Tax break granted for bushfire victims

Australians receiving disaster relief payments will receive a tax break on those payments following pressure from former prime ministers and social media.

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Treasurer Josh Frydenberg on Wednesday announced the Disaster Recovery Allowance, and payments under the Disaster Recovery Funding Arrangements that would have otherwise been taxable, like grants to small businesses, will now be exempt from tax.

Frydenberg said the legislation to bring these changes into effect will be introduced in the next sitting of Parliament on 4 February.

It comes after former prime minister and Labor leader, Kevin Rudd, called for the allowance to be exempted from tax around the country.

Social media users also criticised the tax.

The allowance, which is equal to the controversial Newstart payment, is open to those older than 16 who are Australian residents or holding an eligible visa.

The maximum Newstart fortnightly payment for a single person with no children is $559.

They also must have lost income as a direct result of the fires, and must have been earning less than the fortnightly income threshold.

Additionally, those already receiving an income support payment, parental leave pay or dad and partner pay, ABSTUDY living allowance, farm household allowance or a service pension from the Department of Veterans’ Affairs, are not eligible for the support payment.

The announcement comes after the Morrison government revealed its $2 billion recovery fund.

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