Coding Transport Accident Commission (TAC) lump sum compensation payments and debt action 117-25070116

The TAC is the statutory insurer of third-party liability for transport accidents in the state of Victoria. The TAC operates a ‘no-fault’ compensation scheme which will pay medical benefits and support services to people injured in transport accidents in Victoria. This may include income support during recovery, and/or the payment of a lump sum for serious and permanent injuries.

Under the Transport Accident Act 1986 (Vic) (TAA), some Centrelink recipients are excluded from receiving compensation for the first 18 months following an injury. This is because they are unable to demonstrate to the TAC that the level of their pre-injury earnings meet the definition of an 'earner' under the TAA. They can only claim for loss of earning capacity from 18 months after their injury under common law.

If the injured person is a non-earning minor then the TAA allows payments for loss of earnings capacity to commence from the injured minor's 18th birthday.

The special circumstance debt waiver provisions of the Social Security Act 1991 apply to Centrelink recipients who:

• are injured in transport accidents in Victoria, and
• are unable to meet the definition of an 'earner' under the TAA

The amount of Compensation Affected Payment (CAP) paid during the Transport Accident Act 1986 (Vic) (TAA) non-payment period should not be recovered if:

• the injured Centrelink recipient is not considered to be an earner under the TAA
• does not receive compensation for the first 18 months following their injury, or
• is ineligible to receive TAA payments for other reasons (for example, is unlicensed or unregistered)

This portion of the debt should be waived under the special circumstance debt waiver provisions of section 1237AAD SSA 1991.

If the injured person is a non-earning minor, the special circumstance provisions of section 1237AAD SSA 1991 should be applied to waive recovery of any CAP debts paid up until their 18th birthday.

Notification of a lump sum may come from:

• current customers
• new claims for a Compensation Affected Payment (CAP)
• a third party seeking to release a lump sum payment on settlement of a compensation claim, such as:
• solicitors
• compensation payers, or
• insurance companies

A compensation payer can notify Services Australia of a lump sum compensation payment by using the:

• Compensation Advice of Lump Sum Payments (SS446) form, and
• providing valid supporting documents/evidence (for example, a copy of the signed settlement release or consent judgement)

A compensation notice refers to a:

• Preliminary Notice
• Recovery Notice, or
• Release Notice

If the compensation recipient is deceased, and a notice was sent:

• before the death of a customer, the notice remains in force and compensation recovery provisions apply
• after the death of a customer, the notice cannot be enforced and any debt is recovered against the Estate. See Requesting refunds and raising debts for deceased customer

When a compensation payer receives a formal recovery notice from both Centrelink and Child Support, the payer must act upon them in the order they are received.

If the compensation payer receives a preliminary or recovery notice before a Child Support notice, the payer must refund the Centrelink debt first before releasing funds to Child Support.