GST & Claims Settlements

Some examples of how the treatment of GST is applied to a claim:

Registered ABN Business
The Insured incurs $1,100 (including GST) property damage that is claimable under an insurance policy. The Insured has informed the Insurer of their ABN and a tax status of 100%.

1(a) The Insurer organises the replacement of property (a non-cash settlement).

· Insurer purchases $1,100 replacement property
· Insurer claims $100 GST from ATO.

1(b) The Insured organises the replacement of the property and claims reimbursement from the Insurer (a cash settlement).

· Insured buys $1,100 replacement property
· Insured claims $100 GST from ATO
· Insurer pays to the Insured $1,000.

1(c) The Insured is a registered business with a tax status of only 50%

The Insured organises the replacement of the property and claims reimbursement from the Insurer (a cash settlement).

· Insured buys $1,100 replacement property
· Insured can claim 50% of the GST (being $50) from the ATO
· Insurer pays to the Insured $1,050
· Insurer claims 50% of the GST from the ATO (being $50)

Unregistered Business (Private Individual)

The Insured incurs $1,100 property damage (including $100 GST) that is claimable under an insurance policy.

· Insurer purchases $1,100 replacement property
· Insurer claims $100 GST from ATO