Compensation Operational Guideline - NDIA may recover amount where a participant has received compensation in respect of a personal injury

9. NDIA may recover amount where a participant has received compensation in respect of a personal injury

When a participant has received compensation in respect of a personal injury that has caused, to any extent, their impairment, from another person or an insurer, an amount (known as the recoverable amount) may be payable to the NDIA.

The purpose of calculating the recoverable amount is to ensure that the NDIA can recover any amounts paid to the participant for supports when they also receive compensation from a consent judgement or settlement for those same supports.

This section sets out the circumstances in which an amount will be payable, and how to calculate the recoverable amount.

Amounts may only be payable under this section where:

  • the person has become a participant and received funding from the NDIS for reasonable and necessary supports; and
  • the participant subsequently receives compensation from a judgement or settlement.

An amount payable by a participant to the NDIA under this section is a debt due to the NDIA (section 108).

9.1 Amount payable to NDIA where participant receives compensation from a judgement (other than a consent judgement)

9.1.1 When is an amount payable to the NDIA?

An amount (the recoverable amount) is payable by a participant to the NDIA if the following criteria are met:

  • the participant has suffered a personal injury which has caused, to any extent, their impairment, regardless of whether the participant was a participant at the time of the injury;
  • the participant was awarded compensation, fixed under a judgement (other than a consent judgement), in respect of that injury;
  • before the day of the judgement, NDIS amounts (the past NDIS amounts) had been paid in respect of supports in relation to the person’s impairment; and
  • the judgement specifies that a portion (the past NDIS support component) of the amount of compensation to be a component for supports of a kind funded or provided under the NDIS (section 106(1)).

9.1.2 What amount is payable to the NDIA?

The starting point is that the recoverable amount is equal to the sum of the past NDIS amounts (section 106(2)(a)).

The recoverable amount will be altered in 3 circumstances:

Where liability is apportioned between the participant and another person

The recoverable amount is to be reduced if:

  • the judgement fixes the amount of compensation on the basis that liability for the injury should be apportioned between the participant and another person; and
  • as a result, the amount of compensation is less than it would have been if liability had not been so apportioned.

The recoverable amount is to be reduced by the proportion corresponding to the proportion of liability that is apportioned to the participant by the judgement (section 106(3)).

Where recoverable amount is greater than the NDIS support component

If the sum of the past NDIS amounts is greater than the amount specified in the judgement for supports of the kind provided or funded under the NDIS, then the recoverable amount is the amount specified in the judgement (section 106 (4)).

Where amounts are payable under health legislation or social security provisions, etc.

The recoverable amount cannot be more than the amount of compensation fixed under the judgement after deducting any amounts payable under the social security compensation provisions, under health legislation to reimburse Medicare payments and under any other Commonwealth, state or territory law prescribed by the rules.

If the recoverable amount exceeds the difference (if any) between:

  • the amount of compensation fixed by the judgement; and
  • the sum of any amounts payable under the social security compensation provisions, under health legislation to reimburse Medicare payments and under any other Commonwealth, state or territory law prescribed by the rules,

the recoverable amount is taken to be the amount of the difference (section 106(5)).

9.2 Amount payable to NDIA where participant receives compensation from a consent judgement or settlement

A consent judgement is the determination of a court which outlines the terms agreed upon by the litigating parties.

A settlement is where parties to litigation agree to compromise or resolve a legal claim without a court or tribunal having to resolve the dispute. Typically, the parties would enter into an agreement setting out the terms of the settlement.

9.2.1 When is an amount payable to the NDIA?

An amount (the recoverable amount) is payable by a participant to the NDIA if the following criteria are met:

  • the participant has suffered a personal injury which has caused, to any extent, their impairment, regardless of whether the participant was a participant at the time of the injury;
  • the participant has been awarded compensation, fixed under a consent judgement or settlement, in respect of that injury; and
  • before the day of the consent judgement or settlement, NDIS amounts (the past NDIS amounts) had been paid in respect of supports in relation to the participant’s impairment (section 107).

9.2.2 What amount is payable to the NDIA?

A key difference between a consent judgement or settlement and a judgement specified in part 9.2 of this Guideline, is that it will not be possible to identify a past NDIS support component. Compensation payments under consent judgements or settlements are typically made as lump sum amounts, and usually do not identify the NDIS component.

The starting point is that the recoverable amount is equal to the sum of the past NDIS amounts (section 107(2)(a)).

The recoverable amount will be altered in 2 circumstances:

(1) Where liability is apportioned between the participant and another person

The recoverable amount is to be reduced if:

  • the judgement fixes the amount of compensation on the basis that liability for the injury should be apportioned between the participant and another person; and
  • as a result, the amount of compensation is less than it would have been if liability had not been so apportioned.

The recoverable amount is to be reduced by the proportion corresponding to the proportion of liability that is apportioned to the participant by the judgement (section 107(3)).

(2) Where amounts are payable under health legislation or social security provisions, etc.The recoverable amount cannot be more than the amount of compensation fixed under the judgement after deducting any amounts payable under the social security compensation provisions, under health legislation to reimburse Medicare payments and under any other Commonwealth, state or territory law prescribed by the rules.

If the recoverable amount exceeds the difference (if any) between:

  • the amount of compensation fixed by the judgement; and
  • the sum of any amounts payable under the social security compensation provisions, under health legislation to reimburse Medicare payments and under any other Commonwealth, state or territory law prescribed by the rules,

the recoverable amount is taken to be the amount of the difference (section 107(4)).

This page current as of
18 July 2019