Case G55

Judges:
FE Dubout Ch
G Thompson M
N Dempsey M

Court:
No. 3 Board of Review

Judgment date: 14 August 1975.

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F.E. Dubout (Chairman); N. Dempsey and G. Thompson (Members): The objection in this case is in respect to the year ended 30th June, 1972 and in that year the taxpayer concerned, a nursing sister, was employed by the New South Wales Department of Health at a psychiatric hospital. She resigned from this employment on the 27th August, 1971 and at the date of her resignation she was entitled to 31 days recreation and was paid a lump sum in respect to leave of $324.97 from which her employer deducted $44.97 tax leaving a net payment of $280.

2. When she lodged her return of income for the year ended 30th June, 1972, she included as assessable income only 5% or $16 of this amount, but in raising his assessment the Commissioner included the full amount of $324, thereby increasing the taxable income by $308.

3. Taxpayer lodged a valid objection against the assessment and substantially the basis of her objection is that she is only assessable on 5% of the $324, it being a lump sum paid to her on cessation of her employment.

4. Taxpayer has been shown to have been employed by the Government of New South Wales and the terms of her employment were as set out in the Public Service Regulations of that State. The Board has been provided by the Secretary of the Public Service Board of New South Wales with a copy of the relevant portion of the Regulations and advice as follows -

``At that date the Public Service Regulations made no provision for the payment of the monetary value of leave in lieu of the actual grant of accrued recreation leave to persons ceasing to be employed before attaining 60 years of age. Consequently the only way in which such persons could receive payment for the leave was by taking it after their last day of duty.''

The last day of service then became the date of expiry of such leave....

5. It is quite clear that the payment made to taxpayer was not a lump sum paid to her ``in consequence of retirement from or the termination of any office or employment''. It was a payment made to her in advance to cover the period during which she was entitled to be absent from duty on recreation leave.

6. We are unable to see that any material difference exists in this case to cases already decided by Board of Review No. 1 and reported as Case D41,
72 ATC 237 and Case F70,
74 ATC 421.

7. For the reasons given by that Board, the decisions being unanimous in each case notwithstanding the change which, in the intervening period had taken place in the constitution of the Board, Mr. R. Smith having retired and Mr. C.F. Fairleigh having taken his place, we would confirm the decision of the Commissioner that the objection should be disallowed.

Objection disallowed