
What are the tax implications for informal workers’ compensation settlements?
In February this year the Australian Tax Office (ATO) made a private ruling on the following question: ‘Is the income compensation component of the redemption settlement payable under Workers Compensation and Injury Management Act 2023 (WA) included in your assessable income under section 6-5 of the Income Tax Assessment Act 1997 (Cth)?’ The ATO’s very short answer was ‘Yes’.