What this ruling covers
The Australian Taxation Office has issued Class Ruling CR 2026/46, which sets out the tax treatment of payments made to NSW forestry industry workers who lost their jobs as a result of the state government's move away from native timber harvesting.
The ruling covers payments made under the NSW Government's Forestry Industry Worker Support Program, administered by the Department of Primary Industries and Regional Development.
The ruling applies from 11 November 2025 to 7 September 2028.
The three payment types and their tax treatment
1. Government top-up redundancy payments
These payments are tax-free up to the genuine redundancy limit under the Income Tax Assessment Act 1997. Any amount above that limit is treated as an employment termination payment and taxed based on the individual worker's circumstances.
2. Education and training cost reimbursements
These reimbursements are not assessable income and do not count as fringe benefits.
3. Relocation cost reimbursements
Reimbursements covering removalists, property purchase and tenancy costs, incidental relocation costs, and short-term accommodation are not assessable income and do not count as fringe benefits.
Key actions
- Former NSW forestry industry employees who received or expect to receive payments under the Forestry Industry Worker Support Program are required to identify which payment type they received - government top-up, education and training reimbursement, or relocation reimbursement - as each has different tax treatment.
- Recipients of a government top-up payment are required to determine with a tax agent whether the payment qualifies as a genuine redundancy payment (tax-free up to the limit) or an employment termination payment, as this depends on individual circumstances.
- Education and training cost reimbursements and relocation cost reimbursements are not to be included as income on a tax return - the ruling confirms these are not assessable income.
- The full authorised ruling is available at https://www.ato.gov.au/law/view/document?docid=CLR/CR202646/NAT/ATO/00001 to confirm whether the ruling applies to a specific situation.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.