EXPLANATORY STATEMENT
Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions Amendment Determination 2012 (No. 1)
Issued by authority of the Treasurer
Income Tax (Transitional Provisions) Act 1997
Subsection 4-10(2) of the Income Tax (Transitional Provisions) Act 1997 provides for the Minister to make a legislative instrument for the purpose of exempting classes of individuals from the temporary flood and cyclone reconstruction levy (levy).
The Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions Amendment Determination 2012 (No. 1) amends the eligibility criteria of the classes of individuals who are exempt from the levy as provided for in the Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions 2011.
The Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions 2011 defines the classes of individuals exempt from the levy as: persons who received an Australian Government Disaster Recovery Payment (AGDRP) for a disaster event in 2010-11; those directly affected by a Natural Disaster Relief and Recovery Arrangements (NDRRA) declared disaster in 2010-11 and would have met the AGDRP criteria; and New Zealand non‑protected special category visa holders who received an ex-gratia payment from the Australian Government in relation to a disaster that occurred in 2010-11.
The Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions Amendment Determination 2012 (No. 1) amends the Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions 2011 to expand the eligibility criteria for the class of individuals who are eligible for a levy exemption to those affected by disasters in the 2011-12 financial year. The amendments will also provide for those who were eligible for an AGDRP but did not claim one, to be able to self-assess themselves exempt from the levy against the criteria set out under subitem 2.
In relation to the third class of individuals who are exempt from the levy, New Zealand citizens holding a special category visa who are not eligible for an AGDRP, the Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions Amendment Determination 2012 (No. 1) extends the levy exemption to include those affected by disasters in the 2011-12 financial year.
This amending legislative instrument was developed followed consultation internal to Government with the Australian Taxation Office, the Department of Human Services and the Attorney-General’s Department. Due to the consideration of providing certainty for taxpayers in a timely manner following the recent flooding across Australia, no public consultation on the amendments set out in the Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions Amendment Determination 2012 (No. 1).
Details of the Income Tax – Temporary Flood and Cyclone Reconstruction Levy Exemptions Amendment Determination 2012 (No. 1) are as follows:
Schedule 1 – Classes of individuals who do not pay the temporary flood and cyclone reconstruction levy
Item 1 – Individuals eligible for an Australian Government Disaster Recovery Payment
A class of individuals is eligible for a levy exemption where they are eligible for an Australian Government Disaster Recovery Payment (AGDRP) under Part 2.24 of the Social Security Act 1991 in the 2010-11 or 2011-12 financial years.
Prior to this amendment, only individuals who received an AGDRP for a natural disaster in the 2010-11 financial year were eligible for an exemption from the levy.
This amendment expands the time period eligibility criteria within which an AGDRP declared natural disaster occurs for the class of individuals to be exempt from the levy from the 2010-11 financial year to also include the 2011‑12 financial year.
Item 2 – Individuals affected by a natural disaster declared under the Natural Disaster Relief and Recovery Arrangements
Prior to this amendment, the class of individuals who were affected by a declared natural disaster for the purposes of the Natural Disaster Relief and Recovery Arrangements (NDRRA) as a result of a natural disaster that occurred only during the 2010‑11 financial year were eligible for an exemption from the levy.
This amendment expands the time period eligibility criteria within which an NDRRA declared natural disaster occurs for the class of individuals to be exempt from the levy from the 2010-11 financial year to also include the 2011‑12 financial year.
The amendment also provides that for those who were eligible for an AGDRP but chose not to receive it will also be exempt from the levy. This operates by the person self-assessing against the criteria set out in item 2 as the AGDRP declared areas are a subset of the NDRRA areas declared in 2010-11 and 2011-12.
Item 3 – New Zealand citizens holding a special category visa who are not eligible for Australian Government Disaster Recovery Payment
The class of individuals who are non‑protected New Zealand special category visa holders who received an ex-gratia payment from the Australian Government in relation to a disaster that occurred in 2010-11 are exempt from the levy if an income tax return lodged in at least one of the 2007-08, 2008-09 or 2009-10 income years to be exempt from the levy.
This amendment adds to the exemption criteria the class of individuals who are non‑protected New Zealand special category visa holders an exemption from the levy when they are affected by a natural disaster that occurred in the 2011-12 income year. To be eligible for the levy exemption, an income tax return must have been lodged in one of the 2008‑09, 2009‑10 or 2010‑11 income years.