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Compensation and insurance payments

Check if you need to declare and pay tax on compensation and insurance payments, including settlements.

Last updated 25 April 2023

Personal injury compensation structured settlements
A structured settlement you receive as compensation for a personal injury is tax exempt if it meets certain conditions.

Compensation paid from financial institutions
When tax applies to a compensation payment you receive from a financial institution.

Services Australia income compliance class action settlement payments
A settlement payment you receive from the Services Australia income compliance (Robodebt) class action is not taxable.

Redress scheme payments
Redress scheme payments made as compensation or damages for a wrong, injury or illness are non-assessable income.

Payments of conflicted remuneration
Payments of conflicted remuneration you receive may need to be included as income in your tax return.

Volkswagen, Skoda and Audi emissions settlement payments
An income tax treatment may apply to a settlement payment you receive from the Volkswagen, Skoda and Audi class action.

Income protection insurance payments
Declare payments from an income protection, sickness or accident insurance policy in your tax return.

A structured settlement you receive as compensation for a personal injury is tax exempt if it meets certain conditions.

When tax applies to a compensation payment you receive from a financial institution.

A settlement payment you receive from the Services Australia income compliance (Robodebt) class action is not taxable.

Redress scheme payments made as compensation or damages for a wrong, injury or illness are non-assessable income.

Payments of conflicted remuneration you receive may need to be included as income in your tax return.

An income tax treatment may apply to a settlement payment you receive from the Volkswagen, Skoda and Audi class action.

Declare payments from an income protection, sickness or accident insurance policy in your tax return.

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