Tax relief and assistance for bushfire affected taxpayers

The Treasurer Josh Frydenberg has announced that disaster relief payments to individuals and businesses will be tax exempt.

“This decision will ensure that every dollar that is paid out to affected individuals, businesses and primary producers goes to supporting them during these difficult times and to rebuilding their livelihoods,” Frydenberg said.

Notably, the exemption will extend to payments such as:

  • Disaster Recovery Allowance payments made to individuals; and
  • payments that would otherwise be taxable under state-based Disaster Recovery Funding Arrangements, such as grants that may be made to small businesses and primary producers.

In addition, payments to eligible Rural Fire Service Volunteers in NSW, available to self-employed taxpayers or those who work in small or medium businesses, will also be tax-free. These payments are accessible by volunteers called out for more than 10 days during the recent fire season, for lost income of up to $300 per day, and up to a total of $6,000 per person.

The Treasurer said that legislative amendments for the exemptions will be introduced in the next parliamentary sitting.

ATO assistance
The ATO’s dedicated page Bushfires 2019-20 details the support available to those affected by bushfires, including automatic deferral of due dates for lodgments and payments. Advice is also available on the ATO’s emergency support helpline 1800 806 218. The ATO also offers support to find lost TFNs, reissue returns and statements, reconstruct lost records, fast track refunds, set up payment plans, etc.

Donations to charities
The National Bushfire Recovery Agency has a list of charities with DGR status that have established bushfire appeals, for which gifts of $2 and above will be tax deductible.

Related post: Reconstructing tax records after a natural disaster

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