No tax on flood recovery payments

PEOPLE hit hard by recent natural disasters won't have to pay tax on recovery payments, Assistant Treasurer David Bradbury has announced.

The exemption will apply to those impacted by ex-Tropical cyclone Oswald, recent flooding in Queensland and NSW, and the Tasmania and Wambelong bushfires

It comes a week after the Federal Government passed legislation providing a permanent way for disaster assistance to be delivered to workers, small business people and farmers who experience a loss of income as a direct result of a disaster.

The Disaster Recovery Allowance, which comes into effect on October 1, will provide fortnightly payments equivalent to the maximum rate of Newstart Allowance or Youth Allowance for up to 13 weeks following a disaster.

"Supporting workers, small businesses and farmers following a disaster and keeping them in their local area is key to long term community recovery," Mr Dreyfus said

"If workers lose their job following a natural disaster, often they will be forced to relocate to find new work.

"Training new workers takes time and money. This payment will mean that workers, small businesses and farmers will be financially supported so that they can remain in the community and return to work after recovery and rebuilding efforts conclude."

Parliamentary Secretary to the Attorney-General and Member for Blair Shayne Neumann said the devastating floods of the past three years had created a huge burden for local businesses.

"Small businesses and farmers have been doing it tough in Queensland following the devastation of floods and cyclones over the past few years," Mr Neumann said.

"This legislation has responded to the experiences and needs of those business people, farmers and local workers. They are the lifeblood of our community and it is essential to keep business going and workers employed to assist in the recovery process."

The Disaster Recovery Allowance replaces the current Disaster Income Recovery Subsidy payment, which is delivered via an ex gratia payment.

The Australian Government also provides assistance through the Australian Government Disaster Recovery Payment and in cooperation with the states, through the Natural Disaster Relief and Recovery Arrangements.



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