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4.6 Determining the Lump Sum Option to be Paid
Where an injury to an employee results in death, section 17 provides for the payment of lump sum compensation to the dependants of the employee, who were wholly or partly dependent on the employee at the date of the employee's death.
Determination of the amount of lump sum compensation payable under section 17 requires the delegate to establish whether the various 'dependants' – i.e. those who are candidates for sharing in the payment – were wholly or partially dependent (on the deceased employee) for economic support.
Subsection 17(3) and subsection 17(4) of the SRCA prescribe the two lump sum options (based on whole or partial dependence) that are to be paid out under the section in the circumstances of either whole or partial dependence, as follows:
- if at least one of the dependants was wholly dependent on the deceased employee at the date of death, the whole of the maximum sum prescribed in the Act must be paid to those dependants - ss17(3);
- There is no provision to divide up a lesser compensation amount;
- if none of the dependants were wholly dependent on the deceased employee at the date of death, but were partially dependent on the employee at date of death, an amount up to, but not exceeding the compensation maximum lump sum is payable to those dependatns- ss17(4).
This distinction between dependants as either wholly or partly is made only to quantify the total amount of compensation payable under subsection 17(3) and subsection 17(4). Once that is determined, subsection 17(8) governs the relevant considerations for apportionment of the lump sum – that is 'losses suffered' irrespective of whether the dependant was wholly or partly dependent. Read 1.12 of this chapter of the Handbook for guidance as to what constitutes partial dependency upon the deceased.
* Note: current death lump sum rates can be accessed via the following link.
Where there are no wholly dependent persons, the total amount disbursed may be less than the statutory maximum payable. Furthermore, the individual's share of that lesser total is for DVA to determine, 'having regard to any losses suffered' by that person.
- In Re: Ranck and Australian and Overseas Telecommunications Corporation (1993) the Tribunal held that 'losses' in S43(4) of the 1971 Act meant 'the actual and potential loss of income support suffered by the dependant consequent upon the cessation of the deceased's earnings'. Other losses (or gains) resulting from the employee's death were not relevant.
The amount of the loss is determined by the delegate with the total compensation amount disbursed to be no more than the total lump sum which would have been available to wholly dependent persons. Unlike Ss17(3) there is (depending on the extent of the loss) no requirement to disburse the whole amount available.
Where there is one or more wholly dependent 'dependants', the whole (maximum) S17 lump sum is paid and divided among all dependants, whether they were wholly or partly dependant, giving regard to any losses suffered by those dependants as a result of the cessation of the employee's earnings.
Where there are only partly dependent dependants, DVA may at its discretion pay a lesser total benefit, and divide that lesser total to reflect the relative loss of income suffered by each partly dependent person.