Calculating a charge for lump sum compensation payments (CLK) 117-02010000

Calculate a charge after the Compensation Recovery Teams (CRT) confirm the details of the case.

• To calculate a preclusion period and charge, the lump sum must:
• contain a component for lost earnings or loss of capacity to earn , or
• follow an earlier payment with economic loss

The CRT must obtain a signed copy of the settlement release or the court award before calculating any lump sum compensation charge. Where there is doubt the claim does not contain economic loss, CRT staff should obtain:

• a copy of the writ seeking damages, or
• claim form or statement of claim from the compensation payer

This will show whether or not the customer has suffered and claimed for an economic loss. If economic loss has been claimed there will be some allowance for it in a global settlement.

See Calculating a compensation debt for out of court settlements

The CRT needs to determine:

• the gross amount of the compensation lump sum payment. They may need to consider different state legislation such as
• previously paid statutory compensation
• costs (if known at the time settlement)
• advance payments
• TAA 18 month preclusion period and charge waivers
• or part of the compensation lump sum is for arrears of periodic compensation

Whether the compensation lump sum was at least in part for economic loss or, if not, whether the compensation lump sum follows an earlier compensation lump sum paid for the same claim.

Whether the compensation lump sum was paid as a result of:

• an out of court settlement
• a judicial award or
• an independently arbitrated award
• if the compensation lump sum has been finalised after a contested hearing the compensation part is made up of the amounts awarded specifically for economic loss. If no breakdown is given, decide the economic loss amount taking into account the available evidence.

Different rules apply to ABSTUDY for the treatment of compensation.

All or part of a waived amount may be included within a new debt decision. This includes any previous decision made to:

• waive a debt review
• a waived debt that has been set aside, varied or changed
• review a waived debt and a new compensation recovery charge calculated