Business receipts and personal work
How does ongoing business income affect weekly CTP payments for a self-employed person?
Separate business turnover from income produced by the claimant’s own work
A business can keep receiving money after its owner is injured because customers pay old invoices, employees or subcontractors perform work, stock is sold or the business earns passive income. Those receipts do not automatically equal the claimant’s post-accident weekly earnings or earning capacity. Equally, a claimant cannot ignore work personally performed or income retained through the business. Prepare contemporaneous accounts showing revenue, timing, expenses, staffing, owner drawings and the claimant’s actual duties, then compare the insurer’s calculation with the statutory loss-of-earnings and capacity tests.
The Schedule 1 definition of income from personal exertion includes proceeds of a business carried on alone or in partnership, but applying that concept to a trading business requires reliable evidence. Turnover, taxable profit, cash flow, drawings and personal labour are different measures.
This page concerns post-accident business income and weekly payments. The earlier PAWE calculation for a self-employed person is a separate task. A business may have the same receipts before and after the accident while the owner works less and incurs replacement labour costs, or receipts may fall for reasons unrelated to the injury.
Reviewed by Herman Chan, Stephen Young Lawyers
Why continuing receipts do not settle the weekly-payment question
Invoice dates, service dates and payment dates should be separated. A payment received after the accident may relate to work completed earlier. Conversely, work completed after the accident may not be paid until later. A bank statement without the invoice and ledger can allocate income to the wrong week.
Identify who produced the revenue. Payroll, subcontractor invoices, job sheets and customer records may show that others replaced the claimant’s labour. Record any increased wage or contracting costs and any change in the claimant’s role, hours or productivity.
Owner drawings are not necessarily the same as current earnings. A person can draw retained funds while doing no work, or leave earned income in the business. Tax and accounting material should explain the economic substance rather than allowing one account entry to decide the claim.
How can the insurer assess work and earning capacity?
The insurer may examine the claimant’s actual post-accident tasks, hours, supervision, travel, customer contact and management activity. A Certificate of Fitness should address the real physical, cognitive and psychological demands of the business, not merely list the occupation as “self-employed”.
Actual business results can be relevant to capacity but are not conclusive. A short period maintained through unpaid family help or unsustainable hours may overstate capacity. A market downturn, lost licence, equipment failure or unrelated business decision may reduce income without proving accident-related incapacity.
After week 78, the statutory test can include any employment reasonably available, not only the existing business. Skills, experience, age, rehabilitation and labour-market evidence may therefore become relevant even if the business continues.
How should a self-employed weekly-payment dispute be prepared?
Ask the insurer to identify the figure it treats as actual post-accident earnings and how it derived it. Prepare a month and week schedule reconciling invoices, bank receipts, expenses, payroll, subcontractors and owner work. Explain legitimate accounting adjustments and disclose assumptions.
Worked example: a landscaping business receives $18,000 after the accident, including $10,000 for pre-accident jobs and $8,000 for work completed by employees. The deposits alone do not show $18,000 of the injured owner’s personal earnings. The invoices, service dates, wages, expenses and owner duties are needed before a weekly figure can be assessed.
Use accountant evidence for the numbers and legal review for the statutory character and capacity question. An amended tax return may assist but should be tested against contemporaneous records. Challenge the exact insurer decision through the appropriate review process.
Practical next steps
Reconcile ongoing business income
Show when income was earned, who did the work and what costs changed.
Separate service and payment dates
Match invoices to the work period rather than the bank deposit alone.
Identify the labour source
Record claimant, employee, subcontractor and family work separately.
Reconcile expenses
Keep payroll, replacement labour and ordinary business-cost records.
Document the claimant’s duties
Use activity records and medical evidence addressing real tasks and hours.
Obtain an accountant schedule
Explain turnover, profit, drawings and the weekly figure relied on.
Evidence
Self-employed post-accident evidence
A reliable schedule should reconcile source documents, not just annual totals.
- Sales ledger, invoices and dates services were performed.
- Business bank statements and cash records.
- Profit and loss statements, BAS and tax returns.
- Payroll and subcontractor invoices.
- Replacement labour and additional expense records.
- Owner drawings, distributions and accountant explanation.
- Diary of claimant duties, hours and assistance.
- Certificates of Fitness and insurer calculation.
Business-income mistakes
- Do not equate turnover, bank deposits, profit and personal earnings.
- Do not allocate an old invoice entirely to the payment week.
- Do not ignore unpaid family work or replacement labour.
- Do not use annual tax figures without explaining the relevant weeks.
- Do not assume the business continuing proves full personal capacity.
Timing
Keep records while the business is operating
A later reconstruction is harder when source records and job details are lost.
- Notify the insurer immediately of changed work or employment earnings.
- Provide requested business evidence as soon as reasonably possible.
- Keep the receipt date of each weekly-payment or capacity decision.
- Do not wait for year-end accounts if a review period is already running.
Frequently asked questions
- Does every business deposit reduce weekly payments?
- No. The deposit must be characterised and allocated. It may relate to earlier work, work by others or another source, but all relevant income must be disclosed.
- Are owner drawings the same as earnings?
- Not necessarily. Drawings can come from retained funds, and earned income can remain in the business. Obtain an accounting reconciliation.
- What if my spouse now runs the business?
- Document the change, duties, hours, payments and ownership arrangements. The evidence should show who performed the work and received the economic benefit.
- Can replacement labour costs be relevant?
- Potentially. Keep invoices and payroll and explain why the cost arose. The legal and accounting treatment still requires assessment.
- Can the insurer assess capacity outside my business?
- After week 78, any employment reasonably available may be considered under the broader statutory factors.
- Should I amend my tax return to support the claim?
- Tax records should be accurate for tax purposes. Do not amend solely to produce a claim figure without accountant advice and underlying evidence.
Related NSW CTP guides
Official sources
- Motor Accident Injuries Act 2017 (NSW), current in-force version
- Motor Accident Injuries Regulation 2017 (NSW), current in-force version
- SIRA Motor Accident Guidelines, current published version
- SIRA Motor Accident Guidelines Part 4: claims
- Personal Injury Commission: merit review disputes
This page is based on the current Motor Accident Injuries Act 2017, the Motor Accident Injuries Regulation 2017 and Motor Accident Guidelines version 10.1. The correct result depends on the accident date, entitlement period, written insurer decision and current evidence.
Self-employed payment review
Is business turnover being treated as your personal weekly earnings?
Send the insurer schedule, accountant reconciliation, invoices, payroll and capacity evidence. We can identify the accounting and statutory issues requiring review.
General information only: This page provides general NSW CTP information, not legal, employment, accounting, tax or financial advice. It does not calculate an individual weekly benefit, determine work capacity, guarantee a review outcome or extend any time limit.