Legal History | What Happens If You're a Victim | Australian Structured Settlements Extract of the presentation Mrs Vale made to Parliament on 23 June, 1999 Adjournment Tax Reform Structured Settlements Mrs Vale (Hughes)(9:41p.m) - I rise tonight to bring to the attention of this honourable House and to the people of Australia the launch of a very important proposal for tax reform which will be of significant benefit to accident victims and their families, to the federal government and to all taxpaying Australians. This is the story about a little boy called Jackson, who is driving a special group of people called the Structural Settlement Group, a national body whose members have come to an historic agreement, rare as a confluence of mutual interest in the disparate important tax initiative for all Australians. I first met Jackson about two years ago when he was four at his preschool called Heathdene in my electorate Heathcote. This is Jackson's story and through his grandmother, my Friend Judie Stephens, he would like to tell this House: Hello Australia. My name is Jackson. I was three months old and my brothers Matthew, David and I were on holidays when our parents were killed. Matthew and David are OK, but in the accident I was brain injured. I am a quadriplegic blind and just learning to talk. On my next birthday I will be six. I live with my grandmother, Judie Stephens. She looks after me and she also spends a lots of time making things better for me and people like me. My grandmother wrote this for me because she understand so well. My friend Judie Stephens, Jackson's incredible grandmother, is a woman of tremendous personal strength and great purpose. She has written to me and I think her words should be recorded in the Hansard because it is a story of great human tragedy and inspired human effort. This is Judie's story: Five years ago my daughter and son-in-law were killed in a car accident. The accident left Jackson with catastrophic injuries. Jackson is entitled to compensation for his injuries. His legal case is not yet resolved, but in the meantime I have become an expert in Australian compensation law because of the long litigation trail. Jackson is entitled to lump sum compensation. His compensation payment will need to support him for the rest of his life Jackson must never be a financial liability to the Australian taxpayers and his compensation must pay for his medical, rehab and care to ensure he has optimum opportunity to recover and quality of life. I am gravely concerned about Jackson's future. I am 55 this year and Jackson is only 5. Several years ago, I researched the concept of Structured Settlements. I realised their importance and value immediately - not just for Jackson but for all people who receive compensation. Structured Settlements are a way of paying common law compensation [start page 5676} for personal injury. They are an optional arrangement whereby a claimant can choose to receive their compensation in the form of a lump sum combined with periodci payments for life, In cases involving serious injuries, where the injured person will have lifelong care needs, then periodic payments may be more appropriate than a single lump sun and should be available as a matter of choice. Every year, many people are seriously injured in motor vehicle accidents, at the workplace, by medical negligence and in other circumstances. Making sure that their compensation payments provide an adequate income for life is an enormous challenge. The current tax law in Australia encourages accident victims to take their compensation in the form of a lump sum. It encourages then to spend it quickly, rather than invest it and earn interest that would be taxable. There is no tax incentive to make lifelong financial plans. Overseas, governments in the United Kingdom, United States and Canada have realised that it is in their best interests to encourage Structured Settlements. They have made the interest component of Structured Settlements tax free. Their tax acts have been amended to ensure that claimants do not double dip into social security and Medicare. This saves them million of dollars. Structured Settlements are win-win-win. They are good for the accident victims, good for government and good for defendant insurers. They are also seen as a valuable tool to help settle cases at reduced costs. They make excellent social and economic sense. I hope our federal government will embrace this concept and make the minor change necessary to the Australian tax act so that Jackson and people like him will never have to be supported by the Australian taxpayer. There is enormous support in Australia for Structured Settlements. I have been working closely with the New South Wales Motor Accident Authority and the Structured Settlement Group, led by Jane Ferguson. The Structured Settlement Group is a national body. Members of the group are the most important national organisations involved in compensation:the Insurance Council of Australia, the Law Council of Australia, Injuries Australia, the Australian Plaintiff Lawyers Association and United Medical Protection. On Friday, 25 June 1999, in Parliament House committee room 1R6 at 10 a.m., we will proudly launch the Structured Settlements Proposal - A Tax Reform Proposal to Benefit Accident Victims and All Tax Paying Australians. I wish to add my gratitude for the availability of senior staff in the Prime Minister's office, the office of the Minister for Family and Community Services and the office of the Assistant Treasurer, and I look forward with considerable hope to the government being suitably convinced as to the merit and value of this important tax reform initiative. Top Of Page