"Gross income from personal exertion” considered in Nicholson v Victorian WorkCover Authority [2016] VSCA 146

  • Author : Fiona Ryan - 24-06-2016

The Victorian Court of Appeal considered the construction and operation of section 134AB(38)(f) of the Accident Compensation Act 1985 (“the Act”) specifically the construction of “gross income from personal exertion.” The Court also considered section 6(2) of the Transport Accident Act 1986 which contains the definition of “income from personal exertion” that is expressly adopted by s 134AB(38)(a) of the Act.

Two questions were reserved for the opinion of the Court by a County Court judge during the course of the hearing of a serious injury application.

The plaintiff sought leave to issue proceedings for the recovery of pecuniary loss damages pursuant to s 134AB(37) of the Act. At the time of the serious injury hearing the plaintiff worked part-time and amounts paid to him included a travelling allowance and a clothing allowance (“the allowances”). Against his income, the plaintiff claimed in his tax returns work-related motor vehicle expenses and work-related clothing expenses (“the deductions”).

The plaintiff contended that for the purpose of assessing his “with injury” earnings pursuant to s 134AB(38)(f)(i)(A) the allowances are not to be included in his “gross income from personal exertion.” The plaintiff further contended that if the allowances were included, his “gross income from personal exertion” is calculated by deducting his work-related deductions as claimed in his tax returns.

The two questions considered by the Court of Appeal were:
(a)           Does the plaintiff’s ‘gross income from personal exertion’ (expressed at an annual rate) for the purposes of s 134AB(38)(f) include the allowances?
(b)           If yes to (a), how is the plaintiff’s ‘gross income from personal exertion’ to be calculated? In particular, is it calculated by deducting from his income (including allowances) the deductions claimed in his tax returns for work related motor vehicle and clothing expenses.

The Court of Appeal answered the questions as follows:
(a)           Yes.
(b)           It is to be calculated in accordance with the text of the definition contained in s6(2) of the Transport Accident Act 1986. It is not to be calculated by deducting, from the plaintiff’s income, deductions claimed in the plaintiff’s income tax returns for work-related motor vehicle and clothing expenses.

Click here to access the judgment:
http://www.austlii.edu.au/au/cases/vic/VSCA/2016/146.html

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Fiona Ryan

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"Gross income from personal exertion” considered in Nicholson v Victorian WorkCover Authority [2016] VSCA 146

Fiona Ryan Date: 24-06-2016