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

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Compensation Helpdesk

Centrelink Services, Delegations and Authorisations

Information needed for assessment

Table 1:

Item

Description

1

Does the settlement contain economic loss?

The Deed of Release will state if the settlement is in respect of ‘pecuniary loss’ (economic loss).

A TAC ‘Order of Compromise’ settlement will not contain the above clause.

Confirm with the TAC whether the ‘Order of Compromise’ contains economic loss.

2

Did the accident occur in Victoria?

The Deed of Release will state where the accident occurred.

If the accident occurred outside Victoria, settlement of a claim falls under the jurisdiction of the State/Territory in which the accident occurred.

3

Periodic payments by the TAC

Periodic payments paid by TAC are called Loss of Earnings benefits (LOE) or Loss of Earnings Capacity Benefits (LOEC).

Confirm with TAC whether LOE or LOEC payments were made.

4

Linked workers compensation claim

A TAC claim can sometimes be linked to a workers compensation claim.

The workers compensation insurer may pay periodic payments and/or an impairment lump sum.

Confirm with TAC whether there is a linked workers compensation and the compensation payer’s details.

Confirm claim status details with the linked compensation payer.

5

Prior lump sums

The TAC may have awarded non-economic loss lump sums for:

  • Impairment under section 47 of the Transport Accident Act 1986
  • Pain and of suffering
  • An ‘interim payment’ whilst the common law claim is being determined

Confirm with TAC whether any prior lump sums were paid.

6

Release of settlement

If the TAC were not under notice, they will generally not seek a clearance and will release the lump sum.

If it is unclear whether the settlement was released, confirm with TAC.

TAC Waiver Periods

Table 2:

Item

Age at date of accident

Waiver start date

Waiver end date

Non-earner

18 years and over

Date of accident

18 months from the date of accident (minus one day)

Non-earner Minor

Under 18 years

Date of accident

Day before 18th birthday

TAC Waiver period examples

Table 3:

Item

Example

1

Waiver period if aged 18 years and over at the time of the accident

  • Casey was involved in a transport accident in Victoria on 28 February 2019
  • At the time of the accident, the TAC considered them to be a ‘Non-earner’
  • They did not receive periodic compensation for this injury
  • They received a lump sum compensation payment from the TAC
  • They had a compensation preclusion period for the period 28 February 2019 to 01 January 2025
  • During the preclusion period they received Disability Support Pension (DSP)
  • A compensation debt was raised for the DSP received during the period 28 February 2019 to 01 January 2025, totalling $35,000

Any CAP paid to Casey for 18 months commencing from the date of accident is non-recoverable.

This part of the debt can be waived under Section 1237AAD.

Waiver period:

  • The period that can be waived is 28 February 2019 to 26 August 2020
  • During the waiver period, the total DSP paid was $10,000
  • This portion of debt is waived in a separate debt activity
  • The existing debt amount of $35,000 is reduced by the waiver amount
  • This leaves a recoverable debt amount of $25,000

2

Waiver period if aged under 18 years at the time of the accident

  • Jamie was involved in a transport accident in Victoria on 28 February 2019
  • At the time of the accident, the TAC considered them to be a ‘Non-earner Minor’
  • They did not receive periodic compensation for this injury
  • They received a lump sum compensation payment from the TAC
  • They had a compensation preclusion period from 28 February 2019 to 01 December 2019
  • During the preclusion period, they received Youth Allowance (YAL)
  • A compensation debt was raised for the YAL received during the period 28 February 2019 to 01 December 2019, totalling $8,000

Jamie reached 18 years of age on 02 March 2020.

Any CAP paid to Jamie commencing from the date of the accident and up to the day before their 18th birthday is non-recoverable.

This part of the debt can be waived under Section 1237AAD.

Waiver period:

  • The period that can be waived is 28 February 2019 to 01 March 2020
  • As the compensation debt covers the period 28 February 2019 to 01 December 2019, the whole debt amount of $8000 can be waived

Waiver DOC template

As per Recording reasons for decisions, a decision DOC must include the following details:

  • the decision itself
  • the Act/Guide reference upon which it is based, and
  • the reason for making the decision

The following text should be used to record the debt waiver and must be annotated within the existing TAC Compensation Lump Sum and Waiver DOC.

Table 4:

Item

Description

1

Partial waiver of compensation charge

Waiver due to special circumstances considered and applied to Debt.

Legislation:

6.4.7 of the Guide to the Social Security Act

Section 1237AAD of the Social Security Act 1991

TAC advised that no weekly compensation paid as customer was a Non-Earner or Non-Earner Minor when the accident occurred [DELETE WHICH IS NOT APPLICABLE].

The amount of Compensation Affected Payments (CAPs) received from the Date of Accident and up to the first 18 months/the customer’s 18th birthday [DELETE WHICH IS NOT APPLICABLE] is non-recoverable.

Based on the above, delegate is satisfied that the requirements for this debt waiver provision have been met.

The charge amount has been changed to exclude the non-recoverable portion.

The portion of debt that is non-recoverable has been waived in a separate debt.

Portion of debt waived:

Debt ID:

Amount waived:

Period waived: DD/MM/YYYY to DD/MM/YYYY

Payment Type:

Calculated by: CMAR/PS TOOL/MULTICAL

Portion of debt to be recovered:

Debt ID:

Recoverable debt amount:

Recoverable debt period:

Payment Type:

Manual Notices sent to: TAC/Customer/Customer Sol/Copy to Insurer Sol

Notices sent via Fax/CBOS: Yes/No

If no, reason notices not sent via Fax/CBOS: [ENTER DETAILS]

2

Full waiver of compensation charge

Waiver due to special circumstances considered and applied to Debt.

Legislation:

6.4.7 of the Guide to the Social Security Act

Section 1237AAD of the Social Security Act 1991

TAC advised that no weekly compensation paid as customer was a Non-Earner or Non-Earner Minor when the accident occurred [DELETE WHICH IS NOT APPLICABLE].

The amount of Compensation Affected Payments (CAPs) received from the Date of Accident and up to the first 18 months/the customer’s 18th birthday [DELETE WHICH IS NOT APPLICABLE] is non-recoverable.

Based on the above, delegate is satisfied that the requirements for this debt waiver provision have been met.

The compensation charge has been waived.

Debt ID:

Amount waived:

Period waived: DD/MM/YYYY to DD/MM/YYYY

Payment Type:

Manual Notices sent to: TAC/Customer/Customer Sol/Copy to Insurer Sol

Notices sent via Fax/CBOS: Yes/No

If no, reason notices not sent via Fax/CBOS: [ENTER DETAILS]

Outcome letters

Table 5:

Outcome

Letter code and description

When to send

Nil recovery to compensation payer

Q928: Letter to compensation payer - Nil charge to Compensation Payer

When the compensation payer has requested clearance

Nil recovery to customer and future preclusion period

Q920: Letter to customer - Nil charge but future preclusion period

When customer has a future preclusion period

Charge to compensation payer

Q924: Recovery notice - compensation Payer

Q900: Copy of Recovery Notice - Customer

Q901: Copy of Recovery notice - Solicitor

When charge is to be recovered from compensation payer

Charge to the customer

Q905: Letter to customer - advice of charge and preclusion period

When charge is to be recovered from the customer