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Edited version of your written advice
Authorisation Number: 5010056535567
Date of advice: 23 February 2019
Ruling
Subject: Crisis Compensation
Question
Is the lump sum payment received from X Group of companies for Crisis Recovery Benefit assessable income?
Answer
No.
The Commissioner considers that the payment of benefits you received under your Insurance policy is not ordinary income and it is not statutory income. Consequently, it is not assessable income. As the payment was received as compensation for an illness you suffered personally, any capital gain or loss is disregarded.
This ruling applies for the following period:
Year ended 30 June 2018
The scheme commences on:
1 July 2017
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.
You are a resident of Australia for tax purposes.
You was diagnosed with a medical condition by biopsy 20XX and treated.
The medical condition is expressly listed in your insurance Policy as a "Crisis Event" which qualifies for a "Crisis Recovery Benefit"
You lodged paperwork to claim the Crisis Recovery Benefit in July XXXX and received the Payment in August XXXX.
The Benefit may be payable when an insured member suffers one of the medical conditions covered, and is payable even if the insured member continues to work and/or continues to receive his/her normal salary/remuneration.
You continued to receive your normal salary/remuneration.
You received a lump sum Payment as a result of the policy.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-10
Income Tax Assessment Act 1997 Section 6-15
Income Tax Assessment Act 1997 Subsection 118-37(1)