9.2 Life Insurance Policies

Insurance on the life of the deceased employee is a private financial/commercial arrangement and an amount specified by an insurance policy and paid to a dependant does not have any effect on the compensation entitlement under any of the Commonwealth Acts administered by the Department.

Therefore:

No limitation should be made to compensation entitlements in respect of payments received by a dependant, as prescribed by an insurance policy.

However:

In cases where the insurance company subsequently institutes a legal action in the dependant's name – i.e. to recover damages either from a third party deemed liable for the death (or, indeed from the Commonwealth itself) – Delegates should take an interest in those proceedings. Section 48 requires that the Commonwealth recover:

a)the compensation entitlement OR

b)the amount of damages recovered at law,

whichever is the lesser. Read 9.3 and/or 9.4 below for further information relating to this circumstance.