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Income from Lottery Winnings

Lottery Winnings

For income support purposes, lottery winnings are considered ordinary income as defined in section 5H(1).

Lump Sum Lottery Winnings

Under section 46A of the VEA, lottery winnings that are paid as a single lump sum amount will be taken to have received one fifty-second of that amount as ordinary income of the person during each week in the 12 months commencing on the day on which the person becomes entitled to receive the lump sum amount.

Periodic Lottery Winnings

Lottery winnings that are payable as a series of periodic instalments for a determined period of time or “for life” will be calculated as part of a person’s ordinary annual income for that period.

Examples:

  1. A pensioner is receiving $50,000 per year for 10 years in lottery winnings.This will add $50,000 per year to their rate of ordinary (annual) income;

  2. A person receives $1,000 per month for 6 months, in lottery winnings.This will add $12,000 per month to their annual rate of ordinary income for that 6 month period. That is, an additional $1,000 per month will be assessed for each of the 6 months.In the 7th month the annual rate of ordinary income will return to zero.