Recovery of Provisional Liability Payments

Published: 2 April 2009

The new system of approving applications for weekly payments for up to 13 weeks on a provisional basis has been operating since 1 January 2009.  Some representatives of workers have voiced the concern that workers will have to repay the provisional weekly payments if the compensating authority determines a claim by rejecting it.  The reality is that in only a very small number of cases will workers be required to repay the weekly payments they received on a provisional basis.

The reason for this is that section 50H of the Workers Rehabilitation and Compensation Act 1986 only allows recovery of provisional weekly payments if the worker has acted dishonestly in making an application or providing information for the purpose of obtaining payments.  (This is to be contrasted with the payment of interim benefits under section 106 of the Act, which allows recovery without having to show that the claim was made dishonestly). 

Dishonesty in this context would require the worker to know that they do not have an entitlement to compensation under the Act when they apply for weekly payments on a provisional liability basis.  This is likely to occur very rarely.  At times there will be differing views about whether a disability is work related or whether the circumstances of the injury qualify the injury for compensation.  The existence of such a controversy in any given case might form the grounds for a rejection of a claim but it does not mean that the application for weekly payments on a provisional basis is made dishonestly. 

It is highly unlikely, then, that a compensating authority will be able to seek to recover provisional weekly payments even when it has grounds for formally rejecting the claim.  Although it is still early days for the implementation of the provisional liability system, the experience so far appears to be that compensating authorities do not seek recovery of provisional weekly payments as a matter of course after formally rejecting a claim.

The WorkCover Ombudsman has jurisdiction to investigate complaints about the administration of the provisional liability system.  If a compensating authority demanded a worker to repay provisional liability payments without any proof of dishonesty, the worker could lodge a complaint with the WorkCover Ombudsman’s Office.  Provided no court proceedings had actually been commenced to recover the payments, the WorkCover Ombudsman could intervene to ensure that no recovery is proceeded with unless or until the criteria of section 50H of the Act are met.