6.4.4.11 Frequently asked questions
DISCLAIMER:
The information below is largely based on the provisions of the legislation and the Ministerial Directions (the Directions) made under the legislation.
While this information is provided in good faith as a guide to settlements under the legislation WorkSafe makes no claim as to the accuracy of the information and will not accept any liability for any loss or damage which may be incurred by any person acting in reliance on the information. Workers should obtain independent financial and legal advice before making any decision on relation to a voluntary settlement A lump sum payment that replaces an injured worker's right to ongoing weekly compensation. under the legislation.
Am I eligible to apply for a settlement?
What steps do I need to take to apply for a settlement?
Is acceptance of a settlement voluntary?
Are self-insurers bound by the legislation?
How do I lodge an expression of interest?
How do I apply for a settlement?
How much will my settlement be worth?
Do I have to receive legal advice?
Do I have to receive financial advice?
What happens if I need an interpreter?
Can I be refused a settlement?
What if my application is rejected?
Can I appeal if my application is denied?
How does this process affect other benefits?
What is a settlement?
The legislation allows eligible workers who are still receiving weekly compensation payments from WorkSafe to apply voluntarily to receive a lump sum instead of ongoing weekly payments of compensation.
The settlement amount is the final payment paid to you as compensation for your injury, except for the reasonable costs of medical and like expenses.
Am I eligible to apply for a settlement?
Under the legislation, you may be eligible to apply for a settlement if your circumstances meet the following criteria:
- you are over the age of 55 years and
- you are classified as having no current work capacity Under the legislation, unless inconsistent with the context or subject-matter — current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment, declared training program indefinitely and
- you have received weekly payments for either 104 weeks or 130 weeks if the claim for weekly payments was made after 1 January 2005 or
- you have a serious injury for the purposes of receiving weekly compensation and
- you have been receiving weekly compensation payments for at least 104 weeks for your injury.
You may be eligible now or at some time in the future to apply for a lump sum settlement. However, you cannot express interest in a settlement until you have met all the criteria.
What steps do I need to take to apply for a settlement?
A two-stage process is provided – lodgement of an expression of interest and a formal application for settlement.
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1 - Expression of interest ↓ 2 -Application for settlement |
If you believe you meet the selection criteria and you are interested in taking a lump sum, you should request an Expression of Interest included in a Settlement pack. This pack will contain information and forms required to lodge your expression of interest. You can ask for this pack at any time.
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If you are eligible, your Agent will send an Application for Settlement pack.
To apply for a settlement you must respond within a six month period.
Is acceptance of a settlement voluntary?
Yes. There is no requirement to make a final decision until you are made an offer of settlement. You may choose to accept or reject this offer. This process may take a number of months.
Are self-insurers bound by the legislation?
Yes. Self-insurers must process expressions of interest and settlement applications in accordance with the legislation and the Ministerial Directions.
How do I lodge an expression of interest?
If you believe you meet the eligibility criteria for a settlement, you should ask your Agent to send you an Expression of Interest in a Settlement pack.
The Expression of Interest in a Settlement pack contains further information about what you need to do. To apply, you need to return a completed Expression of Interest form and include certified proof of your identity and date of birth. The pack will tell you what documents you will be able to use for this proof and who can certify these for you.
Expressions of interest can be made at any time after you meet the criteria.
If you choose not to lodge an expression of interest, you will continue to receive weekly payments of compensation for as long as you remain entitled.
If you do not satisfy the criteria for a settlement, you will be informed of the reasons in writing.
Who makes the decision?
Only your Agent can make a determination on whether you meet the criteria for a settlement.
How do I apply for a settlement?
If you are eligible, you will receive an Application for Settlement pack and be advised of the amount of the settlement being offered and what you MUST do before formally applying for the settlement. At this stage, you must obtain financial and legal advice to help you decide whether to apply to accept the settlement offer.
If you wish to lodge an application, you apply using the form provided in the application kit and send it to your Agent, together with certificates from your advisers stating that you received the required legal and financial advice.
You will have SIX MONTHS from the date you receive your Agent’s response to your expression of interest to lodge an application for a settlement.
If you do not proceed with an application within the six month period, you can reapply for a settlement in respect of your injury at any time but you will have to lodge a fresh expression of interest. A new settlement amount will be calculated and provided to you.
Once your valid application is received, a final decision to offer a settlement will be made.
You will have 28 days from the date of receipt of the offer to decide whether you wish to accept it. If you do not respond to the offer within that period the offer will lapse.
If you reject the offer or it lapses, you cease to be entitled to apply for a settlement in respect of the injury.
How much will my settlement be worth?
The method for calculating the settlement amount will be based on your net weekly compensation rate and is calculated using a formula specified in the legislation.
The Australian Taxation Office advises that its current policy is to treat lump sum settlements as tax-free. If this policy changes, there is provision under the legislation to calculate settlements using the gross compensation amount. If this occurs and you have been advised of a settlement amount but not actually received it, you will be sent a notice with the taxable amount and you may be able to get further legal or financial advice.
Do I have to receive legal advice?
Yes, it is important that you understand the full legal effects of a settlement. This is because a settlement can affect other entitlements under the legislation. Legal advice is a requirement to apply for a settlement, however it is not necessary to seek this advice until after your Agent has responded to your expression of interest.
You can seek advice before you receive a response to your expression of interest is given but any cost for this will not be reimbursed.
You will be reimbursed costs to obtain legal advice from an approved type of provider after you have received a response to your expression of interest (including a proposed settlement amount) up to a maximum amount of $400 (inclusive of GST Goods and Services Tax). Details of approved providers will be sent to you in the Application for a Settlement pack. Your legal adviser must provide you with a certificate stating you have received the required legal advice and also certifying that financial advice has been received.
Do I have to receive financial advice?
Yes, it is important that you understand the full financial effects of a settlement. Financial advice is a requirement to apply for a settlement, however it is not necessary to seek this advice until after your Agent has responded to your expression of interest.
You can seek advice before this response is given, however, you will not be reimbursed for the cost.
Once you have received a response to your expression of interest, you will be reimburse your costs up to a maximum amount of $495 (inclusive of GST) to obtain financial advice from an approved type of provider. Details of types of providers will be sent to you in the Application for a Settlement pack. Your financial adviser must provide you with a certificate stating you have received the required financial advice.
What happens if I need an interpreter?
If you need help from an interpreter when receiving legal or financial advice, you or your adviser should contact WorkSafe for a list of approved providers. The reasonable costs of interpreter services will be paid for up to a maximum hourly rate.
Can I be refused a settlement?
If your Agent decides that you should not be offered a settlement, you will be advised in writing and provided with reasons.
What if my application is rejected?
If your application for a lump sum settlement is rejected you will continue to receive weekly payments of compensation for as long as you are entitled to those benefits subject to the normal provisions of the legislation.
Can I appeal if my application is denied?
It is not possible to appeal the decision solely because you disagree with it. There are only limited rights of review to the Supreme Court if your expression of interest or application is not processed in accordance with the law.
How does this process affect other benefits?
After you accept a settlement in respect of an injury, you cease to be entitled to any further compensation or damages for that injury other than compensation for the reasonable costs of medical and like services related to the injury except in relation to a recurrence of the injury arising from employment after the date of the settlement.