Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 51 - Exempt amounts  

SECTION 51-33   Compensation payments for loss of pay and/or allowances as a Defence reservist  

51-33(1)    
A compensation payment for the loss of your pay or an allowance is exempt from income tax if:

(a) the compensation payment is made under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 in respect of an injury (as defined in that Act) you suffered; and

(b) you suffered your injury while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve (but not while on continuous full time service); and

(c) your pay or allowance was payable for service of a kind described in paragraph (b).

51-33(2)    
A compensation payment for the loss of your pay or an allowance is exempt from income tax if:

(a) the compensation payment is made under the Military Rehabilitation and Compensation Act 2004 in respect of a service injury or disease (as defined in that Act); and

(b) you sustained your service injury or contracted your service disease, or your service injury or disease was aggravated or materially contributed to, while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve; and

(c) your pay or allowance was payable for service of a kind described in paragraph (b); and

(d) the compensation payment is worked out by reference to your normal earnings (as defined in that Act) as a part-time Reservist (as defined in that Act).