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4.6 Client is Deceased
Survival of Claims
A person’s claim for permanent impairment continues if they pass away before their claim is determined. Additionally, if a person dies before making a claim but was entitled to, the person’s legal personal representative may make a claim following death.
The relevant subsections in section 55 state:
55(1) Where a person who is entitled to make a claim for compensation under this Act dies without making a claim, a claim may be made by the person's personal representative.
55(2) A claim is not affected by the death of the claimant after the claim was served.
55(4) This section does not apply in relation to a claim for compensation under Section 27.
Essentially, claims for lump sum compensation for permanent impairment may be made and paid after the death of the person providing that the degree of permanent impairment can be properly assessed retrospectively. For posthumous permanent impairment assessments, delegates must be mindful of subsection 55(4) which means that only section 24 amounts can be paid with respect of a deceased person, and not the section 27 non-economic loss component lump sum.
Generally, it is not possible to be prescriptive regarding the circumstances in which it may be possible to award a permanent impairment lump sum. Each case must be considered on its own merits having regard to the effects of an injury or disease on the individual.
Where the death occurs prior to the determination of a PI claim
Where the client dies before an amount of compensation for NEL has been assessed and determined, subsection 55(4) of the DRCA applies with the effect that a payment of compensation for NEL under section 27 will not be made.
In effect, section 55 allows a claim for PI to be made, assessed and paid after the death of the member only under section 24. As long as liability can be found to exist for the injury and the degree of permanent impairment is capable of being assessed medically, the claim for permanent impairment under section 24 can be processed irrespective of the timing of the claim (i.e. whether or not a claim for, or determination of liability, has been made prior to the death). When determining if an impairment is capable of being assessed, it should be noted that section 24 is designed to compensate a person for the difficulties and inconveniences suffered as a result of having to live with a disability.
Delegates should note that the bar on s27 NEL payments also applies if, at the time of the client's death, a reassessment is being undertaken by the delegate (i.e. a reassessment following an earlier interim payment under section 25(1), or a reassessment under section 25(4)) and has not been finalised prior to the death of the client.
Where the death occurs after determination of a PI claim
If the client dies after a claim for compensation (including a claim for NEL under section 27) has been determined, section 111 of the SRCA provides that the compensation is to be paid to the estate of the client, unless the client dies intestate (i.e. without making a will) and 'there is no other person apparently entitled to claim the estate'.
If an original determination granting compensation (including a payment for NEL) has been made, but the client dies while the determination is under reconsideration or review by the AAT, the reconsideration or review should be completed and a decision conveyed to the personal representative of the deceased client.
Where however, at the time of the client's death, a reassessment is being undertaken by the delegate (e.g. a reassessment following an earlier interim payment under section 25(1), or a reassessment under section 25(4)), no amount of compensation for NEL should be included in the reassessment determination.
To whom is the compensation payable?
The Act provides explicitly that where a determination is made that an amount of compensation is payable under the Act to a person that dies prior to the payment being made, the amount forms part of the estate.
The relevant provisions applicable on death of a beneficiary are provided in section 111, and state:
111(1) Subject to this section, where a determination is made that an amount of compensation is payable under this Act to a person and the person dies before the amount is paid, the amount forms part of the estate of the person.
111(3) Where a person referred to in subsection (1) dies intestate and there is no other person apparently entitled to claim the estate (including that amount of compensation) of that person, subsection (1) does not apply and, subject to subsection (5), if the amount of compensation is held by a relevant authority, it shall pay the amount to the Commonwealth.
111(5) Nothing in this section prevents a relevant authority from rendering any provision of this section inoperative in a particular case by making a decision under section 62.
In accordance with section 111, the relevant authority is required to make the compensation payment to the estate of the deceased client.
If there is outstanding compensation claim for an injury or disease owing to a person who dies intestate (i.e. without living a valid Will) and there is no other person entitled to claim the deceased's estate, please consult Benefits and Payments Policy for a way forward.
What information could a delegate gather or consider for a deceased client’s claim?
If a permanent impairment claim is being determined following a client’s death or where the claim has been made posthumously, a delegate may be required to obtain from the legal personal representative the following documents or details:
• details of the Estate;
• a death certificate
• a copy of the Will (unless the client dies intestate);
• letters of administration where the person dies intestate; and
• bank account details in the name of the estate so that the PI compensation payment that is determined can be paid to the Estate.
This list is not exhaustive. A delegate may need to consult with Benefits and Payments Policy on a case by case basis where they are unsure of the status of the deceased’s Estate, beneficiaries, or the legally appointed executor or administrator of the Estate and need further guidance about how to finalise the claim and direct the amounts of compensation payable and owed to the Estate.