Table 5.9: Settlement, redemption or commutation payments | Safe Work Australia

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	Requirements for settlement, redemption or commutation payments;
NSW	A liability in respect of an injury may be commuted to a lump sum with the agreement of the worker. A commutation is a lump sum paid by the insurer on behalf of the employer, the receipt of which brings to an immediate end all future entitlements to weekly payments, hospital, medical and related treatment and rehabilitation expenses in respect of that injury. A commutation is only available if the following pre-conditions are met: the injured worker has a permanent impairment of at least 15% compensation for that permanent impairment has been paid the worker is currently eligible for ongoing weekly payments and must have received weekly payments regularly and periodically during the previous 6 months the worker has an existing and continuing entitlement to weekly payments of compensation it is more than 2 years since worker first claimed compensation injury management and return to work opportunities have been fully exhausted, and weekly payments have not been stopped or reduced as a result of the worker not complying with their return to work obligations [s 87EA, 1987 Act] Prior to receiving a commutation: the worker must receive and understand independent legal advice and be advised of the desirability of obtaining independent financial advice the insurer, and worker must agree with the commutation SIRA must certify the commutation meets the preconditions, and all agreements must be registered with the Workers’ Compensation Commission [s 87F, 1987 Act] There is no entitlement to commute weekly payments for workers under the Workers’ Compensation (Dust Diseases) Act 1942 however dependant entitlements may be redeemed.
Vic	A settlement of weekly payments in a lump sum is allowable in some circumstances — Part 5, Division 9. The settlement is only for weekly payments and does not include reasonable medical and like expenses which continue to be paid.
Qld	Liability for weekly compensation payments can be discharged by a redemption payment agreed between the insurer and worker if worker has been receiving weekly payments for at least 2 years and the worker’s injury is not stable and stationary for the purpose of assessing permanent impairment — Chapter 3, Part 9, Division 7. After a redemption payment has been made the worker has no further entitlement to compensation for the injury, including weekly benefits, and medical and rehabilitation expenses.
WA	A settlement commutes to a lump sum the liability of an employer to pay compensation to a worker and discharges that liability. A settlement agreement may include lump sum compensation for income compensation payments, medical and health expenses, workplace rehabilitation expenses and/or permanent impairment. Calculation of permanent impairment compensation is in accordance with s101 which lists a table of impairments against which a percentage of the lump sum limit is listed. Registration of a settlement agreement is the only pathway to settle a workers compensation claim via a lump sum and to discharge an employer’s liability for the injury. There are minimal barriers to settlement if the parties are in agreement and complete the approved settlement agreement form. For example, there is no requirement in the Act for liability to be accepted or determined or any timeframe prescribed before a settlement can be registered. A settlement is required to be lodged with the Director of CAS along with required supporting documents as soon as practicable after the agreement is made. The Director will scrutinise and register compliant settlements. Every settlement requires a statement by the worker acknowledging that the worker is aware of the consequences of registering the settlement agreement. The Director is also required to scrutinise the settlement for genuineness and be satisfied of the correct amount payable for any permanent impairment compensation. A settlement prevents the worker from pursuing common law damages.
SA	A liability to make weekly payments may, by agreement, be redeemed by a capital payment to the worker. An agreement for the redemption of a liability of weekly payments cannot be made unless; the worker has received competent professional advice about the consequences of redemption and about the investment or use of money to be received on redemption. the Corporation has consulted with the employer out of whose employment the injury arose and has considered any representations made by the employer; and a recognised health practitioner has certified that the extent of the worker’s incapacity resulting from the work injury can be determined with a degree of confidence — s53.
Tas	s132A Settlements made within 2 years of the date of claim: Settlement by agreement of outstanding entitlements to compensation made within 2 years of the date of the claim must be approved by the Tasmanian Civil and Administrative Tribunal. The Tribunal must be satisfied that: all reasonable steps have been taken to enable the worker to be rehabilitated, retrained or to return to work, or the worker has returned to work, or there has been a reasonably arguable case determination, that the proposed agreement is in the best interests of the worker, or there are special circumstances that make rehabilitation, retraining or return to work impracticable and the proposed agreement is in the best interests of the worker. The Tribunal must also be satisfied that the worker has received appropriate professional advice about the proposed agreement to settle and that the worker’s entitlement to lump sum compensation for permanent impairment has been considered. Settlements made after 2 years of the date of claim: Agreements to settle made more than 2 years after the date of the claim do not have to be approved by the Tribunal. A party can subsequently refer the agreement to the Tribunal to be reviewed and possibly set aside. Referral must be made within 3 months of the date of the agreement. The Tribunal can set aside an agreement if it is of the opinion that: a party entered the agreement under duress, or the worker has not received appropriate advice, or a party was induced to enter the agreement by a misrepresentation by another party (or their agent).
ACT	Negotiated between injured worker and employer/insurer. Schedule 1 of the Act provides a list of injuries, including for the loss of toes, taste and smell, and sets out a % rate (from 2% to 100%) of the single loss amount payable. Unlimited Common Law. Benefits may be commuted.
NT	Settlement by agreement between worker and employer/insurer — s78A Prior to a settlement the worker must receive legal advice, paid for by the employer and if requested, financial advice paid for by the employer - s78A(4) If settlement is before 104 weeks, there is a 6 month cooling off period — s78A(6)
Comcare	Redemptions of weekly benefits are only available in some circumstances and are calculated per s30(1) (or s137(1) for ‘former employees’) under the Safety, Rehabilitation and Compensation Act 1988. Medical, rehabilitation or permanent impairment payments are not affected. A redemption lump sum can only be paid out in lieu of ongoing weekly incapacity payments when a worker’s weekly incapacity payments are equal to or less than an indexed amount (currently $147.20 per week, since 1 July 2025) and Comcare is satisfied that the degree of incapacity is unlikely to change. The lump sum payment is calculated by a specified formula.
Seacare	Redemptions of weekly benefits are only available in some circumstances. Medical, rehabilitation or permanent impairment payments are not affected. A redemption lump sum can only be paid out in lieu of ongoing weekly incapacity payments when a worker’s weekly incapacity payments are equal to or less than the statutory rate ($147.20 per week at 1 July 2025) and the employer is satisfied that the degree of incapacity is unlikely to change. The lump sum payment is calculated by a specified formula (s44).
DVA	MRCA – Redemptions of weekly benefits are only available in some circumstances and are calculated per (s138). DRCA – Redemptions of weekly benefits are only available in some circumstances and are calculated per s30(1) [or s137(1) for ‘former employee’].
NZ	Injury prior to 1 April 2002, an independence allowance may be payable if impairment > 10%. From 1 April 2002, spouse of person killed can apply to have weekly compensation commuted. The independence allowance can be capitalised for periods of 5 years. Weekly compensation and medical costs cannot be commuted.