you were an Australian resident for social security reasons at the time of the disaster, and (d) at least one of the following conditions applies: (i) as a direct result of the natural disaster: (A) you were seriously injured, or (B) an Australian was killed and that Australian was an immediate member of your family, or (C) your principal place of residence was destroyed or sustained major damage, or (D) you were unable to gain access to your principal place of residence for at least 24 hours, or (E) you were stranded in your principal place of residence for at least 24 hours, or (ii) as a result of the natural disaster, your principal place of residence was without electricity, water, gas, sewerage service or another essential service for at least 48 hours, or (iii) you were the principal carer of a child (within the meaning of the Social Security Act 1991 ) to whom sub-paragraph (i) or (ii) applies. Class 3 - you are a New Zealand citizen who received an ex-gratia payment from Centrelink by 30 June 2012 for a natural disaster that occurred in the 2010-11 or 2011-12 financial year. | Detailed Reasoning - Application to your circumstances: Your taxable income for the financial year ended 30 June 2012 was in excess of $50,000 and you will be required to pay the flood levy unless you meet an exemption. Tropical Cyclone (TC) Yasi crossed the Queensland coast on 3 February 2011. TC Yasi was declared a natural disaster under the NDRAA. As a direct result of TC Yasi, your home was without electricity for a period in excess of 48 hours. You are exempt from paying the flood levy as you meet the conditions for a Class 2 exemption. That is, you were affected by a natural disaster, are an Australian resident for social security purposes aged over 16 years of age and your principal place of residence was without electricity for at least 48 hours. Accordingly, you are not required to pay the flood levy under section 4-10 of the Income Tax (Transitional Provisions) Act 1997 for the 2011-12 financial year.