Calculating Fox v Wood Claims
We have previously talked about Fox v Wood claims in a previous post. In Fox v Wood (1981) 148 CLR 438, the High Court of Australia established that a plaintiff is entitled to recover any additional income tax paid on refundable workers compensation payments.
Put simply, if an injured party receives workers compensation payments that are later repaid from damages awarded, and those payments have increased their tax liability, the excess tax paid can be claimed.
This claim ensures the injured party is not worse off tax-wise as a result of the structure of the compensation system.
How to Calculate a Fox v Wood Claim
The Fox v Wood amount is calculated as:
Tax on full taxable income less Tax on income minus the workers' compensation refund
The difference represents the additional tax burden caused by the compensation payments. This is the amount recoverable under a Fox v Wood claim.
Sample Calculation Table
You can use the following template in conjunction with our Tax Calculator to calculate Fox v Wood amounts over multiple financial years:
Fox v Wood Calculation Table
2006 | 2007 | 2008 | 2009 | Total | |
Taxable Income (A) | |||||
Workers Compensation (B) | |||||
Income less Workers Comp (C = A − B) | |||||
Tax on Taxable Income (D) | |||||
Tax on Income less Comp (E) | |||||
Fox v Wood Claim (F = D − E) | $_____ |
Tip: Highlight the table and copy-paste it directly into your Word document for easy use.
When to Include a Fox v Wood Claim
These claims are typically included in personal injury litigation where:
Workers compensation payments are refunded from the plaintiff’s award
The plaintiff’s assessable income increases due to those payments
There is a measurable tax consequence
Need Help with a Fox v Wood Assessment?
At Dolman Bateman, our team has extensive experience in preparing economic loss and tax-related components of personal injury claims, including Fox v Wood assessments.
If you have a question or would like us to assist with your claim, get in touch today.
Disclaimer: The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. All content relates to the current financial year only. Future changes to tax laws, thresholds or administrative requirements may affect the accuracy or relevance of this information, so you should always confirm that the guidance remains current. While every effort has been made to ensure accuracy at the time of publication, Dolman Bateman accepts no responsibility or liability for any loss or damage arising from reliance on this information. You should seek professional advice tailored to your circumstances before making any financial or tax decision.