3.8 Lump sums and pensions
3.8.1 Effect of lump sums and pensions on weekly payments | 3.8.2 Pensions | 3.8.3 Impact of lump sums and pensions with a date of injury on or after 5 April 2010
3.8.1 Effect of lump sums and pensions on weekly payments
3.8.1.1 Process for non-entitlement | 3.8.1.2 Determine the non-entitlement period | 3.8.1.3 Start of period of non-entitlement | 3.8.1.4 Approved capital expenditure | 3.8.1.5 Roll over into an approved fund
If a lump sum or pension is received by a worker who is in receipt of weekly payments, the impact on weekly payments will depend on:
- whether the date of injury is before or after 5 April 2010
- the type of lump sum or pension
- the amount of the lump sum or pension.
Workers who receive certain:
- lump sums may not be entitled to weekly payments for a specified period of time
- pensions may have their weekly payment amount reduced whilst the pension is paid.
The lump sums and pensions must relate to the worker’s injury employment.
Superannuation that does not impact weekly payments
Superannuation payments received by workers who have reached preservation age (the preservation age is dependent on when the worker was born but the earliest is 55 years of age) either pre or post injury as a lump sum or regular payment that do not relate to the worker’s retirement, cessation or termination of employment from where the worker's injury arose or occurred have no impact on a workers weekly payments.
Workers in receipt of weekly payments should be advised to seek independent financial advice on the immediate and long-term effects of accessing superannuation payments.
Superannuation lump sums
Workers who deposit or roll over:
- all of their superannuation lump sum into an approved fund do not lose their entitlement to weekly payments
- part of their superannuation lump sum into an approved fund will have a period of non-entitlement calculated on the amount not deposited.
Total & permanent disability benefits
Workers might receive total and permanent disability (TPD) benefits paid for an insurance policy In this Act — workers compensation cover means insurance or registration required under a law of another State or of a Territory in respect of liability for statutory workers compensation under that law entered into by:
- themselves or
- the worker’s employer or a third party on the worker’s behalf.
If the worker’s TPD benefits are paid as a lump sum payment, then a non-entitlement period will usually not apply as the lump sum payment is not an amount being received by reason of redundancy or severance from the employment where worker’s injury arose or occurred.
If the worker receives a TPD pension then it is likely that this will lead to a reduction in weekly payments.
However, given exceptions apply, Agents are advised to consult with the Senior Legal Manager when a worker on weekly payments receives a TPD lump sum or pension payment.
Accrued leave entitlements do not affect entitlement
Any lump sum payment received under an Award or under a contract of employment which does not relate to redundancy or severance of employment must be excluded when assessing any non-entitlement period.
Accrued annual and long service leave entitlements paid as a lump sum have no impact on a workers entitlement to weekly payments.
Approved capital expenditure
Workers can apply to the Agent to access their own contributions from their superannuation fund for an approved capital expenditure and if approved, the lump sum is excluded from the calculation of any weekly payment non-entitlement period.
Recovery of overpayment
If weekly payments are made during a period of non-entitlement, the amount of the payment can be recovered.
Non-entitlement period
Workers are not entitled to weekly payments for a specified period if:
- they receive a superannuation or retirement benefit lump sum related to their retirement from or the cessation or termination of, the employment out of which the worker’s injury arose and they do not deposit that lump sum into a complying superannuation or approved or deposit fund or
- if they do deposit the lump sum into a complying fund, they withdraw or redeem part of that lump sum or the applicable interest.