What is a commutation?
A commutation is an agreement between the injured worker, employer and Scheme Agent or insurer to pay all of the injured worker’s entitlements to weekly benefits, medical, hospital and rehabilitation expenses as a lump sum.
By agreeing to a commutation the injured worker's entitlements to weekly payments and all other expenses will no longer be paid and the Scheme Agent or insurer will not be liable for further claims with regards to the injury.
WorkCover must also certify the commutation meets all the criteria set out in Section 87EA of the Workers Compensation Act 1987.
What are the preconditions for a commutation?
A commutation is only available when the following preconditions have been met:
- the injured worker must have a permanent impairment that is at least a 15 per cent whole person impairment
- compensation for permanent impairment and pain and suffering has been paid
- it is two or more years since the worker first received weekly payments for the injury
- all opportunities for injury management and return-to-work have been fully exhausted
- the worker has received weekly benefits regularly and periodically throughout the previous six months
- the worker must be entitled to ongoing weekly benefits
- weekly benefits have not been stopped or reduced as a result of the worker not seeking suitable employment.
Prior to receiving a commutation:
- the worker must receive independent legal and financial advice
- the Scheme Agent or insurer, employer and worker must agree with the commutation
- WorkCover must approve the commutation
- all agreements must be registered with the Workers Compensation Commission.
For further information call the WorkCover Appeals Branch on (02) 4321 5502.