| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012776079297
Date of advice: 7 March 2015
Ruling
Subject: Assessable income
Question
Are you assessable on interest earned on disability support payments?
Answer No
This ruling applies for the following period
Year ended 30 June 2015
Year ended 30 June 2016
The scheme commenced on
1 July 2014
Relevant facts
You receive disability support funding from a government entity.
You have opened a separate bank account into which these funds would be deposited by the so that you would not confuse it with your own funds.
The money in the account is not you’re your own to be used as you like but for two specific services for which you are accountable.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Reasons for decision
Under subsection 6-5(1) of the Income Tax Assessment Act (ITAA 1997) an amount is assessable income if it is ordinary income. Interest earned on money held in a bank account is usually ordinary income and assessable to the owner or owners of the bank account.
In the present case, however, any interest accrued on funds deposited in a separate bank account disability funding. The disability funding is not taxable and therefore neither is the interest earned on these funds.