CXTB and Inspector-General in Bankruptcy

This matter concerned an application by CXTB (the Applicant) for a review of a decision made by a Delegate of the Inspector-General in Bankruptcy (the Respondent). The Respondent had assessed the Applicant's contribution liability under section 139W of the Bankruptcy Act 1966 for the period 10 May 2018 to 9 May 2019 as $3,573.36. The core of the dispute revolved around whether payments received by the Applicant from the Victorian Work Cover Authority (Work Cover) following a work-related injury constituted "income" for the purposes of bankruptcy contribution assessments.

The legal issue before the Tribunal was whether the weekly payments received by the Applicant from Work Cover, after his injury claim was accepted under the Victorian Workplace Injury Rehabilitation and Compensation Act 2013, were to be considered income within the meaning of section 139L(1) of the Bankruptcy Act 1966. The Applicant contended that these payments were compensation for injury and therefore not income, arguing that they were distinct from ordinary income and represented an "intangible asset" protected from the bankruptcy estate.

The Tribunal reasoned that while the payments were made under a compensation scheme and were intended to compensate for incapacity due to injury, they were to be treated as income for the purposes of assessing the Applicant's contribution liability under Division 4B of the Bankruptcy Act. The Tribunal clarified that the payments were not property that vested in the Official Trustee under section 116(2) of the Act. Instead, the payments were to be taken into account when calculating the bankrupt's income for the assessment under section 139W, thereby creating a debt owed to the bankrupt estate, rather than being property of the estate itself.

Consequently, the Tribunal affirmed the reviewable decision of the Respondent.