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Edited version of your written advice
Authorisation Number: 1051452459287
Date of advice: 27 November 2018
Ruling
Subject: Assessability of payments received in connection with a trauma recovery benefit policy.
Question
Is a lump sum payment designated a Trauma Benefit as part of an employer’s salary continuance insurance policy assessable income?
Answer
No
We agree your assessment of the payments you received as a Trauma Recovery Benefit and confirm that the payment of benefits you received under the trauma feature of your Group Salary Continuance Plan are not ordinary income and are not statutory income.
This ruling applies for the following period:
Year ended June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You suffered a medical emergency.
You made a Group Salary Continuance claim with the relevant insurance company.
You were subsequently notified by letter that the claim was approved.
The benefit payments totalled a specified amount. You have provided details of this.
The benefit payments have been included in the total of your Pay As You Go (PAYG) statement supplied by your employer.
Your employer has advised you they have received advice previously that the payments for salary continuance should be included in the PAYG statement.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Subsection 6-5(2)
Income Tax Assessment Act 1997 Section 6-10