Redress schemes are about making an acknowledgement for wrongs in the past. They have general features that include payments for harm, harassment or discrimination of a person.
Redress scheme payments may be compensation for:
- damages for a wrong, injury or illness an individual suffers personally – are non- assessable payments
- financial loss or on termination – may be assessable.
You don't need to declare any compensation payments you receive from a redress scheme for personal injury you suffer. These payments are non-assessable income. This means you don't need to include these amounts in your tax return.
These payments are also not subject to capital gains tax.
Several state and national redress schemes have come into operation in the last few years, such as the:
- Australian Government's National Redress SchemeExternal Link – payments started on 1 July 2018 and will run for 10 years.
- Victorian Government's Restorative Engagement and Redress SchemeExternal Link – payments started on 1 July 2020.
- Territories Stolen Generations Redress SchemeExternal Link – announced on 5 August 2021 and will run for 5 years. It opened for applications on 1 March 2022.