The Australian government has made disaster relief payments to bushfire-affected individuals and businesses tax-exempt while extending tax-free financial support to NSW Rural Fire Service volunteers.
A statement from Treasurer Josh Frydenberg said, “The new laws 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.”
The exemptions covered by the legislation include for disaster recovery allowance payments for individuals and payments otherwise taxable under disaster recovery funding arrangements, such as grants for small businesses and primary producers.
The support for NSW Rural Fire Service volunteers gives effect to a previous government announcement by the federal government that it would cooperate with the NSW government to provide tax-free financial support to volunteers who are employed by small or medium businesses and had volunteered for an extended period to assist in combating fires.
The new legislation also allows taxpayers to claim income tax deductions for donations to two organisations established in response to the bushfires:
- The Australian Volunteers Trust – which provides support to volunteers and their immediate families where the volunteer has died or become seriously injured during their service in responding to a disaster in Australia.
- The Community Rebuilding Trust – set up to receive, manage and mobilise donations to help rebuild and re-establish communities affected by disasters in Australia.