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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15203
Experience:  15years with H & R Block. Divisional leader, Instructor
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I became totally permanently disabled from a work injury. My

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I became totally permanently disabled from a work injury. My contract on finished in January 2012 so I was unemployed and because of my injury was unable to get another job. I received a TPD lump sum for my injury from my super insurance. I also received a mixture of monthly payments and two lump sums which my super company says is a salary continuance payment or income protection. Both of these payments were received in 2014 and I have a tax bill for this salary continuance payment. I understand that it should not have been taxed because I had no job and was unable to get one because of my injury and feel it was not a payment for loss of income but should be classified as payment for compensation or loss of earning capacity because of my injury.
Submitted: 2 years ago.
Category: Tax
Expert:  Robin D. replied 2 years ago.
Hello and thank you for allowing me to assist you today.
You must include any amounts paid to you for lost salary or wages under an income protection, sickness or accident insurance policy or workers compensation scheme.
You stated you received the payments based on an insurance policy.
If you made a personal injury claim and you agreed to a settlement, or a court ordered in your favour, you may receive compensation in the form of a lump sum payment or structural (periodic) payments (or both). Such payments are tax-free, provided that certain conditions are met.
The method by which you made your claim determines the tax exempt nature of what you received unfortunately.
You can read about Structured Settlements by using the following url:
https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Other-income,-deductions-or-offsets/Structured-settlements---information-for-injured-people/