Bushfire compensation to start flowing – but tax grab leaves sour taste in mouth

14 November 2016
Money from the record-setting Maurice Blackburn Black Saturday bushfire class actions will start going to survivors before the year’s end, the Supreme Court has heard today.

While the distribution news will be welcome for long-suffering bushfire survivors, the Australian Tax Office has decided to tax interest on money set aside for bushfire survivors and could diminish their payouts to the tune of $20 million.

Maurice Blackburn Lawyers has today announced it is seeking legal advice and may challenge the Tax Office on what it believes is an unfair ruling against bushfire survivors.

“We have fought for bushfire survivors every step of this long, tough road, and we’re not about to let this latest hurdle pass unchallenged either,” Maurice Blackburn Principal Andrew Watson said.

“While it won’t affect the timing of payments starting to be distributed to our clients this year, and the net effect is a few cents in the dollar on recoveries, we believe the tax office’s decision is wrong, and if our expert legal advice reaffirms that, we will fight to recover that money for clients.”

“Our clients will receive their initial payments which are on track to go out as previously advised (this year for personal injury claims and early next year for property and economic loss claims), but if we successfully challenge the tax office there may be a further distribution.”

Mr Watson said the firm had been trying to get clarity from the ATO on the taxation issues from mid-2015 in order to help with the distribution process and the shock news had only been provided within the last fortnight, prior to today’s case management hearing.