Tax Exemption For Flood Assistance Payments Paid to Flood Victims

On 21 January 2011, the Government announced that it will make clean-up and recovery grants, paid under the Natural Disaster Relief and Recovery Arrangements, to primary producers and small businesses affected by the flooding that has occurred since 29 November 2010, exempt from tax.



Such grants are normally treated as assessable income however the Government has decided to make these payments non-assessable, non-exempt income.

The Government also confirmed that it will make Disaster Income Recovery Subsidy Payments, paid to those affected by flooding events in Australia that commenced on 29 November 2010, exempt from income tax.

The Disaster Income Recovery Subsidy Payments, which are administered by Centrelink, provide financial assistance to employees, small business persons and farmers who have lost income as a direct result of the flooding.

See ==> ATO on Flood Relief

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