An amount paid to a person to reimburse for the cost of expenses they have incurred is not considered income. The person does not gain additional benefit from the payment. When an organisation or employer pays MORE than the amount actually incurred by a person, the extra IS income as the person has gained additional funds in excess of the amount they paid for expenses.
Example: A payment is not considered income when an employee pays accommodation costs for a work trip up front and their employer reimburses the employee after for the expenses incurred.
Act reference: SSAct section 8(1) Income test definitions
Payment of an allowance from an employer for expenses incurred IS income where there is discretion to use for the employee's own use or benefit. The payment is NOT included in any income assessment when payments are specifically for expenses associated with their employment and the employee does not have discretion to use for other purposes.
Policy reference: SS Guide 18.104.22.168 Employment Income for Allowees, 22.214.171.124 Assessment of Income for Sole Traders & Partnerships, 126.96.36.199 Assessment of Business Deductions & Losses for Sole Traders & Partnerships
For the income test treatment of ministers of religion see 188.8.131.52.
Where a volunteer worker receives reimbursement from an agency specifically for out-of-pocket expenses incurred the payment is NOT assessed as income. Payment IS income where the volunteer has discretion to use the amount for their own use or benefit.
Examples: Reimbursements to volunteer workers such as telephone calls, travel expenses or purchases.
A payment (including for out-of-pocket expenses) to a person for serving, or being summoned to serve, on a jury is NOT income.
A payment to a person for expenses as a witness, other than an expert witness, before a court, commission or tribunal is NOT income.
Exception: Payments to expert witnesses for special skills or knowledge, ARE treated as income if they are:
Act reference: SSAct section 8(8) Excluded amounts-general, see (zg) and (zh)
Policy reference: SS Guide 4.3.3 Income from Employment
Many overseas countries provide one-off payments on the death of a contributor or pensioner to assist with funeral and other costs associated with the bereavement. An amount paid to a person in respect of the cost of funeral and other expenses that were associated with the bereavement is not considered income provided the delegate is satisfied that the expenses were incurred by the person.
Act reference: SSAct section 8(1)-'income', see paragraph (a)
Last reviewed: 11 November 2013