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

If a third party gives notification of a lump sum:

• Complete an Interest check before actioning charge work items
• See Actioning compensation interest checks

Customers have an obligation to supply information required to assess their entitlement to a Compensation Affected Payment (CAP), including Farm Household Allowance (FHA).

Customers who fail to respond to requests for information about compensation may have their CAP suspended. See Actioning a compensation clearance.

Go to Step 2.

Is the compensation payer the Transport Accident Commission (TAC)?

• Yes, go to Step 3
• No, see Coding lump sum compensation payments and raising debts

Check if the following criteria applies to the compensation recipient:

• had an accident in the state of Victoria
• did not receive periodic payments for the injury
• the lump sum contains economic loss, and
• there will be a compensation charge due to the compensation preclusion period

Does the case meet the above criteria?

• Yes, go to Step 4
• No, waiver does not apply. See Coding lump sum compensation payments and raising debts

When TAC is served a preliminary notice:

• they will complete a Compensation Advice of Lump Sum Payment (SS446) form, and
• seek a clearance

If an SS446 is not completed, do not proceed with the assessment until they complete it.

Check the compensation record in Compensation Management System (CMS) to verify a preliminary notice was issued.

Was a preliminary notice issued?

• Yes, and the notification of the lump sum is from:
• the customer or their solicitor, go to Step 5
• TAC, go to Step 6
• No, go to Step 6

When TAC is placed under notice, the obligation to provide lump sum information remains with them.

If the notification has come from the customer or their solicitor, and:

• the case requires urgent processing:
• Contact the compensation payer
• Request completion of an SS446 and hold the CMM/CHG activity for 7 days
• Record all information in the Compensation Progress Doc Fast Note
• Once all information is received, go to Step 6
• all other cases:
• Contact the solicitor or customer and tell them, Services Australia can only assess the lump sum after TAC notifies the agency
• Cancel the associated CMM/CHG activity
• Record all information in the Compensation Progress Doc Fast Note
• Procedure ends here

Determine if:

• there is sufficient information about:
• previously paid lump sums, and
• costs (if specified in the terms)
• there is a linked workers compensation claim
• periodic compensation was paid by TAC or another compensation payer
• the settlement was released to the claimant

See the Resources page for more examples of information needed.

If there is insufficient information to proceed:

• phone TAC to confirm the required information, and
• document this on the customer’s record

If TAC cannot give all of the required information over the phone:

• Send a Q908 letter to TAC requesting the required information using the appropriate method, see Compensation letters
• Place the CMM/CHG activity on hold for 23 days
• Record all action taken including contact attempts in a Compensation Progress Doc Fast Note
• Procedure ends here

If there is sufficient information, go to Step 7.

Is a single lump sum being paid to settle a single compensable event?

• Yes, go to Step 10
• No, go to Step 8

Check if a single lump sum is being paid to settle multiple compensable events:

• Seek confirmation from the compensation payer to determine if there is a specific apportionment of the lump sum for each incident. If the lump sum is apportioned to each incident:
• each claim is treated separately and not aggregated
• preclusion periods are calculated for each incident based on the apportioned amounts
• If there are no specific apportioned amounts for each event, the lump sum is:
• divided equally between each claim, and
• the amounts are not aggregated

Is a single lump sum being paid to settle multiple compensable events?

• Yes, go to Step 10
• No, go to Step 9

Multiple lump sums received for the same incident are aggregated if the following criteria is met: Initial investigation and determining the lump sum

• at least one of the payments has economic loss
• the later lump sum is not being used to repay an earlier lump sum (exclusive)

For example, a person injured in a motor vehicle accident receives a non-economic loss lump sum from WorkCover, and the motor vehicle insurer also makes a subsequent lump sum payment. If the second lump sum:

• does not need a repayment of the first lump sum, the payments are aggregated to calculate the preclusion period
• needs a repayment of the total amount of the first lump sum (inclusive), only the second lump sum is used to calculate the new preclusion period

In all cases, examine the terms of the settlement, agreement or determination to decide:

• if the lump sum is inclusive of previous lump sum/s, and
• the total gross amount the customer has actually received

For examples of aggregation and the 50% rule, see the Resources page in Coding lump sum compensation payments and raising debts.

