If the client elects to receive a lump sum, the Commission has 30 days from the date it becomes aware of the client's choice in which to pay, otherwise interest is payable under subsection 79 (2) from the day the 30 day period elapses. The interest rate payable is the “weighted average yield of 90 day bank-accepted bills, as published by the Reserve Bank of Australia, settled immediately prior to the last day of the thirty day settlement period”. This rate is available from the Reserve Bank's website via the following link –
http://www.rba.gov.au/statistics/tables/index.html#interest-rates
This is the easiest way to access the applicable interest rate on any day - once in the spreadsheet, scroll down to the latest daily rate and look across under "Bank Accepted Bills" to 90 day - this gives you the weighted average yield of 90 day bank-accepted bills.
If the link above does not work, go to http://www.rba.gov.au. Once there, click onto “Statistics” located along the top of the screen. Click on ‘Economic and Financial Statistics”, and then "Statistical Tables" then scroll down to "Interest Rate" and click on "Interest Rates and Yields - Money Mark - Daily - F1".
Example of calculating an interest payment
1. RBA interest rate ÷ 100 = interest rate percentage
2. Interest rate percentage x section 78 Lump Sum amount = yearly amount
3. Yearly amount ÷ 365 = daily amount
4. Daily amount x number of days late = amount payable
Example:
Interest rate: 4.75%
Section 78 Lump Sum amount: $12,706.00
Days late: 168
- 4.75 ÷ 100 = .0475 (interest rate percentage)
- 0475 x 12706 = 603.535 (yearly amount)
- 603.535 ÷ 365 = 1.6535 (daily amount)
- 1.6535 x 168 = $277.79 (amount payable)
Lump Sum election and Death
Claimants who have a terminal illness, or who have a high probability of a reduced lifespan should be made aware that while periodic payments will cease upon death, if they did elect to take a lump sum, then no proportion of their lump sum would be recovered as a result of their death.
From 1 July 2026, new subsection 78(7) was introduced under the MRCA to provide legal personal representatives with the ability to convert a weekly amount of PI compensation that would have been payable to a deceased veteran to a lump sum (excluding any amount for lifestyle effects) where the veteran dies before being able to make a choice to convert their entitlement. The change applies in respect of a person who dies on or after 1 July 2026, irrespective of when the claim for compensation under the MRCA was lodged.
For the purposes of the changes, section 5 of the MRCA defines ‘legal personal representative’ as:
(a) the executor of the will, or the administrator of the estate, of a deceased person; or
(b) the trustee of the estate of a person under a legal disability; or
(c) a person who holds an enduring power of attorney granted by another person; or
(d) a person who, by order of a court or otherwise, has the legal administration or control of the affairs of another person.
New subsection 78(8) also prescribes that any choice under subsection 78(7) must be made in writing and must be given to the Commission within 6 months after the date on which the legal personal representative is given the notice under section 76.