QLD CTP: Squaring the ledger – payment of statutory and contractual refunds at the successful conclusion of a Compulsory Third Party Claim

William Deicke

Legal Practitioner

At the successful conclusion of a CTP claim, a claimant may be obligated to repay monies paid on their behalf by government bodies or other third parties. This requirement is imposed either by statute, or by operation of a contract entered into by the claimant. Below is a non-exhaustive overview of some of the more common statutory and contractual refunds.

Medicare Australia

Medicare’s entitlement to recovery of benefits paid throughout the duration of a CTP claim is governed by the Health and Other Services (Compensation) Act 1995 (Cth).

If a claimant qualifies for access to Medicare Australia benefits and uses these benefits for treatment of their accident-related injuries, Medicare may be entitled to a refund of benefits paid upon the successful conclusion of your claim. However, it should be stressed that not all Medicare benefits received during the course of the claim are refundable. It is only those benefits that specifically relate to the claimant’s accident-related injuries that are required to be refunded.

The most commonly stated rationale for the repayment of Medicare benefits is that as a result of the defendant’s negligence, a claimant sustained injuries which have required treatment and rehabilitation, and which have been partially funded by Medicare. As a claimant is entitled to claim the full amount of any reasonably incurred rehabilitation and treatment expenses from the Insurer, any portion paid by Medicare should therefore be refunded to them. Some exclusions apply, including matters that are resolved below the requisite monetary threshold imposed by the Health and Other Services (Compensation) Act 1995 (Cth).

Typically, any refund owing to Medicare will automatically be deducted from the gross settlement amount by the relevant CTP insurer.

Centrelink

The Centrelink refund scheme is governed by the Social Security Act 1991 (Cth).

If a claimant receives social security benefits from Centrelink between the date of accident and the settlement date, and the settlement sum includes an award for economic loss, a portion of the Centrelink benefits received throughout the duration of your claim will likely be refundable to them following settlement.

In basic terms, this entitlement is justified on the basis that if one is compensated for economic loss incurred as a result of their injuries, reimbursement for part of this loss may have already been provided to them by way of Centrelink benefits. The claimant will therefore need to refund to Centrelink a portion of the damages, so that they are not compensated twice in relation to this loss.

The majority, but not all, of Centrelink benefits are currently considered refundable, including but not limited to Job Seeker, Disability Support Pension, Carer Payments and some Parenting Payments. However, this list is subject to change.

Some may consider the refund payable to Centrelink for benefits they would have received regardless of their accident related injuries to be unfair. However, there is little scope for avoiding or negotiating the refund owing to Centrelink, and any refund owing will automatically be deducted from the gross settlement amount.

Private Health Insurance

In the event that a claimant utilises private health insurance to assist with payment for treatment of their accident-related injuries, their private health insurer may also be entitled to a refund of benefits paid upon settlement of the claim. A private health insurer’s entitlement to repayment is established by operation of a contract existing between the insurer and the claimant. Typically, such a contract is entered into by a claimant prior to their involvement in an accident, usually when the claimant takes out private health insurance.

Unlike refunds owing to Medicare and Centrelink, CTP Insurers do not have obligations in relation to the payment of monies owing to private health insurers. Instead, this is a personal contractual obligation owed by the claimant. As such, a private health refund will not be automatically deducted from the gross settlement sum by the insurer.

Conclusion

Should you have any queries with respect to the payment of refunds at the successful conclusion of a CTP claim, please do not hesitate to contact our office.