Allocating Lump Sums To Partial Dependants
The sharing of a compensation lump sum in cases involving partial dependence requires:
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assessment of each dependant's level of dependence (as per the two previous examples where the dependant did or didn't live with the deceased employee); and
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allocation of the lump sum based on each dependant's level of dependence.
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Example |
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One dependant may be assessed as being entitled to $11,000 of the lump sum. |
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Another may be assessed as being entitled to $8,000 of the lump sum. |
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Allocation of the lump sum would be based on each assessment. |
However, while the assessment of partial dependence may result in a figure that can be directly attributed to any lump sum amount payable, there is discretion to alter that figure where the merits of an individual case warrant it.
The following three examples provide distinct scenarios for allocation of shared lump sum amounts to each of:
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combined whole and partial dependency claims; and
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combined partial dependency claims.
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Example 1 - Whole and partial dependency |
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Claims are received from a de facto spouse living with the deceased employee and a partly dependent legal spouse (separated but not divorced). |
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The de facto spouse living with the employee at the date of death is deemed under section 4 (5) to be wholly dependent on the employee. She is therefore qualified to receive at least 75% of the maximum lump sum entitlement payable. |
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The monetary measure of the legal spouse (not living with the employee) must be established. This will be based on the partial dependence calculation as outlined on page 13 of this Part. |
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Formula is (A - B) x C |
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A total weekly household expenditure = $345.00 |
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B after tax weekly income = $235.00 |
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C expected duration of dependency = 35 years |
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Duration calculated down to 35 x 52 weeks = 1820 weeks |
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($345 - $235) x 1820 |
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$110 x 1820 = $200,200.00 |
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Lump sum entitlement is $200,200.00. |
However, while it has been established that there is a substantial lump sum entitlement, those dependants who have established whole dependency must be taken into account first.
In this case, the following applies:
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75% x $168,937.90 = $126,703.43 (payment for whole dependence) |
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BALANCE = $42,234.47 (residual to partially dependent spouse) |
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Example 2 - Partial (living with) and partial (not living with) dependence |
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Claims are received from the deceased employee's mother, who was partly dependent and from the separated spouse, who was also partly dependent. |
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Dependency of the mother (living with the employee) will be established based on the formula (67% x A - B) x C. |
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Dependency of the spouse (not living with the employee) will be established based on the formula (A - B) x C. |
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The mother's partial dependency is established as $83.00 per week for 7 years, or $30,212.00 |
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Partial dependency for the spouse is established as $40.00 per week for 27 years, or $56,160.00. |
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The total amount payable for the claims is: |
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$30,212 payable to the mother and $56,160 payable to the spouse |
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OR $86,372 |
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Example 3 - Partial and partial dependence (both not living with) |
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Claims are received from two partially dependent claimants. One is the separated spouse and the other is the dependant child. The child is 17 years old and is currently attending University. The monetary measure of both dependants is required. |
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SPOUSE |
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Formula is (A – B) x C |
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A total weekly household expenditure = $345.00 |
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B after tax weekly income = $235.00 |
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C expected duration of dependency = 35 years |
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Calculated as 35 x 52 weeks = 1820 weeks |
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($345 - $235) x 1820 |
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$110 x 1820 = $200,200.00 (amount payable to the spouse) |
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CHILD |
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The employee was paying $35 per week maintenance for the child. This is sufficient to establish partial dependency. The child is studying for a medical degree and is expected to finish when he is 23 years and 9 months of age. |
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Weekly level of dependency = $35.00, expected duration of dependency = 6 years 9 months and calculated as 6.75 x 52 = 351 weeks |
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$35 x 351 weeks = $12,285.00 (amount payable to the child) |
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As the total amount payable exceeds the maximum lump sum limit, dependency must be proportioned within that limit: |
$168,937.90 (maximum payable) x 6.14% = $10,372.79
TOTAL PAYABLE - child's proportion = spouse's proportion
$168,937.90 - $10,372.79 = $158,565.11
Source URL: https://clik.dva.gov.au/military-compensation-reference-library/historical-information/comcare-operations-manual/volume-six-death-claims/part-two-payments-death-claims/partial-dependence/allocating-lump-sums-partial-dependants