Compensation - NDIA may require a participant or prospective participant to take action to claim compensation

8. NDIA may require a participant or prospective participant to take action to claim compensation

When a participant, or prospective participant, is entitled to compensation in respect of a personal injury but has not taken action (or not taken reasonable action) to claim or obtain the compensation, the NDIA may require the person to take certain action to claim the compensation. There may be consequences if the person fails to take the required action.

8.1 When can the NDIA require a person to take action to obtain compensation

8.1.1 When can the NDIA require a person to take action to obtain compensation?

The NDIA may, by issuing a written notice, require a participant or prospective participant (the person) to take action to claim or obtain compensation if the following criteria are met:

  • The person is, or may be, entitled to compensation in respect of a personal injury (section 104(1)(a)).
  • The person:
  1. has taken no action to claim or obtain compensation; or
  2. has taken no reasonable action to claim or obtain compensation (section 104(1)(b)).

Note: If the person has entered into an agreement to give up his or her right to compensation, the NDIA may form the opinion that the person may be entitled to compensation if satisfied that the agreement is void, ineffective or unenforceable (section 104(6)).

  • The action specified in the notice is reasonable to enable the person to claim or obtain the compensation, taking into account:
  1. the disability of the person;
  2. the circumstances that gave rise to the entitlement or possible entitlement to compensation;
  3. any impediments the person may face in recovering compensation;
  4. any reasons given by the person as to why he or she has not claimed or obtained compensation;
  5. the financial circumstances of the person; and
  6. the impact of the requirement to take the action on the person and his or her family (section 104(3)).
  • The person has reasonable prospects of success in claiming or obtaining compensation (section 104(4)).

Note: Unless the NDIA has information that allows it to be satisfied that the person has reasonable prospects of success in claiming or obtaining the compensation, it must not issue a notice. What constitutes ‘reasonable prospects of success’ depends on the circumstances of the matter. As a general rule, it would usually require the person to have a better than even chance of succeeding in the claim.

8.1.2 What action can the NDIA require the person to take?

If the above criteria are met, the NDIA may give a notice to the person to take the action specified in the notice within the period specified in the notice.

The action must be action that is reasonable to enable the person to claim or obtain the compensation (section 104(2)).

Examples of the actions the NDIA can require a person to take are:

  • seeking advice from a lawyer about their entitlement to compensation. Note, the NDIA will not generally reimburse legal costs;
  • sending a letter of demand;
  • commencing legal proceedings;
  • contacting an insurer directly to claim compensation; or
  • applying to relevant state/territory accident compensation bodies.

8.1.3 A decision to give a notice requiring a person to claim or obtain compensation is a reviewable decision

A decision to give a notice requiring a person to take reasonable action to claim or obtain compensation can be reviewed and is known as a reviewable decision (section 99(o)).

The NDIA must notify the person in writing of a decision to require the person to take reasonable action to claim or obtain compensation, including a statement to the effect that the person may request that the NDIA review the decision (section 100(1)).

Where possible, the NDIA will also attempt to contact the person by telephone to advise them of the decision which has been made (section 7(2)).

8.1.4 What is the timeframe for compliance?

The period specified in the notice must be at least 28 days after the day on which the notice is given. This period may be extended on application by the person (section 104(5A)).

A decision to refuse to extend the period can be reviewed and is known as a reviewable decision (section 99(oa)).

The NDIA must notify the person in writing of a decision refusing to extend the period, including a statement to the effect that the person may request that the NDIA review the decision (section 100(1)).

Where possible, the NDIA will also attempt to contact the person by telephone to advise them of the decision which has been made (section 7(2)).

8.2 What are the consequences if a person does not comply with a notice?

A person who is given a notice requiring them to take action must take the required action within the specified period (section 105(1)).

8.2.1 Consequences if the person does not take required action to obtain compensation under a Commonwealth, state or territory scheme

If the required action related to enabling the person to claim or obtain compensation under a scheme of compensation under a Commonwealth, state or territory law, the following consequences apply:

  • if the participant has a plan in effect – the plan is suspended from the end of the period specified in the notice until the participant takes the required action (section 105(2)(a)); or
  • if a plan is not yet in effect for the participant – the NDIA is still required to finalise the preparation of the participant’s plan, but the plan does not come into effect until the participant takes the required action (section 105(2)(b)).
  • If the person is a prospective participant – the NDIA is not prevented from deciding whether or not the prospective participant meets the access criteria and from commencing the facilitation of the preparation of their plan, however the plan does not come into effect until the participant takes the required action (section 105(3)).

