If you are injured at work, in a motor accident or in other circumstances where you might bring a claim against the person at fault for your injury, you are going to want compensation or damages for loss of wages.
If all or some of your income has been paid "cash in the hand" and you have not declared that income to the tax office, you are going to face some difficulties.
Tax records and payslips are the primary documents used to prove your income and, if it is in dispute, your employment. Difficulties will arise if these documents do not exist or do not represent the full extent of your earnings.
Insurers paying statutory compensation will look at wage records provided by your employer to assess your claim in the first instance meaning your initial payments will be smaller than they should be.
You may be able to prove your income through bank deposits or other evidence, but you will then be admitting to tax fraud.
If you or your spouse were also claiming income tested Centrelink benefits and you have intentionally failed to declare your full income to Centrelink, you have committed social security fraud.
Intentionally failing to declare some or all of your income to the Tax Office or Centrelink is a serious criminal offence and you should get legal advice from an expert before telling the insurer about your "real" income.
So what should you do if you find yourself in this situation?
First, stop what you are doing and start declaring all of your income from this point forward.
Second, do not try to explain yourself to Centrelink or the ATO without seeking legal advice. Any admissions you make could make it easier for them to prosecute you.
Third you need to get expert legal advice from a specialist personal injury lawyer so you can consider the potential value of your claims and weigh up the risks of "confessing".
Generally the ATO will allow you to file amended tax returns and pay the tax you owe.
Centrelink however are not so forgiving. They will generally prosecute you if they can prove fraud, even if you volunteer to pay back the overpayments. At the very least you could get a criminal record which may affect future employment prospects. At the worst, a prison sentence.
Contact us for more information.
DISCLAIMER: This blog is made available by Mortimer Fox Lawyers to give you general information and a general understanding of the law, not to provide specific legal advice. Unless otherwise stated, all information provided pertains to injuries sustained in or in connection with New South Wales. By using this blog you understand that there is no solicitor client relationship between you and Mortimer Fox Lawyers. This blog should not be used as a substitute for legal advice. If you require legal advice please contact us for an appointment.
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