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  • Disaster assistance payments

    If you're experiencing financial hardship as a result of a disaster, you may receive a relief payment from:

    • local, state or federal government agencies
    • a charity or community group
    • your employer.

    Most one-off assistance payments are tax-free. Regular Centrelink payments remain taxable, unless specifically exempted by the government.

    Emergency assistance in the form of gifts from family and friends is not taxable.

    If you use an assistance payment to purchase items for your business, the normal conditions for deductibility apply. The fact that money from a relief fund is used to purchase an item doesn't affect the deductibility of that item.

    Grants from government and private funding bodies don't attract goods and services tax (GST), provided the grant recipient doesn't provide anything of value in return.

    For some major disasters, we have published a list of 'affected postcodes' to help us identify people and businesses in disaster-affected areas.

    On this page:

    See also:

    Government disaster recovery payments

    If you receive a relief payment from a local, state or federal government agency, you need to understand what type of payment it is and how it affects your tax.

    Common types of government disaster relief payments are:

    Australian Government Disaster Recovery Payments

    If you receive a Disaster Recovery Payment (DRP), it will be treated as exempt income. You don't pay tax on the DRP amount, but you need to include it in your tax return when you work out your tax loss.

    Disaster Recovery Allowance and Natural Disaster Relief and Recovery Arrangements

    Disaster Recovery Allowance (DRA) and Natural Disaster Relief and Recovery Arrangements (NDRRA) payments are generally taxable. However, the government may declare that, for some natural disasters, DRA and NDRRA payments are exempt income. You don't pay tax on exempt income but you need to include the amount in your tax return when you work out your tax loss.

    Ex-gratia recovery payments

    The tax treatment of ex-gratia recovery payments depends on the specific circumstances of the payments. In some recent cases the government has decided to exempt such payments from tax.

    We can't advise you about the tax treatment of ex-gratia payments until the government decides on the tax status of that type of payment.

    For more information, refer to DisasterAssist.gov.auExternal Link

    Find out about:

    Payments to volunteer firefighters

    You are not required to pay tax on government support payments you receive as a volunteer firefighter in relation to the bushfires 2019–20.

    You don't need to include these payments on your tax return and they will not affect your tax losses. 

    For more information, refer to:

    Charities and community groups

    If you receive assistance from a charitable organisation, the payment you receive is not taxable. These payments have no GST implications.

    The organisations make these payments voluntarily to help you with the basic necessities of life. You have no right or entitlement to the payment – the payment is in the nature of a gift to you from the organisation.

    Your employer

    Salary or wages are taxable because they are part of your ordinary income. They have to be included as income in your tax return. Your employer will specify the amount as normal salary or wages in your annual income statement.

    However, emergency assistance from your employer (for example, one-off and other non-periodic emergency relief payments) is not taxable.

    An employer is not required to withhold tax from a payment that is not taxable.

    An employer who gives emergency assistance to an employee can claim a tax deduction as a business expense.

    Tax treatment of disaster relief payments

    You are not required to pay tax on any relief recovery payments or benefits provided by the Australian Government in relation to the bushfires 2019–20.

    You don't need to include these payments on your tax return and they will not affect your tax losses. 

    See also:

    Last modified: 14 Feb 2020QC 21525