How are Compensation Payouts Calculated?

Personal Injury Claim Payouts include various financial losses. Learn how compensation payout values are calculated and how a personal injury law firm helps make the most of yours.
A hand holding a calculator for personal injury claims payouts

You will likely want to know how personal injury claim payouts are calculated when you have a valid compensation claim. Generally, an injury compensation payout is the financial support that someone with an accident injury receives to rebuild their lives back to where they were if the incident hadn’t happened.

It’s no secret that accidents can result in physical and emotional hardships accompanied by substantial losses. So, if you have suffered a physical or psychological injury, you could get a lump sum payment depending on the injuries’ severity and circumstances.

But many Queenslanders don’t understand the extent of personal injury claim entitlements they might receive for their losses. Additionally, calculating claim payouts is complex and changes depending on various factors.

Our compensation payout guide will unveil the truth behind calculating personal injury claim payouts.

What is my claim worth?

Claiming for a Lump Sum Payment for Personal Injury

A personal injury claim seeks monetary compensation for someone suffering physical injury or mental harm due to the negligent behaviour of another person or party. When successful, they receive a lump sum payment for medical expenses, lost wages, lost quality of life, travel expenses, pain and suffering, and permanent disability.

There are several types of personal injury claims, including:

Motor Vehicle Accident Claims

You can claim compensation for injuries sustained in car accidents or other motor vehicle accidents. In Queensland, you can make motor accident claims for a collision with a bus, truck, motorcycle, bicycle, pedestrian or hit-and-run crash when you are not the at-fault party.

Workers Compensation Claim

In Queensland, you can make a WorkCover claim and receive weekly workers’ compensation payments for workplace injuries. Approved workers’ compensation payouts include lump sum compensation and a permanent impairment payout (for serious injuries). Additionally, you can make a common law claim.

The workplace injury compensation process begins with filing a workers’ compensation claim. Once approved, you will get regular workers’ compensation payments.

Permanent Impairment Payout

Injured workers nearing the end of the workers’ compensation claim process will have a permanent impairment assessment. The Whole Person Impairment (WPI) scale calculates the level of impairment resulting from an illness or injury in workers’ compensation claims.

Depending on the severity of your injury, you could get a once-off workers’ compensation settlement (most often for serious injuries).

Public Liability Claims

You may be entitled to public liability compensation if you are injured in a slip-and-fall accident or any other injury in a public space or privately owned property.

Medical Negligence Claims

You can claim compensation when a medical professional fails their duty of care and you suffer a loss. Once approved, you will receive a lump-sum settlement. However, successful medical negligence payouts generally depend on seeking legal advice from a personal injury lawyer specialising in medical negligence claims.

Knowing the payout calculation process can empower you to fight for fair compensation regardless of accident circumstances. So, let’s dive into the intricacies of personal injury claim calculations and uncover the truth behind the numbers.

Which personal injuries are eligible for compensation >

List of Average Compensation Payout Amounts

WorkCover Queensland, the primary workplace injury insurer, publishes average workers’ compensation payouts for injuries sustained in work-related accidents.

Average Workplace Injury Statutory Compensation

Type of InjuryAverage Compensation
Open Wound: Hand$10,936
Other Open Wounds$12,477
Foreign Body$5,534
Back Strain and Sprain$16,478
Other Strains and Sprains$17,634
Shoulder Strain and Sprain$35,456
Musculoskeletal System Disease: Back$23,614
Other Musculoskeletal System Diseases$25,261
Psychological and psychiatric injuries$55,402
Other injuries and diseases (e.g. hearing loss)$31,654
Overall average$24,560
Table of Average Statutory Work Injury Compensation Payments (QLD)

Common Law Settlement Average Payout 2021-2022

When your employer’s negligence causes harm, you can also make a common law claim (sue for damages) and receive lump sum compensation. The average common law lump sum settlement for workplace injuries in 2021–2022 was $175,772.

QLD Car Accident Average Payout Amounts

Severity of InjuryAverage Lump Sum Payout
Table of average payouts for car accident compensation (QLD)

Factors that Determine the Value of Personal Injury Claim Payouts

Several factors affect how much you receive for a personal injury claim payout:

  1. The severity of the injury
  2. The impact on the injured person’s life
  3. If you have a permanent disability
  4. The level of negligence on the part of the responsible party
  5. If you were partially at fault for the accident,
  6. Your current age and life expectancy
  7. If your injuries impact your capacity to earn an income
  8. Your previous medical history

All of the above factors contribute to calculating the lump sum payout amount. Next, in our compensation payout guide, we review the significant factors.

