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Income on which you don’t pay tax

Non taxable amounts generally fall into three categories:

  • exempt income
  • non-assessable non-exempt income (“NANE”), and
  • other non-taxable amounts which don’t affect your tax return

The Tax Office provides an annually updated page detailing types of income received by individuals which are not taxed.

They are listed below.

For individuals see:

For businesses, see What to exclude from your business’s assessable income

Tax Treatment of Covid Relief Payments

Note that this list is not guaranteed to be complete. If your item is not listed, check with the Tax Office or a tax advisor.

Government PaymentTax treatment
Robodebt class action settlementsNot taxable or required to report
JobKeeper Assessable income, no GST
Pandemic Leave Disaster PaymentsAssessable income **
Employment paymentsNormal tax tax treatment (salary, leave, redundancy etc)
Cash Flow BoostExempt
Unit Trust distributes Cash Flow BoostNot taxable but CGT event E4 (cost base attribution)
Company distributes Cash Flow Boost (dividend)Taxable as a dividend
Pandemic leave disaster payment to individualsAssessable income, no GST
(Covid-based) Early release of superTax free
Child Care Transition Payment (paid to providers)Assessable income, GST free supply
Creative Economy Support – grantAssessable income, no GST
Creative Economy Support – concessional loanNot assessable. Interest/deductions accounted for in the normal way
Consumer Travel Support grantAssessable income, no GST
Vic & NSW Government business support grantsNon assessable non-exempt income (NANE), no GST
State Govt Voucher SubsidiesAssessable income, and GST accountable

** Pandemic Leave Disaster Payments are assessable income but will NOT be included in the Centrelink payment summary, nor will it be prefilled in your income tax return. Tax return instructions are set out here.

Human Services Emergency Payments

“One-off assistance payments are generally taxable, however some may be tax free” – see ato.gov.au search code: QC67560

The following payments are taxable:

  • Disaster Recovery Allowance
  • Disaster Recovery Allowance Top-up
  • New Zealand Disaster Recovery Allowance
  • Pandemic Leave Disaster Payment.

The following payments are not taxable:

  • Australian Government Disaster Recovery Payment
  • Australian Government Disaster Recovery Payment – Special Supplement for a natural disaster
  • Australian Victim of Terrorism Overseas Payment
  • COVID-19 Disaster Payment.

See further: Reporting disaster payments and grants in your tax return

See also at ato.gov.au: Government grants and payments during COVID-19

Redress Scheme Payments For NT & ACT Stolen Generations

Redress payments made to individuals under the Territories Stolen Generations Redress Scheme are exempt from tax and won’t affect eligibility for other Commonwealth payments and benefits. Legislation applies from 2021-22.

Disaster Relief Payments

Legislation has been passed to make disaster relief payments to individuals and businesses impacted by the devastating bushfires tax exempt.

This includes:

  • Disaster Recovery Allowance payments made to individuals; and
  • Payments to small businesses and primary producers that would otherwise have been taxable

Most one-time and emergency disaster relief payments are exempt, or may become so after specific government action to declare them as such.

Some exempt payments however may still need to be declared, although non-taxable.

Payments to volunteer firefighters, assistance provided by charities and employers are exempt from tax.

For more information, see Disaster assistance payments and your tax

National Redress Scheme for Institutional Child Sexual Abuse

Taxation Determination TD 2018/16 – payments are not assessable or subject to capital gains tax. The determination applies from 1 July 2018.

Stolen Generation Compensation

Stolen Generation lump sums payments made by the various states and territories are generally not taxable income and do not need to be disclosed in a tax return.


Defence Force Overseas Projects

ADF personnel deployed overseas don’t pay income tax on the salary and allowances if there is a certificate in force issued by the Chief of the Defence Force in writing to the effect that you are on eligible duty with a specified organisation in a specified area outside Australia (not as, or under, an attaché at an Australian embassy or legation).

See Australian Defence Forces overseas service

Temporary Residents

Temporary residents generally don’t pay tax on their non-Australian income except income from employment or services.

Foreign tax paid on such income can generally be claimed as a foreign income tax offset.

See Foreign income exemption for temporary residents.

 See also

Because of the complexity of rules determining taxability of income, and potentially high penalties for getting things wrong, qualified advice is always recommended. Some items may be partially taxable.

For Tax Office guidance call 132861 or alternatively seek advice from a registered tax agent.

This page was last modified 2024-06-15