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.
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.
If you have witnessed or experienced a potentially traumatic event while you are at work and are suffering symptoms of enduring mental trauma you may be covered by Workers Compensation. Check your rights.