Personal Injury & Compensation
Personal Injury & Compensation

Make the Best of an Unfortunate Situation

 

Compensation payments are often a once off occurrence, so getting the right  advice can make a significant difference to your financial position going forward.

        

For instance, there’s a special exemption that may allow you to contribute all (or part) of your payment into your superannuation where you can commence a tax free, fully accessible income stream without the risk of breaking the rules.

In order to take advantage of this exemption your payment needs to meet at least one of the following criteria:
  • The payment is for the settlement of a claim for compensation or damages for personal injury.
  • The payment is for the settlement of a claim for personal injury suffered in relation to workers compensation.
  • The payment is made following a court order for compensation or damages for personal injury.

It’s also important to note that if your payment combines personal injury compensation with other compensation, for medical expenses or property damage for instance, only the amount relating to personal injury is exempt from the super contribution cap.

 

Timing is crucial

You need to make the contribution within 90 days of whichever of the following events occurs last:

  • Receipt of the payment (when you or your legal representative receives it).
  • An agreement for the settlement of a personal injury payment is reached.
  • A court order for a personal injury payment is handed down.

You also need to advise your super fund you are claiming the exemption before or at the time of the contribution.

 

Tax free access?

If you can make a Personal Injury Payment into superannuation, you might also qualify to release your super based upon Total and Permanent Disability rules.

This may then permit you to commence a retirement phase pension which has tax-free earnings.

If established correctly it can also provide you with a tax-free income and access to lump sum withdrawals.

 

Personal Injury & Compensation

Making the Best of an Unfortunate Situation

Ensuring you are eligible to take advantage of these rules before you act is paramount. The details in these rules can make a big difference and if not fully understood the resulting outcomes may place you in a worse position.

Our Director of Wealth, Kurt Purkiss, has over a decade of experience in dealing with these cases.

If you would like to explore your options call (02) 4969 6600 to book in for a complimentary chat.

Contact Us

Please feel free to reach out to us at any time. Call or use the convenient email link below to submit your questions or book a complimentary assessment.
NEWCASTLE

Level 1, 56 Hudson Street
Hamilton NSW 2303
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Office (02) 4969 6600
Fax (02) 4969 6655
info@lambourne.com.au

SYDNEY

Level 25, Aurora Place
88 Phillip Street, SYDNEY NSW 2000
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Office (02) 8313 7071
Fax (02) 4969 6655
info@lambourne.com.au

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