Go to Step 10.

The total gross lump sum may include additional payments, if the settlement terms specify they are additional or not included in (exclusive of) the settlement amount. Only legal costs and disbursements can be added to the settlement amount.

If the amount for costs is not specified in the settlement terms, do not add the costs to the gross lump sum amount.

Go to Table 2.

If the lump sum will result in a charge and/or future preclusion period, the customer must be notified in writing.

For current customers, no address change is required unless advised by the customer.

For non-current customers, make sure current address is recorded.

If the compensation recipient is partnered, only apply the change of address to the compensation recipient’s record.

Staff must take care that any updates do not flow on to the partner’s record.

Note: due to system limitations, complete address updates in Customer First only.

See Updating address details.

Go to Step 2.

In Customer First, search for the Compensation Management Summary:

• Check the Claim Summary section. If a Claim ID does not exist for the claim, run the New Compensation and Damages Notification (MOD C) workflow and complete the clearance
• If there is an existing claim, select the Claim ID and check the following screens are up to date:
• Clearance Details
• Incident Details
• Claim Details
• Compensation Payer Details
• Solicitor Details
• Liable Party Details
• Periodic Payment Details
• Record all information in the TAC Compensation Lump Sum and Waiver Fast Note

Go to Step 3.

Is the customer deceased?

• Yes, go to Step 4
• No, go to Step 5

Determine the customer’s date of death and the date the preliminary notice was issued.

Go to the Death/Executor (DEA) screen to find the date of death. Find the archived preliminary notices through the Archiving and Culling Engine (ACE).

If a preliminary notice was issued before the death of the customer:

• make sure the compensation notices are not sent to:
• the deceased customer
• their personal representative, or
• the estate
• raise a compensation payer charge, go to Step 8

If a preliminary notice was not issued, or was issued after the death of the customer:

• the debt cannot be recovered from a compensation payer
• recovery of debt must be made against the customer’s estate
• change the preliminary notice back to Advice Not Issued

In the Compensation Management Summary (CMS):

• Select the relevant Claim ID
• Select Compensation Payer Details
• In the Issue Advice field, select Advice Not Issued from the dropdown box
• Complete Source and Receipt fields and select Continue

Go to Step 8.

The Preliminary Notice field determines if the charge will be raised to the TAC or the customer.

Go to the Clearance Details screen.

If the Issue Preliminary Notice field shows:

• Advice issued automatically or Manual, this will result in a Compensation Payer charge
• Advice not issued, this will result in a customer debt

Is the Issue Preliminary Notice field correct?

• Yes, go to Step 8
• No, and for:
• compensation payer charge, go to Step 6
• customer debt, go to Step 7

To create a Compensation Payer Charge:

• Change the Issue Preliminary Notice field to Manual
• In the Compensation Management Summary (CMS):
• select the relevant Claim ID
• select Compensation Payer Details
• select Advice Issued Manually from the dropdown box in the Issue Preliminary Notice field
• complete Source and Receipt fields
• select Continue

Go to Step 8.

To create a customer debt:

• Change the Issue Preliminary Notice field to Not issued
• In the Compensation Management Summary (CMS):
• select the relevant Claim ID
• select Compensation Payer Details
• select Advice Not Issued from the dropdown box in the Issue Preliminary Notice field
• complete Source and Receipt fields
• select Continue

Go to Step 8.

The lump sum must be coded and charge created before a waiver is applied.

Compensation Management Summary (CMS) must reflect the total charge period.

Before coding the lump sum settlement, check to make sure all other lump sum payments for the same incident are recorded. The system will auto aggregate the previous lump sums when the lump sum is coded. Coding instructions within this step must also be followed for all previous lump sums.

