Income tax: does paragraph 26(e) apply to a lump sum paid by an employer to compensate an employee for a change in working conditions?

Yes. A lump sum paid by an employer to compensate an employee for a change in working conditions is included in the employee's assessable income under paragraph 26(e). It is paid as a consequence of the existing relationship of employer and employee. The relationship alone is not sufficient to attract the subsection unless it is also a contributory cause of the payment.