Tax Treatment of the Grants

Unless a determination is made by the Tax Office to the contrary, we would expect both income tax and GST would be payable on the freight subsidy and the special disaster flood assistance grants.

The other grants should be non-taxable.

Flood Assistance - State Government Assistance

The State Government has announced the following assistance initiatives:

Personal Hardship and Distress Assistance:

  • Individuals and families who do not have the capacity to meet immediate, unexpected basic costs for food, clothing, medical supplies or accommodation caused by the disaster;
  • The grant is a non-means tested one-off payment of $170 per person (maximum of $850 per family).

Essential Household Contents Grant and Structural Assistance Grant:
  • Essential household contents have been lost or damaged in the disaster and no contents insurance;
  • Eligible household contents include cooking utensils, clothing, bedding and linen, floor coverings, essential furniture and white goods and food;
  • The grant is a means tested one-off payment of up to $1,705 per adult (maximum of $5,120 per family).

Flood Assistance - Federal Government Assistance

The Federal Government has announced the following assistance initiative:

Australian Government Disaster Recovery Payment (AGDRP):
  • Immediate one-off financial assistance of $1,000 per adult and $400 per child;
  • Claimed through Centrelink; and
  • Applications close 4 July 2011.

This payment will be made available where:
  • A person is injured; or
  • A person is an immediate family member of an Australian killed as direct result of the disaster; or
  • A person’s main residence has been destroyed; or
  • A person’s main residence has sustained major damage; or
  • A person is unable to gain access to his or her main residence for at least 24 hours; or
  • The person is stranded in his or her main residence for at least 24 hours; or
  • The person’s main residence was without electricity, water, gas, sewerage service or another essential service for at least 48 hours, which was caused by damage to public or private infrastructure; or
  • The person is the primary carer of a dependent child and any of the above applied to the dependent child.

Superannuation Reminder

As a reminder, if you are an employer and required to pay superannuation on behalf of your employees, you are required to make the payment within 28 days following the end of each quarter i.e. 28 January 2011 for the 31 December 2010 quarter.

Not fulfilling this obligation means that additional interest and penalties will apply plus the amount is not deductible for income tax purposes.