Calculating a compensation debt for judgements 117-02010030

This document outlines how to calculate a debt when the ruling is by a judge, tribunal or specific arbitrators after a contested hearing.

Economic loss components and the lump sum preclusion period

The specific amounts awarded for economic loss are taken to be the compensation part of the lump sum. The economic loss amount is calculated by adding any amounts awarded for:

past and future economic loss
interest awarded on past economic loss
interest on superannuation
loss of superannuation and
taking away any amount of periodic compensation from the judgement

Any 'Fox v Wood' component is not included as economic loss. This component is to reimburse income tax previously paid when weekly compensation must be repaid from the judgement.

Compensation payer intends to pay and will not be appealing

Before calculating any debt the Compensation Recovery Team (CRT) should establish that the compensation payer intends to pay and there will be no appeal of the decision to a higher court.

The CRT must obtain a copy of the judgement or award before calculating a debt.

Where there is any doubt the claim does not specify the amounts for economic loss, CRT staff should seek more information from the compensation payer.

Where no evidence exists, it is reasonable to determine that the compensation part is 50% of the gross.

Aggregation of a judgement and a settlement

In some situations, a judgement may leave earlier compensation lump sum settlements in place. The decision maker must examine the combined amount and decide the components for economic loss.

Preclusion period and appeals

Contact the compensation payer if:

a preclusion period has been calculated and a debt raised, and
the judgement will be appealed

Cancel the debt where payment is withheld. Vary the debt for part payments.

Compensation notices

A compensation notice refers to a:

Preliminary notice
Recovery notice

See the Resources page for more information.

If a notice is issued:

before the death of a customer, the notice will still apply.
after the death of a customer, the debt is recovered against the estate under Chapter 5 of the Social Security Act 1991

Small debt waivers

The waiver of a debt is dependent on the recoverable amount specified in the Recovery Notice under section 1184.

Waivers, like any other decision, can be reviewed and changed.

The Resources page contains a link to the Payment Details Download Sheet (PS Tool) and a link to the Services Australia index for access to calculators and tools.

Operational Information