ATO warning over Centrelink payment as 82 per cent of Aussies get it wrong
The Australian Taxation Office (ATO) has warned businesses about reporting their income correctly if they received a natural disaster payment this year. Services Australia has dished out multiple forms of these payments due to flooding in different parts of the country.
While the Centrelink cash boost has come from a government agency, the ATO has issued a reminder that it's still part of your assessable income. The tax office recently quizzed business owners about this and 82 per cent of them got it wrong.
"The answer depends on the 'type' of support payment received," the ATO said.
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Some support payments handed out by Services Australia don't need to be included on your tax return, and you don't have to pay any tax on them.
However, the ATO has a very short list of what those payments are:
Cyclone Seroja 11 April 2021
2021 storms and floods recovery grant
2019–2020 Bushfires Relief recovery payment
2019 North Queensland floods recovery grants
2019 Restocking, replanting or farm infrastructure grantsThat means the disaster payments from ex-Tropical Cyclone Alfred, for example, which hit northern NSW and southeast Queensland in late February, need to be included on your tax return and could form part of your assessable income.
The ATO said you can be entitled to claim a deduction on these payments, but only if you used the money to:
purchase replacement trading stock or new assets
repair your business premises and fit out
pay for other business expenses
Assistance payments from private funds, charitable groups or crowdfunding platforms to help you pay for your business expenses also need to be declared on your tax return.
Services Australia spokesperson Hank Jongen told Yahoo Finance there was a lot of confusion when these natural disaster payments were issued after Cyclone Alfred.
The federal government works with state and territory governments to provide support to people affected by a natural disaster event, and they can dish out payments under the umbrella of the Disaster Recovery Funding Arrangements (DRFA).
Within the DRFA, those affected by Cyclone Alfred could have accessed the following:
Emergency/Personal Hardship Assistance Grants (NSW & Queensland): $180 for individuals and up to $900 for families to cover essentials like food, clothing, and medicine.
Essential Services Hardship Assistance (Queensland): $150 per person, up to $750 for families of five or more, to assist with immediate needs following the loss of essential services at home for more than five consecutive days.
Essential Household Contents Grants (Queensland): Up to $1,765 for individuals and up to $5,300 for couples or families to replace destroyed essential household contents.
Structural Assistance Grants (Queensland): Up to $80,000 for uninsured, income-tested owner-occupiers to help repair or replace a disaster-damaged dwelling and restore it to a safe and habitable condition.
Essential Services Safety and Reconnection Scheme (Queensland): There are two parts to this grant – uninsured, low-income, owner-occupiers may receive:
But more broadly, these are the usual payments you can receive after a natural disaster:
Disaster Recovery Allowance (DRA): This can provide up to 13 weeks of income support for people living and working in affected areas who have lost some or all of their income due to the disaster.
It's paid at either the JobSeeker or Youth Allowance rate, depending on your personal circumstances.
The maximum Jobseeker amount per fortnight is $1,011.50, meaning the most you could receive over the 13 weeks would be around $6,574.
The allowance is paid fortnightly from the date you started losing income as a direct result of the disaster.
Australian Government Disaster Recovery Payment (AGDRP): This is a one-off payment of $1,000 per adult and $400 per child for those who were significantly affected by the disaster and need assistance.
For example, if your principal place of residence has been destroyed or sustained major damage as a direct result of the disaster.
So, if you received any of these in the past few months, as well as the flooding assistance for those affected in Western Australia, you'll need to chuck these on your tax return.
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