23AG employee receives general damage payment after resign

 Author: AlliATO(Community Support)Community Support

12 Dec 2022

Hi @LXFMAIL

Thanks for your reply Connie.

I’ve done some checking; we would see a general damages payment under a deed of settlement as a form of compensation because of an incident incurred and/or suffered by the employee.

These forms of payment can be quite complex in nature, we’re not able to state if the payment would be deemed as ordinary income, an eligible termination payment (ETP), or a capital gain. It would depend on all the circumstances surrounding the general damages payment.

I would recommend seeking a Private ruling outlining the circumstances of the general damage payment, the deed and if being a 23AG employee will have any bearing on the ruling, and how the payment will be treated.

Based on the outcome of the ruling it would state how the payment should be treated by the employer and the employee.