Private ruling: Assessability of payments received in connection with a trauma recovery benefit policy.
Date of advice: 27 November 2018
Published: March 2019
Ruling period: Year ended June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is a lump sum payment designated a Trauma Benefit as part of an employer’s salary continuance insurance policy assessable income? | A1: No We agree your assessment of the payments you received as a Trauma Recovery Benefit and confirm that the payment of benefits you received under the trauma feature of your Group Salary Continuance Plan are not ordinary income and are not statutory income.

Relevant facts and circumstances: You suffered a medical emergency. You made a Group Salary Continuance claim with the relevant insurance company. You were subsequently notified by letter that the claim was approved. The benefit payments totalled a specified amount. You have provided details of this. The benefit payments have been included in the total of your Pay As You Go (PAYG) statement supplied by your employer. Your employer has advised you they have received advice previously that the payments for salary continuance should be included in the PAYG statement.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Subsection 6-5(2) | Income Tax Assessment Act 1997 Section 6-10