We are frequently asked if workers compensation claims (including WorkCover payments) are taxable. The answer depends on whether it is a weekly income payment or a lump sum settlement.
Yes. The weekly WorkCover payments which an injured worker receives while unable to work, are treated like salary and are therefore taxable.
No, they a tax-free. Lump sum payments made by Workcover for permanent impairment (the degree to which you are assessed as being physically impaired as a result of the injury) and damages you are awarded from a common law claim are not taxable.
It’s important to get advice for your specific situation. Check if you can make a risk-free compensation claim and get free initial advice from our Principal lawyer, Greg Smith.
Have you been asked to go for a workers comp medical exam? Understand how these examinations work or how they differ from a regular medical examination.
If your boss or employer is putting pressure on your not to report an injury, it's very important to know your legal rights and their obligations.