Payment procedures

Whilst a decision to pay MRCA permanent impairment is accompanied by a choice to take legal action for damages against the Commonwealth for non-economic loss under s 389, the decision is not an ‘offer’ of compensation. 

It is a determination of entitlement to compensation that is dependent on by a positive election by the client to seek damages under s 389. 

This is also the case with the choice under s78 to take the entitlement of weekly compensation as a lump sum.  

The client is entitled to weekly compensation provided they do not make a positive election to seek damages under s389.

Once the amount of PI compensation payable has been determined, the client is sent:

  • a determination letter

  • a Payment Options form 

  • a Common Law Election form.

Payment Options form

Clients have 6 months from the date of the determination letter to decide the way they would like their MRCA permanent impairment compensation payments to be made (weekly payments paid fortnightly) or lump sum compensation or a combination of both if applicable).

If the client elects to take the PI compensation option, they should complete the payment options form including their bank account details. 

A client’s representative can sign a MRCA PI election form on behalf of a client who does not have the physical capacity to sign the form. The choice to receive a lump sum payment must be made by the client themselves.

Where the client is incapable of approving someone to act on their behalf, a representative chosen by the Commission may make the decision to elect the PI lump sum payment on the client’s behalf, as long as it is in the client’s best interest. 

The payment cannot be made to an account held by a third-party account such as a solicitor, even if the client has directed the compensation to be paid to the third party.

Common Law Election form

Clients may elect to forego the determined entitlement and commence action or proceeding for damages under common law. This election cannot be revoked or reversed regardless of the outcome. This means that no PI compensation will be payable for the claimed conditions after the date that choice is made.

Request for extension

Clients can request an extension of time to return the election form. Requests must be made in writing and will be considered by APS6 team leader or senior delegate.

When the election form is not received

Legally, clients can be put into payment without returning the election forms. Before doing this, staff must make every reasonable effort to contact the client. All attempts must be documented.

When the election form is returned

Once the client’s election form is returned, it must be attached in R&C ISH > Election/payments screen > Common Law tab > related documents section. 

Completed election form details

Procedure

Client’s nominated bank account details provided or left blank.

The name of the nominated bank account on the election form must contain the client’s name. The bank account can be held jointly with another person.

MRCA permanent impairment payments cannot be paid into a solicitor’s account or a company account.

Client suing the Commonwealth

The claim can be automatically finalised in R&C ISH – election/payments screen > Common Law tab > YES

Trust account

The payment can only be made to a trust account where a trustee in respect of payment of the client’s compensation has been appointed by the Commission in accordance with section 432 [1] [1] [1] of the MRCA.

Debts/overpayments

Where a debt has been identified, request a clearance from the Debt Management Unit (DMU) using the Debt details tab in R&C ISH.

Ensure debts recoverable from lump sum payments are deducted from the total permanent impairment compensation in R&C ISH. Case-notes must be made explaining the debt recovery.

Services Australia clearance

For MRCA Permanent Impairment (PI) payments with an eligibility start date after 31 December 2021, you don't need a clearance from Services Australia. However, if the eligibility start date is before this date, you must inform Services Australia. In such cases, delegates should send an initial email to Services Australia to check if they have any interest in the client.

This assists them to calculate any effects on any Services Australia benefits the client may be receiving.

If Services Australia confirm there is an interest,  the delegate must complete the Full Services Australia MRCA clearance form (CM9 #2110177E) [2] [2] [3] and return it back to Services Australia.

The clearance email template and full clearance forms are available on the Compensation Claims Support Site.

A Services Australia interest in a MRCA Permanent Impairment payment has no effect on DVA continuing to process the payment to the client without delay.

VEA Disability Compensation Payment (DCP)

It is not necessary to raise a clearance between MRCA PI and the VEA Offsetting team for clients in receipt of Disability Compensation Payment (DCP).

MRCA PI payments have no impact on DCP at the general or above general rate. The amount of DCP is factored into the calculation of the MRCA PI payment.  This is because MRCA PI only actually pays for the MRCA conditions. 

DRCA lump sum payments have the potential to impact the rate of DCP paid to the client.

All conditions where liability has been accepted under VEA or DRCA on or before a MRCA PI claim is made are included in the assessment as MRCA PI is a ‘whole person assessment’.

Process payment

Once payment has been processed, the compensation payment advice letter will automatically generate in ISH and the case will be finalised. Delegates should check the correspondence to ensure that all details are correct, including weekly payments (paid fortnightly) if applicable.

For further information refer to:

 

 

Source URL: https://clik.dva.gov.au/compensation-claims-procedures/mrca-permanent-impairment-procedures/payment-procedures

Last amended