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5.11.3 Electing a Lump Sum - Special Circumstances

Last amended 
12 March 2015

In order to elect a lump sum, section 78 requires that:

  • the claimant's choice must be advised in writing; and
  • it must be made within 6 months of the date the claimant receives the section 76 notice.


Note: the 6 month period in which the claimant must make the election does not begin until any review through the Administrative Appeals Tribunal, Veterans' Review Board or by internal reconsideration is finalised.

Section 78(2) of the MRCA states 'a person who makes the choice cannot change it'.  Whilst s78(3) and 78(4) provides for a six month period to make the choice and the extension of that period in special circumstances, it does not override the specific statutory direction that a choice cannot be changed.  Therefore once an option is selected the decision cannot be altered, this includes circumstances where a client elects to convert only part of their periodic payment into a lump sum.  Any remaining weekly periodic payment cannot be subsequently converted to a lump sum amount after the first choice is formally advised.

The only basis in which the MRCC could allow for a 'new' choice to be made would be if it was satisfied that the original choice was a nullity or void, so that no choice had previously been made. It is important that the delegate appropriately informs the client of the implications and finality of their choice before the client formally makes a lump sum conversion choice.


The Commission may, either before or after the end of the 6 month time limit, extend the period within which the choice must be made if it considers there are “special circumstances” for doing so.  The delegation to extend this time limit is at the APS 5 level or above.  A delegate must decide, using the following guidelines, if a claim for an extension satisfies the criteria for there being special circumstances. Special Circumstances Guidelines

What constitutes Special Circumstances for the purposes of ss78(4)?

The Military Rehabilitation and Compensation Commission (MRCC) is of the view that the phrase special circumstances for the purposes of ss78(4) is to be considered in a non-restrictive manner, i.e. the Commission will take a broad view on what constitutes special.

By way of illustration, the following list provides some examples of circumstances that are special:

  • The claimant is deployed in warlike/non-warlike operations at any time during the six month period.
  • The claimant has a disability which affects their capacity to make the election.
  • The claimant is experiencing psychological distress as a result of the death of their partner.
  • The claimant has not received financial advice.
  • The deceased estate has not been finalised.
  • A dispute that directly impinges upon the nature of the choice is still before the courts (e.g. a matter before the Family Court over a custody matter).
  • The upcoming birth of a child of the claimant or the claimant’s partner.
  • The claimant is sick or hospitalised.
  • The claimant had to travel overseas to visit a sick family member.
  • The claimant’s family member is severely injured or there is a death of a family member.
  • The claimant lost his/her job during the 6 month election period and is unsure of his/her ability to find work in the short term.


This list is not exhaustive and the delegate should take a non-restrictive view of ‘special’ when considering such a claim. The discretionary nature of special circumstances makes it impossible to give a precise list of when the provisions would apply.

The important point is that each case be assessed on its own merits, taking into account the particulars of the individual's case. Where a delegate is unsure if a particular case would constitute special circumstances, the Benefits and Payments Policy Section (B&PP) should be consulted via the MRCA Advice Line.


Is the client required to provide the delegate with a reason for requesting an extension under ss78(4)?

Yes. The legislation makes it clear that an extension may only be granted if the circumstances are special and this entails that a reason must be provided. This is required even though the phrase ‘special’ is being interpreted in a very broad sense.


Is there a time limit on an extension granted under ss78(4)?

A person granted an extension under ss78(4) is to be reviewed after 6 months to establish if they are still considering their payment choice. The delegate should provide the client with updated lump sum conversion amounts (adjusted for periodic payments already made) and remind them about the availability of reimbursement for financial/legal advice, if such compensation has not yet been claimed.

A client may request a further extension, which should then be considered in accordance with these guidelines. However, an extension may not be granted indefinitely. Each 6-month period of extension will require a reason and should be assessed by the delegate on its merits.