May 11, 2022
Manage small business finances

All you need to know about tax-free COVID testing and pandemic leave disaster payments

Just like everything else to do with COVID, the rules keep changing around tax and government payments. It has been announced that PCR and rapid antigen tests (RAT) will be tax deductible for individuals and exempt from fringe benefits tax (FBT) for employers, if purchased for work purposes.

This means that if you have had to purchase RATs to be able to work, you can claim a tax deduction for the cost you have incurred from 1 July 2021 (providing you have evidence of the expense). If the RAT cost $20, someone on a marginal tax rate of 32.5% will receive a tax benefit of $6.50.

For business, it is expected that RAT, PCR and other coronavirus tests will be exempt from FBT for the 2021-22 financial year.

For more information, click here.

Pandemic Leave Disaster Payments rule changes

The rules for the Pandemic Leave Disaster Payment, which is the payment accessible to those who have lost work because they have had to self-isolate with COVID-19, or are caring for someone who contracted it, changed on 18 January 2022.

The new rules change the definition of a close contact in line with the harmonised national definition. The payment is now accessible if you are a close contact because you either:

-     usually live with the person who has tested positive with COVID-19, or
-     have stayed in the same household for more than 4 hours with the person who has tested positive with COVID-19 during their infectious period.

The payment provides:

-     $450 if you lost at least 8 hours or a full day’s work, and less than 20 hours of work
-     $750 if you lost 20 hours or more of work. 

To claim the payment, you will need to be an Australian citizen, permanent visa holder (or temporary visa holder with a right to work) or a New Zealand passport holder. The payment is also subject to means testing with a $10,000 illiquid assets test.

For more information, click here.

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