DCA 11 - SECTION 137 - LUMP SUM REDEMPTIONS

DEFENCE COMPENSATION ADVICE - NO 11

Commonwealth Employees Rehabilitation And Compensation Act 1988

SECTION 137 - LUMP SUM REDEMPTIONS

1.  It has come to my attention that there is some confusion regarding whether, as a consequence of the operation of section 48(8) of the Act an employee's incapacity payments are reduced below $53.85 his/her request for lump sum redemption under section 137 of the Act can be determined in their favour.

2.  The employee's entitlement to weekly compensation is made under section 131 of the Act. However, by virtue of sub-section 48(8), the gross amount is reduced. As a result of this reduction, the amount payable to the employee is now under the section 137 limit. (Without application of section 99 of the Compensation (Commonwealth government Employees') Act 1971, the employee's entitlement would exceed the $53.85 threshold).

3.  As it would be inequitable to redeem an amount which conceivably in the future (when complete offset occurs) would be greater than the section 137 limit, such a payment should not generally be made.

4.  Should such cases arise, it is recommended that file papers be referred to this office for consideration.

5.  Should you have any further queries concerning this matter, contact Mr Paul Ontong on 062-668639.

D.J. WHITEHEAD

DOHC

20 October 1989