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Non-concessional contributions

Personal injury contributions

Section: 5.5

Personal injury contributions are not counted against the non-concessional contributions cap. To qualify as a personal injury contributions the contribution must arise from the settlement of a claim in respect of a personal injury to the member:

Qualifying personal injury payments Details When contribution must be made
Structured settlements Settlements of a claim for compensation or damages for personal injury suffered by the persona and the claim is made by the person or their "legal representative"

The settlement takes the form of a written agreement between the parties to the claim (whether or not a court order is required to make the agreement effective

Within 90 days of the later of:
  • receipt of payment or
  • date agreement (or court order takes effect)
Lump sum worker's compensation payment Settlement of a claim in relation to a personal injury suffered by the person under a low of Commonwealth or of a State or Territory relating to workers compensation Within 90 days of the receipt of the payment
Court order for a personal injury payment Order is made in respect of a claim that is for compensation or damages for personal injury suffered by the person and the claim is made by the person or their "legal representative".

the claim is based on the commission of a wrong, or on a right created by statute

the order is not an order for a structured settlement

Within 90 days of the later of:
  • Receipt of payment; or
  • Date the court order is made

Furthermore, the following conditions must be satisfied to qualify as a personal injury contribution:

  • two legally qualified medical practitioners must have certified that, because of the personal injury, it is unlikely that the member can ever be gainfully employed in a capacity for which they are reasonably qualified because of education, experience or training, and
  • the member or their legal personal representative gives the fund a competed 'Contributions for personal injury' from when (or before) making the contribution. This effectively notifies the fund it is a personal injury contribution. This form can be obtained from the ATO website.

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Tuesday, September 15, 2020