If there are multiple compensation payers and claims are linked in CMS:

• Select Incident Date from the ‘Incident date’ column
• Select Lump Sum Payments
• The Lump Sum (Incident) screen will show
• Select the primary payers Claim ID
• Add Lump Sum

If there is only one compensation payer:

• Select the relevant Claim ID
• Select Lump Sum Payments
• The Lump Sum (Claim) screen will show
• Add Lump Sum

On the Add Lump Sum screen, code the following fields:

• Settlement Date: this field determines the divisor amount applying on the date of settlement. The divisor amount is used to calculate the preclusion period in CMS. Code the date the formal decision or agreement of the lump sum was made or signed:
• If there are multiple dates advised and they cover the date the divisor changed, use the latest date. This will provide the most beneficial outcome to the customer
• Settlement Type: this field is used to distinguish between differing lump sum payment types. For more information on situations where each settlement type is used, see the Resources page in Coding lump sum compensation payments and raising debts
• Gross settlement amount: key the total lump sum amount. Include legal and disbursement costs in the amount if applicable
• Issue advice: this field determines if an automatic Recovery or Release notice will be sent to the customer, solicitor and compensation payer. This field will default to Advice Issued Automatically
• For TAC waiver cases:
• Select Manual Advice Issued from the dropdown box
• If an impairment lump sum has already been released, select Advice Not Issued from the dropdown box

Note: staff must make sure that no automatic charge recovery notices are issued for TAC waiver case. Manual recovery notices will be issued once waiver is applied.

Go to Table 3.

Did the customer receive FHA payments during the preclusion period?

• Yes, debt components will not display in CMS:
• Check the Payment List screen in Customer First Workspace to verify FHA payments received
• Manually adjust the Lump Sum Assessment Results screen to include the FHA payments in the debt
• Notify the Farm Household Allowance (FHA) team of the period and amount of FHA payments used in the compensation assessment. Use Fast Note - select Auto text > use Rural > FHCO > Notification change of circumstance
• No, go to Step 2

When the preclusion period is calculated, the debt amount and debt period will show on the Lump Sum Assessment Results screen.

See Compensation and Supplementary payments for information about which payments are included in compensation calculations.

The following payments are not compensation affected and must be raised and recovered separately:

• Income Support Bonus (ISB)
• Utilities Allowance (UA)
• Student Start Up Loans (SSL). Note: these are raised automatically
• Clean Energy Advance (CEA)
• Schoolkids Bonus (SKB)

Staff must review all undetermined and previously investigated CAP debts that fall within the preclusion period:

• Go to the Debt List (OPDL) screen to determine if there were debts in the period
• Debts that will need to be added back into the compensation debt include:
• Debt/s that were previously waived. See Reversal of waivers
• Debts that were finalised ‘no debt’ unless they are not legally recoverable. See Finalised 'no debt' (FND) or 'zeroing' debts that are not legally recoverable
• Debts that are currently undetermined. See Actioning an undetermined debt on the Debt Management and Information System (DMIS)

Check the system generated debt is correct. The Payment Details Download Sheet (PS Tool) must be used to confirm payments received in the preclusion period. If the amount of the debt cannot be explained using the PS Tool, investigate the customers record:

• Select Save and Exit
• Check the Payment Summary (PS) screen to determine if arrears paid outside of the preclusion period cover days in the debt period
• Check for previously raised debts which may cover days in the debt period
• Check for Benefit Transfers which may have taken place during the debt period. See Debts resulting from internal transfers and clearances
• Find the archived activities through the Archiving and Culling Engine (ACE)

If after investigation the system amount cannot be explained, the Lump Sum Assessment Results screen may need manual adjustments. An explanation of any adjustments made to the result must be recorded in a DOC and evidence scanned to the customer record.

Is the calculated debt correct?

• Yes, go to Step 4
• No, go to Step 3

If manual adjustments are needed, calculate the correct amount of CAPs received in the periods showing on the Lump Sum Assessment Results screen:

• Select the started Lump Sum activity under Action Item
• Select Continue on the Lump Sum screen to go to the Lump Sum Assessment screen
• Select Add Payment Charge to add new payment line:
• Enter the payment in the required field
• Select Submit to add new line and edit the payments components
• Select Add Component or Edit Component and update if appropriate
• Make sure the payment components are recorded in the correct financial year, see Processing manual Follow-up (MFU) tax activities for compensation debts
• Select Delete to delete the payment component
• Select Back
• Select Delete Payment Charge to delete payment line

When all adjustments are complete, select Save and Exit to save Lump Sum Assessment details.

