Why it’s important to make sure your payment summary is correct

TAXThis story was supplied to us by another brave injured worker, who just like the rest of us, entered the Workers Compensation System thinking their well being would be given priority – only to realise that once you are within the system, it starts to impact other areas of your life – it seems that even taxation can become an issue within the NSW Workers Compensation System.

I am an injured worker. I was bullied at work and am psychologically injured. I have not been able to work for over a year, and have been on worker’s compensation all that time. I experienced the usual delays with weekly payments commencing, and then my first payment was a lump sum to cover a period of several weeks.

A couple of months after payments commenced the insurer advised they had made an error in calculating my weekly payment amount and had overpaid me. They required repayment, but would take instalments from future weekly payments. They wanted the GROSS amount of the overpayment repaid. The overpayment and the repayment would occur within the same financial year. Perhaps other injured workers have experienced a similar situation.

I ended up taking my concerns about the amount of the repayments to the Workcover Independent Review Office. Turned out there is an ATO document (under information for businesses, rather than for individuals, which is why I missed it when I checked the ATO website) called: “PAYG withholding – repayment of overpaid amounts”.  That document clearly showed the insurer was wrong seeking repayment of the gross overpayment, and I was only required to repay to the insurer the NET amount of the overpayment because the overpayment and repayment occured in the same financial year. The document also states that, where the overpayment and repayment are in the same financial year, the Group Certificate for that year should NOT include the overpayment in the payment summary amount. Clear as day, problem solved one may think.

The insurer then admitted their error, but by then I had repaid in excess of the NET amount of the overpayment. The insurer then reimbursed me the excess. That should have been the end of the insurer stuff ups, but, unfortunately it was not.

The insurer provided my group certificate in July for the 2012-13 financial year. They, incorrectly, included the total of the overpayment in the payment summary amount! It makes it look like I got paid more than I really got. I then began another battle with the insurer.

Despite their error being pointed out, and despite me showing them where they went wrong and what the correct amounts should have been on the group certificate, the insurer is refusing to correct their error. They say they have addressed my concerns! The insurer also seems to have forgotten they previously wanted me to repay the gross overpayment, and now alleges it was some sort of computer error than caused them to be seeking from me repayment of the net overpayment amount! In dealing with the matter the insurer has, in my view, acted unconscionably. The insurer is not following ATO requirements, nor acting rationally. They refuse to acknowledge their mistake. Other documents they have provided to me indicate some of their records are incorrect.

The insurer is seeking to have me lodge my tax return using the group certificate they provided.  I will not do that, because, among other reasons, that would be dishonest. They have put me to the trouble of having to lodge my tax return by completing a statutory declaration, which has details of the error on the group certificate and outlines the correct details. If the errors were not corrected in a document of this type, then imagine an injured worker later getting a lump sum compensation payment, which involves paying back weekly payments already to the injured worker – they may end up having to pay back more than they received as weekly payments due to the error in the insurer’s records.

Any injured worker who receives a group certificate from an insurer may want to check what they were paid, and what tax was withheld, during the relevant financial year against the amounts shown on the group certificate. This is even more important to do if there were any overpayments and repayments of weekly payments.