Payment of lump sum compensation to a solicitor’s trust account

The following guidance is for insurers, workers and legal professionals.

Background

A worker who is assessed as having sustained a degree of permanent impairment (DPI) following a compensable, work-related injury, is entitled to a payment, or offer of payment, of lump sum compensation for the permanent impairment.

Section 110(3) The Workers’ Compensation and Rehabilitation Act 2003 states:

Compensation cannot be assigned, charged, taken in execution, or attached, and a worker’s entitlement to compensation cannot pass to another person by operation of law or otherwise, and no claim can be set off against the amount.

This was introduced to prevent employers garnishing compensation payments as reimbursement for wages paid to the worker.

However, an insurer may pay lump sum compensation into a solicitor’s trust account if the worker provides a written authority directing this.

In this instance, the payment being made into the trust account is being held by the solicitor on behalf of the worker or, in the case of a dependency payment, the person entitled to the compensation. A payment to a trust account in this context is not an example of compensation being assigned, charged, taken in execution or attached to another person.

This position has been endorsed by the Queensland Law Society.

For more information

If you have concerns regarding compliance with section 110(3) or questions about this information, contact the Office of Industrial Relations on 1300 362 128.