Once the amount of PI compensation payable has been determined under section 74 of the MRCA, or the level of interim compensation has been determined under section 75 of the MRCA, section 76 and section 389 of the MRCA requires the delegate to advise the claimant in writing of:
- the amount of weekly compensation to which they are entitled;
- their choice to advise the MRCC if they intend to institute an action for damages against the Commonwealth or a potentially liable member at common law (s389 choice)
- what percentage of the maximum weekly compensation they are to receive; and
- their options for converting all or part to a lump sum.
On PI compensation becoming payable, a client is to be sent a Determination letter, with enclosed terms of decision. The letter shall draw attention to the operation of s389, which will usually be accompanied by an election form which allows the client to advise the DVA of their s389 choice. Whilst there is no legislative timeframe in relation to a choice under s389, claimants should be advised to let DVA know of any intention to institute action for damages by retuning the signed 'election form' clearly indicating their intentions. If the s389 election form is not received by the DVA within a reasonable timeframe, every reasonable effore should be made to contact the client to ensure they are aware of their choice under s389. See Chapter 5.14 "Claimants Pursing Common Law Action" for more information.
Under s68, 71 & 75 of the MRCA, compensation is generally payable once a determination has been made that a person is eligible for that compensation (having regard to the requirements of s77). Other than the 'choice' under s78 (discussed below), there is no further positive action required on the part of the person of the compensation to be required to be paid. Legally a person can be put into payment without a positive indicatin in writing that they wish to receive compensation, however, in lieu of doing this within a strict non-statutory tiemframe, there is instead a responsibility on processing staff to follow-up with those clients who do not respond within a reasonable timeframe.
It is important to note that as long as the clients is still within the 6 month timeframe, they are still able to advise the MRCC that they elect to convert part or all of their compensation into a lump sum.
If interim payments have been made for a condition which has stabilised and if the new amount payable is greater than the amount of interim compensation which has been paid, section 76 requires the delegate to advise the claimant in writing:
- of the difference between the two amounts; and
- that the difference may be converted to a lump sum.
Each notice must specify the date on which it is given.
It is imperative that a claimant understands the impacts of their decision to convert permanent impairment periodic payments to a partial or whole lump sum. The financial impact of this decision on a client, will vary depending on the client's personal circumstances, and it should always be recommended that a client seeks financial and legal advice before making this decision.
It is also important to note that a decision to convert a weekly amount into a partial or whole lump sum under s78 is irrevocable and cannot be altered after it is made.
The legal personal representative of a deceased person is not entitled to choose to convert any percentage of a weekly amount that was payable to the deceased person to a lump sum.