8.2.2 Consequences if the person does not take required action to obtain compensation otherwise than under a scheme of compensation under a Commonwealth, State or Territory law

If the required action related to enabling the person to claim or obtain compensation otherwise than under a scheme of compensation under a Commonwealth, state or territory law, the NDIA may:

  • take action to claim or obtain compensation in the name of the participant or prospective participant; or
  • take over the conduct of any existing claim (section 105(4)).

Before taking action to claim or obtain compensation, or take over the conduct of an existing claim, the NDIA must have regard to the following:

  • the disability of the person;
  • the circumstances that gave rise to the entitlement or possible entitlement to compensation;
  • any impediments the NDIA may face if the NDIA takes the action or takes over the conduct of the claim;
  • any reasons given by the person as to why he or she has not claimed or obtained compensation;
  • the impact (including any financial impact), of the NDIA taking the action or taking over the conduct of the claim, on the person and his or her family;
  • any other matter the NDIA considers relevant, having regard to the objects and principles set out in the NDIS Act (section 105(5)).

The NDIA must not take any action to claim or obtain compensation , or take over the conduct of an existing claim, unless:

  • the NDIA has notified the participant or prospective participant, in writing, that the action is being considered; and
  • 28 days have passed since the notice was given (section 105(6)).

An example of compensation otherwise than under a scheme of compensation under a Commonwealth, state or territory law includes legal proceedings in a court.

8.2.3 Matters relating to claims

If the NDIA requires a person to take action to claim or obtain compensation in the name of the person, or takes over the conduct of an existing claim, the NDIA Legal Services Branch will arrange for the administration of the claim.

If the NDIA takes action to claim or obtain compensation, or takes over the conduct of an existing claim, the NDIA becomes liable to pay all costs of and incidental to that claim that would otherwise be payable by the person who originally made the claim, or the person in whose name the claim was made, other than costs unreasonably incurred by that person (section 105A(1)).

The NDIA may:

  • take whatever steps are appropriate to bring the claim to a conclusion; and
  • if the claim is before a court – settle the proceedings either with or without obtaining judgement; and
  • if the claim is before a court and judgement has been obtained in favour of the plaintiff – take such steps as are necessary to enforce the judgement (section 105A(2)).

8.2.4 NDIA may require person to sign documents

The person must sign any document relevant to a claim made or taken over by the NDIA (including the settlement of the claim or of any proceedings arising out of the claim), that the NDIA requires the person to sign (section 105A(3)).

If the person does not sign a document as required by the NDIA:

  • if the claim is not before a court or tribunal at the time of the failure – the Federal Court of Australia may, on the application of the NDIA, direct that the document be signed on behalf of the person by another person appointed by the NDIA; or
  • otherwise – the court or tribunal in which proceedings relating to the claim are being heard may, on the application of the NDIA, so direct (section 105A(4)).

If the NDIA proposes to make an application to a court to direct that a document be signed:

  • the NDIA must notify the person of that fact; and
  • the person has a right of representation in the hearing of that application (section 105A(5)).

8.2.5 Recovery of amounts by NDIA

Any amount obtained as a result of a claim made or taken over by the NDIA must be paid to the NDIA, deducting the following amounts from the award of damages:

  • an amount equal to the total of NDIS amounts payable to, or for the benefit of, the person before the amount was paid to the NDIA; and
  • the amount of any costs incidental to the claim paid by the NDIA.

The balance of the amount obtained as a result of a claim made or taken over by the NDIA must be paid to the person (section 105B).

8.2.6 A decision to take action to claim or obtain compensation or to take over the conduct of a claim is a reviewable decision

A decision to take action to claim or obtain compensation or to take over the conduct of a claim can be reviewed and is known as a reviewable decision (section 99(oc)).

The NDIA must notify the person in writing of a decision to take action to claim or obtain compensation or a decision to take over the conduct of a claim, including a statement to the effect that the person may request that the NDIA review the decision (section 100(1)).

Where possible, the NDIA will also attempt to contact the person by telephone to advise them of the decision which has been made (section 7(2)).

This page current as of
1 April 2019