This measure extends eligibility for the beneficiary tax offset to drought affected taxpayers in receipt of Interim Income Support Payments.
Welfare support for drought affected farmers in areas declared to be in exceptional circumstances is mainly provided through Exceptional Circumstances Relief Payments (ECRP). ECRP is a benefit to which the beneficiary tax offset applies.
Interim Income Support Payments are made to farmers in areas where an Exceptional Circumstances application lodged by a state demonstrates a prima facie case for full exceptional circumstances assistance but is prior to an area being declared to be in Exceptional Circumstances. The payments are available for up to six months while the case for full Exceptional Circumstances assistance is being considered.
Extending the beneficiary tax offset to Interim Income Support Payments ensures consistent taxation treatment with ECRP so that taxpayers in receipt of Interim Income Support Payments and ECRP are eligible for the beneficiary tax offset.
This measure further demonstrates the Government’s commitment to assist drought affected farmers.
Supporting Information
Why is this important?
- This measure ensures consistent taxation treatment of Exceptional Circumstances Relief Payments (ECRP) and Interim Income Support Payments by making Interim Income Support Payments eligible for the beneficiary tax offset.
- ECRP is drought relief assistance, paid to eligible producers where an area has been declared to be in Exceptional Circumstances. Interim Income Support Payments (introduced in September 2002) are available when a prima facie case of exceptional circumstances has been made, but prior to full declaration of Exceptional Circumstances. Interim Income Support Payments are temporary payments but the extent and ongoing nature of the drought has required that this interim assistance continue and that recipients of Interim Income Support Payments receive the same taxation treatment as ECRP.
Who will benefit?
- Farmers who receive Interim Income Support Payments and move onto ECRP may be eligible for the beneficiary tax offset depending on the individual taxpayer’s circumstances.
What funding is the Government committing to the initiative?
- This measure has an estimated cost to revenue of $1 million in 2006-07, $1 million in 2007-08, $1 million in 2008-09 and $1 million in 2009-10.
What have we done in the past?
- Interim Income Support Payments were not eligible for the beneficiary tax offset.
When will the initiative conclude?
- This measure is on-going.