4.13.2.40 Compensation part of lump sum - judgement by contested hearing

This topic

This topic contains information on the following:

• judgement by contested hearing
• what is the economic loss amount, and
• repayment of periodic payments.

Summary

This topic explains what amount is taken as the compensation part of a lump sum payment, when a lump sum is received as a result of a judgement by contested hearing. It also explains the deduction of repaid periodic payments from the total lump sum.

Judgement by contested hearing

A court, tribunal or arbitrator can make a judgement by contested hearing. The compensation part of the lump sum is determined by the delegate based on the specific amounts awarded for economic loss.

What is the economic loss amount

When a case is finalised after a contested hearing, the compensation part of the lump sum is made up of the amounts awarded specifically for economic loss. In particular the delegate should have regard to amounts awarded for:

• lost wages (past economic loss)
• interest on past economic loss
• lost capacity to earn (future economic loss)
• interest on future economic loss
• lost superannuation contributions, and
• interest on lost superannuation contributions.

Note: Any Fox v Wood (1981) HCA 41; 148 CLR 438 component is not included as economic loss. This component is to reimburse income tax previously paid when weekly compensation must be repaid from the judgement.

If a court order does NOT set out fully the basis of the award, more information should be sought about the nature of the award and a decision made on the basis of all the available information.

If NO information is available then the 50% rule should be applied.

Repayment of periodic payments

When a case is finalised by contested hearing and the judgement requires repayment of past periodic payments, the compensation part of the lump sum is the total of all the amounts awarded for economic loss minus the past periodic payments amount.