What you can claim
If your injuries have affected your ability to work, you may be eligible to claim compensation for economic loss (the loss of, or reduction in, earning capacity). This applies after the first week that you were unable to work (or work to the same extent or hours as you did before the accident) because of your injuries, under Section 54(1) of the Civil Liability Act 1936 (the CL Act).
Assessing your economic loss
Assessing your economic loss takes into consideration past or future impairment of earning capacity and loss of opportunity (such as overtime, promotions or new jobs). You will need to provide proof of your earnings; you should speak to your CTP Insurer (or to your legal representative, if you have one) about what information (such as payslips, tax returns or an employer’ letter) will be required to assess your economic loss.
There is no minimum ISV to claim for past economic loss, however, to claim for future economic loss (including impairment of future earning capacity or a chance of that loss occurring in the future) your dominant injury of the injuries caused by the motor vehicle accident must have an ISV of 8-100, required under Section 56A(2) of the CL Act.
Economic loss payments
Under Section 56A(5) of the CL Act, all compensation payments for loss or impairment of earning capacity are subject to a fixed discount reduction of 20% (applied after any other reductions for contributory negligence or fixed statutory reductions).
The total amount of compensation that you can receive for loss of earning capacity (excluding interest on past economic loss) is not to exceed a prescribed maximum which is indexed annually and is shown in the Table of Prescribed Maximum Economic Loss.
Interest may be claimed on past economic loss but cannot be claimed for non-economic or future loss, according to Section 56 of the CL Act.
Expand the boxes below to find out more about calculating compensation for economic loss.
How economic loss is determined
If you were an employee at the date of the accident and you are unable to work for a period of time after the accident (or worked reduced hours/lost usual overtime/ or went on alternative duties at a lower salary), your CTP Insurer may reimburse this loss on resolution of your claim. You must provide your CTP Insurer with proof of your earnings (both prior to and after the accident).
Generally, your lost income is calculated from your after-tax income. The first week of your loss of earnings is excluded from compensation, under Section 54(1) of the CL Act.
If you were self-employed at the date of the accident, you should speak to your CTP Insurer for information specific to your circumstances. If your spouse or domestic partner is also your business partner, they may be eligible to make a claim for their financial loss as a result of your accident-related injuries (refer to Section 66 of the CL Act).
If you were not working at the time of the accident and you were taking time off between jobs or intended to go back to work in the future (but are prevented from doing so because of your injuries), you will need to provide the CTP Insurer with proof of any previous income, such as letters from past/prospective future employers and tax returns.
Your entitlement to future economic loss or impairment of future earning capacity may be based on a chance of that future loss occurring and a court or your CTP Insurer must apply these legislative provisions when calculating that loss (see Section 56A of the CL Act for more information).
Loss of superannuation contributions
If you prove your eligibility for compensation for loss of income (or impairment of earning capacity), any loss of employer superannuation contributions applicable to that calculation of economic loss will be added to your loss. Past loss of superannuation is calculated at the Australian Government’s Superannuation Guarantee Rate of 9.5%. Future loss is calculated based on the Superannuation Guarantee Rate as provided by the Australian Taxation Office.
Should your employer have paid superannuation contributions at a higher rate, for example under an Industry Award/Enterprise Bargaining Agreement (EBA) or employment contract, you will need to provide your CTP Insurer with proof of this higher rate, such as payslips and a copy of the Award, EBA or contract.
If you were self-employed at the time of the accident and were paying yourself superannuation under a business arrangement, you will need to provide proof of this to the CTP Insurer.