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.

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Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.