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Edited version of private advice
Authorisation Number: 1052179842790
Date of advice: 31 October 2023
Ruling
Subject: Legal fees - deductions
Question
Are you entitled to a deduction for the portion of the legal expenses incurred in relation to you seeking compensation for your weekly WorkCover payments?
Answer
Yes, the associated legal expenses in relation to you seeking to have the WorkCover payments be back paid relates sufficiently to the earning of your assessable income and are therefore deductible under section 8-1 of the Income Tax Assessment Act 1997.
This ruling applies for the following period:
XX July XXXX
The scheme commenced on:
XX XX XXXX
Relevant facts and circumstances
On XX XX 20XX you sustained a personal injury while performing your work duties as a process operator.
On XX XX 20XX you lodged a Worker's Injury claim in regard to your injury with your insurer.
The incident was subsequently accepted by your insurer, and weekly payments commenced on the XX XX 20XX.
On XX XX 20XX, your insurer gave notice of the termination of your entitlement to medical and like expenses for your injury.
On XX XX 20XX you lodged a statement of claim at the Magistrates Court, in which you were seeking a reinstation of your weekly Workcover payment.
On XX XX 20XX you settled with your insurer and agreed to a lump sum payment of 45 weeks' pay for the date between XX XX 20XX to XX XX 20XX.
You incurred $XX in legal fees in seeking your settlement.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1