Wage and salary earners paid a lump-sum
If you are being paid the wage subsidy as a lump-sum instead of weekly payments there may be some tax implications. Although the lump-sum payment makes up 12 weeks-worth of payments, for tax purposes this treated as earned when you receive it. This makes a difference if you were paid the lump-sum payment on or before 31 March 2020.
If you received the lump-sum before 31 March 2020, income that would have normally been earned in the next tax year (after 31 March 2020) will be included in your income tax assessment for this tax year.
The impacts of this additional income are:
- that you may be moved into a higher tax bracket which may result in a tax bill when we complete an automatic income assessment at the end of the tax year
- if, as a result of receiving additional income, your total before tax income for the year exceeds $48,000 you will no longer qualify for the Independent Earner Tax Credit (IETC)
- the additional income may also impact your entitlement to Working for Families Tax Credits
- you may also receive a Student Loan bill for underpaying in relation to the amount of income you have received.
Home-based childcare providers
Information to help you at this time can be found on the COVID-19 Self-employed page.