A commutation is an agreement made between you (the worker), your employer and the insurer to pay your entitlements as a lump sum.
If you accept a commutation, you will no longer be entitled to future weekly payments, or to claim medical, hospital, rehabilitation expenses for that injury.
Preconditions for a commutation
A commutation is only available when these preconditions have been met:
- you have an injury that has resulted in a permanent impairment of at least a 15 per cent
- compensation for permanent impairment has been paid
- it has been more than two years since you first received weekly payments for the injury
- all opportunities for injury management and return to work have been fully exhausted
- you have received weekly payments (regularly and periodically) throughout the previous six months
- you are entitled to ongoing weekly payments
- weekly payments have not been stopped or reduced as a result of you not complying with your return to work obligations
If you (the worker) meet these preconditions, these things must happen before receiving a commutation:
- you must receive independent legal advice, including advice that is in your best interest to get independent financial advice.
- you and the insurer must agree with the commutation
- SIRA must certify the commutation meets all the criteria set out in Section 87EA of the Workers Compensation Act 1987
- the agreement must be registered with the Workers Compensation Commission in order to take effect.
Further information is available in the guidelines for claiming workers compensation.
Sometimes there can be disputes about compensation. If there’s a dispute, there’s help available. Our workers compensation disputes section has more information on how we can help.