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Severity of Injury

The potential settlement increases with the severity of the injury. This general rule applies because catastrophic and severe injuries have a more significant impact on your life than minor injuries, hence:

  • Requiring more time off work
  • Extensive medical treatment and rehabilitation
  • Long-term outcomes like permanent disabilities

Generally, injury severity is the most critical influence when calculating the compensation amount.

Impact on the Injured Person’s Life

Another essential consideration is the impact of the physical or psychiatric injury on the victim’s life. Personal injuries can cause physical limitations, emotional trauma, psychological harm, and the inability to perform daily functions. Compensation is calculated based on the injury’s impact on the victim’s quality of life, including their work capacity and ability to engage in activities they enjoyed before the accident.

The Level of Negligence

Who was the responsible party, and their level of negligence, is a significant factor. The compensation amount would be substantial if the responsible party’s actions were extraordinarily negligent or intentional. This outcome is to deter future behaviour by others and to provide justice to the victim.

If You Were Partly to Blame

Your damages settlement will be reduced if you were partly to blame for the accident. In this case, you will have contributory negligence. Typically, insurance companies seek to increase your contribution level, meaning they owe you a reduced compensation payout amount.

However, a skilled personal injury lawyer understands how this works and will seek to reduce your negligence contribution, increasing the value of your lump sum claim.

Your Current Age and Life Expectancy

Your current age and life expectancy influence the value of a lump sum compensation payout when you have suffered significant harm. Generally, damages for lost wages will also include future earnings when you have a long-term or permanent injury. This calculation considers your current age and how many working years you have left, so the younger you are, the higher the payout value.

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A person questioning how is a compensation payout calculated
A person questioning how is a compensation payout calculated

How is Compensation Calculated?

In personal injury claims, a compensation payout reimburses the victim because of an accident or incident. According to the Civil Liability Act of 2003, the value of a personal injury settlement is typically determined using “heads of damages,” which assess the evidence against each claimable element. These fall into two types of compensation: economic and non-economic (or general) damages. Let’s explore these in detail.

Types of Damages in Compensation Claims

Economic damages are tangible losses quantified in monetary terms. These include medical expenses, lost wages, and property damage. Typically, consideration is given to the actual costs the victim incurs when calculating economic damages.

1. Economic Damages

Medical expenses

Medical expenses encompass all costs related to medical treatment, including hospital bills, ambulance fees, medication, surgeries, rehabilitation, and future medical needs. 

Lost wages

Refers to the income lost because of the injury, including wages they could have earned during their recovery period. In some cases, if the injury results in a long-term disability that prevents the victim from returning to work, they could receive a permanent impairment payout.

Domestic care

Compensation payouts also cover reasonable home care expenses and out-of-pocket costs, such as those incurred thanks to family and friends.

Travel expenses

Compensation payout amounts also reimburse medical treatment-related travel costs.

Property damage

It applies to personal property, such as a car damaged in a motor vehicle accident. The cost of repairing or replacing the broken property is considered when calculating economic damages.

2. Non-Economic Damages (General damages) 

Non-economic damages are intangible losses that are not easily quantifiable in monetary terms. They include pain and suffering, emotional trauma, loss of consortium, and loss of enjoyment of life. Calculating non-economic damages is more subjective than calculating economic damages.

Pain and suffering

Pain and suffering refer to the immediate and long-term emotional and physical suffering the claimant endured as a result of the accident. Compensation for pain and suffering aims to provide comfort for the victim’s loss and their life impact.

Emotional distress

Includes the psychological impacts of the accident, like anxiety, depression, post-traumatic stress disorder (PTSD), and other psychiatric conditions associated with the injury. Compensation for emotional trauma acknowledges the mental health toll of the accident.

Loss of enjoyment of life

Refers to the inability to engage in activities and hobbies enjoyed before the accident. If the harm has limited the injured person’s ability to participate in these activities, there will be compensation to help restore their quality of life.

Loss of consortium

Damages awarded to a spouse or partner of the claimant compensate for the loss of companionship, love, and the ability to continue a typical married or domestic relationship that the accident or illness has taken away.

Do I Have a Valid Claim?

The Role of Insurance in Calculating Compensation Payouts

Insurance companies play a substantial role in calculating injury compensation payouts. In most cases, the responsible party’s insurance policy is the primary source of compensation for successful claims.

For most Queensland compensation cases, the at-fault party generally carries liability insurance. This coverage protects the liable party from financial losses when their duty of care failure causes someone a loss. In this case, the claimant’s compensation lawyer negotiates a fair settlement with the insurer. The insurance company will assess the legal claim based on the policy coverage, the available evidence, and the extent of the damage.

It is important to note that profitability drives insurers’ decisions. Their primary goal is to minimise their financial liability and your injury payout’s value. As a result, they will try to undervalue or deny valid claims, often saying you helped cause the accident. In this situation, the importance of legal representation comes into play.

