TAC leave reimbursements
If a person is unable to return to work because of their accident injuries, the TAC can pay a loss of earnings benefit. We call this benefit 'income support'.
Income support is a temporary benefit while a person recovers enough to return to work.
If a person takes paid leave for their accident-related time off work, the TAC can pay income support to their employer. The employer can use the income support payment to reinstate some of the person’s leave. We call this a TAC leave reimbursement.
How the TAC pays income support
TAC client unfit to work because of accident injuries | No leave paid by an employer | The TAC can pay the client income support |
Leave paid by an employer |
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What the TAC needs to make a leave reimbursement payment
When:
- a person has an accepted TAC claim, and
- the TAC has assessed their eligibility for income support,
we can make an income support payment to an employer when we receive:
- a completed and signed leave reimbursement authority form
- the employer must provide their business and bank account details
- a valid Certificate of Capacity for the TAC client’s days off work.
When does the TAC start to pay income support?
In most cases, the TAC starts to pay income support from the 6th day a person is off work after their accident.
By law, the TAC does not pay for the first 5 days off work after a transport accident.
If a person is in ‘acute financial hardship’ they can ask the TAC to waive this requirement and pay for the first 5 days. Here is more information about how the TAC assesses acute financial hardship.
How to reinstate leave for an employee
In most cases, the TAC can pay 80% of a person’s wage, up to a statutory maximum amount. More information about how we calculate what to pay is on our income support page.
When we pay income support to an employer, we pay a gross amount. An employer can use this payment to credit back some of the paid leave to their employee.
Leave reimbursement calculation
The formula to work out how much leave to reimburse is:
$total leave reimbursement payment / $TAC client’s normal hourly rate = the number of hours leave to reinstate for the employee.
For example:
$1,800 / $30 per hour = 60 hours of leave to reimburse.
See below for a case study that uses this calculation.
Peta’s leave reimbursement calculation
Peta works Monday to Friday and does a 37.5 hour week. She is paid $30 an hour and earns $1,125 gross per week.
The TAC assesses her entitlement to income support at $900.00 gross per week (80% of her wage).
After her accident, Peta needs 3 weeks off work (15 work days). This equals 112.5 hours of paid leave.
Her employer pays Peta $3,375 gross in leave payments (112.5 hours x $30 per hour).
By law, the TAC does not pay for the first 5 days a person has from work after their accident.
In this example, the TAC can pay Peta’s employer for 10 days off (2 weeks). The TAC pays Peta’s employer $1,800 in gross income support. This is equal to 60 hours of paid leave ($1,800 / Peta’s hourly rate of $30).
Peta used 112.5 hours of leave after her accident. She gets back 60 hours of leave to use at another time.
What to do if a person stops getting paid leave
Please email the TAC at income@tac.vic.gov.au
Include the TAC client’s name and claim number in the subject line of your email. Let us know the date leave payments stopped.
We will stop paying income support to the employer. We can start to pay the TAC client income support.
What happens if a TAC client returns to work at reduced hours
If a TAC client returns to work on reduced hours, the TAC may be able to pay some income support. Please let the TAC case manager know the details of the return to work so we can work out what to pay.
If a TAC client receives paid leave for the hours they can’t work, the TAC may be able to pay a partial leave reimbursement to their employer.
If the TAC client is not paid leave for the hours they can’t work, the TAC may be able to pay the client partial income support.
Find out more about returning to work on reduced hours on our income support page.
Does the TAC pay superannuation and leave accrual?
No. The TAC calculates how much to pay for income support based on a formula in the Transport Accident Act 1986 (the Act). The calculation is based on a person’s gross pre-accident earnings. It does not take into account amounts for superannuation or leave accrual.
See ‘How to reinstate leave for an employee’ for more information about what the TAC pays.
Does the TAC withhold tax from leave reimbursement payments?
No. The TAC pays a gross payment for leave reimbursements. It is an employer’s responsibility to withhold tax from payments made to their employees.
Can a TAC client receive paid leave from their employer and TAC income support at the same time?
No. The TAC can only pay a TAC client income support if they are not receiving leave payments from their employer.
A TAC client can withdraw their authority for the TAC to pay their employer at any time. When we confirm the date leave payments have stopped, we can start to pay the TAC client income support.
Please email the TAC at income@tac.vic.gov.au if you wish to withdraw your authority for the TAC to pay your employer.
The 2024 pay dates for eligible clients:
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Tax rate adjustment for 2020-2021
The Australian Taxation Office (ATO) has adjusted tax rates for the 2020/21 financial year. This is in line with the changes to personal income tax thresholds announced in the Federal Budget.
From 18 November 2020, if you receive the following benefits from the TAC, these new tax rates will apply to you:
- Loss of Earnings (LOE)
- Dependent Surviving Partners Benefit
- Dependent Surviving Child Benefit
If you receive a Partial Loss of Earning Capacity (LOEC) benefit, the adjusted tax rates may also change the amount you receive from the TAC. This is because you have a capacity to work.
The adjusted tax rate does not change the gross amount we have agreed to pay you. It may change the amount of tax we withhold from your payment, which could change the amount of net pay you receive.
You will receive a tax credit for any extra tax withheld from your payments before our system update. This tax credit will apply when you lodge your 2020–21 income tax return with the Australian Tax Office.
When does the TAC pay leave reimbursements to an employer?
The TAC makes income support payments each fortnight.
We can only make income support payments when we have a valid Certificate of Capacity from a registered medical practitioner.
It is the TAC client's responsibility to make sure they have sent the TAC a valid certificate.
The 2024 pay dates for eligible clients:
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Tax rate adjustment for 2020-2021
The Australian Taxation Office (ATO) has adjusted tax rates for the 2020/21 financial year. This is in line with the changes to personal income tax thresholds announced in the Federal Budget.
From 18 November 2020, if you receive the following benefits from the TAC, these new tax rates will apply to you:
- Loss of Earnings (LOE)
- Dependent Surviving Partners Benefit
- Dependent Surviving Child Benefit
If you receive a Partial Loss of Earning Capacity (LOEC) benefit, the adjusted tax rates may also change the amount you receive from the TAC. This is because you have a capacity to work.
The adjusted tax rate does not change the gross amount we have agreed to pay you. It may change the amount of tax we withhold from your payment, which could change the amount of net pay you receive.
You will receive a tax credit for any extra tax withheld from your payments before our system update. This tax credit will apply when you lodge your 2020–21 income tax return with the Australian Tax Office.