Go to Step 4.

Garnishee can be considered to recover outstanding debts. See Garnishee of compensation payments to recover debts.

Go to Step 5.

An unfavourable decision is a decision that is adverse to the customer and/or partner. This includes:

• rejection of a claim or concession card
• cancellation of payment or concession card, or
• raising a customer debt

Will the assessment result in an adverse decision?

• Yes, and:
• all adverse decisions not related to a customer debt, go to Step 6
• adverse decision relates to a customer debt only, go to Step 7
• No, go to Step 7

Compensation Recovery Team (CRT) staff must avoid placing a customer in financial hardship.

If the lump sum compensation payment has not yet been released staff must consider:

• when the compensation payer will release the lump sum to the customer
• when the next income support payment is due to be paid, and
• placing activity on hold until after the next entitlement period of the Compensation Affected Payment (CAP)

Before finalising the activity, staff must:

• make genuine attempts to contact the customer and/or partner. See Advising verbally of an unfavourable decision
• consider any vulnerabilities or sensitivities that may impact the customer. See Identifying customer vulnerability and risk issues
• record details of each contact attempt on a Fast Note
• discuss all aspects of the adverse decision:
• For suggested staff scripts when explaining a lump sum preclusion period to the customer and frequently asked questions, see the Resources page in Coding periodic compensation payments and raising debts
• record details of discussion(s) including preclusion period and/or garnishee action with customer on a Fast Note

Interpreter and language services

There are language and interpreter services available for customers who may need an:

• Immediate telephone interpreter
• Indigenous language interpreter

See Interpreter Services.

Go to Step 7.

On the Compensation Management Summary screen, select the started Lump Sum activity under Action Item.

On the Lump Sum screen:

• Complete Source and Receipt Date
• Select Continue
• The Assessment Results (AR) screen will show
• Select Submit to finalise the lump sum

CRT should complete any resulting tax adjustment. See Processing Manual Follow-up (MFU) tax activities for compensation debts.

Record all action taken in the TAC Compensation Lump Sum and Waiver Fast Note and close any open Compensation Progress Doc.

Go to Table 4.

Staff must determine what part of the existing debt can be waived and what part is recoverable. The waiver period is determined by customer’s age at the date of the accident.

On the date of the incident, if the customer was:

• under 18 years of age, the end date of the waiver is the day before the customer’s 18th birthday
• over 18 years of age, the end date of the waiver is 18 months after the date of incident

See the Resources page for examples.

Go to Step 2.

Select the debt from the Debt List (OPDL) screen to view the total debt amount.

Calculate the amount of debt that falls within the waiver period. The Compensation Assessment Results (CMAR), Payment Details Download Sheet (PS Tool) or Multical can be used to calculate the waiver amount.

Staff in CRT with the appropriate delegation can waive a debt. See Centrelink Services, Delegations and Authorisations.

Does the staff member have the delegation to waive the debt?

• Yes, go to Step 5
• No, and:
• only part of the debt can be waived, go to Step 3
• all of the debt can be waived, go to Step 4

If only part of the debt is being waived, a new undetermined debt must be created for the waived portion.

This ensures record correctness for future reassessments and satisfies audit needs.

Note: the debt activity must remain undetermined. As the delegated staff member is the decision maker they must code the waiver.

Create a new undetermined debt using the Debt Action script or manually. See Create a new debt record manually on the Debt Management and Information System (DMIS):

• Go to the Add Debt (OPAD) and code all compulsory fields:
• Benefit Type: the same as the original debt
• Reason: the same as the original debt
• Section of the Act: the same as the original debt
• Date of Event: key the date of event that caused the debt. The date cannot be in the future
• Date of Notification: key the date customer advised
• Start Date: key the start date of the waived part of the debt
• End Date: key end date of the waived part of the debt
• Calculated Amount: key the correct amount of the debt to be waived
• Additional Reference No:
• Go to the Component Amount (OPCA) screen:
• Record the new component end date
• Record the new component amounts
• Go to the Debt Reference Summary (OPDR) screen. In the ‘Insert new reference’ add Y and code all compulsory fields - the same as recorded in the original debt
• Do not finalise the activity
• Go to the Activity List (AL) screen
• Place activity on hold pending waiver request

Go to Step 4.

