2.2.9 Receipt of Private Insurance Benefits

For the purposes of the Act, payments received via settlement of private insurance matters do not meet the criteria of “damages” (being monetary compensation that is awarded by a Court in a civil action to an individual who has been injured through the wrongful conduct of another party) and are therefore excluded from the recovery provisions contained in Chapter 10 of the Act, which would normally apply for cases involving common law or third party damages.

The rationale behind this is that private insurance policy payments reflect a contractual arrangement between the insurance company and the injured person and is not the result of any legal wrong committed by the insurance company.

Similarly, any benefits a client may receive in the form of income protection as part of an insurance policy are excluded when calculating a client's actual earnings to determine incapacity entitlements.

In summary, Delegates should be aware that receipt of private insurance benefits will not affect a client's entitlements to either permanent impairment or incapacity compensation under the MRCA, meaning the employee has the benefit of receiving the insurance payment(s) separately to any compensation which is payable under the Act.  This approach has been supported by the Department's Business Integrity & Legal Services Group.