Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 54 - Exemption for certain payments made under structured settlements and structured orders  

Subdivision 54-C - Tax exemption for personal injury lump sums  

Operative provisions

SECTION 54-60   Requirements for payments of the lump sum  

54-60(1)    
The instrument under which the *personal injury lump sum is paid must specify the date and amount of the payment of the lump sum.

54-60(2)    
The instrument may only allow the amount of the payment to be varied by increasing the amount:

(a) in order to maintain its real value:

(i) by indexation by reference to increases in the *All Groups Consumer Price Index number; or

(ii) by indexation by reference to increases in the full-time adult average weekly ordinary time earnings, published by the Australian Statistician; or

(b) by a percentage specified in the instrument.

54-60(3)    
The instrument may only allow the amount of the payment to be varied:

(a) by only one of the methods referred to in subsection (2); or

(b) by whichever of 2 or more of those methods would result in the biggest or smallest increase.

54-60(4)    
A reference in this section to specifying a date or percentage requires an actual date or figure to be specified, not merely a method of determining a date or figure.

Example:

Under subsection (1), " 13 September 2002 " would be allowed, but " The date on which the annuitant finishes university " would not be allowed.