With millions of Aussie suffering from restrictions prompted by COVID, there is a little news of relief for those receiving Covid-19 disaster payments.
As a result of some changes announced by Prime Minister Scott Morrison in July, those disaster payments are tax-free.
This means that people who have received disaster payments due to COVID do not need to include them as part of their taxable income from the Family Tax Benefit and Child Care Subsidy Rate.
When the Covid-19 disaster relief fund began in June, guidelines said it would be taxed, but by the end of July Mr Morrison changed that policy.
“They will not be taxed,” he told Sunrise at the time.
“JobKeeper, by the way was. And we are treating this as a disaster in these areas where this has befallen people in the same way the payments that we make for bushfires, and the payments we made for floods and other natural disasters, we are making these payments under that disaster payment framework,” he added.
He also said on ABC radio that for those who receive welfare, “they’re also non-assessable on your income test for accessing your welfare payments”.
While it is clear that the COVID disaster payments are tax-free, many may not realize that they anyway do not get included in the income of people when they are asked to make the estimate for things as Family Tax Benefit and Child Care Subsidy.
At the beginning of each tax year, families wishing to receive such benefits must provide an annual income estimate.
For those who have lost their jobs or income as a result of the epidemic, this will affect their calculations.
Those who haven’t updated their income estimate, come tax time, it could mean Centrelink has underpaid them, therefore they may receive a payment to make up for that.