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The Tax Office views circumstances sympathetically, and helps wherever possible, where clients cannot meet a tax obligation because they have been affected by a natural disaster.
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If you have questions, require assistance, or are having difficulty meeting your tax obligations, please phone us on 13 11 42 between 8.00am and 6.00pm Monday to Friday, or visit www.ato.gov.au
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This guide describes the types of financial assistance the New South Wales and Queensland governments provided to those affected by the floods in the Northern NSW and South East Queensland regions in January 2008. It includes information on how to treat those payments for tax purposes.
This guide also explains how the Tax Office can help you to meet your tax obligations and who to contact in seeking that help.
The New South Wales and Queensland governments provided financial assistance in response to the short-term needs of those affected by the floods in the Northern NSW and South East Queensland regions in January 2008.
NSW Disaster Relief Scheme – personal hardship and distress assistance
The New South Wales Government provided personal hardship and distress assistance through the NSW Disaster Relief Scheme to cover essential household contents and structural repairs for people whose homes were damaged or destroyed.
The payment was income and asset tested.
The payment is not assessable and you do not need to include this payment in your income tax return, unless it was received as part of business income.
For more information, you can:
NSW Community Disaster Relief Fund (CDRF)
These payments were made by the NSW Department of Community Services. They were one-off payments to help victims of the flooding by providing immediate welfare relief such as accommodation, food and clothing. The scheme also helps people to repair or replace their home and basic contents where they meet a means test and they are not adequately insured.
These one-off payments are not assessable and you do not need to include these payments in your tax return.
For more information, you can:
Natural Disaster Relief Assistance - loans
The NSW Rural Assistance Authority provided concessional loans through the Natural Disaster Relief Scheme to small businesses and primary producers. These loans were capped at $130,000 at concessional interest rates.
These payments are not included in assessable income and, therefore, are not included in your tax return.
Deductions may be claimed for interest, to the extent the loan is used for income producing purposes.
For more information, you can:
- phone the NSW Rural Assistance Authority on 1800 678 593, or
- visit them online at www.raa.nsw.gov.au
Transport subsidy support
The transport subsidy support arrangements provided a 50% rebate for transporting fodder to affected stock or transporting stock to and from agistment for farmers who were affected by the flooding in Northern NSW. The subsidy is capped at $15,000.
The rebate is subject to tax and should be included in your income tax return as business income.
For more information regarding this payment, contact your local Rural Lands Protection Board.
Disaster Relief Scheme – personal hardship assistance
Administered through the Queensland Department of Community Services, the payments were available to those whose homes were damaged or destroyed as a direct result of the storm damage and associated flooding in the SE Queensland region.
The payments were to be used to cover uninsured essential household contents, structural repairs, and referrals to counselling, advocacy and similar support services.
Maximum limits applied and eligibility to some assistance was income tested.
You do not need to include this payment in your income tax return, unless it was received as part of business income.
For more information, you can:
Queensland flood assistance
Grants of up to $160 per person and $740 per family for essentials such as food, clothing and accommodation were provided by the Queensland Government.
You do not need to include this payment in your tax return, unless it was received as part of business income.
For more information, you can:
State-Commonwealth Natural Disaster Relief and Recovery Arrangements (NDRRA)
These payments of concessional loans, grants and freight subsidies are administered through Queensland Rural Adjustment Authority (QRAA).
Concessional loans and grants to sporting and community not-for-profit organisations to restore essential public assets
If your organisation is an endorsed tax-exempt entity, any income derived is not assessable and no deductions may be claimed.
Where your organisation is not tax exempt, the loans are not included in assessable income but deductions may be claimed for interest where the loan is used for an income producing purpose.
If your organisation is not tax exempt and is carrying on a business, generally the grant is assessable income. Expenditure on items related to the business are deductible.
Concessional loans to small business and primary producers up to a cumulative total of $150,000
These loans are not included in assessable income, so you do not need to include the payments in your tax return.
Deductions may be claimed for interest, to the extent the loan is used for income producing purposes.
Freight subsidies for primary producers for the movement of essential items including food, building materials, stock, fodder, water, machinery or fuels
The subsidy is subject to tax where you receive the payment as part of your business income.
Payments under the following forms of assistance will give rise to a capital gain:
- NSW Disaster Relief Scheme – personal hardship and distress assistance
- NSW Community Disaster Relief Fund (CDRF)
- Disaster Relief Scheme – personal hardship assistance, and
- Queensland flood assistance.
However, under the CGT provisions, any capital gain or loss made as a result of the payment of your expenses under a government assistance scheme such as those listed above is disregarded.
Administrative assistance
The Tax Office can help you by:
- fast tracking refunds for people impacted by the floods
- giving extra time to pay debts – without interest charges
- giving more time to meet business activity statement (BAS) and other lodgement obligations, without penalties
- helping reconstruct tax records where documents have been destroyed, and
- offering personal visits from field officers to help reconcile lost records.
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If you have any questions after reading this guide, phone the Tax Office on:
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- 13 28 61 for non-business related matters, and
- 13 28 66 for business related matters.
Tax agents needing advice about matters dealt within the guide can phone the Tax Office on 13 72 86.
If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.
If you have a hearing or speech impairment and have access to appropriate TTY or modem equipment, phone 13 36 77. If you do not have access to TTY or modem equipment, phone the Speech to Speech Relay Service on 1300 555 727.
Last Modified: Friday, 15 August 2008
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