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Edited version of private advice
Authorisation Number: 1051609514700
Date of advice: 21 November 2019
Ruling
Subject: Lump sum payment
Question
Is the lump sum payment of $XXXX you will receive assessable?
Answer
No. It is accepted that the lump sum payment you will receive is a capital amount that is disregarded under subparagraph 118-37(1)(a)(i) of the ITAA 1997.
This ruling applies for the following period:
Year ending 30 June 2020
The scheme commences on:
1 July 2019
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
On XXXX, you were injured and subsequently made a claim under the Workers Rehabilitation and Compensation Act 1986 (X)(WRCA) for injuries sustained whilst employed.
Your employment with the department was terminated on the XXXX on the basis that you were unfit for the requirements for employment with the department.
The WRCA was replaced by the Return to Work Act 2014 (X) (RWA).TheRWAcame into force 1 July 2015.
You continued to receive weekly payments pursuant to the WRCA on the basis that the compensable injury sustained was an existing injury.
As at XXXX, in accordance with the RWA, your entitlement to weekly payments in respect of your compensable injury ceased.
You made an application to be classified as a seriously injured worker within the meaning the RWA.
Section 21 subsection (2) of the RWA states:
For the purposes of this Act, a seriously injured worker is a worker whose work injury has resulted in permanent impairment and the degree of whole person impairment has been assessed under Division 5 for the purposes of this Act to be 30% or more.
A transfer of liability from Return to Work to the department for the liability to make payments of compensation under the RWA occurred for employees of the department.
The department on behalf of itself issued a determination declining your request to be classified as a seriously injured worker in accordance with section 21 of the RWA.
You filed a review with the Relevant Employment Tribunal.
This matter was not considered by the Tribunal and is being settled by way of a Deed of Release and Settlement (the deed).
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 subsection 6-5(1)
Income Tax Assessment Act 1997 section 102-5
Income Tax Assessment Act 1997 paragraph 108-5(1)(b)