Why You Need Legal Representation for Compensation Claims

Having legal representation is crucial for a successful compensation claim payout. Personal injury lawyers have the know-how and expertise to navigate complex legal processes and negotiate with insurers on behalf of their clients. Let’s explore some of the reasons why it’s vital to work with an effective legal representative.

Firstly, personal injury solicitors know the intricacies of compensation law and the factors determining claim payout values. They are experts in evaluating damages, gathering evidence, and presenting a compelling case to support their client’s interests. Their expertise increases the chance of securing a fair compensation settlement or winning a court case.

Secondly, experienced compensation lawyers have an established network of experts and professionals who provide valuable opinions and testimony to support the injury claim. These experts include medical professionals, accident reconstruction specialists, vocational experts, and economists who can assess long-term impacts to calculate the appropriate compensation.

Thirdly, compensation litigation lawyers are skilled negotiators when dealing with resistant insurance companies. They know insurance adjusters’ tactics and can counter their attempts to undervalue or deny a valid case. Lawyers are expert, fair, settlement negotiators, considering all aspects of the victim’s losses.

Lastly, if the parties cannot reach a fair settlement, your compensation law firm will advise if your case warrants court action. Furthermore, they have the litigation experience to present a strong case before a judge and fight for their client’s rights.

Now that we have emphasised the importance of legal representation, let’s address some common misconceptions about personal injury claim payouts.

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Common Misconceptions About Personal Injury Claim Payouts

In Queensland, there are several misconceptions about personal injury claim payouts. These misunderstandings can lead to unrealistic expectations and confusion about the compensation process. Let’s review some of the common mistaken beliefs.

Misconception 1: Personal injury claim payouts are always substantial.

Truth: The value of personal injury claim payouts varies depending on the specifics of each case. While some claim substantial payouts, others may only cover immediate medical expenses and lost income. Realistic expectations and consulting with an experienced personal injury law firm are essential to understanding the potential damages payout.

Misconception 2: Personal injury claims have quick outcomes

Truth: Personal injury claims can be a lengthy process. Gathering evidence, negotiating with insurers, and potentially going to court can take months or years. Please exercise patience and work with a knowledgeable accident claim lawyer who will guide you through each step of the process.

Misconception 3: Personal injury claim payouts are tax-free

Truth: In Queensland, lump sum personal injury payouts are generally tax-free. However, if you receive weekly compensation payments for a workplace injury, you will likely owe income tax, as with your regular pay. Please consult with a tax expert to determine your tax implications.

Misconception 4: Compensation claims can be lodged at any time

The Truth: In Queensland, claiming for a personal injury is subject to statutes of limitations, which impose strict time limits for lodgement. These time restrictions vary depending on location, the type of case, and the victim’s age. If you believe you have a potential claim, please seek legal advice immediately to ensure you meet the deadline.

Legal Advice for Calculating Personal Injury Payouts

If an accident harms you and you aren’t to blame, you can claim a personal injury payout. You must understand your circumstances and the legal process for seeking restitution.

At Splatt Lawyers, knowing the value of your potential injury compensation claim is free. Regardless of your psychological and physical injuries, our 100% no-win, no-fee lawyers provide expert legal advice and a free payout evaluation. They provide specialist compensation advice, guiding you through the claim process to a successful outcome, with no legal fees if you lose.

Contact our friendly legal team now to know how much you could receive in common law damages. Call Now – 1800 700 125

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Personal Injury Claims Payouts FAQs

What counts as a serious injury?

Safe Work Australia statistics show 1,140 employees have claimed workers’ compensation for serious injuries in the past ten years. In Australia, severe injuries are generally considered to be physical injuries that require:

  1. Immediate medical attention or hospitalisation
  2. One where the worker must take a minimum of five days off work

How much is the average workers’ compensation payout?

Safe Work Australia data for 2022 shows that the average payout for a workers’ compensation claim for physical injury was $15,743. However, the amount was higher for psychological injury, at $58,615.

What is the average compensation payout for a back injury in Australia?

Compensation payout amounts for back injuries in Australia vary depending on a few factors, including:

  1. The accident type, e.g. car accident or workplace injury
  2. How much your injuries affect your capacity to earn an income

However, if you suffer a back injury due to another’s negligence, the average payout value generally ranges from $10,000 for minor damage to $100,000 for severe harm.

How are pain and suffering calculated in Australia?

The value of injury compensation payouts in Australia is calculated using “heads of damages”, which consider

  1. Pain and suffering
  2. Lost past and future earnings
  3. Cost of home care
  4. Medical expenses, including travel
  5. Cost of aids and equipment
  6. Lost enjoyment of life

Hence, how much compensation you receive for pain and suffering depends on how much your injuries have altered your life.

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