6.4.3 Financial & legal advice Costs to obtain financial or legal advice

Workers eligible for a settlement A lump sum payment that replaces an injured worker's right to ongoing weekly compensation. must obtain financial and legal advice. Workers must show proof that independent advice was obtained after receiving a response to their EOI Expression of Interest and before lodging an application for settlement.

Independence of advisers

To ensure independence, the financial or legal adviser may not be a member of the worker’s family. A financial or legal adviser cannot be:

Financial advice

Financial advice must be provided either by:

  • a Certified Financial Planner, a Certified Practising Accountant or a member of the Institute of Chartered Accountants or National Institute of Accountants who is also either of:
  • a person entitled to provide investment or financial product advice as the holder of a license under the Corporations Act 2001 or
  • a person permitted under the Corporations Act 2001 to act as a representative of such a licensee.

Advice for workers overseas

The financial adviser must be qualified in Australia. WorkSafe or the Agent should ensure workers living overseas know of this requirement.

Type of advice required

The worker must receive advice about:

  • short term money management
  • a financial plan for the long term
  • responsibilities and skills to manage a lump sum settlement
  • an estimated Centrelink preclusion period
  • the rights of the Commonwealth to recover amounts owed by the worker and the possible consequent reduction by those amounts otherwise payable to the worker
  • disclosure of financial adviser’s commissions, fees and so on.

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Legal advice

Legal advice must be provided by an Australian legal practitioner Legal practitioner means an Australian legal practitioner within the meaning of the Legal Profession Act 2004 within the meaning of the Legal Profession Uniform Application Act 2014 (Vic).

Advice for workers overseas

The legal adviser must be qualified in Australia. WorkSafe or the Agent should ensure workers living overseas know of this requirement.

Type of advice required

The worker must receive advice which explains:

  • that acceptance of a settlement is voluntary
  • the provisions of the legislation that relate to the settlement
  • the legal consequences of accepting a settlement
  • a general overview of the compensation provisions of the Social Security Act 1991 of the Commonwealth
  • what the Centrelink preclusion period means and the effect of a settlement on social security payments
  • any other legal remedies or rights available to the worker as an alternative to accepting a settlement.
Proof of advice

The provider of the legal and financial advice (or someone within the financial adviser or legal firm) is required to provide evidence that they meet the qualifications to provide the financial and legal advice. If not, the Agent must inform the worker that their adviser does not meet the required qualifications.

Workers must provide proof of appropriate advice by attaching the financial and legal advisers’ certificates to the settlement application.

A suggested pro forma for the certificate to be completed by financial and legal advisers can be downloaded from the WorkSafe website.

Check that advice has been given

The Agent must check certificates carefully to ensure they cover matters listed in Ministerial Directions 16 and 17. If the certificate/s has a negative response on any point, the adviser must provide additional information on alternative provisions recommended or advised (see point (h) of Ministerial Direction 16 and 17). If the certificates are deficient:

  • the Agent contacts the provider and asks if all relevant matters were covered with the worker
  • the adviser must either re-advise the worker or provide a fresh certificate, as appropriate
  • if the financial adviser’s certificate is deficient, they must also submit the fresh certificate (and advice) to the legal provider. This enables the legal provider to re-certify that they sighted the financial adviser’s advice
  • both new certificates must be forwarded to the Agent before the application for settlement can be considered valid.

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