Taxability of disaster relief payments 2011-12

Introduction

During the 2011-12 financial year, you may have been one of the many Australians who were affected by natural disasters. If you received a natural disaster relief payment, you need to understand how it affects your tax. Some of these payments are treated for tax purposes as:

exempt income
non-assessable non-exempt payments, or
amounts you do not need to pay tax on (not taxable).

This document lists some of the payments that have been made by federal, state or local governments and how they should be treated on your tax return. If a payment is:

exempt income - you do not pay tax on this amount, but the amount is included when working out a tax loss
non-assessable non-exempt income - it does not need to be included anywhere on your tax return
not taxable - it also does not need to be included on your tax return.

Payments to individuals

Individuals may have received a listed payment as a result of damage to their principal residence, loss of household effects and/or for emergency relief. The following table shows the tax treatment for the individual affected by the disaster.

None of the payments listed here need to be included in your adjusted taxable income, which is used when calculating tax offsets, deductions, obligations and concessions.

If you are not registered for the goods and services tax (GST), there are no GST implications for receiving the payments listed below.

Payments made in New South Wales

	Paid by	Tax treatment
Personal hardship and distress assistance	Dept of Family and Community Services	Not taxable

Payments made in Victoria

	Paid by	Tax treatment
Personal hardship and distress assistance	Dept of Human Services	Not taxable

Payments made in Western Australia

	Paid by	Tax treatment
Personal hardship and distress assistance	Dept for Child Protection	Not taxable
Up to $10,000 for the replacement of whitegoods and floor coverings	Dept for Child Protection	Not taxable

Payments to businesses

If you are not registered for goods and service tax (GST), there are no GST implications for the payments listed below. If you are registered for GST and you receive a payment then there may be GST implications - for further information, see Goods and Services Tax Ruling GSTR 2000/11W Goods and services tax: grants of financial assistance.

Payments made in New South Wales

	Paid by	Tax treatment
Transport freight subsidies for primary producers	Dept of Primary Industries	Taxable - transport expense deductible
Concessional interest rate loans (small business and primary producers)	Rural Assistance Authority	Interest expense deductible

Payments made in Queensland

	Paid by	Tax treatment
Concessional interest rate loans (small business and primary producers)	Queensland Rural Adjustment Authority	Interest expense deductible
Freight subsidies for primary producers	Department of Agriculture, Fisheries and Forestry	Taxable - expenses deductible

Payments made in Western Australia

	Paid by	Tax treatment
Interest rate subsidies for loans of up to $150,000 for small businesses	Dept of Fire and Emergency Services	Taxable - interest deductible
Interest rate subsidies for loans of up to $150,000 for primary producers	Dept of Agriculture and Food	Taxable - interest deductible
Professional advice grants and freight subsidies for primary producers	Dept of Agriculture and Food	Taxable - expenses deductible

What to read or do next

For general information on dealing with the tax implications of disasters, see
Dealing with disasters - home.

Last Modified: Wednesday, 27 February 2013

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