Test a structured settlement against section 54-10 and the date rule
MaintainedLast reviewed
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- Test the proposed terms against section 54-10 and record the date section 54-5 selects. Do not state the annuity conditions in the later sections. Do not treat a claim against an employer, or a workers compensation claim, as inside the definition.
- What the lawyer must review
- Work through each condition in section 54-10(1)
- Use the order date only where the agreement depends on the order
- Stop before the annuity conditions that were not opened
Rules that apply
The document starts from the task name. Change it if this piece of work is different.
The work product
Forum. New South Wales
Produce. A condition-by-condition note, with the date rule recorded and the later sections left alone.
Have ready. The proposed terms; Whether the defendant is sued as employer; Whether the agreement depends on a court order.
Example of the limit. Illustrative example: The defendant is the employer. The note records that section 54-10(1)(c) is not met. It does not go on to the annuity conditions.
Stop and hand it back when
- The tool would say the terms are tax-free.
- The tool would apply a section after section 54-10.
Sources for this task were checked on 2026-10-23.
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Section 54-10(1) requires a claim for compensation or damages for personal injury, made by the injured person or their legal personal representative, based on a wrong or a statutory right. The claim must not be made against the defendant as employer, or as an associate of an employer, and must not be made under a workers compensation law or as an alternative to such a claim.
- The settlement must be a written agreement, whether or not a court approves it or embodies it in a consent order. Under the terms, some or all of the compensation or damages is to be used to buy, from a life insurance company or a State insurer, an annuity for the injured person or a trustee, or an annuity together with one or more lump sums.
- A claim for damages against the employer, including a claim to which section 151A applies, is outside section 54-10(1)(c). The test records that. It does not decide any tax exemption.
- Section 54-5 says the date of the settlement is the date the agreement was entered into, unless the agreement depends for its effectiveness on a court order or on being embodied in a consent order, in which case the date is the date of the order. Where section 76 makes a compromise ineffective until approval, and the agreement depends on that approval, the date rule points to the order. Where section 76(3A) means no approval is required and the agreement does not otherwise depend on an order, the date is the date the agreement was entered into.
Sources
- Income Tax Assessment Act 1997 (Cth), section 54-10 · 2026-10-23
- Income Tax Assessment Act 1997 (Cth), section 54-5 · 2026-10-23
- Civil Procedure Act 2005 (NSW), section 76 · 2026-10-23
- Workers Compensation Act 1987 (NSW), in force from 1 October 2026, section 151A · 2026-10-23
Sections 54-15 to 54-40 were not opened. Do not state annuity, exemption or minimum-support conditions.
Health and wage records stay in a firm-controlled tool. The lawyer applies ASCR r 9 and APP 11, and decides whether any breach is notifiable under the Privacy Act 1988 (Cth).