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16 Nov 1111 Payment was an employment termination payment - Luke

The AAT has held that a payment of $20,000 made to the taxpayer (a lecturer) by his former employer (Monash College) was an employment termination payment rather than a capital payment for personal injury.

With respect to the claim of personal injury, the taxpayer asserted that, during the term of his employment, he suffered management abuses including unauthorised disciplinary actions, victimisation and defamation. He was involved in an industrial dispute with the employer after being stood down from teaching. He claimed to have been subsequently harassed, bullied and intimidated at meetings with the employer. All of this had had an impact on his mental, physical and emotional state.

The AAT said at para 47:

"From the Tribunal's observations at the hearing, the applicant appears emotional but in no way mentally ill or incapacitated. The applicant has been affronted, and continues to feel angry and emotional about his perceived mistreatment but this does not amount to a personal injury."

It also said at para 50:

"...evidence is required that the payment had some form of identifiable and unambiguous connection with a personal injury, for which compensation was necessary as a reflection of the fact that the applicant's capacity to derive income from personal exertion had been impaired. There is insufficient evidence to this effect in the present case."

The AAT affirmed the Commissioner's decision under review: Luke and FCT [2011] AATA 801 (AAT, Hughes M, 14 November 2011).


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