If staff member does not have delegation to waive the debt:

• Annotate the TAC Compensation Lump Sum and Waiver Fast Note with the waiver submission. See the Resources page for waiver submission template
• Request waiver approval from an appropriately delegated officer (APS5 or above) in the Compensation Recovery Team (CRT). Discuss the case and/or email the request to a Quality Development Officer (QDO) or Team Leader in CRT
• Delegated officer must annotate the DOC with their approval

Go to Step 5.

The staff member that holds the appropriate delegation is regarded as the decision maker and must code the waiver.

Waive the debt under section 1237AAD. See Special circumstances debt waivers.

Use the:

• Debt Action script to code a waiver of an undetermined debt
• Debt Recovery script to code a waiver of a determined debt

If only part of the debt is being waived, a separate undetermined debt must be created. This ensures record correctness for future reassessments and satisfies audit needs.

For partial waiver of debt:

• Use the Debt Action script, or
• Create manually. See Create a new debt record manually on the Debt Management and Information System (DMIS)

To code the waiver manually:

• Select the Debt ID that is to be waived from the Debt List (OPDL) screen and press [Enter]
• Go to the Add Waiver (OPWAA) screen and complete the following fields:
• Amount Waived $: code the amount to be waived
• Reason Waived: use reason code EUC
• Comments: record a brief reason why the debt is being waived
• Select [Enter]
• Finalise activity on the Assessment Finalisation (OPAF) screen

Record the waiver details in the TAC Compensation Lump Sum and Waiver Fast Note. See the Resources page for Waiver submission template.

Go to Step 6.

When part of a debt is to be waived, the existing debt amount must be reduced to reflect the recoverable amount. This will also allow the system to apply the tax adjustment correctly once the debt is fully repaid.

Reduce the debt amount by the waiver portion:

• Select the Debt ID from the Debt List (OPDL) screen
• Go to the Debt Amount (OPDA) screen:
• Record the new debt amount
• In the Reason for Change: field insert reason code MUL (multiple debt activities)
• Go to the Component Amount (OPCA) screen, and record the:
• new component end date
• new component amounts
• Go to the Assessment Finalisation (OPAF) and select Y to finalise the activity

See Changing account details on debts raised in the Debt Management and Information System (DMIS).

Note: do not issue a Q053 or Q417 letter, as these are not appropriate for these cases.

Go to Step 7.

Create Compensation Recovery letters manually. See Compensation Online Advice (OLA) letters.

If the customer is deceased, go to Step 8.

If the result is a payer charge, customer debt and/or a future preclusion period, outcome letters must be sent to all relevant parties. See the Resources page for a list of letters which can be issued for each scenario.

If the debt is fully waived or there is a nil charge to the TAC, see the Resources page for when to send a Q928 letter.

Go to Step 8.

Check if the debt was raised to the compensation payer or the customer.

If the debt was raised to the:

• compensation payer (charge), make sure the compensation notices are not sent to:
• the deceased customer
• their personal representative, or
• the estate
• customer:
• Issue Send a Q928 Release Notice to the compensation payer
• Letter may need to be issued to the deceased customer’s estate. See Recovering debts from a deceased customer's estate

The Debt Recovery Team will take recovery action against the estate under Chapter 5 of the Social Security Act 1991.

Go to Step 9.

Letters to third parties are issued according to the service they are registered for:

• CBOS (Centrelink Business Online Services)
• Fax
• Mail

See Compensation letters for further information about sending compensation recovery letters to third parties.

Note: Garnishee letters must be sent at the same time.

Go to Step 10.

Action any debt activities that have resulted from coding the lump sum.

Customer contact may be required before debt raising. See Debt raising support for customers for contact requirements.

See General debt raising information for more details about actioning debt activities.