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Edited version of private advice
Authorisation Number: 1051892794367
Date of advice: 2 September 2021
Ruling
Subject: Assessable income - repaid monies
Question
Will the Monies you received in error and repaid be included in your assessable income under Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
No. Based on the information provided, and applying the principles contained in TD 2008/9 to your situation, it has been determined that the Monies you were paid in error, and were repaid, are not viewed as assessable income under section 6-5 of the ITAA 1997.
This ruling applies for the following period
Income year ending 30 June 20XX
The scheme commences on
1 July 20XX
Relevant facts and circumstances
You were an employee of an Organisation (Employer).
Due to an illness you had an extended period of leave and had been on unpaid leave. You were on sickness benefits for several months, with them having been exhausted by a specified date (the Date).
Your employer issued a payslip that outlined that you had been paid for sick leave as at the Date, being the Monies.
You had not applied for any personal leave to be paid in advance of any future entitlement and were not entitled to receive any accrual of leave.
You consider that you were contractually obligated to repay overpaid payments and were immediately obligated to repay any amounts received in error.
You notified the Employer in writing that you would repay the Monies.
You indicated to the Employer that you rejected the Monies in writing on several occasions and had never accepted or agreed to any alternative outcome. You had committed to repaying the Monies and have pursued the correction of this matter with the Employer.
Your requests to the Employer for them to confirm if the correction of the amount during the period covered by this ruling were not answered for a significant period of time and you were unable to repay the Monies in the same income year the errors had been made due to delays in the Employer providing records and responses in relation to this matter to you.
A representative of the Employer, Person A, sent you an email acknowledging your request to repay the payment of sick leave made in advance of accrual.
You sent an email to Person A advising that you would pay the full net and superannuation amounts.
Person A confirmed via email that the Employer had paid the sick leave in error and that it should not have accrued.
The Employer confirmed the value of the sick leave payments and you were provided with their bank account details for the repayment of the Monies.
You repaid the Monies during the period covered by this ruling.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5