Treating periodic compensation payments as a direct deduction or income 108-03190040

Item

Description

Example 1

Keith worked on a casual basis and suffered a workplace accident on 1 April 2024.

Keith left work early on 1 April 2024 to seek medical treatment and was given 6 weeks off work to recover.

Keith was not paid any wages for the time taken off work.

Assessment

• The date of the compensable event is 01 April 2024. This is the first date Keith started to lose wages due to the accident
• This date is recorded in the Loss of Earnings Start Date field in CMS
• If Keith was qualified for and in receipt of a CAP as of 1 April 2024, his periodic compensation is treated as ordinary income
• If Keith was not qualified for and not in receipt of a CAP as of 1 April 2024, his periodic compensation is treated as a direct deduction

Example 2

Lisa worked part time and injured her shoulder at work on 20 February 2022.

Lisa continued to work until 2 March 2022.

From 3 March 2022, Lisa was unable to continue work and visited her doctor.

Lisa has not received any wages or leave payments from her employer since 3 March 2022.

Assessment

• The date of the compensable event is 3 March 2022. This is the first date Lisa started to lose wages because of the injury
• This date is recorded in the Loss of Earnings Start Date field in CMS
• If Lisa was qualified for and in receipt of a CAP as of 3 March 2022, her periodic compensation is treated as ordinary income
• If Lisa was not qualified for and not in receipt of a CAP as of 3 March 2022, her periodic compensation is treated as a direct deduction

Example 3

Trevor was exposed to asbestos in 1985 and retired from the workforce in 2019.

Trevor was diagnosed with a dust disease on 14 April 2021.

Assessment

• The date of the compensable event is 14 April 2021. This is the date Trevor’s disease was diagnosed
• This date is recorded in CMS under the Incident Date field
• No date is required to be recorded in the Loss of Earnings Start Date field in CMS
• If Trevor was qualified for and in receipt of a CAP as of 14 April 2021, his periodic compensation is treated as ordinary income
• If Trevor was not qualified for and not in receipt of a CAP as of 14 April 2021, his periodic compensation is treated as a direct deduction