Should I accept an offer of lump sum compensation for my workplace injury? TGB lawyer Ben Smith explains your options
When you’ve been injured at work, have made a claim, and are offered lump sum compensation it’s natural to want to take the first offer and move on with your life.
However, by accepting the insurance company’s first offer there’s a chance you are missing out on a larger amount of compensation.
If you have been injured at work in Western Australia you are entitled to weekly income payments, as well as reasonable medical, rehabilitation and other expenses. Most workers find out about the additional entitlement to lump sum compensation for permanent impairment by way of a single letter from their workers compensation insurer, which states something along the lines of:
You were recently assessed by Accredited Medical Specialist (“AMS”) Dr Smith as suffering from X% permanent impairment. You are therefore entitled to $XX,XXX.XX Please contact us if you are interested in settling your claim.
These offers to settle (called “Schedule 2 settlements” under WA law) are a way of compensating for any permanent disability suffered by an injured worker due to their work injury – similar to compensation for pain and suffering in the US. The WA legislation states that acceptance of a Schedule 2 settlement ceases all other entitlements to compensation. This means that, once an offer is accepted, a worker is no longer entitled to weekly payments or medical, rehabilitation and travel expenses.
The amount offered is based on a percentage of the “prescribed amount”. The current prescribed amount is $221,891 for assessments in the financial year starting July 1, 2016. Certain injuries and impairments attract different percentages of the prescribed amount. For example, loss of a middle finger equals 13% impairment, resulting in compensation of $28,845.83 (being 13% of the prescribed amount). However, most permanent impairments are not as simple to quantify and require a thorough assessment by an AMS to determine the correct percentage. If you disagree with the assessment you should obtain legal advice immediately.
Often there can be added complexities for workers with multiple or subsequent/consequential (commonly referred to as “sequelae”) injuries or conditions. For example, a worker who suffers a leg injury can also suffer permanent impairment to their hips or ankles. Insurers have been known to make offers which only take into account one or some of the compensable injuries. It is important to ensure all injuries are considered in a Schedule 2 settlement.
If you have an ongoing incapacity for work, or are receiving ongoing medical treatment or vocational rehabilitation, or may need it in the future, a Schedule 2 settlement will most likely not be in your best interests.
If you have had an offer of compensation it is important to seek advice about whether or not it is a fair and reasonable offer as once you have settled your claim or signed settlement documents it is too late to obtain legal advice.
If you have been injured at work in Western Australia, made a claim, and would like to organise a free initial interview, register your details or call our Perth office on (08) 9211 5800.
If you have not made a claim, disregard this publication.
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