Personal Injury Compensation: What is Included and How is it Calculated?

A personal injury can change the course of one’s life. Unfortunately, it is rarely, if ever, for the better. Compensation exists to restore an injured party, as much as possible, to their previous position. In cases of compensation claims, consideration is given to an injured person’s predicted life trajectory and how such a path has been altered due to the injury. When calculating compensation, the difference between one’s expected life trajectory and the post-injury trajectory becomes paramount.

What Does the Law Say About Personal Injury Compensation?

Of course, it’s impossible to totally predict the expected future of an injured person. With predictions based on assumptions and society patterns, calculating exactly what an injured person would have lost as a result of the injury, and what they are then entitled to in compensation can be challenging. Each state and territory in Australia looks to a combination of legislation and previous cases when calculating compensation and a fair outcome for injured persons.

In addition to state variations, the compensation calculation process also varies according to the type of injury. Personal injury claims generally fall into three main categories: public liability; workplace accidents; and motor vehicle accidents. Most states have legislation that applies specifically to each type of personal injury. For example, workplace injuries and resulting compensation claims in New South Wales are covered under Workers Compensation legislation while injuries sustained in motor vehicle accidents are covered under the Motor Accidents Compensation Act 1999.

While the case law and statutory rules surrounding the calculation of injury compensation vary according to the type of injury and jurisdiction, the same principles apply when calculating appropriate compensation. As previously mentioned, the goal of any compensation award is to return the injured person to their pre-injury position. An award of compensation is made up of ‘heads of damage’. A court will calculate compensation according to each head of damage, considering the injuries sustained, the impact on the claimant’s lifestyle and employment, plus costs as a result of the injury as well as reasonable future costs.

What is Included in Personal Injury Compensation?

Below are the common heads of damage that make up a compensation award.

Pain and Suffering

Compensation for pain and suffering is awarded to a claimant as a means of compensating them for the direct effects of the injury and loss of enjoyment of life. When calculating this head of damage, it can be difficult to attribute a monetary value to one’s pain and suffering. To achieve consistency, most states have a legislated set of rules that are applied to each case and injury.

Usually these rules work on a scale or point system whereby injuries are classified on a scale or given points based on the severity of the injury. Once an injury has been classified according to the specified rules a court will look to previous cases when deciding on how much compensation should be awarded. In a claim under the motor vehicle legislation your injuries need to be greater than 10% whole person impairment to be entitled to pain and suffering. In relation to a negligence claim against your employer there is no entitlement to damages for pain and suffering.

Financial Loss

Financial loss can be divided into two parts: past financial loss and future financial loss. Past financial loss will include any financial loss as a result of the injury to date. This may include loss of income due to time off work or things like transport costs if the injury prevented the claimant from driving. Evidence in the form of medical certificates, records from an employer, tax returns and receipts can all be used to help calculate past financial loss.

Future financial loss can be claimed when a claimant’s injuries impact on their ability to work or reduce their capacity to work. A court will consider recommendations from medical professionals to determine how a claimant’s injuries affect their ability to work. Calculating future financial loss can be more complicated and difficult to define especially if compensation under this head of damage is awarded as a lump sum. Considerations need to be given to inflation and number of working years.

Medical Expenses

Calculating medical expenses is relatively straight-forward. Under this head of damage compensation is awarded to the injured party for all medical costs as a result of the injury. This can even include transport to and from medical appointments, medication and equipment such as crutches or a wheelchair.

In some cases, where an injury requires ongoing medical support, a claim can be made for future medical expenses. Again, the court will rely on the opinion of medical professionals to assist with calculating this figure. Future medical expenses may account for a nursing service, future procedures or equipment replacements.

Other Services

After an injury a claimant may no longer have the ability to perform everyday tasks such as gardening or cleaning. This head of damage includes any reasonable services to assist the claimant in everyday life. Examples include gardening, cleaning or meal services.


Superannuation is also included within a compensation claim. An injured person can claim lost superannuation both past and future as a result of the injury. An injured person’s income and employment years will be taken into account when calculating superannuation compensation.

Have You Suffered a Personal Injury?

If you’ve sustained a personal injury as a result of someone else’s negligence or actions, then you don’t have to suffer. You have a right to be restored to your previous position.

The above list of compensation inclusions serves to provide a broad overview, but is by no means an extensive list of everything that you may be eligible to claim. An experienced compensation lawyer will be able to advise on what you can claim in order to fully restore you to your previous position. In addition, because the laws surrounding personal injury compensation claims vary across states and according to injury, it can be complicated to determine just how much compensation you are entitled to without the help of a legal professional.

Taylor & Scott Lawyers are compensation experts with years of experience. Meet with a compensation lawyer for a free, no obligation case assessment. In most cases they will act on your behalf on a no win/no fee basis.

Arrange a free case assessment with a compensation lawyer and find out exactly what you deserve.

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