Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) A compensation payment for the loss of your pay or an allowance is exempt from income tax if:
(a) the compensation payment is made under the Safety, Rehabilitation and Compensation (Defence - related Claims) Act 1988 in respect of an injury (as defined in that Act) you suffered; and
(b) you suffered your injury while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve (but not while on continuous full time service); and
(c) your pay or allowance was payable for service of a kind described in paragraph (b).
(2) A compensation payment for the loss of your pay or an allowance is exempt from income tax if:
(a) the compensation payment is made under the Military Rehabilitation and Compensation Act 2004 in respect of a service injury or disease (as defined in that Act); and
(b) you sustained your service injury or contracted your service disease, or your service injury or disease was aggravated or materially contributed to, while serving as a member of the Naval Reserve, Army Reserve or Air Force Reserve; and
(c) your pay or allowance was payable for service of a kind described in paragraph (b); and
(d) the compensation payment is worked out by reference to your
normal earnings (as defined in that Act) as a part - time Reservist (as
defined in that Act).