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4.7.2 The lump sum may be distributed unequally between the deceased employee's dependants


Any lump sum compensation does not have to be distributed equally between the dependants. Determining authorities have discretion to determine the size of each dependant's share, so the shares may or may not be equal. This is made clear by the wording contained in subsection 17(8), 'Comcare shall determine the shares of those dependants in that amount as Comcare sees fit'.

The focus of the decision-making process when determining apportionment should be the losses suffered by each dependant as a result of the cessation of the employee's earnings

The wording in subsection 17(8) of the SRC Act, 'losses suffered by those dependants as a result of the cessation of the employee's earnings,' must be the focal point when deciding apportionment of the lump sum compensation under section 17.

Section 4 defines 'dependant' as being 'dependent for economic support'. Consequently the reference to 'cessation of earnings' in subsection 17(8) of the SRC Act makes it clear that apportionment of death lump sum compensation is based on the economic loss that results from the employee's death.

Determining the nature and extent of the economic loss may not be straightforward. For example, a child, who lives with one parent, may visit and stay with the other. Whilst at the other parent's home all expenses are met. In determining the relative loss of the child after the death of the non-custodial parent, it may be appropriate to consider not only child support payments, but also the value of economic support the child received while visiting the non-custodial parent.

Section 17 provides for the maximum payment of a specified lump sum. That sum is not reflective of the monetary value of the income lost as a result of the employee's death—otherwise the lump sum would vary depending on the dollar value of the income of the employee. For similar reasons, this section does not seek to replace the dollar value of the financial loss suffered by the dependant. Rather than the actual financial loss, the section seeks to allocate the lump sum in proportion to the relative loss  suffered by each dependant.

It may be appropriate that, after considering the losses suffered by the dependants, each dependant will receive part of the lump sum. It may further be appropriate, after considering the relative positions of each dependant, to apportion the majority of the lump sum to the dependent spouse, given he or she will be responsible to provide ongoing economic support for the child or children while they continue to be dependent. A smaller proportion might then be allocated and held in trust for a wholly dependent child or children. This is only an example of what may be appropriate in one set of circumstances and is not intended to be prescriptive. The Determining Authority must exercise its discretion and apportion the lump sum as it thinks fit, having regard to any losses suffered by each of the eligible dependants.